EXHIBIT 1
RIVER VALLEY BANCORP
765,000 to 1,035,000 Shares
of
COMMON STOCK
(without par value)
Subscription Price $10.00 Per Share
SALES AGENCY AGREEMENT
________, 1996
Trident Securities, Inc.
Xxxxx 000
0000 Xxx Xxxxx Xxxx
Xxxxxxx, Xxxxx Xxxxxxxx 00000
Gentlemen:
River Valley Bancorp, a corporation formed under the laws of Indiana
(hereinafter referred to as the "Company"), and Madison First Federal Savings
and Loan Association, a federal savings and loan association formed under the
laws of the United States (hereinafter referred to as the "Association"), hereby
confirm their respective agreements with Trident Securities, Inc., a corporation
formed under the laws of North Carolina (hereinafter referred to as "Trident")
as follows:
1. The Offering. The Company was incorporated on May 22, 1996, for the
purpose of serving as a savings and loan holding company and a bank holding
company which will own of record all of the shares of common stock to be issued
by the Association in the conversion of the Association from the mutual form to
the capital stock form of organization (hereinafter referred to as the
"Conversion") pursuant to a Plan of Conversion adopted by the Board of Directors
of the Association on March 5, 1996 (hereinafter referred to as the "Plan of
Conversion"), and in accordance with the regulations of the Office of Thrift
Supervision (hereinafter referred to as the "OTS"). As set forth in the Plan of
Conversion, the Company intends to conduct a subscription offering in which a
minimum of 765,000 and a maximum of 1,035,000 shares (subject to a possible
increase to 1,190,250 shares) of common stock of the Company, without par value
(hereinafter referred to as the "Shares"), will be offered to certain
eligible subscribers at a purchase price of $10.00 per Share (hereinafter
referred to as the "Subscription Offering") in accordance with the terms and
subject to the conditions of the Plan of Conversion and the Prospectus (as
hereinafter defined). Simultaneously with the Subscription Offering, the Company
intends to offer the Shares to the public in a direct community offering
(hereinafter referred to as the "Community Offering").
In a transaction which is currently expected to occur simultaneously
with the consummation of the Conversion, the Company will acquire 120,429 shares
of common stock, $8.00 par value per share, of Citizens National Bank of Madison
("Citizens"), a national banking association (the "Citizens Shares"), which
constitute 95.6% of Citizens' issued and outstanding capital stock, pursuant to
the terms of an Amended and Restated Stock Purchase Agreement dated March 4,
1996 ("Purchase Agreement"). The Company's acquisition of the Citizens Shares
pursuant to the Purchase Agreement is hereinafter referred to as the
"Acquisition." Upon consummation of the Acquisition, the Company will own of
record the Citizens Shares and will act as the bank holding company of Citizens.
The Association and Citizens are hereinafter referred to as the
"Institutions."
The Company has been advised by Trident that Trident will utilize its
best efforts to assist the Company and the Association in the completion of the
Conversion and to assist the Company and the Association with the sale of the
Shares in the Subscription Offering and in the Community Offering. At the time
of the execution of this Sales Agency Agreement (hereinafter referred to as this
"Agreement"), the Company delivered to Trident the Prospectus for use in the
Subscription Offering and in the Community Offering. The Prospectus contains
information with respect to the Company, the Institutions and the Shares.
2. Representations and Warranties. The Company and the Association,
jointly and severally, represent and warrant to Trident that:
(a) The Company has filed with the Securities and Exchange Commission
(hereinafter referred to as the "Commission") a Registration Statement on Form
S-1 (Registration No. 333- 5121) and an amendment or amendments thereto, in
respect of the registration of the Shares under the Securities Act of 1933, as
amended (hereinafter referred to as the "Act"). The Registration Statement
complies in all material respects with the Act and the Regulations (as
hereinafter defined). The Registration Statement became effective under the Act
on ___________________, and no stop order has been issued with respect thereto
and no proceedings therefor have been initiated or, to the knowledge of the
Company, threatened by the Commission. Except as the context may otherwise
require, such Registration Statement, as amended, on file with the Commission at
the time the Registration Statement became effective, including the Prospectus,
financial statements, schedules, exhibits and all other documents filed as part
thereof, is herein referred to as the "Registration Statement" and the
Prospectus on file with the Commission at the time the Registration Statement
became effective is herein referred to as the "Prospectus"; provided, however,
that if the prospectus filed by the Company with the Commission pursuant to Rule
424(b) of the rules and regulations of the Commission promulgated
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under the Act (herein referred to as the "Regulations") differs from the form of
Prospectus on file at the time the Registration Statement became effective, the
term "Prospectus" shall refer to the Rule 424(b) prospectus from and after the
time such prospectus is filed with or mailed for filing to the Commission and
shall include any amendments or supplements thereto from and after their dates
of effectiveness or use, respectively.
(b) The Association has filed with the OTS an Application for Approval
of Conversion on Form AC, including exhibits and amendments and/or supplements
thereto (hereinafter referred to as the "Form AC"). The Form AC complies in all
material respects with the rules and regulations of the OTS. The Form AC has
been approved by the OTS and such approval is in full force and effect. The
Proxy Statement, which is included in the Form AC as Form PS, and the
Prospectus, which is included in the Form AC as Form OC, have been approved for
use by the OTS and such approval is in full force and effect. No order has been
issued by the OTS preventing or suspending the use of such Proxy Statement or
the Prospectus. No action by or before the OTS revoking such approvals or orders
of effectiveness is pending or, to the knowledge of the Association, threatened.
(c) The Company has filed with the OTS an Application on Form H-(e)l-S,
including exhibits and amendments and/or supplements thereto (hereinafter
referred to as the "Form H-(e)l-S"), for approval of the acquisition of the
common stock to be issued by the Association in connection with the Conversion.
The Form H-(e)l-S complies in all material respects with the rules and
regulations of the OTS. On the Closing Date (hereinafter defined), the Form
H-(e)l-S and the acquisition by the Company of all of the common stock of the
Association to be issued by the Association in connection with the Conversion
will each have received the approval of the OTS.
(d) The Company has filed with the Board of Governors of the Federal
Reserve Board ("FRB") an Application To Form Holding Company on Form FR Y-3,
including exhibits and amendments and/or supplements thereto (hereinafter
referred to as the "Form FR Y-3"), to become a bank holding company and for
approval of the acquisition of the Citizens Shares pursuant to the Purchase
Agreement. The Form FR Y-3 complies in all material respects with the Bank
Holding Company Act ("BHCA"), the rules and regulations promulgated thereunder
or any other applicable rules or regulations of the FRB. On the Closing Date
(hereinafter defined), the Form FR Y-3 and the acquisition by the Company of the
Citizens Shares pursuant to the Purchase Agreement will each have received the
approval of the FRB. No action by or before the FRB revoking such approvals or
orders of effectiveness is pending or, to the knowledge of the Company,
threatened.
(e) As of the effective date, the Registration Statement (as amended or
supplemented, if amended or supplemented) did not contain any 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 light of the
circumstances under which they were made, not misleading. As of the date of the
Prospectus, the Prospectus (as amended or supplemented, if amended or
supplemented) did not contain any untrue statement of a material fact or omit to
state any material fact required to
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be stated therein or necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading. Representations or
warranties in this subparagraph (e) shall not apply to statements or omissions
which relate to Trident and which were made in reliance upon and in conformity
with written information furnished to the Company or the Association by or on
behalf of Trident expressly for use in the Registration Statement and/or the
Prospectus.
(f) The Company is a corporation duly organized and validly existing
under the laws of the State of Indiana with full power and authority to own its
properties and conduct its business as set forth in the Prospectus. The Company
has all necessary corporate power and authority to enter into this Agreement, to
perform all of its obligations hereunder and to consummate the transactions
contemplated hereby. The Company has obtained all licenses, permits and other
governmental authorizations currently required for the conduct of its business,
all of which are in full force and effect, and the Company is in all material
respects complying therewith.
(g) The Association is a mutual savings association duly organized,
validly existing and in good standing under the laws of the United States with
full power and authority to own its properties and conduct its business as set
forth in the Prospectus and is a member in good standing of the Federal Home
Loan Bank of Indianapolis. The Association has all necessary corporate power and
authority to enter into this Agreement, to perform all of its obligations
hereunder and to consummate the transactions contemplated hereby. The deposit
accounts of the Association are insured up to applicable limits by the Federal
Deposit Insurance Corporation (hereinafter referred to as the "FDIC"). The
Association has obtained all licenses, permits and other governmental
authorizations currently required for the conduct of its business, all of which
are in full force and effect, and the Association is in all material respects
complying therewith.
