Exhibit 1.1
$10,000,000
MMCapS(SM)
HORIZON BANCORP CAPITAL TRUST II
PLACEMENT AGREEMENT
New York, New York
October 21, ▇▇▇▇
▇▇▇▇▇▇▇ ▇'▇▇▇▇▇ & PARTNERS, L.P.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Horizon Bancorp Capital Trust II (the "Trust"), a statutory trust
organized under the Delaware Statutory Trust Act, 12 Del. C. Section 3801 et
seq. (the "Delaware Act"), and Horizon Bancorp, an Indiana corporation (the
"Company" and together with the Trust, the "Offerors"), confirm their agreement
(the "Agreement") with Sandler ▇'▇▇▇▇▇ & Partners, L.P., as agent of the
Offerors (the "Placement Agent"), with respect to the issue and sale by the
Trust and the placement by the Placement Agent of 10,000 MMCapS(SM) (liquidation
amount of $1,000 per security) of the Trust (the "Capital Securities"). The
Capital Securities will be guaranteed by the Company to the extent provided in
the Guarantee Agreement, to be dated as of the Closing Date (as defined in
Section 2(a) hereof) (the "Guarantee Agreement"), between the Company, as
guarantor, and Wilmington Trust Company, as guarantee trustee (the "Guarantee
Trustee"), with respect to distributions and payments upon liquidation,
redemption and otherwise.
The entire proceeds from the sale of the Capital Securities will be
combined with the entire proceeds from the sale by the Trust to the Company of
its common securities (the "Common Securities"), and will be used by the Trust
to purchase $10,310,000 aggregate principal amount of Floating Rate Junior
Subordinated Debt Securities due 2034 (the "Subordinated Debt Securities")
issued by the Company. The Capital Securities and the Common Securities will be
issued pursuant to the Amended and Restated Declaration of Trust, to be dated as
of the Closing Date (the "Declaration"), among the Company, as sponsor, the
Administrators named therein (the "Administrators"), Wilmington Trust Company,
as institutional trustee (the "Institutional Trustee"), Wilmington Trust
Company, as Delaware trustee (the "Delaware Trustee"), and the holders, from
time to time, of undivided beneficial interests in the assets of the Trust. The
Subordinated Debt Securities will be issued pursuant to the Indenture, to be
dated as of the Closing Date (the "Indenture"), between the Company and
Wilmington Trust Company, as indenture trustee (the "Indenture Trustee"). The
Indenture, the Guarantee Agreement, the Declaration, this Agreement and the
Subscription Agreement (as defined in Section 2(a) hereof) are hereinafter
referred to collectively as the "Operative Documents."
SECTION 1. Representations and Warranties.
(a) The Trust and the Company, jointly and severally, represent and
warrant to the Placement Agent and NBC Capital Markets Group, Inc. (or its
designee) (the "Purchaser") as of the date hereof and as of the Closing Date,
and agree with the Placement Agent and the Purchaser, as follows:
(i) Similar Offerings. Within a period of six months before or after
the date hereof, the Offerors have not, directly or indirectly, solicited any
offer to buy or offered to sell, and will not, directly or indirectly, solicit
any offer to buy or offer to sell, in the United States or to any United States
citizen or resident, any security which is or would be integrated with the sale
of the Capital Securities (including any securities of the same or a similar
class as the Capital Securities) in a manner that would require the Capital
Securities to be registered under the Securities Act of 1933, as amended (the
"1933 Act").
(ii) Incorporated Documents. The documents of the Company filed with
the Securities and Exchange Commission (the "Commission") in accordance with the
Securities Exchange Act of 1934, as amended (the "1934 Act"), from and including
the commencement of the fiscal year covered by the Company's most recent Annual
Report on Form 10-K, at the time they were or hereafter are filed by the Company
with the Commission (collectively, the "1934 Act Reports"), complied and will
comply in all material respects with the requirements of the 1934 Act and the
rules and regulations of the Commission thereunder (the "1934 Act Regulations"),
and, at the date of this Agreement, on the Closing Date and on the
Representation and Delivery Date (as defined in Section 2(a) hereof), do not and
will not include an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; and other than such instruments, agreements, contracts and other
documents as are filed as exhibits to the Company's Annual Report on Form 10-K,
Quarterly Reports on Form 10-Q or Current Reports on Form 8-K, there are no
instruments, agreements, contracts or documents of a character described in Item
601 of Regulation S-K promulgated by the Commission to which the Company or any
of its subsidiaries is a party.
(iii) Independent Accountants. The accountants of the Company who
certified the financial statements included in the 1934 Act Reports (the
"Independent Accountants") are independent public accountants of the Company and
its subsidiaries within the meaning of the 1933 Act and the rules and
regulations of the Commission thereunder (the "1933 Act Regulations").
(iv) Financial Statements and Information. The consolidated
historical financial statements of the Company, together with the related
schedules and notes, included in the 1934 Act Reports present fairly, in all
material respects, the respective consolidated financial positions of the
Company and its consolidated subsidiaries at the respective dates indicated, and
the consolidated statements of income, changes in stockholders' equity and cash
flows of the Company and its consolidated subsidiaries for the respective
periods specified; said financial statements have been prepared in conformity
with generally accepted accounting principles in the United States applied on a
consistent basis throughout the periods involved, except as disclosed in the
notes to such financial statements; the supporting schedules, if any, included
in
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the 1934 Act Reports present fairly, in all material respects, the information
required to be stated therein; and any pro forma financial statements and the
related notes thereto included in the 1934 Act Reports present fairly, in all
material respects, the information shown therein, have been prepared in
accordance with the Commission's rules and guidelines with respect to pro forma
financial statements and have been properly compiled on the bases described
therein, and the assumptions used in the preparation thereof are reasonable and
the adjustments used therein are appropriate to give effect to the transactions
and circumstances referred to therein.
(v) No Material Adverse Change. Since the respective dates as of
which information is given in the 1934 Act Reports, there has not been (A) any
material adverse change in the condition, financial, regulatory or otherwise, or
in the earnings, business affairs or business prospects of the Trust or of the
Company and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business (a "Material Adverse Effect") or (B)
any dividend or distribution of any kind declared, paid or made by the Company
on any class of its capital stock other than regular quarterly dividends on the
Company's common stock declared and paid consistent with past practice.
(vi) Internal Accounting Controls. Each of the Company and its
subsidiaries maintain a system of internal accounting controls sufficient to
provide reasonable assurance that (i) transactions are executed in accordance
with the management's general or specific authorizations, (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain asset
accountability, (iii) access to assets is permitted only in accordance with the
management's general or specific authorization and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.
(vii) Disclosure Controls. The Company has established and maintains
disclosure controls and procedures (as such term is defined in Rule 13a-15(e)
and 15d-15(e) under the 1934 Act); such disclosure controls and procedures (i)
are designed to ensure that material information relating to the Company,
including its consolidated subsidiaries, is made known to the Company's Chief
Executive Officer and its Chief Financial Officer by others within those
entities, particularly during the periods in which the 1934 Act Reports are
being prepared, (ii) have been evaluated for effectiveness as of the end of the
annual or quarterly period reported to the Commission and (iii) are effective to
perform the functions for which they were established; the Company's auditors
and the Audit Committee of the Board of Directors have been advised of: (A) any
significant deficiencies in the design or operation of internal controls which
could adversely affect the Company's ability to record, process, summarize, and
report financial data and (B) any fraud, whether or not material, that involves
management or other employees who have a role in the Company's internal
controls; any material weaknesses in internal controls have been identified for
the Company's auditors; and since the date of the most recent evaluation of such
disclosure controls and procedures, there have been no significant changes in
internal controls or in other factors that could significantly affect internal
controls, including any corrective actions with regard to significant
deficiencies and material weaknesses.
(viii) Regulatory Matters. Except as set forth in Schedule
1(a)(viii), neither the Company nor any of its subsidiaries is subject or is
party to, or has received any
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notice or advice that any of them may become subject or party to any
investigation with respect to, any corrective, suspension or cease-and-desist
order, agreement, consent agreement, memorandum of understanding or other
regulatory enforcement action, proceeding or order with or by, or is a party to
any commitment letter or similar undertaking to, or is subject to any directive
by, or has been a recipient of any supervisory letter from, or has adopted any
board resolutions at the request of, any Regulatory Agency (as defined below)
that currently relates to or restricts in any material respect the conduct of
their business or that in any manner relates to their capital adequacy, credit
policies, management or business (each, a "Regulatory Agreement"), nor has the
Company or any of its subsidiaries been advised by any Regulatory Agency that it
is considering issuing or requesting any such Regulatory Agreement; there is no
unresolved violation, criticism or exception by any Regulatory Agency with
respect to any report or statement relating to any examinations of the Company
or any of its subsidiaries which, in the reasonable judgment of the Company, is
expected to result in a Material Adverse Effect. As used herein, the term
"Regulatory Agency" means any federal or state agency charged with the
supervision or regulation of depositary institutions or holding companies of
depositary institutions, or engaged in the insurance of depositary institution
deposits, or any court, administrative agency or commission or other
governmental agency, authority or instrumentality having supervisory or
regulatory authority with respect to the Company or any of its subsidiaries.