(h) The Plan of Conversion has been adopted by the Boards of Directors
of the Association and the Company and, before the Closing Date, will be adopted
by the members of the Association. As of the date of this Agreement, no person
has sought to obtain review of the final action of (i) the OTS in approving the
Plan of Conversion, the Conversion or the Form H-(e)1-S pursuant to the Home
Owners' Loan Act ("HOLA"), as amended, or any other statute or regulation or
(ii) the FRB in approving the Company's application to acquire the Citizens
Shares or the Form FR Y-3 pursuant to the BHCA or any other applicable rule or
regulation.
(i) Upon the effectiveness of the amendment of the Association's
Charter and Bylaws in accordance with the rules and regulations of the OTS, and
the completion of the sale by the Company of the Shares as contemplated by the
Prospectus and the Plan of Conversion, (i) the Association will be converted
pursuant to the Plan of Conversion to a capital stock savings and loan
association duly organized, validly existing and in good standing under the laws
of the United States with full power and authority to own its property and
conduct its business as described in the Prospectus; (ii) all of the outstanding
capital stock of the Association will be owned of record and beneficially by the
Company, free and clear of all liens, charges, encumbrances or restrictions, and
(iii) the Company will have no directly-owned wholly-owned subsidiaries other
than the Association (and Citizens, if the Acquisition closes on the date of
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consummation of the Conversion) and will own no equity securities in any entity
or business enterprise other than the shares of the Association, the Citizens
Shares and the shares of the Subsidiaries (as hereinafter defined) or as
otherwise disclosed in the Prospectus.
(j) Each of the Company and the Association is duly qualified and in
good standing as a foreign corporation in all jurisdictions in which the conduct
of its business requires such qualification or, if not so qualified and in good
standing, failure to so qualify would not have any material adverse effect on
either the Company or the Association.
(k) The Subsidiaries (as hereinafter defined) are the wholly-owned
direct or indirect subsidiaries of the Association. The Subsidiaries have been
duly organized and are validly existing and in good standing under the laws of
the State of Indiana with full power and authority to own their properties and
conduct their businesses as described in the Prospectus, and the Subsidiaries
are not required to be qualified to do business as foreign corporations in any
jurisdiction where non-qualification would have a material adverse effect on the
Association, the Subsidiaries and the Company taken as a whole. Each of the
Subsidiaries hold all material licenses, certificates and permits from
governmental authorities necessary for the conduct of its business as described
in the Prospectus, and all such licenses, certificates and permits are in full
force and effect and the Subsidiaries are in all material respects complying
therewith. All of the outstanding stock of the Subsidiaries has been duly
authorized and is fully paid and nonassessable, and such stock is owned directly
or indirectly by the Association free and clear of any liens or encumbrances.
The activities of the Subsidiaries are permitted to subsidiaries of a federally
chartered savings association by virtue of the applicable rules and regulations
of the OTS and Indiana law (except as to such specific exceptions as may have
been granted by any of such agencies); provided, however, that the operations of
the Subsidiaries may require divestiture as a result of the Holding Company's
acquisition of the Citizens Shares. The Subsidiaries have good and marketable
title to all assets material to their businesses and to those assets described
in the Prospectus, if any, free and clear of all material liens, charges,
encumbrances or restrictions.
(l) Each of the Company and the Association has good, marketable and
insurable title to all assets material to their respective businesses and to
those assets described in the Prospectus as owned by the Company or the
Association, free and clear of all material liens, charges, encumbrances or
restrictions, except as set forth in the Prospectus. All of the leases and
subleases material to the business of the Company and the Association under
which any one of them holds properties, including those set forth in the
Prospectus, are in full force and effect as described therein.
(m) This Agreement has been duly and validly authorized, executed and
delivered by each of the Company and the Association and constitutes the valid
and legally binding obligation of each of the Company and the Association,
enforceable against each of them in accordance with its terms, except as may be
limited by bankruptcy, insolvency, reorganization, moratorium, receivership,
conservatorship or other laws affecting creditors' rights generally and as may
be limited by the exercise of judicial discretion in applying principles of
equity and except as the
5
obligations of the Company and the Association under the indemnization and
contribution provisions of Sections 7 and 8 hereof may be unenforceable or
against public policy.
(n) The Conversion will constitute a tax free reorganization under the
Internal Revenue Code of 1986, as amended, and will not be a taxable transaction
under the laws of Indiana to the Association or to persons receiving
subscription rights in accordance with the Plan of Conversion. The Association
and Trident have received the opinion of Xxxxxx & Xxxxxxxxx, special counsel to
the Association, with respect to the federal and Indiana state tax consequences
of the Conversion, a copy of which is included as Exhibit 8(1) to the
Registration Statement. The facts relied upon by such counsel as set forth in
such opinion are accurate and complete as of the date of such opinion.
(o) Each of the Company and the Association has all such power,
authority, authorizations, approvals and orders as may be required to enter into
this Agreement and to carry out the terms and conditions hereof. Without
limiting the generality of the foregoing sentence, the Company has the power,
authority, authorizations, approvals and orders to issue and sell the Shares to
be sold by the Company in accordance with this Agreement and the Association has
the power, authority, authorizations, approvals and orders to issue and sell the
shares of its capital stock to the Company as provided in the Plan of
Conversion, subject to the issuance to the Association of an amended Charter in
the form required for a federal stock savings and loan association (hereinafter
referred to as the "Stock Charter"). The form of the Stock Charter has been
approved by the OTS.
(p) Each of the Company and the Association has all such power,
authority, authorizations, approvals and orders as may be required to enter into
the Purchase Agreement and to carry out the terms and conditions thereof.
Without limiting the generality of the foregoing sentence, the Company and the
Association have the power, authority, authorizations, approvals and orders to
acquire the Citizens Shares in accordance with the Purchase Agreement and the
Company has the power, authority, authorizations, approvals and orders to become
the bank holding company for Citizens as provided in the Form FR Y-3. The
obligations of the Purchase Agreement constitute a valid and legally binding
obligation of each of the Company and the Association, enforceable against each
of them in accordance with its terms, except as may be limited by bankruptcy,
insolvency, reorganization, moratorium, receivership, conservatorship or other
laws affecting creditors' rights generally and as may be limited by the exercise
of judicial discretion in applying principles of equity.
(q) Neither the Company nor the Association is in violation of any rule
or regulation of the Commission, the OTS or the FDIC which might materially and
adversely affect the condition (financial or otherwise), operations, businesses,
assets or properties of the Company or the Association. The Association is not
subject to any directive from the OTS or the FDIC (or their predecessors) to
make any change in the method of conducting its business or affairs and has
conducted its business in material compliance with all applicable statutes and
regulations (including, without limitation, all regulations, decisions,
directives and order of the FHLB of Indianapolis, the OTS and the FDIC, or their
predecessors). Except as set forth in the
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Prospectus, there is not pending or, to the knowledge of the Company or the
Association, threatened any litigation, charge, investigation, action, suit or
proceeding before or by any court, regulatory authority or governmental agency
or body which, individually or in the aggregate, might affect the performance of
the terms and conditions of this Agreement or the consummation of the
transactions contemplated hereby or which, individually or in the aggregate,
might result in any material adverse change in the condition (financial or
otherwise), business, prospects or results of operations of the Company or the
Institutions considered as one enterprise.
(r) The financial statements of the Association which are included in
the Registration Statement and are part of the Prospectus fairly present the
statements of financial condition, statements of income, statements of changes
in equity capital and statements of cash flows of the Association and its
wholly-owned subsidiaries, Madison First Service Corporation and XxXxxxxx
Insurance Agency, Inc. ("Subsidiaries") at the respective dates thereof and for
the respective periods covered thereby and comply in all material respects with
the applicable accounting requirements of the Commission and the OTS. Such
financial statements have been prepared in accordance with generally accepted
accounting principles consistently applied throughout the periods involved
except as specifically noted in such financial statements, and are true,
complete and correct and fairly present the financial position of the
Association. The tabular information in the Prospectus accurately presents the
information purported to be shown thereby at the respective dates and for the
respective periods covered thereby.
(s) There has been no material adverse change in the condition
(financial or otherwise) of the Company or the Association or in the assets,
properties, operations, earnings or business prospects of the Company or the
Association since the latest date as of which such condition is set forth in the
Prospectus, except as referred to therein. The capitalization, assets,
properties and business of each of the Company and the Association conform in
all material respects to the descriptions thereof contained in the Prospectus as
of the date specified and, since such date, there has been no material adverse
change in either the condition (financial or otherwise) of the Company or the
Association or in the assets, properties, operations, earnings or business
prospects of the Company or the Association, except as referred to therein.