(ix) No Undisclosed Liabilities. Neither the Company nor any of its
subsidiaries has any material liability, whether known or unknown, whether
asserted or unasserted, whether absolute or contingent, whether accrued or
unaccrued, whether liquidated or unliquidated, and whether due or to become due,
including any liability for taxes (and there is no past or present fact,
situation, circumstance, condition or other basis for any present or future
action, suit, proceeding, hearing, charge, complaint, claim or demand against
the Company or its subsidiaries giving rise to any such liability), except (i)
for liabilities set forth in the financial statements referred to in Section
1(a)(iv) above and (ii) normal fluctuations in the amount of the liabilities
referred to in clause (i) above occurring in the ordinary course of business of
the Company and all of its subsidiaries since the date of the most recent
balance sheet included in such financial statements.
(x) Good Standing of the Company. The Company has been duly
organized and is validly existing as a corporation in good standing under the
laws of the State of Indiana and has full power and authority under such laws to
own, lease and operate its properties and to conduct its business, to enter into
and perform its obligations under each of the Operative Documents to which it is
a party, and to issue the Subordinated Debt Securities; and the Company is duly
registered as a bank holding company under the Bank Holding Company Act of 1956,
as amended.
(xi) Good Standing of the Subsidiaries. Each "significant
subsidiary" (as defined in Rule 1-02 of Regulation S-X) of the Company (a
"Significant Subsidiary") has been duly organized and is validly existing as an
entity in good standing under the laws of the jurisdiction in which it is
chartered and has full power and authority under such laws to own, lease and
operate its properties and to conduct its current and contemplated business; and
the deposit accounts of Horizon Bank, National Association are insured up to the
applicable limits by the Bank Insurance Fund of the Federal Deposit Insurance
Corporation (the "FDIC") to the fullest extent permitted by law and the rules
and regulations of the FDIC, and no proceeding for
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the revocation or termination of such insurance is pending or, to the knowledge
of the Company, threatened. For the avoidance of doubt, Horizon Trust &
Investment Management, National Association is operated solely as a trust
company and only exercises trust power. In that regard, Horizon Trust &
Investment Management, National Association holds no deposit accounts that
require FDIC insurance.
(xii) Foreign Qualifications. Each of the Company and its
subsidiaries is duly qualified as a foreign entity to transact business and each
is in good standing in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure to be so qualified would not
singularly, or in the aggregate, in the reasonable judgment of the Company, be
expected to result in a Material Adverse Effect.
(xiii) Capital Stock Duly Authorized and Validly Issued. All of the
issued and outstanding capital stock of the Company has been duly authorized and
validly issued and is fully paid and nonassessable; all of the issued and
outstanding capital stock of each Significant Subsidiary of the Company has been
duly authorized and validly issued, is fully paid and nonassessable and is owned
by the Company, directly or through subsidiaries, free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equitable right; and
none of the issued and outstanding capital stock of the Company or its
Significant Subsidiaries was issued in violation of any preemptive or similar
rights arising by operation of law, under the charter, by-laws or code of
regulations of the Company or any of its Significant Subsidiaries or under any
agreement to which the Company or any of its Significant Subsidiaries is a
party.
(xiv) Good Standing of the Trust. The Trust has been duly created
and is validly existing in good standing as a statutory trust under the Delaware
Act with the power and authority to own property and to conduct its business as
provided in the Declaration, to enter into and perform its obligations under the
Operative Documents to which it is a party, and to issue the Capital Securities
and the Common Securities; the Trust is not a party to or otherwise bound by any
agreement other than the Operative Documents to which it is a party; and the
Trust is, and will be, under current law, classified for United States federal
income tax purposes as a grantor trust and not as an association taxable as a
corporation.
(xv) Authorization of Common Securities. The Common Securities have
been duly authorized, issued, executed and delivered in accordance with the
Declaration and are validly issued and fully paid and nonassessable undivided
common beneficial ownership interests in the assets of the Trust; the issuance
of the Common Securities is not subject to preemptive or other similar rights;
and all of the issued and outstanding Common Securities of the Trust are owned
directly by the Company, free and clear of any security interest, mortgage,
pledge, lien, encumbrance, claim or equitable right.
(xvi) Authorization of Capital Securities. The Capital Securities
have been duly authorized, issued, executed, authenticated and delivered in
accordance with the Declaration and are validly issued and fully paid and
nonassessable undivided preferred beneficial ownership interests in the assets
of the Trust; the issuance of the Capital Securities will not be subject to
preemptive or other similar rights; and the Capital Securities are in the form
contemplated by, and entitled to the benefits of, the Declaration.
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(xvii) Authorization of this Agreement. This Agreement has been duly
authorized, executed and delivered by each of the Offerors.
(xviii) Authorization of Subscription Agreement. The Subscription
Agreement has been duly authorized, executed and delivered by each of the
Offerors, and assuming due authorization, execution and delivery of the
Subscription Agreement by the Purchaser, the Subscription Agreement constitutes
a valid, legal and binding agreement of each of the Offerors, enforceable
against each of the Offerors in accordance with its terms, except to the extent
that enforceability may be limited by (a) bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or other similar laws now or
hereafter in effect relating to creditors' rights generally and (b) general
principles of equity (regardless of whether enforceability is considered in a
proceeding at law or in equity) (collectively, the "Enforceability Exceptions").
(xix) Authorization of Declaration. The Declaration has been duly
authorized, executed and delivered by the Company and the Administrators, and
assuming due authorization, execution and delivery of the Declaration by the
Institutional Trustee and the Delaware Trustee, the Declaration constitutes a
valid, legal and binding agreement of the Company, enforceable against the
Company in accordance with its terms, except to the extent that enforceability
may be limited by the Enforceability Exceptions.
(xx) Authorization of Guarantee Agreement. The Guarantee Agreement
has been duly authorized, executed and delivered by the Company, and assuming
due authorization, execution and delivery of the Guarantee Agreement by the
Guarantee Trustee, the Guarantee Agreement constitutes a valid, legal and
binding agreement of the Company, enforceable against the Company in accordance
with its terms, except to the extent that enforceability may be limited by the
Enforceability Exceptions.
(xxi) Authorization of Indenture. The Indenture has been duly
authorized, executed and delivered by the Company, and assuming due
authorization, execution and delivery of the Indenture by the Indenture Trustee,
the Indenture constitutes a valid, legal and binding agreement of the Company,
enforceable against the Company in accordance with its terms, except to the
extent that enforceability may be limited by the Enforceability Exceptions.
(xxii) Authorization of Subordinated Debt Securities. The
Subordinated Debt Securities have been duly authorized, executed, authenticated
and delivered by the Company in accordance with the Indenture and constitute
valid, legal and binding obligations of the Company, enforceable against the
Company in accordance with their terms, except to the extent that enforceability
may be limited by the Enforceability Exceptions; the Subordinated Debt
Securities are in the form contemplated by, and entitled to the benefits of, the
Indenture; the Subordinated Debt Securities constitute indebtedness of the
Company for United States federal income tax purposes and the Company has no
present intention to exercise its option to defer payments of interest on the
Subordinated Debt Securities as provided in the Indenture.
(xxiii) Authorization of Administrators. Each of the Administrators
of the Trust is an officer or employee of the Company and has been duly
authorized by the Company to execute and deliver the Declaration.
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(xxiv) Not an Investment Company. Neither the Trust nor the Company
is, and immediately following consummation of the transactions contemplated
hereby and the application of the net proceeds therefrom neither the Trust nor
the Company will be, an "investment company" or an entity "controlled" by an
"investment company", in each case within the meaning of Section 3(a) of the
Investment Company Act of 1940, as amended (the "1940 Act"), without regard to
Section 3(c) of the 1940 Act.
(xxv) Absence of Defaults and Conflicts. The Trust is not in
violation of the trust certificate of the Trust filed with the State of Delaware
(the "Trust Certificate") or the Declaration, and neither the Company nor any of
its subsidiaries is in violation of its charter, by-laws or code of regulations;
none of the Trust, the Company or any subsidiary of the Company is in default in
the performance or observance of any obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, deed of trust, loan or
credit agreement, note, lease or other agreement or instrument to which it is a
party or by which it or any of them may be bound or to which any of its
properties or assets is subject (collectively, "Agreements and Instruments"),
except for such defaults under Agreements and Instruments that, in the
reasonable judgment of the Company, are not expected to result in a Material
Adverse Effect; and the execution, delivery and performance of the Operative
Documents by the Trust or the Company, as the case may be, the issuance, sale
and delivery of the Capital Securities and the Subordinated Debt Securities, the
consummation of the transactions contemplated by the Operative Documents, and
compliance by the Trust and the Company with the terms of the Operative
Documents to which they are a party have been duly authorized by all necessary
corporate action on the part of the Company and by all necessary action on the
part of the Trust and do not and will not, whether with or without the giving of
notice or passage of time or both, violate, conflict with or constitute a breach
of, or default or Repayment Event (as defined below) under, or result in the
creation or imposition of any, security interest, mortgage, pledge, lien,
charge, encumbrance, claim or equitable right upon any properties or assets of
the Trust or the Company or any of its subsidiaries pursuant to any of the
Agreements and Instruments, nor will such action result in any violation of the
provisions of the charter, by-laws or code of regulations of the Company or any
of its subsidiaries or the Declaration or the Trust Certificate, or violation by
the Company or any of its subsidiaries of any applicable law, statute, rule,
regulation, judgment, order, writ or decree of any government, government
authority, agency (including, without limitation, each applicable Regulatory
Agency) or instrumentality or court, domestic or foreign, having jurisdiction
over the Trust or the Company or any of its subsidiaries or their respective
properties or assets (collectively, "Governmental Entities"). As used herein, a
"Repayment Event" means any event or condition which gives the holder of any
note, debenture or other evidence of indebtedness (or any person acting on such
holder's behalf) the right to require the repurchase, redemption or repayment of
all or a portion of such indebtedness by the Trust or the Company or any of its
subsidiaries prior to its scheduled maturity.
(xxvi) Absence of Labor Dispute. No labor dispute with the employees
of the Company or any of its subsidiaries exists or, to the knowledge of the
executive officers of the Company, is imminent, which, in the reasonable
judgment of the Company, in either case, is expected to result in a Material
Adverse Effect.
(xxvii) Absence of Proceedings. There is no action, suit,
proceeding, inquiry or investigation before or brought by any Governmental
Entity, now pending, or, to the
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knowledge of the Trust or the Company, threatened, against or affecting the
Trust or the Company or any of its subsidiaries, which, in the reasonable
judgment of the Trust or the Company is expected to result in a Material Adverse
Effect or materially and adversely affect the consummation of the transactions
contemplated by the Operative Documents or the performance by the Trust or the
Company of its obligations hereunder or thereunder; and the aggregate of all
pending legal or governmental proceedings to which the Trust or the Company or
any of its subsidiaries is a party or of which any of their respective
properties or assets is the subject, including ordinary routine litigation
incidental to the business, are not, in the reasonable judgment of the Company
or the Trust, expected to result in a Material Adverse Effect.
(xxviii) Absence of Further Requirements. No filing with, or
authorization, approval, consent, license, order, registration, qualification or
decree of, any Governmental Entity, other than those that have been made or
obtained, is necessary or required for the authorization, execution, delivery or
performance by the Trust or the Company of their respective obligations under
the Operative Documents, the Subordinated Debt Securities or the Capital
Securities, as applicable, or the consummation by the Trust or the Company of
the transactions contemplated by the Operative Documents.
(xxix) Possession of Licenses and Permits. Each of the Trust, the
Company and the subsidiaries of the Company possesses such permits, orders,
certificates, licenses, approvals, consents and other authorizations
(collectively, "Governmental Licenses") issued by the appropriate Governmental
Entities necessary to conduct the business now operated by it that is material
to the Trust or the Company and its subsidiaries considered as one enterprise;
each of the Trust, the Company and the subsidiaries of the Company is in
compliance with the terms and conditions of all of its Governmental Licenses,
except where the failure so to comply, in the reasonable judgment of the
Company, is not expected to, singularly or in the aggregate, have a Material
Adverse Effect; all of the Governmental Licenses are valid and in full force and
effect, except when the invalidity of such Governmental Licenses or the failure
of such Governmental Licenses to be in full force and effect, in the reasonable
judgment of the Company, is not expected to have a Material Adverse Effect; and
none of the Trust, the Company or any subsidiary of the Company has received
notice of any proceeding, and to the knowledge of the Trust, the Company or any
subsidiary of the Company, there has been no threatened proceeding, relating to
the revocation, termination, suspension or modification of any such Governmental
Licenses which, singularly or in the aggregate, in the reasonable judgment of
the Company or the Trust, is expected to result in a Material Adverse Effect.
(xxx) Title to Property. Each of the Trust, the Company and the
subsidiaries of the Company has good and marketable title to all of its
respective real and personal properties, in each case free and clear of all
liens, encumbrances and defects, except such as, in the reasonable judgment of
the Trust or the Company, singularly or in the aggregate, are not expected to
result in a Material Adverse Effect; and all of the leases and subleases under
which the Trust, the Company or any subsidiary of the Company holds properties
are in full force and effect, except when the failure of such leases and
subleases to be in full force and effect, in the reasonable judgment of the
Company, singularly or in the aggregate, is not expected to have a Material
Adverse Effect, and none of the Trust, the Company or any subsidiary of the
Company has any notice of any claim of any sort that has been asserted by anyone
adverse to the rights of the Trust, the Company or any subsidiary of the Company
under any of the leases or
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subleases under which the Trust, the Company or any subsidiary of the Company
holds properties, or affecting or questioning the rights of such entity to the
continued possession of the leased or subleased premises under any such lease or
sublease, except when such claim, in the reasonable judgment of the Company,
singularly or in the aggregate, is not expected to have a Material Adverse
Effect.
(xxxi) Stabilization. The Company has not taken and will not take,
directly or indirectly, any action designed to, or that might be reasonably
expected to, cause or result in stabilization or manipulation of the price of
the Capital Securities.
(xxxii) No General Solicitation. Neither the Trust or the Company
nor any of their Affiliates (as defined in Rule 501(b) under the ▇▇▇▇ ▇▇▇) or
any person acting on its or any of their behalf (other than the Placement Agent,
as to whom the Offerors make no representation) has engaged or will engage, in
connection with the offer and sale of the Capital Securities, in any form of
general solicitation or general advertising within the meaning of Rule 502(c)
under the 1933 Act.
(xxxiii) No Directed Selling Efforts. Neither the Trust or the
Company nor any of their Affiliates or any person acting on its or any of their
behalf (other than the Placement Agent, as to whom the Offerors make no
representation) has engaged or will engage in any directed selling efforts
within the meaning of Regulation S under the 1933 Act ("Regulation S") with
respect to the offer and sale of the Capital Securities.
(xxxiv) No Registration. Subject to compliance by the Placement
Agent with the relevant provisions of Section 6 hereof, it is not necessary in
connection with the offer, sale and delivery of the Capital Securities by the
Trust and the subsequent sale of the Capital Securities by the Purchaser to the
Transferee (as defined in Section 2(a) hereof) in the manner contemplated by
this Agreement to register the Capital Securities, the guarantee as described in
the Guarantee Agreement or the Subordinated Debt Securities under the 1933 Act
or to qualify the Declaration, the Guarantee Agreement or the Indenture under
the Trust Indenture Act of 1939, as amended.
(b) Any certificate signed by any Trustee of the Trust or any duly
authorized officer of the Company or any of its subsidiaries and delivered to
the Placement Agent or to counsel for the Placement Agent shall be deemed a
representation and warranty by the Trust or the Company, as the case may be, to
the Placement Agent as to the matters covered thereby.
SECTION 2. Purchase and Sale; Closing.
(a) The Offerors propose to issue and sell the Capital Securities on
October 21, 2004 (or such other date mutually agreed to by the Offerors and the
Placement Agent) (the "Closing Date") to the Purchaser pursuant to the terms of
the Capital Securities Subscription Agreement, entered into on the date hereof
(the "Subscription Agreement"), between the Offerors and the Purchaser. It is
understood and agreed that the Purchaser may transfer the Capital Securities to
any purchaser(s) selected by it (the "Transferee") in accordance with the
provisions contained in the Declaration. The date on which the Purchaser has
transferred all of the Capital Securities purchased on the Closing Date is
referred to herein as the "Representation
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and Delivery Date". In addition, the Offerors agree that the Purchaser and the
Transferee shall be entitled to the benefit of, and to rely on, the provisions
of this Agreement to the extent such provisions address or relate to the
Purchaser or the Capital Securities to be purchased by the Purchaser.
(b) The Offerors hereby grant to the Placement Agent the exclusive right
to arrange the placement of the Capital Securities with the Purchaser on their
behalf. The Placement Agent accepts such right and agrees to use its best
efforts, on and prior to the Closing Date, to effect such placement.