Neither the Company nor the Association has any material contingent liabilities
of any kind, except as set forth in the Prospectus.
(t) No material default exists, and no event has occurred which, with
notice or lapse of time, or both, would constitute a default, on the part of
either the Company or the Association or, to their knowledge, on the part of any
other party, including Citizens, in the due performance and observance of any
term, covenant or condition of any agreement which is material to the condition
(financial or otherwise) of the Company or the Association. Such agreements are
in full force and effect, and no other party to any such agreement has
instituted or, to their knowledge, threatened any action or proceeding wherein
the Company or the Association would or might be alleged to be in default
thereunder.
(u) Neither the Company nor the Association is in violation of their
respective charter, articles of incorporation, code of bylaws or bylaws or in
default in any material respect in the
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performance of any material obligation, agreement or condition contained in any
bond, debenture, note or any other evidence of indebtedness by which it is
bound. The execution, delivery and fulfillment of the terms of this Agreement
and the consummation of the transactions contemplated hereby do not and will not
violate or conflict with the respective charter, articles of incorporation, code
of bylaws or bylaws of the Company or the Association or, in any material
respect, violate, conflict with or constitute a breach of, or default (or an
event which, with notice or lapse of time, or both, would constitute a default)
under any agreement, indenture or other instrument by which the Company or the
Association is bound, or under any governmental license or permit or any law,
administrative regulation or authorization, approval, order or court decree,
injunction or order to which the Company or the Association is subject.
(v) Subsequent to the respective dates as of which information is given
in the Prospectus and prior to the Closing Date (hereinafter defined), except as
otherwise may be indicated or contemplated therein, neither the Company nor the
Association will issue any securities or incur any liability or obligation,
direct or contingent, for borrowed money, except borrowings from the Federal
Home Loan Bank of Indianapolis and other borrowings in the ordinary course of
business, or enter into any other transaction not in the ordinary course of
business which is material in light of the businesses and properties of the
Company or the Institutions considered as one enterprise.
(w) No equity or debt securities of the Company have ever been issued
or are outstanding. Upon the consummation of the Conversion, the authorized,
issued and outstanding equity capital of the Company shall be as set forth in
the Prospectus under the caption "Capitalization," adjusted to give effect to
the actual sale of the Shares. The offer, sale and issuance of the Shares have
been duly authorized by all necessary action of the Company and approved by the
OTS. When issued in accordance with the terms of the Plan of Conversion, the
Shares will be validly issued, fully paid and nonassessable, will conform to the
description thereof set forth in the Prospectus and will be issued in full
compliance with all securities laws applicable to the Company or the
Association. The issuance of the Shares is not subject to preemptive rights.
Good title to the Shares will be transferred to the purchasers thereof upon
issuance thereof against payment therefor, free and clear of all claims,
encumbrances, security interests and liens created by the Company or the
Association. The certificates evidencing the Shares will conform with the
requirements of applicable laws and regulations.
(x) No equity securities of the Association have ever been issued or
are outstanding. The sale and issuance of the capital stock of the Association
to the Company have been duly authorized by all necessary action of the
Association and the Company and approved by the OTS. Immediately after the
Closing Date, the authorized capital of the Association will consist of 1,000
shares of common stock, par value $.01 per share, 1,000 of which will be issued
to and held of record by the Company, and 1,000,000 shares of preferred stock,
par value $1.00 per share, none of which will be issued or outstanding. When
issued to the Company in accordance with the terms of the Plan of Conversion,
such shares of common stock will be validly issued, fully paid and nonassessable
and will be issued in full compliance with all securities laws applicable to the
Association or the Company. There are no preemptive rights
8
or rights to subscribe for or to purchase any securities of the Association.
None of the shares of such capital stock will be issued in violation of any
rights of any member of the Association. Good title to such capital stock will
be transferred to the Company upon issuance thereof against the payment to the
Association of all but 60% of the net proceeds of the sale of the Shares, after
giving effect to the loan to be made by the Holding Company to its employee
stock ownership plan (the "ESOP Loan"), in cash, free and clear of all claims,
encumbrances, security interests and liens whatsoever. Upon the consummation of
the Conversion, the liquidation account will be duly established in accordance
with the requirements of the OTS and the Plan of Conversion.
(y) At the Closing Date, the Company and the Association will have
satisfied all conditions precedent to, and conducted the Conversion in all
material respects in accordance with the Plan of Conversion, the Regulations and
all other applicable laws, regulations, decisions and orders, including all
terms, conditions, requirements and conditions precedent to the consummation of
the transactions contemplated by the Plan of Conversion, the Acquisition, the
approval of the Form AC and the Form H-(e)l-S imposed upon them by the OTS.
(z) At the Closing Date, the Company and the Association will have
satisfied all conditions precedent to, and conducted the Acquisition in all
material respects in accordance with the Purchase Agreement, the Form FR Y-3,
and all other applicable laws, regulations, decisions and orders, including all
terms, conditions, requirements and provisions precedent to the consummation of
the Acquisition and the approval of the Form FR Y-3 imposed upon them by the
FRB.
(aa) Upon consummation of the Acquisition, the purchase of the
Citizens Shares by the Company, the authorized capital stock of Citizens will
consist of 150,000 shares of common stock, par value $8.00 per share, 120,429 of
which will be owned of record and held by the Company. When purchased by the
Company in accordance with the terms of the Purchase Agreement, the Citizens
Shares will be validly issued, fully paid and nonassessable and will be held by
the Company in full compliance with all applicable securities laws. There are no
preemptive rights or rights to subscribe for or to purchase any securities of
Citizens. Good title to the Citizens Shares will be transferred to the Company
upon issuance thereof against the payment pursuant to the Purchase Agreement of
$3,010,715 of the gross proceeds of the sale of the Shares, in cash, free and
clear of all claims, encumbrances, security interests and liens whatsoever.
(bb) Appropriate arrangements for placing the funds received
from subscriptions for Shares in special interest-bearing accounts with the
Association until all Shares are sold and paid for (hereinafter referred to as
the "Escrow Account") were made before the commencement of the Subscription
Offering, with provision (i) for prompt refund to the subscribers if the minimum
number of Shares is not sold within the period prescribed by the Plan of
Conversion and Prospectus or if the transactions contemplated by the Prospectus
and Plan of Conversion are otherwise not consummated or (ii) for delivery to the
Company if the minimum number of Shares is sold and the transactions
contemplated by the Prospectus and Plan of Conversion are consummated.
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(cc) No approval of any regulatory or supervisory or other
public authority is required in connection with the execution and delivery of
this Agreement or the issuance and sale of the Shares, except (i) the approval
of the OTS and FRB, (ii) the declaration of effectiveness of any required
post-effective amendment to the Registration Statement by the Commission and
approval thereof by the OTS, (iii) the issuance to the Association of the Stock
Charter by the OTS, (iv) the approval of the Form H-(e)1-S, (v) the approval by
the National Association of Securities Dealers, Inc. (the "NASD") of the
fairness of the compensation to be paid to Trident pursuant to this Agreement,
(ii) the approval of the Form FR Y-3, (vii) the listing of the Shares on the
NASDAQ Small Cap Market, and (viii) as may be otherwise required under the
securities laws of various jurisdictions.
(dd) All contracts and other documents required to be filed as
exhibits to the Registration Statement, the Form AC, the Form H-(e)1-S and/or
the Form FR Y-3 have been filed with the Commission, the OTS and/or the FRB.
(ee) Xxxxx Xxxxxxxx LLP, the public accounting firm which has
certified the financial statements and supporting schedules of the Association
included in the Prospectus, are independent certified public accountants within
the meaning of the Code of Professional Ethics of the American Institute of
Certified Public Accountants ("AICPA") and 12 C.F.R. ss. 571.2(c)(3). Xxxxxxx,
Xxxxxx & Xxxxxxxx and Xxxxxxxxx X. Xxxx & Co., the public accounting firms which
have certified the financial statements and supporting schedules of Citizens
included in the Prospectus, are independent certified public accountants within
the meaning of the Code of Professional Ethics of the AICPA and 12 C.F.R. ss.
571.2(c)(3).
(ff) Each of the Company and the Association has (i) timely
filed all required federal, state and foreign tax returns and no deficiency has
been asserted with respect to such returns by any taxing authorities, (ii) paid
all taxes that have become due and (iii) made adequate reserves for similar
future tax liabilities.
(gg) The records of account holders, depositors, borrowers and
other members of the Association delivered to Trident by the Association or its
agent for use during the Conversion are reliable and accurate.
(hh) The Association has not engaged in any transaction in
connection with which the Association or the Company could be subject to either
a civil penalty assessed pursuant to Section 502(i) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), or a tax imposed by Section
4975 of the Internal Revenue Code of 1986, as amended. No material liability to
the Pension Benefit Guaranty Corporation has been or is expected by the
Association to be incurred by the Company or the Association with respect to any
pension plan subject to ERISA (a "Pension Plan"). There has been no "reportable
event" (within the meaning of Section 4043(b) of ERISA) with respect to any
Pension Plan and no event or condition which presents a material risk of the
termination of any Pension Plan by the Pension Benefit Guaranty Corporation.
Full payment has been made of all amounts which the Association is required,
under the terms of any Pension Plan, to have paid as contributions to
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such Pension Plan as of the date hereof, and no "accumulated funding deficiency"
(as defined in Section 302 of ERISA and Section 412 of the Code), whether or not
waived, exists with respect to any Pension Plan.
(ii) Xxxxxx & Company, Inc. (the "Appraiser"), the corporation
which prepared an appraisal of the estimated pro forma fair market value of the
Company and the Association, has advised the Company, the Association and
Citizens that the Appraiser is independent with respect to each of them within
the meaning of the Conversion Regulations.
(jj) The Company and the Association are in compliance with
all laws, rules and regulations relating to environmental protection, and
neither the Company nor the Association has any reason to believe that the
Company or the Association is subject to liability under the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended, or
any similar law, except for violations which, if asserted, would not have a
material adverse effect on the Company and the Association. There are no
actions, suits, regulatory investigations or other proceedings pending or, to
the best knowledge of the Company or the Association, threatened against the
Company or the Association relating to environmental protection. No disposal,
release or discharge of hazardous or toxic substances, pollutants or
contaminants, including petroleum and gas products, as any of such terms may be
defined under federal, state or local law, has been caused by the Company or the
Association or, to their best knowledge, has occurred on, in, at or about any of
the facilities or properties of the Company or the Association, except such
disposal, release or discharge which, if discovered, would not have a material
adverse effect on the Company and the Association.
(kk) The seller of the Citizens Shares identified in the
Purchase Agreement has good and marketable title to these shares and has
authority to sell the Citizens Shares to the Company pursuant to the Purchase
Agreement.
(ll) All of the loans represented as assets of the Association
on the most recent financial statements of the Association included in the
Prospectus meet or are exempt from all requirements of federal, state or local
law pertaining to lending, including without limitation truth in lending
(including the requirements of 12 C.F.R. Part 226 ("Regulation Z")), real estate
settlement procedures, consumer credit protection, equal credit opportunity and
all disclosure laws applicable to such loans, except for violations which, if
asserted, would not have a material adverse effect on the Company or the
Association, taken as a whole.
(mm) Neither the Company nor the Association nor any employee
of the Company or the Association, has made any payment of funds of the Company
or the Association prohibited by law, and no funds of the Company or the
Association have been set aside to be used for any payment prohibited by law.
(nn) No labor dispute with the employees of the Company or the
Association exists or, to the actual knowledge of the Company or the
Association, is imminent; and the Company is not aware of any existing or
imminent labor disturbance by the employees of any
11
of its principal suppliers or contractors which might be expected to result in
any material adverse change in the financial condition, results of operations or
business of the Company and the Association, taken as a whole.
(oo) The Company and the Association are in compliance in all
material respects with the applicable financial recordkeeping and reporting
requirements of the Currency and Foreign Transaction Reporting Act of 1970, as
amended, and the rules and regulations thereunder.
(pp) The Company has received approval, subject to regulatory
approval to consummate the Conversion and issue the Shares and subject to
certain other standard conditions, to have the Shares quoted through the NASDAQ
Small Cap Market effective on the Closing Date.
3. Retention of Trident. On the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth, the
Company and the Association hereby agree with Trident as follows:
(a) Assistance with Conversion. The Association and the Company hereby
retain Trident to assist the Association and the Company in the Conversion by
(i) training and educating the Association's employees in respect of the
mechanics and regulatory requirements of the conversion process; (ii) keeping
records of all subscriptions for the Shares; and (iii) obtaining proxies from
the Association's members for use at the Special Meeting of Members at which the
Conversion is to be considered.
(b) Assistance with Community Offering. The Association and the Company
hereby retain Trident to act as the exclusive agent of the Association and the
Company in assisting in the sale of the Shares in the Community Offering;
provided, however, that the Association and the Company acknowledge and agree
that Trident may offer to other NASD-registered broker dealers selected by the
Association and Trident ("Selected Dealers") the opportunity to solicit
subscriptions for the Shares to be sold in the Community Offering on a best
efforts basis pursuant to the terms and conditions of Selected Dealer Agreements
between Trident and such Selected Dealers. Trident and the Association will
determine the Selected Dealers to assist the Association during the Community
Offering. Preference in the Community Offering shall be given to residents of
Jefferson County, Indiana.
(c) Other Matters. Subscriptions shall be offered in the Subscription
Offering only during the subscription period by means of Order Forms as
described in the Prospectus and may be offered in the Community Offering by
means of Order Forms or by solicitations of indications of interest from
customers of Trident or Selected Dealers residing in those states in which the
Shares may be qualified for offer and sale. The Association and the Company
shall notify Trident promptly after the expiration of the Subscription Offering
of the number of Shares sold in the Subscription Offering and the aggregate
number of Shares remaining available to be sold in the Community Offering. The
Association and the Company shall provide Trident with any
12
information (which shall be accurate and reliable) necessary to assist Trident
in allocating the Shares in the event of an oversubscription. The Association
and the Company, jointly and severally, shall indemnify and hold harmless each
of Trident and the Selected Dealers against any losses, claims, damages or
liabilities resulting from reliance under any records of depositors, borrowers
and other members of the Association delivered to Trident by the Association or
its agents for use during the Conversion.
Trident agrees that any Selected Dealer Agreements between Trident and
Selected Dealers will provide that Selected Dealers will solicit indications of
interest from their customers to place orders for the purchase of Shares as of a
certain date (the "Order Date") and, upon request by Trident, (i) submit orders
to purchase Shares, for which they have previously received indications of
interest from their customers, (ii) mail confirmations of receipt of orders to
each subscriber confirming interest on the business day following the Order
Date, (iii) debit accounts of such subscribers on the third business day from
the Order Date ("Settlement Date"), and (iv) forward completed Order Forms
together with such funds to the Association on the Settlement Date for deposit
in a segregated account.
(d) Fees and Expenses.
(i) As compensation for Trident's services hereunder, the
Company and the Association, jointly and severally, agree to
pay Trident compensation and reimbursement as follows: (I) a
management fee in the amount of one-half of one percent (0.5%)
of the aggregate dollar amount of shares sold in the
Subscription Offering and the Community Offering; (II) a
commission equal to two percent (2.0%) of the aggregate dollar
amount of shares sold in the Subscription Offering, excluding
any Shares sold to the Association's or Citizens' directors,
executive officers (including shares sold to "associates" as
that term is defined in the Plan of Conversion) or employee
stock ownership plan; and (III) a commission equal to two
percent (2%) of the aggregate dollar amount of shares sold in
the Community Offering, but excluding such shares sold by
Selected Dealers. In connection with shares sold by Selected
Dealers, the total commission shall not exceed four and
one-half percent (4.5%).
(ii) In addition to the fees described in subparagraph (i) of
this Section 3(d), the Company and the Association jointly and
severally, agree to reimburse Trident for all reasonable
out-of-pocket expenses (including fees and disbursements of
counsel) incurred by Trident in connection with the
Conversion, which expenses shall not exceed $47,000 (of which
$10,000 has previously been paid to Trident as an advance)
without the Association's consent; provided, however, that
such $47,000 shall be exclusive of fees and disbursements of
counsel and any expenses payable by the Association and the
Company pursuant to subparagraph (iii) of this Section 3(d) to
the extent incurred in the first instance by Trident. The
expenses to be reimbursed hereunder, including fees and
disbursements of Trident's counsel, shall be payable by the
Association and the Company as they are
13
incurred by Trident and billed to the Association, and shall
be payable whether or not the Closing occurs or this Agreement
is terminated for any reason.