(c) Deliveries of certificates for the Capital Securities shall be made by
the Trust to or on behalf of the Purchaser at the offices of Sidley ▇▇▇▇▇▇ ▇▇▇▇▇
& ▇▇▇▇ LLP in The City of New York, and payment of the purchase price for the
Capital Securities shall be made by the Purchaser to the Trust by wire transfer
of immediately available funds to a bank designated by the Company
contemporaneous with closing on the Closing Date.
Certificates for the Capital Securities in the aggregate liquidation
amount thereof shall be registered in the name of the Purchaser.
(d) It is agreed that no placement fee shall be paid by the Company or the
Trust in connection with the transactions contemplated by this Agreement.
(e) In performing its duties under this Agreement, the Placement Agent
shall be entitled to rely upon any notice, signature or writing which the
Placement Agent shall in good faith believe to be genuine and to be signed or
presented by a proper party or parties. The Placement Agent may rely upon any
opinions or certificates or other documents delivered by the Offerors or their
counsel or designees either to it or the Purchaser. In addition, in connection
with the performance of its duties under this Agreement, the Placement Agent
shall not be liable for any error of judgment or any action taken or omitted to
be taken unless it was grossly negligent or engaged in willful misconduct in
connection with such performance or non-performance. No provision of this
Agreement shall require the Placement Agent to expend or risk its own funds or
otherwise incur any financial liability on behalf of the Purchaser in connection
with the performance of any of its duties hereunder. The Placement Agent shall
be under no obligation to exercise any of the rights or powers vested in it by
this Agreement.
SECTION 3. Notice of Material Events. The Offerors covenant with the
Placement Agent and the Purchaser that, prior to the Representation and Delivery
Date, the Offerors will immediately notify the Placement Agent, and confirm such
notice in writing, of any event or development that, in the reasonable judgment
of the Company, is expected to result in a Material Adverse Effect.
SECTION 4. Payment of Expenses. Whether or not this Agreement or the
Subscription Agreement is terminated or the sale of the Capital Securities is
consummated, the Company, as borrower under the Subordinated Debt Securities,
will pay all expenses incident to the performance of its obligations under this
Agreement, including (i) the preparation, issuance and delivery of the
certificates for the Capital Securities and Subordinated Debt Securities and
(ii) the fees and disbursements of the Company's counsel, accountants and other
advisors;
10
provided, however, that upon the sale of the Capital Securities on the Closing
Date, the Placement Agent agrees to reimburse the Offerors for such fees and
expenses in the amount of $10,000, and the Company will pay all such fees and
expenses in excess of $10,000. Notwithstanding the foregoing, the fees and
disbursements of any trustee appointed under any of the Operative Documents and
its counsel shall be paid as specified in the fee agreement between the Company
and Wilmington Trust Company.
SECTION 5. Conditions of Placement Agent's Obligations. The obligations of
the Placement Agent and the Purchaser on the Closing Date are subject to the
accuracy of the representations and warranties of the Offerors contained in
Section 1 hereof or in certificates of any Administrator of the Trust or any
officer of the Company or any of its subsidiaries delivered pursuant to the
provisions hereof, to the performance by the Offerors of their obligations
hereunder, and to the following further conditions:
(a) Opinion of Counsel for the Offerors. On the Closing Date, the
Placement Agent and the Purchaser shall have received the favorable opinion,
dated as of the Closing Date, of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ LLP, special counsel for the
Offerors, in substantially the form set out in Annex A hereto, in form and
substance reasonably satisfactory to counsel for the Placement Agent. Such
counsel may state that, insofar as such opinion involves factual matters, they
have relied, to the extent they deem proper, upon certificates of Administrators
of the Trust, officers of the Company or any of its subsidiaries and public
officials.
(b) Opinion of Special Delaware Counsel for the Trust. On the Closing
Date, the Placement Agent and the Purchaser shall have received the favorable
opinion, dated as of the Closing Date, of Morris, James, Hitchens & ▇▇▇▇▇▇▇▇
LLP, special Delaware counsel for the Trust, in substantially the form set out
in Annex B hereto, in form and substance reasonably satisfactory to counsel for
the Placement Agent.
(c) Opinion of Special Tax Counsel for the Offerors. On the Closing Date,
the Placement Agent and the Purchaser shall have received an opinion, dated as
of the Closing Date, of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ LLP, special tax counsel for the
Offerors, that (i) the Trust will be classified for United States federal income
tax purposes as a grantor trust and not as an association taxable as a
corporation and (ii) the Subordinated Debt Securities will constitute
indebtedness of the Company for United States federal income tax purposes, in
substantially the form set out in Annex C hereto. Such opinion may be
conditioned on, among other things, the initial and continuing accuracy of the
facts, financial and other information, covenants and representations set forth
in certificates of officers of the Company and other documents deemed necessary
for such opinion.
(d) Opinion of Counsel to the Guarantee Trustee, the Institutional
Trustee, the Delaware Trustee and the Indenture Trustee. On the Closing Date,
the Placement Agent and the Purchaser shall have received the favorable opinion,
dated as of the Closing Date, of Morris, James, Hitchens & ▇▇▇▇▇▇▇▇ LLP, counsel
for the Guarantee Trustee, the Institutional Trustee, the Delaware Trustee and
the Indenture Trustee, in substantially the form set out in Annex D hereto, in
form and substance reasonably satisfactory to counsel for the Placement Agent.
11
(e) Certificates. On the Closing Date, there shall not have been, since
the date hereof or since the respective dates as of which information is given
in the 1934 Act Reports, any Material Adverse Effect, and the Placement Agent
and the Purchaser shall have received a certificate of the Chairman, the Chief
Executive Officer, the President, any Executive Vice President or any Vice
President of the Company and of the Chief Financial Officer or Chief Accounting
Officer of the Company and a certificate of an Administrator of the Trust, dated
as of the Closing Date, to the effect that (i) there has been no such Material
Adverse Effect, (ii) the representations and warranties in Section 1 hereof were
true and correct when made and are true and correct with the same force and
effect as though expressly made on and as of the Closing Date, and (iii) the
Offerors have complied with all agreements and satisfied all conditions on their
part to be performed or satisfied on or prior to the Closing Date.
(f) Maintenance of Ratings. From the date of this Agreement through the
Closing Date, there shall not have occurred a downgrading in or withdrawal of
the rating assigned to any debt securities or preferred stock of the Company or
any of its subsidiaries by any "nationally recognized statistical rating
organization," as that term is defined by the Commission for the purposes of
Rule 436(g)(2) under the 1933 Act, and no such organization shall have publicly
announced that it has under surveillance or review its rating of any debt
securities or preferred stock of the Company or any of its subsidiaries.
(g) Additional Documents. On the Closing Date and the Representation and
Delivery Date, the Placement Agent and the Purchaser shall have been furnished
such documents and opinions as they may reasonably request in connection with
the issue and sale of the Capital Securities; and all proceedings taken by the
Offerors in connection with the issuance, sale and placement of the Capital
Securities shall be satisfactory in form and substance to the Placement Agent
and the Purchaser.
(h) Termination of Agreement. If any condition specified in this Section
shall not have been fulfilled when and as required to be fulfilled, this
Agreement may be terminated by the Placement Agent by notice to the Offerors at
any time on or prior to the Closing Date. If the sale of the Capital Securities
to the Purchaser is not consummated because any condition set forth in Section
5(a), (b), (c), (d), (e), (f) or (g) is not satisfied, because of any
termination pursuant to Section 10(a) hereof or because of any refusal,
inability or failure on the part of the Offerors to perform any agreement herein
or comply with any provision hereof, the Company will reimburse the Placement
Agent upon demand for documented out-of-pocket expenses (including reasonable
fees and disbursements of counsel) that shall have been incurred by the
Placement Agent in connection with the proposed sale not in excess of $25,000.
In addition, such termination shall be subject to Section 4 hereof, and Sections
7 and 8 hereof shall survive any such termination and remain in full force and
effect.
SECTION 6. Offers and Sales of the Capital Securities.
(a) Offer and Sale Procedures. The Placement Agent and the Offerors hereby
establish and agree to observe the following provisions with respect to the
offer and sale of the Capital Securities:
12
(i) Offers and Sales only to the Purchaser. Offers and sales of the
Capital Securities will be made only to the Purchaser in a transaction not
requiring registration under the 1933 Act.
(ii) No General Solicitation. No general solicitation or general
advertising (within the meaning of Rule 502(c) under the ▇▇▇▇ ▇▇▇) has been or
will be used in connection with the offer and sale of the Capital Securities.
(iii) No Directed Selling Efforts. No directed selling efforts
(within the meaning of Regulation S) has been or will be used with respect to
the offer and sale of the Capital Securities.