(iii) Whether or not the Closing occurs or this Agreement is
terminated for any reason, (I) the Company and the Association
will pay all expenses incident to the performance of their
obligations in connection with the Conversion, including,
without limitation, all fees and disbursements of their
counsel, all expenses incurred in the preparation, printing,
filing and distribution of all documents relating to the
Conversion, telephone charges, air freight, rental equipment,
supplies, marketing materials, all fees and expenses of the
Company's transfer agent and all transfer taxes payable with
respect to the sale of the Shares, (II) the Company and the
Association will reimburse Trident for all expenses required
to be reimbursed pursuant to subparagraph (d)(ii) of this
Section 3 and (III) the Company and the Association will
reimburse Trident for any out-of-pocket accountable expenses
(including fees and disbursements of counsel) incurred by them
in connection with the matters referred to in Section 5(d) of
this Agreement and the preparation of memoranda relating
thereto and for any filing fees of the NASD relating to the
Shares. The expenses to be reimbursed to Trident pursuant to
subparagraph (d)(iii)(I) and (III) of this Section 3 shall be
in addition to, and not subject to the limitations on, the
expenses to be reimbursed to Trident pursuant to (ii) above.
(e) Termination. The employment of Trident hereunder shall terminate upon
the first to occur of the following: (i) the forty-fifth day after the
expiration of the Subscription Offering, unless the Association and the Company,
with the approval of the OTS, are permitted to extend such date; (ii) the
Closing; or (iii) the termination of this Agreement pursuant to Section 10
hereof.
4. Closing.
(a) Subject to the terms and upon the conditions of the Agreement, the
closing of the purchase and sale of the Shares (herein referred to as the
"Closing") shall take place at the offices of Xxxxxx & Xxxxxxxxx, 00 Xxxxx
Xxxxxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxx, at 10:00 a.m., Indianapolis time, on a
business day which is agreed upon by the parties hereto, but which is not later
than the fifth business day after the date upon which the Association certifies
to the OTS that at least the minimum number of Shares permitted to be sold in
the Conversion has been sold against payment therefor (herein referred to as the
"Closing Date").
(b) In accordance with the regulations of the OTS and the Regulations,
before the commencement of the Subscription Offering, appropriate arrangements
will be made for placing the funds received in payment for the shares of Common
Stock in the Escrow Account until such shares are sold and paid for at the
Closing. If the Closing does not occur within the time specified in Section
3(e)(i) of this Agreement, the Association will promptly refund all funds in the
Escrow Account to the persons who have the beneficial interests therein.
14
(c) At the Closing, the Shares will be issued by the Company against
payment of the purchase price therefor by wire transfer in immediately available
funds from the Escrow Account. Certificates representing the Shares shall be
prepared in definitive form and in such denominations and registered in such
names as set forth in the Order Forms or, in the case of Shares not subscribed
for pursuant to Order Forms, in such names as Trident (or Selected Dealers, if
applicable) may request, upon at least two business days' prior notice to the
Association, and shall be, (i) in the case of Shares subscribed for pursuant to
Order Forms, delivered by the Company directly to the purchasers thereof as
promptly as practicable following the Closing, and (ii) in the case of Shares
not subscribed for pursuant to Order Forms, made available for checking and
packaging at least one business day before the Closing at a location to be
designated by Trident.
5. Further Agreements. The Company and the Association, jointly and
severally, covenant and agree that:
(a) The Company will deliver to Trident, from time to time, such number of
copies of the Prospectus as Trident may reasonably require. The Company hereby
authorizes and directs Trident to use the Prospectus in connection with the
offer and sale of the Shares.
(b) The Company will notify Trident immediately upon obtaining knowledge
thereof, and confirm the notice in writing: (i) when any post-effective
amendment to the Registration Statement becomes effective or when any supplement
to the Prospectus has been filed with the Commission; (ii) of the issuance by
the Commission of any stop order relating to the Registration Statement or of
the initiation or the threat of any proceedings for such purpose; (iii) of the
receipt of any notice with respect to the suspension of the qualification of the
Shares for offering or sale in any jurisdiction; (iv) of the receipt of any
comments from the staff of the Commission relating to the Registration Statement
or from the staff of the OTS relating to the Form AC or the Form H-(e)1-S; and
(v) of the receipt of any comments from the staff of the FRB relating to the
Form FR Y-3. In the event the Commission enters a stop order relating to the
Registration Statement at any time, the Company will make every reasonable
effort to obtain the lifting of such order at the earliest possible moment.
(c) During the time when a prospectus is required to be delivered under
the Act, the Company will comply with all requirements of the Act, as now in
effect and as hereafter amended, and with the Regulations, as from time to time
in force, so far as necessary to permit the continuance of offers and sales of
or dealings in the Shares in accordance with the provisions hereof and the
Prospectus. If, during the period when the Prospectus is used in connection with
the offer and sale of the Shares, any event relating to or affecting the
Company, the Association or Citizens shall occur as a result of which it is
necessary, in the opinion of counsel for the Company or counsel for Trident, to
amend, or supplement the Prospectus in order to make the Prospectus not false or
misleading in light of the circumstances existing at the time the Prospectus is
delivered to a purchaser of the Shares, the Company shall forthwith prepare and
15
furnish to Trident a reasonable number of copies of an amendment or amendments
or of a supplement or supplements to the Prospectus (in form and substance
reasonably satisfactory to counsel for Trident) which shall amend or supplement
the Prospectus so that, as amended or supplemented, the Prospectus will not
contain any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in light of the circumstances
existing at the time the Prospectus is delivered to a purchaser of the Shares,
not misleading. The Company will not file or use any amendment or supplement to
the Registration Statement or the Prospectus of which Trident has not first been
furnished a copy or as to which Trident shall reasonably object after having
been furnished such copy. For the purposes of this subsection (c), the Company,
the Association and Citizens shall furnish such information with respect to
themselves as Trident from time to time reasonably may request.
(d) The Company will take all reasonably necessary action as may be
required to qualify or register the Shares for offer and sale by the Company
under the securities or "blue sky" laws of such jurisdictions as Trident and the
Company or its counsel may agree upon; provided, however, that the Company will
not be obligated to qualify as a foreign corporation under the laws of any such
jurisdiction. In each jurisdiction in which such qualification or registration
will be effected, the Company, unless Trident agrees that such action is not
necessary or advisable in connection with the distribution of the Shares, will
file and make such statements or reports as are, or reasonably may be, required
by the laws of such jurisdiction.
(e) The liquidation account for the benefit of eligible account holders as
of December 31, 1994 and supplemental eligible account holders as of [June 30,
1996], will be duly established and maintained in accordance with the
requirements of the OTS and such eligible account holders and supplemental
eligible account holders who continue to maintain their savings accounts in the
Association will have an inchoate interest in their pro rata portion of the
liquidation account which shall have a priority superior to that of the holders
of the Shares in the event of a complete liquidation of the Association.
(f) The Company will file a registration statement for the Shares under
Section 12(g) of the Securities Exchange Act of 1934, as amended (hereinafter
referred to as the "Exchange Act"), upon completion of the Subscription Offering
and the Community Offering pursuant to the Plan of Conversion and will request
that such registration statement become effective upon the completion of the
Conversion. The Company will maintain the effectiveness of such registration
under Section 12(g) of the Exchange Act for not less than three (3) years or
such shorter period as may be required by the OTS' approval of the Form AC.
(g) For a period of three (3) years from the date of this Agreement, the
Company will furnish the following to Trident:
(i) As soon as publicly available after the end of each fiscal
year, a copy of its Annual Report to Shareholders for such year;
(ii) As soon as publicly available, a copy of each report or
definitive proxy
16
statement of the Company filed with the Commission under the Exchange
Act or mailed to shareholders; and
(iii) From time to time, such other public information concerning
the Company as Trident may reasonably request.
(h) The Company will use the net proceeds from the sale of the Shares
in the manner set forth in the Prospectus under the caption "Use of Proceeds."
(i) The Company will not deliver the Shares until each and every
condition set forth in Section 6 of this Agreement has been satisfied in full,
unless such condition is waived in writing by Trident.
(j) The Company will provide Trident with any information necessary to
assist Trident in allocating the Shares in the event of an oversubscription.
Such information will be accurate and reliable. The Company will indemnify and
hold harmless Trident from and against any liability arising out of any records
of account holders, other depositors, borrowers or other members of the
Association delivered to Trident by the Company or the Association or their
agents for use during the Conversion.
(k) The Company and the Association will take such actions and furnish
such information as are reasonably requested by Trident in order for Trident to
ensure compliance with the NASD's "Interpretation Relating to Free Riding and
Withholding."
6. Conditions of Trident's Obligations. The obligations of Trident set
forth in this Agreement shall be subject to the accuracy of the representations
and warranties contained in Section 2 of this Agreement as of the date hereof
and as of the Closing Date, to the accuracy of the statements of officers and
directors of the Company, the Association and Citizens made pursuant to the
provisions hereof, to the performance by the Company and the Association of
their obligations hereunder, and to the following additional conditions:
(a) At the Closing Date, the Company and the Association will have
satisfied the conditions precedent to, and will have conducted the Conversion in
all material respects in accordance with the Plan of Conversion and all
applicable laws, regulations, decisions and orders, including all terms,
conditions, requirements and conditions precedent to the Conversion imposed by,
among other authorities, the OTS and/or the Commission.
(b) At the Closing Date, the Company and the Association will have
satisfied the conditions precedent to, and will have effected the Acquisition in
all material respects in accordance with the Purchase Agreement and all
applicable laws, regulations, decisions and orders, including all terms,
conditions, requirements and conditions precedent to the Acquisition imposed by,
among other authorities, the FRB, the OTS and/or the Commission.
(c) On the Closing Date, Trident shall receive an opinion of Xxxxxx &
Xxxxxxxxx, special
17
counsel for the Company and the Association (hereinafter referred to as "Special
Counsel"), dated as of the Closing Date, addressed to Trident, in form and
substance reasonably satisfactory to counsel for Trident and to the effect that:
(i) The Company is a corporation duly organized and validly existing
under the laws of the State of Indiana with full power and authority to
own its properties and conduct its business as set forth in the
Prospectus. The Company has all necessary corporate power and authority
to enter into this Agreement, to perform all of its obligations
hereunder and to consummate the transactions contemplated hereby. To
their knowledge, the Company has obtained all licenses, permits and
other governmental authorizations currently required for the conduct of
its business, all of which are in full force and effect, and the
Company is in all material respects complying therewith.
(ii) The Association is a mutual savings association validly existing
and in good standing under the laws of the United States with full
power and authority to own its properties and conduct its business as
set forth in the Prospectus and is a member in good standing of the
Federal Home Loan Bank of Indianapolis. The Association has all
necessary corporate power and authority to enter into this Agreement,
to perform all of its obligations hereunder and to consummate the
transactions contemplated hereby. The deposit accounts of the
Association are insured up to applicable limits by the FDIC. To their
knowledge, the Association has obtained all licenses, permits and other
governmental authorizations currently required for the conduct of its
business, all of which are in full force and effect, and the
Association is in all material respects complying therewith.
(iii) The Company has all necessary corporate power and authority to
enter into the Purchase Agreement, to perform all of its obligations
thereunder and to consummate the Acquisition contemplated thereby. To
their knowledge, the Company has obtained all licenses, permits and
other governmental authorizations currently required for it to act as
the holding company of Citizens, all of which are in full force and
effect, and the Company is in all material respects complying
therewith.
(iv) The Plan of Conversion has been adopted by the Board of Directors
and members of the Association and approved by the Board of Directors
of the Company. As of the date of this Agreement, no person has sought
to obtain review of the final action of the OTS in approving the Plan
of Conversion, the Conversion or the Form H-(e)l-S pursuant to the
HOLA, as amended, or any other statute or regulation.
(v) The Purchase Agreement has been adopted and approved by the Board
of Directors of the Company. As of the date of this Agreement, no
person has sought to obtain review of the final action of the FRB in
approving the Acquisition, the Company's application to become the bank
holding company for Citizens or the Form FR Y-3 pursuant to the BHCA,
as amended, or any other statute or regulation.
18
(vi) Upon the effectiveness of the amendment of the Association's
Charter and Bylaws in accordance with the rules and regulations of the
OTS and the completion of the sale by the Company of the Shares as
contemplated by the Prospectus and the Plan of Conversion, (I) the
Association will be converted pursuant to the Plan of Conversion to a
capital stock savings association duly organized, validly existing and
in good standing under the laws of the United States with full power
and authority to own its property and conduct its business as described
in the Prospectus; (II) all of the outstanding capital stock of the
Association will be owned of record and beneficially by the Company;
and (III) the Company will have no direct subsidiaries other than the
Association and Citizens.
(vii) Each of the Company and the Association is duly qualified and in
good standing to do business as a foreign corporation in all
jurisdictions in which the conduct of its business requires such
qualification or, if not so qualified and in good standing, failure to
so qualify would not have any material adverse effect on either the
Company or the Association.
(viii) Each of the Association and the Subsidiaries has obtained all
licenses, permits and other governmental authorizations currently
required for the conduct of its business, except where the failure to
obtain such licenses, permits and other governmental authorizations
would not have a material adverse effect on its financial condition,
business or results of its operations; and all such licenses, permits
and other governmental authorizations are in full force and effect.
(ix) The execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby have been fully and validly
authorized by all necessary action on the part of each of the Company
and the Association. This Agreement is a legal, valid and binding
obligation of each of the Company and the Association, enforceable
against each of them in accordance with its terms, except as may be
limited by bankruptcy, insolvency, reorganization, moratorium,
receivership, conservatorship or other laws affecting creditors' rights
generally and as may be limited by the exercise of judicial discretion
in applying principles of equity and except as the obligations of the
Company and the Association under the indemnification and contribution
provisions of Sections 7 and 8 hereof may be unenforceable or against
public policy, as to which no opinion need be rendered.
(x) Each of the Company and the Association has all such power,
authority, authorizations, approvals and orders as may be required to
enter into this Agreement and to carry out the terms and conditions
hereof. Without limiting the generality of the foregoing sentence, the
Company has the power, authority, authorizations, approvals and orders
(I) to issue and sell the Shares to be sold by the Company in
accordance with this Agreement, (II) upon consummation of the
Acquisition, to hold the Citizens Shares as owner of record and (III)
to become the bank holding company for Citizens. The Association has
the power, authority, authorizations, approvals and orders to issue and
19
sell the shares of its capital stock to the Company as provided in the
Plan of Conversion, subject to the issuance of an amended Charter in
the form required for a federal stock savings and loan association
(hereinafter referred to as the "Stock Charter"). The form of the Stock
Charter has been approved by the OTS.
(xi) To their knowledge, neither the Company nor the Association is in
violation of any rule or regulation of the Commission or the OTS, which
might materially and adversely affect the condition (financial or
otherwise), operations, businesses, assets, or properties of the
Company or the Association. To their knowledge, the Association is not
subject to any written directive from the OTS or the FDIC (or their
predecessors) to make any material change in the method of conducting
its business or affairs and has conducted its business in material
compliance with all applicable statutes and regulations (including,
without limitation, all regulations, decisions, directives and orders
of the FHLB of Indianapolis, the OTS, and the FDIC, or their
predecessors). Except as set forth in the Prospectus, to their
knowledge, there is not pending or threatened any litigation, charge,
investigation, action, suit or proceeding before or by any court,
regulatory authority or governmental agency or body which might affect
the performance of the terms and conditions of this Agreement or the
consummation of the transactions contemplated hereby or which might
result in any material adverse change in the condition (financial or
otherwise), business, prospects or results of operations of the Company
or the Association.
(xii) To their knowledge, no material default exists, and no event has
occurred which, with notice or lapse of time, or both, would constitute
a default, on the part of either the Company or the Association in the
due performance and observance of any term, covenant or condition of
any agreement which is material to the condition (financial or
otherwise) of the Company or the Association. To their knowledge, such
agreements are in full force and effect, and no other party to any such
agreement has instituted or threatened any action or proceeding wherein
the Company or the Association would or might be alleged to be in
default thereunder.
(xiii) To their knowledge, neither the Company nor the Association is
in violation of their respective charter, articles of incorporation or
bylaws or in default in any material respect in the performance of any
material obligation, agreement or condition contained in any bond,
debenture, note or any other evidence of indebtedness. The execution,
delivery and fulfillment of the terms of this Agreement and the
consummation of the transactions contemplated hereby do not and will
not violate or conflict with the respective charter, articles of
incorporation or bylaws of the Company or the Association or, in any
material respect, violate, conflict with or constitute a breach of, or
default (or an event which, with notice or lapse of time, or both,
would constitute a default) under any material agreement, indenture or
other instrument by which either the Company or the Association is
bound, or under any governmental license or permit or any law,
administrative regulation or authorization, approval or order, court
decree, injunction or order to which the Company or the Association is
subject.