(iv) Purchaser Notification. Prior to or contemporaneously with the
purchase of the Capital Securities by the Purchaser, the Placement Agent will
take reasonable steps to inform the Purchaser that the Capital Securities (A)
have not been and will not be registered under the 1933 Act, (B) are being sold
to them without registration under the 1933 Act in accordance with an exemption
from, or in a transaction not subject to, the registration requirements of the
1933 Act and (C) may not be offered, sold or otherwise transferred except in
accordance with the legend set forth in Annex E hereto.
(b) Covenants of the Offerors. Each of the Offerors, jointly and
severally, covenant with the Placement Agent and the Purchaser as follows:
(i) Due Diligence. In connection with the initial purchase of the
Capital Securities, the Offerors agree that, prior to the Representation and
Delivery Date, the Placement Agent and the Purchaser shall have the right to
make reasonable inquiries into the business of the Trust, the Company and the
subsidiaries of the Company. The Offerors also agree to provide answers to the
Placement Agent and the Purchaser, if requested, concerning the Trust, the
Company and the subsidiaries of the Company (to the extent that such information
is available or can be acquired and made available without unreasonable effort
or expense and to the extent the provision thereof is not prohibited by
applicable law) and the terms and conditions of the offering of the Capital
Securities and the Subordinated Debt Securities.
(ii) Integration. The Offerors agree that they will not, and will
cause their Affiliates not to, make any offer or sale of securities of the
Offerors of any class if, as a result of the doctrine of "integration" referred
to in Rule 502 under the 1933 Act, such offer or sale would render invalid the
exemption from the registration requirements of the 1933 Act provided by Section
4(2) thereof or by Rule 144A or otherwise.
(iii) Restriction on Repurchases. Until the expiration of two (2)
years (or such shorter period as may hereafter be referred to in Rule 144(k) (or
similar successor rule)) after the original issuance of the Capital Securities,
the Offerors will not, and will cause their Affiliates not to, purchase or agree
to purchase or otherwise acquire any Capital Securities which are "restricted
securities" (as such term is defined under Rule 144(a)(3) under the 1933 Act),
whether as beneficial owner or otherwise, unless, immediately upon any such
purchase, the Offerors or any Affiliate shall submit such Capital Securities to
the Institutional Trustee for cancellation.
13
SECTION 7. Indemnification.
(a) Indemnification of the Placement Agent and the Purchaser. Each of the
Offerors agree, jointly and severally, to indemnify and hold harmless: (x) the
Placement Agent, and the Purchaser, (y) each person, if any, who controls
(within the meaning of Section 15 of the 1933 Act or ▇▇▇▇▇▇▇ ▇▇ ▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇)
the Placement Agent or the Purchaser (each such person, a "controlling person")
and (z) the respective partners, directors, officers, employees and agents of
the Placement Agent and the Purchaser or any such controlling person, as
follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, relating to or arising out of, or based upon, in whole
or in part, (A) any untrue statement or alleged untrue statement of a material
fact included in the 1934 Act Reports, or the omission or alleged omission
therefrom of a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading;
(B) any untrue statement or alleged untrue statement of material fact contained
in any information (whether written or oral) or documents executed in favor of
or furnished or made available to the Placement Agent or the Purchaser by the
Offerors; (C) any omission or alleged omission to state in any information
(whether written or oral) or documents executed in favor of or furnished or made
available to the Placement Agent or the Purchaser by the Offerors a material
fact necessary to make the statements therein not misleading; or (D) the breach
or alleged breach of any representation, warranty and agreement of any Offeror
contained herein or in the Subscription Agreement;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim whatsoever
based upon any such untrue statement or omission, or any such alleged untrue
statement or omission, or breach or alleged breach of any such representation,
warranty or agreement; provided, that (subject to Section 7(c) hereof) any such
settlement is effected with the written consent of the Offerors; and
(iii) against any and all expense whatsoever, as incurred (including
the fees and disbursements of counsel chosen by the Placement Agent), reasonably
incurred in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission, or breach or alleged
breach of any such representation, warranty or agreement, to the extent that any
such expense is not paid under (i) or (ii) above;
provided, however, that the Company agrees to indemnify and hold harmless the
Trust against any and all loss, liability, claim, damage and expense whatsoever,
as incurred, which is due from the Trust pursuant to the foregoing.
(b) Actions against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability
14
hereunder to the extent it is not materially prejudiced as a result thereof, and
in any event shall not relieve it from any liability which it may have otherwise
than on account of this indemnity agreement. Counsel to the indemnified parties
shall be selected by the Placement Agent. An indemnifying party may participate
at its own expense in the defense of any such action; provided, however, that
counsel to the indemnifying party shall not (except with the consent of the
indemnified party) also be counsel to the indemnified party. In no event shall
the indemnifying parties be liable for fees and expenses of more than one
counsel (in addition to any local counsel) separate from their own counsel for
all indemnified parties in connection with any one action or separate but
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances. No indemnifying party shall, without the
prior written consent of the indemnified parties, settle or compromise or
consent to the entry of any judgment with respect to any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever in respect of which indemnification or
contribution could be sought under this Section 7 or Section 8 hereof (whether
or not the indemnified parties are actual or potential parties thereto), unless
such settlement, compromise or consent (i) includes an unconditional release of
each indemnified party from all liability arising out of such litigation,
investigation, proceeding or claim and (ii) does not include a statement as to
or an admission of fault, culpability or a failure to act by or on behalf of any
indemnified party.
(c) Settlement without Consent if Failure to Reimburse. If at any time an
indemnified party shall have validly requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel, such
indemnifying party agrees that it shall be liable for any settlement of the
nature contemplated by Section 7(a)(ii) effected without its written consent if
(i) such settlement is entered into more than 45 days after receipt by such
indemnifying party of the aforesaid request, (ii) such indemnifying party shall
have received notice of the terms of such settlement at least 30 days prior to
such settlement being entered into and (iii) such indemnifying party shall not
have reimbursed such indemnified party in accordance with such request prior to
the date of such settlement, provided, however, that an indemnifying party shall
not be liable for any such settlement effected without its consent if such
indemnifying party (1) reimburses such indemnified party with respect to those
fees and expenses of counsel that it determines in good faith are reasonable and
(2) provides written notice within 10 days after receipt of the request for
reimbursement to the indemnified party substantiating the unpaid balance as
unreasonable, in each case prior to the date of such settlement.
SECTION 8. Contribution. In order to provide for just and equitable
contribution in circumstances under which the indemnification provided for in
Section 7 hereof is for any reason held to be unenforceable for the benefit of
an indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Offerors, on the
one hand, and the Placement Agent, on the other hand, from the offer and sale of
the Capital Securities pursuant to this Agreement or (ii) if the allocation
provided by clause (i) is not permitted by applicable law, in such proportion as
is appropriate to reflect not only the relative benefits referred to in clause
(i) above but also the relative fault of the Offerors, on the one hand, and the
Placement Agent, on
15
the other hand, in connection with the statements, omissions or breaches which
resulted in such losses, liabilities, claims, damages or expenses, as well as
any other relevant equitable considerations.
The relative benefits received by the Offerors, on the one hand, and the
Placement Agent, on the other hand, in connection with the offer and sale of the
Capital Securities pursuant to this Agreement shall be deemed to be in the same
respective proportions as the total net proceeds from the sale of the Capital
Securities pursuant to this Agreement (before deducting expenses) received by
the Offerors and the total commission received by the Placement Agent bear to
the aggregate of such net proceeds and commissions.
The Offerors and the Placement Agent agree that it would not be just and
equitable if contribution pursuant to this Section 8 were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to above in this Section 8. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 8 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement, omission or alleged omission or breach or alleged breach.
Notwithstanding the provisions of this Section 8, the Placement Agent
shall not be required to contribute any amount in excess of the total
commissions received by it.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the ▇▇▇▇ ▇▇▇) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 8, the Purchaser, each person, if any, who
controls the Placement Agent or the Purchaser within the meaning of Section 15
of the 1933 Act or Section 20 of the 1934 Act and the respective partners,
directors, officers, employees and agents of the Placement Agent, the Purchaser
or any such controlling person shall have the same rights to contribution as the
Placement Agent, while each officer and director of the Company, each Trustee of
the Trust and each person, if any, who controls the Company within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same
rights to contribution as the Offerors.
SECTION 9. Representations, Warranties and Agreements to Survive Delivery.
All representations, warranties and agreements contained in this Agreement or in
certificates of officers of the Company or Trustees of the Trust submitted
pursuant hereto shall remain operative and in full force and effect, and shall
survive delivery of the Capital Securities by the Trust.
SECTION 10. Termination of Agreement.