20
(xiv) No equity or debt securities of the Company have ever been issued
or are outstanding. Upon the consummation of the Conversion, the
authorized, issued and outstanding equity capital of the Company shall
be as set forth in the Prospectus under the caption "Capitalization,"
adjusted to give effect to the actual sale of the Shares. The offer,
sale and issuance of the Shares have been duly authorized by all
necessary action of the Company and approved by the OTS. When issued in
accordance with the terms of the Plan of Conversion, the Shares will be
validly issued, fully paid and nonassessable and will conform to the
description thereof set forth in the Prospectus. The issuance of the
Shares is not subject to preemptive rights. Good title to the Shares
will be transferred to the purchasers thereof upon issuance thereof
against payment therefor. The certificates evidencing the Shares will
conform in all material respects with the requirements of applicable
laws and regulations.
(xv) No equity securities of the Association have ever been issued or
are outstanding. The offer, sale and issuance of the capital stock of
the Association to the Company have been duly authorized by all
necessary action of the Association and the Company and approved by the
OTS. Immediately after the Closing Date, the authorized capital of the
Association will consist of 1,000 shares of common stock, par value
$.01 per share, 1,000 of which will be issued to the Company, and
1,000,000 shares of preferred stock, par value $1.00 per share, none of
which will be issued or outstanding. When issued in accordance with the
terms of the Plan of Conversion, such common stock will be validly
issued, fully paid and nonassessable. There are no preemptive rights or
rights to subscribe for or to purchase any capital stock of the
Association. None of the shares of such capital stock will be issued in
violation of any rights of any member of the Association. Good title to
such capital stock will be transferred to the Company upon issuance
thereof against the payment to the Association of all but 60% of the
net proceeds of the sale of the Shares, after giving effect to the ESOP
Loan, in cash, free and clear of all claims, encumbrances, security
interests and liens whatsoever. Upon the consummation of the
Conversion, the liquidation account will be duly established in
accordance with the requirements of the OTS and the Plan of Conversion.
(xvi) At the Closing Date, the Company and the Association will have
satisfied all material conditions precedent to, and conducted the
Conversion in all material respects in accordance with, the Plan of
Conversion, the Regulations and all other applicable laws, regulations,
decisions and orders, including all terms, conditions, requirements and
provisions precedent to the consummation of the transactions
contemplated by the Plan of Conversion and the approval of the Form AC
and the Form H-(e)l-S imposed upon them by the OTS.
(xvii) No approval of any regulatory or supervisory or other public
authority is required in connection with the execution and delivery of
this Agreement or the issuance and sale of the Shares, except (i) the
approval of the OTS, (ii) the declaration of effectiveness of any
required post-effective amendment to the Registration Statement by the
Commission and approval thereof by the OTS, (iii) the issuance to the
Association of the Stock
21
Charter by the OTS, (iv) the approval of the Form H-(e)1-S, (v) the
approval of the NASD of the fairness of the compensation to be paid to
Trident pursuant to this Agreement, (vi) the approval of the FRB, (vii)
the listing of the Shares on the NASDAQ Small Cap Market, and (viii) as
may be otherwise required under the securities laws of various
jurisdictions.
(xviii) The Company may offer, issue and sell the Shares in the
Subscription Offering and, if necessary, in the Community Offering
without registration of the Company or its directors, officers or
employees as brokers, dealers, salesmen or investment advisors under
the Exchange Act or the Investment Company Act of 1940.
(xix) The statements in the Prospectus under the captions "Dividend
Policy," "Capitalization," "Regulation," "Taxation," "The Conversion,"
"Restrictions on Acquisition of the Holding Company" and "Description
of Capital Stock," insofar as they are, or refer to, statements of law
or legal conclusions, have been prepared or reviewed by such Special
Counsel and are correct in all material respects.
(xx) The Form AC and the Form H-(e)1-S have been approved by the OTS
and the Prospectus has been authorized by the OTS and the Commission.
The Stock Charter has been approved by the OTS. The Registration
Statement and any post-effective amendment thereto have been declared
effective by the Commission. No proceedings are pending by or before
the Commission or the OTS seeking to revoke or rescind the orders
declaring the Registration Statement or the Prospectus effective nor,
to their knowledge, are any such proceedings contemplated or
threatened.
(xxi) The Form AC, the Registration Statement and the Prospectus (in
each case as amended or supplemented, if so amended or supplemented)
comply as to form in all material respects with the requirements of the
Act, and the applicable rules, regulations, and all written decisions
and orders of the OTS and the Commission, as the case may be (except as
to financial statements, notes to financial statements, financial
tables and other financial and statistical data included therein as to
which no opinion need be expressed). All documents and exhibits
required to be filed with the Form AC and the Registration Statement
(in each case as amended or supplemented, if so amended or
supplemented) have been so filed, the description in the Form AC and
the Registration Statement of such documents and exhibits is accurate
in all material respects and presents fairly the information required
to be shown. To their knowledge, there are no contracts or other
documents of a character required to be described in the Registration
Statement or the Prospectus which are not described and there are no
statutes or regulations applicable to, certificates, permits or other
authorizations from governmental regulatory officials or bodies
required to be obtained or maintained by, or legal or governmental
proceedings, past, pending or threatened, against the Company or the
Association of a character required to be disclosed in the Form AC, the
Registration Statement or the Prospectus which have not been so
disclosed and properly described therein.
22
(xxii) In connection with the preparation of the Registration Statement
and Prospectus, Special Counsel has participated in conferences with
certain officers, employees and other representatives of, and certain
representatives of the independent public accountants for the Company
and the Association as well as reviewed various documents and other
information deemed relevant thereto and, in connection therewith,
nothing has come to the attention of Special Counsel that would lead
them to believe (I) that the Registration Statement, as amended or
supplemented, if amended or supplemented (except as to financial
statements, notes to financial statements, financial tables and other
financial and statistical data contained therein, as to which Special
Counsel need not express an opinion), at the time it became effective,
at the time any post-effective amendment thereto became effective and
at the Closing Date, contained any untrue statement of a material fact
or omitted to state a material fact required to be stated therein or
necessary to make the statements made therein not misleading, or (II)
that the Prospectus, as amended or supplemented, if amended or
supplemented (except as to financial statements, notes to financial
statements, financial tables and other financial and statistical data
contained therein, as to which Special Counsel need not express an
opinion), at the time the Registration Statement became effective or at
the time any amendment or supplement to the Prospectus was filed with
the Commission or transmitted to the Commission for filing, contained
any untrue statement of a material fact or omitted to state a material
fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. In rendering
such opinion, Special Counsel may state that they have not undertaken
to verify independently the information in the Registration Statement
or Prospectus and, therefore, do not assume any responsibility for the
accuracy or completeness thereof.
In giving such opinion, such counsel may rely as to certain matters of fact
on certificates of officers and directors of the Company and the Association,
and certificates of public officials delivered pursuant hereto and on the
opinion of qualified local counsel, satisfactory to Trident, with respect to
matters particularly within the knowledge and scope of representation of such
counsel. Such opinion may be governed by, and interpreted in accordance with,
the Legal Opinion Accord of the ABA Section of Business Law (1991).
23
(d) On the Closing Date, Trident shall have received such opinion of
Xxxxxxx Xxxxxxxx & Xxxx, counsel for Trident, with respect to certain matters as
Trident may reasonably request, and such counsel shall have received such
documents, papers and records as they request for the purpose of enabling them
to pass upon such matters.
(e) Counsel for Trident shall have been furnished such documents as they
reasonably may require for the purpose of enabling them to review or pass upon
the matters required by Trident and for the purpose of evidencing the accuracy,
completeness or satisfaction of any of the representations, warranties or
conditions herein contained, including, but not limited to, resolutions of the
Board of Directors of the Company and the Association regarding the
authorization of this Agreement and the transactions contemplated hereby.