(a) Termination; General. The Placement Agent may terminate this
Agreement, by notice to the Offerors, at any time on or prior to the Closing
Date if, since the
16
time of execution of this Agreement or, in the case of (i), since the respective
dates as of which information is given in the 1934 Act Reports, (i) there has
occurred any Material Adverse Effect, or (ii) there has occurred any material
adverse change in the financial markets in the United States, any outbreak of
hostilities or escalation thereof or any other calamity or crisis, or any change
or development involving political, financial or economic conditions, in each
case the effect of which is such as to make it, in the judgment of the Placement
Agent, impracticable to market the Capital Securities or to enforce contracts
for the sale of the Capital Securities, or (iii) trading in any securities of
the Company has been suspended or limited by the Commission or any national
stock exchange or market on or in which such securities are traded or quoted, or
if trading generally on the American Stock Exchange, the New York Stock Exchange
or the Nasdaq National Market has been suspended or limited, or minimum or
maximum prices for trading have been fixed, or maximum ranges for prices have
been required, by any of said exchanges or by such system or by order of the
Commission, the National Association of Securities Dealers or any other
governmental authority, or (iv) a banking moratorium has been declared by United
States federal, Delaware, Indiana or New York authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this Section,
such termination shall be without liability of any party to any other party
except as provided in Section 4 and Section 5 hereof, and provided further that
Sections 1, 7 and 8 hereof shall survive such termination and remain in full
force and effect.
SECTION 11. Notices. All notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the Placement
Agent shall be directed to Sandler ▇'▇▇▇▇▇ & Partners, L.P., as follows: ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
Principal, with a copy to Sidley ▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇; and notices to the
Offerors shall be directed to Horizon Bancorp, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, with a copy to ▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇▇ LLP, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ , Attention: ▇▇▇▇
▇. ▇▇▇▇▇.
SECTION 12. Parties. This Agreement shall inure to the benefit of and be
binding upon each of the Placement Agent, the Purchaser and the Offerors and
their respective successors. Nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any person, firm or corporation, other
than the Placement Agent, the Purchaser and the Offerors, and their respective
successors and the controlling persons and other persons referred to in Sections
1, 7 and 8 hereof and their heirs and legal representatives, any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision herein contained. This Agreement and all conditions and provisions
hereof are intended to be for the sole and exclusive benefit of the Placement
Agent, the Purchaser and the Offerors and their respective successors, and said
controlling persons and other persons and their heirs and legal representatives,
and for the benefit of no other person, firm or corporation.
SECTION 13. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD
TO CONFLICT OF LAWS PRINCIPLES OF
17
SAID STATE OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.
EACH OF THE TRUST AND THE COMPANY HEREBY IRREVOCABLY SUBMITS TO THE
EXCLUSIVE JURISDICTION OF THE FEDERAL AND NEW YORK STATE COURTS LOCATED IN THE
CITY OF NEW YORK IN CONNECTION WITH ANY SUIT, ACTION OR PROCEEDING RELATED TO
THIS AGREEMENT OR ANY OF THE MATTERS CONTEMPLATED HEREBY, IRREVOCABLY WAIVES ANY
DEFENSE OF LACK OF PERSONAL JURISDICTION AND IRREVOCABLY AGREES THAT ALL CLAIMS
IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY
SUCH COURT. EACH OF THE TRUST AND THE COMPANY IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, ANY OBJECTION WHICH IT MAY
NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH SUIT, ACTION OR
PROCEEDING BROUGHT IN ANY SUCH COURT AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR
PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
SECTION 14. Effect of Headings. The Section headings herein are for
convenience only and shall not affect the construction hereof.
18
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
among the Placement Agent and the Offerors in accordance with its terms.
Very truly yours,
HORIZON BANCORP
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Chief Financial Officer
HORIZON BANCORP CAPITAL TRUST II
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------------
Administrator
CONFIRMED AND ACCEPTED,
as of the date first above written:
SANDLER ▇'▇▇▇▇▇ & PARTNERS, L.P.
By: Sandler ▇'▇▇▇▇▇ & Partners Corp.,
the sole general partner
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Authorized Signatory
SCHEDULE 1(a)(viii)
TO
PLACEMENT AGREEMENT
During the course of a routine periodic examination by Horizon Bank's
regulators (the FDIC and the OCC) that commenced in February 2003, the
examination personnel raised the issue of whether the Bank's mortgage warehouse
loans should be treated as "other loans" rather than "home mortgage loans" for
call report purposes. If these loans are treated as "other loans" for regulatory
reporting purposes, it would change the calculations for risk-based capital and
reduce the Bank's and Horizon Bancorp's risk-based capital ratios. Horizon
submitted a position statement to the regulators on this issue during the Spring
of 2003, and since that time, the regulators have not requested or required that
Horizon change the manner in which it is treating these loans. In the last
conversation Horizon had with the regulators, Horizon was informed that the
regulators were still considering the issue. At September 30, 2004, Horizon had
$107,688,262 in mortgage loans in the warehouse facility.
Management believes that it has properly characterized the loans in its
mortgage warehouse loan portfolio for risk-based capital purposes, but if the
regulators decide to force a resolution of this issue, there is no assurance
that the regulators will concur with Horizon's determination. Should the call
report classification of the loans be changed, Horizon Bancorp and the Bank
would still be categorized as well capitalized at June 30, 2004 as well as at
the end of each calendar quarter in 2002, 2003 and 2004, and Horizon Bancorp
does not believe such a reporting change would have a Material Adverse Effect.
ANNEX A
Pursuant to Section 5(a) of the Placement Agreement, special counsel for the
Offerors shall deliver an opinion in substantially the following form:
1. The Company is incorporated and is validly existing as a corporation
in good standing under the laws of the State of Indiana.
2. The Company has corporate power and authority to (i) execute and
deliver, and to perform its obligations under, the Operative Documents to which
it is a party and (ii) issue and perform its obligations under the Subordinated
Debt Securities.
3. The Company is registered as a bank holding company under the Bank
Holding Company Act of 1956, as amended.
4. (i) Each Significant Subsidiary is validly existing and in good
standing under the laws of the jurisdiction of its organization; and (ii) to the
best of our knowledge, all of the issued and outstanding shares of capital stock
of each Significant Subsidiary are owned of record by the Company, directly or
through other subsidiaries.
5. The deposit accounts of each of the bank subsidiary of the Company
are insured by the Federal Deposit Insurance Corporation up to the maximum
amount allowable under applicable law and, to the best of our knowledge, no
proceeding for the termination of such insurance is pending or threatened.
6. Each of the Company and its subsidiaries (i) is duly qualified to do
business as a foreign corporation and is in good standing under the laws of each
jurisdiction which requires such qualification wherein it owns or leases
properties or conducts business and (ii) holds all approvals, authorizations,
orders, licenses, certificates and permits from governmental authorities
necessary for the conduct of its business, except where the failure to be so
qualified or to hold such approvals, authorizations, orders, licenses,
certificates and/or permits would not, singularly or in the aggregate, have a
Material Adverse Effect.
7. No consent, approval, authorization or order of or filing,
registration or qualification with any Governmental Entity is required under any
law or regulation of the United States or the states in which the Company and
any bank subsidiary of the Company is organized in connection with the
authorization, execution, delivery and performance by the Company of the
Operative Documents or the Subordinated Debt Securities and the consummation of
the transactions contemplated thereby except as have already been obtained or
made.
8. Each of the Placement Agreement and the Subscription Agreement has
been duly authorized, executed and delivered by the Company and, assuming due
authorization, execution and delivery by the Placement Agent and the Purchaser,
respectively, constitutes a valid and binding instrument of the Company,
enforceable against the Company in accordance with its terms, except as rights
to indemnity and contribution thereunder may be limited under applicable law or
public policy, and subject to the qualifications that (i) enforcement thereof
may be limited by bankruptcy, insolvency, receivership, reorganization,
liquidation, voidable preference, moratorium or other laws (including the laws
of fraudulent conveyance and transfer)
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or judicial decisions affecting the enforcement of creditors' rights generally
or the reorganization of financial institutions and (ii) the enforceability of
the obligations of the Company thereunder is subject to general principles of
equity (regardless of whether such enforceability is considered in a proceeding
in equity or at law) and to the effect of certain laws and judicial decisions
upon the availability and enforceability of certain remedies, including the
remedies of specific performance and self-help.
9. The Declaration has been duly authorized, executed and delivered by
the Company and the Administrators.
10. Each of the Guarantee Agreement and the Indenture has been duly
authorized, executed, and delivered by the Company and, assuming due
authorization, execution and delivery by the Guarantee Trustee and the Indenture
Trustee, respectively, constitutes a valid and binding instrument of the
Company, enforceable against the Company in accordance with its terms, except as
rights to indemnity and contribution thereunder may be limited under applicable
law or public policy, and subject to the qualifications that (i) enforcement
thereof may be limited by bankruptcy, insolvency, receivership, reorganization,
liquidation, voidable preference, moratorium or other laws (including the laws
of fraudulent conveyance and transfer) or judicial decisions affecting the
enforcement of creditors' rights generally or the reorganization of financial
institutions and (ii) the enforceability of the Company's obligations thereunder
is subject to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law) and to the
effect of certain laws and judicial decisions upon the availability and
enforceability of certain remedies, including the remedies of specific
performance and self-help.
11. The Subordinated Debt Securities have been duly authorized,
executed, authenticated and delivered in accordance with the Indenture and
constitute valid and binding obligations of the Company and entitle the holders
thereof to the benefits of the Indenture, enforceable against the Company in
accordance with their terms, except as rights to indemnity and contribution
thereunder may be limited under applicable law or public policy, and subject to
the qualifications that (i) enforcement thereof may be limited by bankruptcy,
insolvency, receivership, reorganization, liquidation, voidable preference,
moratorium or other laws (including the laws of fraudulent conveyance and
transfer) or judicial decisions affecting the enforcement of creditors' rights
generally or the reorganization of financial institutions and (ii) the
enforceability of the Company's obligations thereunder is subject to general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law) and to the effect of certain laws and judicial
decisions upon the availability and enforceability of certain remedies,
including the remedies of specific performance and self-help.
12. The execution, delivery and performance of the Operative Documents,
the Subordinated Debt Securities and the Capital Securities, as applicable, by
the Company and the Trust and the consummation by the Company and the Trust of
the transactions contemplated by the Operative Documents, as applicable, will
not result in any violation of the charter or bylaws of the Company or any
subsidiary of the Company, the Declaration, the Trust Certificate, the terms of
any indenture or other agreement or instrument known to such counsel and to
which the Company or any of its subsidiaries is a party or bound or any
judgment, order or decree of any
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Governmental Entity having jurisdiction over the Company or any of its
subsidiaries, or any law or administrative regulation of any state applicable to
the Company or any of the subsidiaries.
13. Assuming (i) the accuracy of the representations and warranties,
and compliance with the agreements, contained in the Placement Agreement and the
Subscription Agreement and (ii) that the Capital Securities are sold in the
manner contemplated by, and in accordance with, the Placement Agreement, the
Subscription Agreement and the Declaration, it is not necessary in connection
with the offer, sale and delivery of the Capital Securities by the Trust to the
Purchaser and by the Purchaser to the Transferee to register the Capital
Securities, the Guarantee Agreement or the Subordinated Debt Securities under
the 1933 Act or to qualify an indenture under the Trust Indenture Act of 1939,
as amended.
14. Neither the Company nor the Trust is, and, following the issuance
of the Capital Securities and the consummation of the transactions contemplated
by the Operative Documents and the application of the proceeds therefrom,
neither the Company nor the Trust will be, an "investment company" or entity
"controlled" by an "investment company", in each case within the meaning of
Section 3(a) of the 1940 Act, without regard to Section 3(c) of such Act.
In rendering such opinions, such counsel may (A) state that its opinion is
limited to the laws of New York, the laws of the State of Indiana and the
Federal laws of the United States and (B) rely as to matters involving the
application of laws of any jurisdiction other than New York, Indiana or the
United States, to the extent deemed proper and specified in such opinion, upon
the opinion of other counsel of good standing believed to be reliable and who
are satisfactory to you and as to matters of fact, to the extent deemed proper,
on certificates of responsible officers of the Company and public officials.
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ANNEX B
Pursuant to Section 5(b) of the Placement Agreement, special Delaware
counsel for the Trust shall deliver an opinion in substantially the following
form:
1. The Trust has been duly formed and is validly existing in good
standing as a statutory trust under the Delaware Act.
2. The Declaration constitutes a valid and binding obligation of the
Sponsor and Trustees party thereto, enforceable against such Sponsor and
Trustees in accordance with its terms.
3. Under the Delaware Act and the Declaration, the Trust has the
requisite trust power and authority (i) to own its properties and conduct its
business, all as described in the Declaration, (ii) to execute and deliver, and
perform its obligations under, the Operative Documents to which it is a party,
(iii) to authorize, issue, sell and perform its obligations under its Capital
Securities and Common Securities, and (iv) to purchase and hold the Subordinated
Debt Securities.
4. The Capital Securities have been duly authorized for issuance by the
Trust and, when issued, executed and authenticated in accordance with the
Declaration and delivered against payment therefor in accordance with the
Declaration and the Subscription Agreement, will be validly issued and, subject
to the qualifications set forth in paragraph 5 below, fully paid and
nonassessable undivided beneficial interests in the assets of the Trust and the
holders of the Capital Securities will be entitled to the benefits provided by
the Declaration.
5. Each holder of Capital Securities, in such capacity, will be
entitled to the same limitation of personal liability extended to stockholders
of private corporations for profit organized under the General Corporation Law
of the State of Delaware. We note, however, that the holders of the Capital
Securities may be required to make payment or provide indemnity or security as
set forth in the Declaration.
6. Under the Declaration and the Delaware Act, the issuance of the
Capital Securities and Common Securities is not subject to preemptive rights.
7. The Common Securities have been duly authorized for issuance by the
Trust and, when issued and executed in accordance with the Declaration and
delivered against payment therefor in accordance with the Declaration and the
subscription agreement therefor, will be validly issued undivided beneficial
interests in the assets of the Trust and the holders of the Common Securities
will be entitled to the benefits provided by the Declaration.
8. Under the Declaration and the Delaware Act, the execution and
delivery by the Trust of the Operative Documents to which it is a party, and the
performance by the Trust of its obligations thereunder, have been duly
authorized by the requisite trust action on the part of the Trust.
9. The issuance and sale by the Trust of its Capital Securities and
Common Securities, the execution, delivery and performance by the Trust of the
Operative Documents to
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which it is a party, the consummation by the Trust of the transactions
contemplated by the Operative Documents to which it is party, and the compliance
by the Trust with its obligations thereunder are not prohibited by (i) the
Declaration or the Trust Certificate, or (ii) any law or administrative
regulation of the State of Delaware applicable to the Trust.
10. No authorization, approval, consent or order of any Delaware court
or Delaware governmental authority or Delaware agency is required to be obtained
by the Trust solely in connection with the issuance and sale by the Trust of its
Capital Securities and Common Securities, the due authorization, execution and
delivery by the Trust of the Operative Documents to which it is a party or the
performance by the Trust of its obligations under the Operative Documents to
which it is a party.
11. The holders of the Capital Securities (other than those holders who
reside or are domiciled in the State of Delaware) will have no liability for
income taxes imposed by the State of Delaware solely as a result of their
participation in the Trust, and the Trust will not be liable for any income tax
imposed by the State of Delaware.
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ANNEX C
Pursuant to Section 5(c) of the Placement Agreement, special tax counsel for the
Offerors shall deliver an opinion in substantially the following form:
We have acted as special tax counsel to Horizon Bancorp, an Indiana
corporation (the "Company"), in connection with the offering by Horizon Bancorp
Capital Trust II (the "Trust") of 10,000 MMCapS(SM) (liquidation amount $1,000
per capital security) (the "Capital Securities"). This opinion letter is
furnished pursuant to Section 5(c) of the Placement Agreement, dated October 21,
2004, between the Company, the Trust and you.
In arriving at the opinions expressed below we have examined executed
copies of (i) the Amended and Restated Declaration of Trust of the Trust dated
the date hereof (the "Declaration"), and (ii) the Indenture relating to the
issuance of the Floating Rate Junior Subordinated Debt Securities due 2034 (the
"Subordinated Debt Securities"), dated as of the date hereof (the "Indenture")
(together, the "Operative Documents"). In addition, we have made such
investigations of law and fact as we have deemed appropriate as a basis for the
opinion expressed below.
It is our opinion that, under current law and assuming the performance
of the Operative Documents in accordance with the terms described therein, the
Subordinated Debt Securities will be treated for United States federal income
tax purposes as indebtedness of the Company.
It is our opinion that the Trust will be classified for United States
federal income tax purposes as a grantor trust and not as an association taxable
as a corporation.
Our opinion is based on the U.S. Internal Revenue Code of 1986, as
amended, Treasury regulations promulgated thereunder, and administrative and
judicial interpretations thereof, all as of the date hereof and all of which are
subject to change, possibly on a retroactive basis. In rendering this opinion,
we are expressing our views only as to the federal income tax laws of the United
States of America.
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ANNEX D
Pursuant to Section 5(d) of the Placement Agreement, counsel to the
Guarantee Trustee, the Institutional Trustee, the Delaware Trustee and the
Indenture Trustee shall deliver an opinion in substantially the following form:
1. Wilmington Trust Company ("WTC") is a Delaware banking corporation
with trust powers, duly incorporated, validly existing and in good standing
under the laws of the State of Delaware, with requisite corporate power and
authority to execute and deliver, and to perform its obligations under, the
Declaration, the Guarantee Agreement and the Indenture (collectively, the
"Transaction Documents").
2. The execution, delivery, and performance by WTC of the Transaction
Documents have been duly authorized by all necessary corporate action on the
part of WTC, and the Transaction Documents have been duly executed and delivered
by WTC.
3. The execution, delivery and performance of the Transaction Documents
by WTC and the consummation of any of the transactions by WTC contemplated
thereby are not prohibited by (i) the charter or bylaws of WTC, (ii) any law or
administrative regulation of the State of Delaware or the United States of
America governing the banking and trust powers of WTC, or (iii) to our knowledge
(based and relying solely on the Officer Certificates), any agreements or
instruments to which WTC is a party or by which WTC is bound or any judgments or
order applicable to WTC.
4. The Subordinated Debt Securities delivered on the date hereof have
been authenticated by due execution thereof and delivered by WTC, as Indenture
Trustee, in accordance with the Indenture. The Capital Securities delivered on
the date hereof have been authenticated by due execution thereof and delivered
by WTC, as Institutional Trustee, in accordance with the Declaration.
5. None of the execution, delivery and performance by WTC of the
Transaction Documents and the consummation of any of the transactions by WTC
contemplated thereby requires the consent, authorization, order or approval of,
the withholding of objection on the part of, the giving of notice to, the
registration with or the taking of any other action in respect of, any
governmental authority or agency, under any law or administrative regulation of
the State of Delaware or the United States of America governing the banking and
trust powers of WTC, except for the filing of the Trust Certificate with the
Office of the Secretary of State of the State of Delaware pursuant to the
Delaware Act (which filing has been duly made).
D-1
ANNEX E
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS OR ANY OTHER
APPLICABLE SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR
UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER OF THIS SECURITY OR ANY INTEREST
OR PARTICIPATION HEREIN, BY ITS ACCEPTANCE HEREOF OR THEREOF, AS THE CASE MAY
BE, HEREIN AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY OR ANY
INTEREST OR PARTICIPATION HEREIN PRIOR TO THE DATE WHICH IS THE LATER OF (i) TWO
YEARS (OR SUCH SHORTER PERIOD OF TIME AS PERMITTED BY RULE 144(k) UNDER THE
SECURITIES ACT) AFTER THE LATER OF (Y) THE DATE OF ORIGINAL ISSUANCE HEREOF AND
(Z) THE LAST DATE ON WHICH THE TRUST OR ANY AFFILIATE (AS DEFINED IN RULE 405
UNDER THE SECURITIES ACT) OF THE TRUST WAS THE HOLDER OF THIS SECURITY OR SUCH
INTEREST OR PARTICIPATION (OR ANY PREDECESSOR THERETO) AND (ii) SUCH LATER DATE,
IF ANY, AS MAY BE REQUIRED BY ANY SUBSEQUENT CHANGE IN APPLICABLE LAW, ONLY (A)
TO THE DEBENTURE ISSUER OR THE TRUST, (B) PURSUANT TO RULE 144A UNDER THE
SECURITIES ACT ("RULE 144A"), TO A PERSON THE HOLDER REASONABLY BELIEVES IS A
"QUALIFIED INSTITUTIONAL BUYER," AS DEFINED IN RULE 144A, THAT PURCHASES FOR ITS
OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE
IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (C) PURSUANT
TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT TO AN
"ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (a) (1), (2), (3), (7)
OR (8) OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THIS SECURITY OR
SUCH INTEREST OR PARTICIPATION FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH
AN ACCREDITED INVESTOR, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR
OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE
SECURITIES ACT, (D) PURSUANT TO OFFERS AND SALES TO NON-US PERSONS THAT OCCUR
OUTSIDE THE UNITED STATES PURSUANT TO REGULATION S UNDER THE SECURITIES ACT OR
(E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT, SUBJECT TO THE RIGHT OF THE DEBENTURE ISSUER AND THE
TRUST PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (C) OR (E)
ABOVE TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR
OTHER INFORMATION SATISFACTORY TO EACH OF THEM IN ACCORDANCE WITH THE AMENDED
AND RESTATED DECLARATION OF TRUST, A COPY OF WHICH MAY BE OBTAINED FROM THE
DEBENTURE ISSUER OR THE TRUST. THE HOLDER OF THIS SECURITY OR ANY INTEREST OR
PARTICIPATION HEREIN, BY ITS ACCEPTANCE HEREOF OR THEREOF, AS THE
B-2
CASE MAY BE, AGREES THAT IT WILL COMPLY WITH THE FOREGOING RESTRICTIONS.
THE HOLDER OF THIS SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN, BY
ITS ACCEPTANCE HEREOF OR THEREOF, AS THE CASE MAY BE, ALSO AGREES, REPRESENTS
AND WARRANTS THAT IT IS NOT AN EMPLOYEE BENEFIT, INDIVIDUAL RETIREMENT ACCOUNT
OR OTHER PLAN OR ARRANGEMENT SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE") (EACH A "PLAN"), OR AN
ENTITY WHOSE UNDERLYING ASSETS INCLUDE "PLAN ASSETS" BY REASON OF ANY PLAN'S
INVESTMENT IN THE ENTITY AND NO PERSON INVESTING "PLAN ASSETS" OF ANY PLAN MAY
ACQUIRE OR HOLD THIS SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN, UNLESS
SUCH PURCHASER OR HOLDER IS ELIGIBLE FOR THE EXEMPTIVE RELIEF AVAILABLE UNDER
U.S. DEPARTMENT OF LABOR PROHIBITED TRANSACTION CLASS EXEMPTION 96-23, 95-60,
91-38, 90-1 OR 84-14 OR ANOTHER APPLICABLE EXEMPTION OR ITS PURCHASE AND HOLDING
OF THIS SECURITY OR SUCH INTEREST OR PARTICIPATION IS NOT PROHIBITED BY SECTION
406 OF ERISA OR SECTION 4975 OF THE CODE WITH RESPECT TO SUCH PURCHASE OR
HOLDING. ANY PURCHASER OR HOLDER OF THIS SECURITY OR ANY INTEREST OR
PARTICIPATION HEREIN WILL BE DEEMED TO HAVE REPRESENTED BY ITS PURCHASE AND
HOLDING HEREOF OR THEREOF, AS THE CASE MAY BE, THAT EITHER (i) IT IS NOT AN
EMPLOYEE BENEFIT PLAN WITHIN THE MEANING OF SECTION 3(3) OF ERISA, OR A PLAN TO
WHICH SECTION 4975 OF THE CODE IS APPLICABLE, A TRUSTEE OR OTHER PERSON ACTING
ON BEHALF OF AN EMPLOYEE BENEFIT PLAN OR PLAN, OR ANY OTHER PERSON OR ENTITY
USING THE ASSETS OF ANY EMPLOYEE BENEFIT PLAN OR PLAN TO FINANCE SUCH PURCHASE,
OR (ii) SUCH PURCHASE AND HOLDING WILL NOT RESULT IN A PROHIBITED TRANSACTION
UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE FOR WHICH THERE IS NO
APPLICABLE STATUTORY OR ADMINISTRATIVE EXEMPTION.
IN CONNECTION WITH ANY TRANSFER, THE HOLDER OF THIS SECURITY WILL
DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER
INFORMATION AS MAY BE REQUIRED BY THE AMENDED AND RESTATED DECLARATION OF TRUST
TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.
THIS SECURITY WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN BLOCKS
HAVING A LIQUIDATION AMOUNT OF NOT LESS THAN $100,000 AND MULTIPLES OF $1,000 IN
EXCESS THEREOF. ANY ATTEMPTED TRANSFER OF THIS SECURITY IN A BLOCK HAVING A
LIQUIDATION AMOUNT OF LESS THAN $100,000 SHALL BE DEEMED TO BE VOID AND OF NO
LEGAL EFFECT WHATSOEVER. ANY SUCH PURPORTED TRANSFEREE SHALL BE DEEMED NOT TO BE
THE HOLDER OF THIS SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN FOR ANY
PURPOSE, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON
B-3
THIS SECURITY OR SUCH INTEREST OR PARTICIPATION, AND SUCH PURPORTED TRANSFEREE
SHALL BE DEEMED TO HAVE NO INTEREST WHATSOEVER IN THIS SECURITY OR ANY INTEREST
OR PARTICIPATION HEREIN.
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