(f) Prior to and at the Closing Date, in the reasonable opinion of
Trident: (i) there shall have been no material adverse change in the financial
or other condition of the Company or the Institutions considered as one
enterprise from that as of the latest date as of which such condition is set
forth in the Prospectus; (ii) there shall have been no material transaction
entered into by the Company or the Institutions from the latest date as of which
the financial condition of the Company or the Institutions is set forth in the
Prospectus, other than transactions referred to or contemplated therein and
transactions in the ordinary course of business; (iii) neither the Company nor
the Association shall have received from the OTS any direction (oral or written)
to make any material change in the method of conducting their respective
businesses with which they have not complied (which direction, if any, shall
have been disclosed to Trident) or which materially and adversely would affect
the business, operations, financial condition or income of the Company or the
Association; (iv) Citizens shall not have received from the OCC any direction
(oral or written) to make any material change in the method of conducting its
business with which it has not complied (which direction, if any, shall have
been disclosed to Trident) or which materially and adversely would affect the
business, operations, financial condition or income of Citizens; (v) no action,
suit or proceeding, at law or in equity, or before or by any federal or state
commission, board or other administrative agency, or before any arbitrator or
arbitrators, shall be pending or threatened against the Company or the
Institutions or affecting any of their respective assets wherein an unfavorable
decision, ruling or finding materially and adversely would affect the business,
operations, financial condition or income of the Company or the Institutions;
and (vi) the Shares shall have been qualified or registered for offering and
sale by the Company under the securities or "blue sky" laws of each jurisdiction
upon which Trident and the Company shall have agreed.
(g) At the Closing Date, Trident shall receive a certificate of the
President and the Principal Financial Officer of each of the Company and the
Association (hereinafter referred to as the "Officers"), dated the Closing Date,
to the effect that: (i) the Officers have carefully examined the Prospectus and
at the time the Prospectus became authorized for final use, the Prospectus did
not contain any untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading; (ii) since the date
the Prospectus became authorized for final use, no event has occurred which
should have been set forth in an amendment or supplement to the
24
Prospectus which has not been so set forth, including, without limitation, any
material adverse change in the business, financial condition, income or
operations of the Company or the Association and the conditions set forth in
clauses (ii) through (iv) inclusive of subsection (g) of this Section 6 have
been satisfied; (iii) no order has been issued by the Commission, the OTS or the
FRB to suspend the approval of the Acquisition, the effectiveness of the
Prospectus or to terminate the Subscription Offering or the Community Offering
and, to the best knowledge of the Officers, no action for such purposes has been
instituted or threatened by the Commission, the OTS or the FRB; (iv) to the best
knowledge of the Officers, no person has sought to obtain review of the final
action of the OTS approving the Plan pursuant to Section 5(i)(2)(B) of the Home
Owners' Loan Act of 1933, as amended; (v) to the best knowledge of the Officers,
no person has sought to obtain review of the final action of the FRB approving
the Acquisition and Purchase Agreement pursuant to the BHCA; and (vi) all of the
representations and warranties contained in Section 2 of this Agreement are true
and correct with the same force and effect as though expressly made on the
Closing Date.
(h) At the Closing Date, Trident shall receive a certificate of the
President and the Principal Financial Officer of Citizens (hereinafter referred
to as the "Citizens Officers"), in form and substance reasonably satisfactory to
Trident, dated the Closing Date, to the effect that:
(i) the consolidated financial statements and the related notes thereto
included in the Registration Statement and the Prospectus present
fairly the consolidated financial position of Citizens at the
respective dates indicated and the results of operations, retained
earnings and cash flows for the periods specified comply as to form in
all material respects with the applicable accounting requirements of
the Regulations and the Conversion Regulations; except as otherwise
stated in the Registration Statement, said financial statements have
been prepared in conformity with generally accepted accounting
principles applied on a consistent basis; and the supporting schedules
and tables included in the Registration Statement present fairly the
information required to be stated therein;
(ii) since the respective dates as of which information is given in the
Registration Statement and the Prospectus, except as otherwise stated
therein (A) there has been no material adverse change in the financial
condition, results of operations or business affairs of Citizens,
whether or not arising in the ordinary course of business, and (B)
except for transactions specifically referred to or contemplated in the
Prospectus, there have been no transactions entered into by Citizens
other than those in the ordinary course of business, which are material
with respect to Citizens;
(iii) Citizens is a national banking association in stock form, with
full corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the Prospectus;
Citizens has obtained all licenses, permits and other governmental
authorizations currently required for the conduct of its business,
except where the failure to obtain such licenses, permits or other
governmental authorizations would not have a material adverse effect on
the financial condition, results of operations or business affairs of
Citizens; all such licenses, permits and other governmental
25
authorizations are in full force and effect and Citizens is in all
material respects in compliance therewith; Citizens has not received
notice of any proceeding or action relating to the revocation or
modification of any such license, permit or other governmental
authorization which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, might have a material adverse
effect on the financial condition, results of operations or business
affairs of Citizens;
(iv) all acts or other proceedings required to be taken by or on the
part of Citizens, including the consummation of the Acquisition, and
the necessary approvals, consents, authorizations or notifications
required to be taken to consummate the Acquisition, have been properly
taken or obtained; neither the execution and delivery of the Purchase
Agreement nor the consummation of the Acquisition, with or without the
giving of notice or the lapse of time, or both, will: (I) violate any
provision of the charter or bylaws of Citizens, or (II) violate,
conflict with, result in the material breach or termination of,
constitute a material default thereunder, accelerate the performance
required by, or result in the creation of any material lien, charge or
encumbrance upon any of the properties or assets of Citizens pursuant
to any indenture, mortgage, deed of trust or other agreement or
instrument to which Citizens is a party or which it or any of its
properties or assets may be bound, or violate any statute, rule, or
regulation applicable to Citizens, and to their knowledge, there exists
no consent, approval, authorization, order, registration or
qualification of or with any court, regulatory authority or other
governmental body, other than as specifically contemplated under this
Agreement or the Purchase Agreement or as is required for consummation
of the Acquisition;
(v) the deposit accounts of Citizens are insured to applicable limits
by the FDIC;
(vi) subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus and prior to the
Closing Time, except as otherwise may be indicated or contemplated in
the Prospectus, Citizens has not (A) issued any securities or incurred
any material liability or obligation, direct or contingent, or borrowed
money, except borrowings in the ordinary course of business from the
same or similar sources indicated in the Prospectus, or (B) entered
into any transaction or series of transactions which is material in
light of Citizens' business, excluding transactions in the ordinary
course of business and consistent with past practice or as otherwise
indicated in the Prospectus;
(vii) Citizens is not in violation of its charter or bylaws; and
Citizens is not in default (nor has any event occurred which, with
notice or lapse of time, or both, would constitute a default) in the
performance or observance of any obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which Citizens is a party
or by which it may be bound, or to which any of its property or assets
is subject, except for such defaults that would not, individually or in
the aggregate, have a material adverse effect on the financial
condition, results of operations or business of Citizens;
26
(viii) no labor dispute with the employees of Citizens exists or, to
its knowledge, is imminent;
(ix) Citizens has good and marketable title to all properties and
assets for which ownership is material to its business and to those
properties and assets described in the Prospectus as owned by Citizens
free and clear of all liens, charges, encumbrances or restrictions,
except such as are described in the Prospectus or are not material in
relation to business; and all of the leases and subleases material to
the business of Citizens under which it holds properties, including
those described in the Prospectus, are valid and binding agreements of
Citizens enforceable in accordance with their terms;
(x) Citizens is not in violation of any rule or regulation of the
Commission, the FRB or the OCC, which might materially and adversely
affect the condition (financial or otherwise), operations, businesses,
assets, or properties of Citizens or the consummation of the
Acquisition. To their knowledge, Citizens is not subject to any written
directive from the OCC or the FDIC (or their predecessors) to make any
material change in the method of conducting its business or affairs and
has conducted its business in material compliance with all applicable
statutes and regulations (including, without limitation, all
regulations, decisions, directives and orders of the OCC, and the FDIC,
or their predecessors).
(xi) Citizens is not in violation of any directive from the OCC to make
any material changes in the method of conducting its business; Citizens
has conducted and is conducting its business so as to comply in all
material respects with all applicable statutes, regulations and
administrative and court decrees (including, without limitation, all
regulations, decisions, directives and orders of the OCC or the FDIC);
(xii) there is no action, suit or proceeding before or by any court or
governmental agency or body, domestic or foreign, now pending or, to
the knowledge of Citizens, threatened against or affecting Citizens
which is required to be disclosed in the Registration Statement (other
than as disclosed therein), or which might result in any material
adverse change in the financial condition, results of operations or
business affairs of Citizens, or which might materially and adversely
affect the properties or assets thereof or which might materially and
adversely affect the consummation of the Acquisition; all pending legal
or governmental proceedings to which Citizens is a party or of which
any of its property or assets is subject which are not described in the
Registration Statement, including ordinary routine litigation
incidental to its business, are considered in the aggregate not
material.
(xiii) all of the loans represented as assets on the most financial
statements or selected financial information of Citizens included in
the Prospectus meet or are exempt from all requirements of federal,
state and local law pertaining to lending, including, without
limitation, truth in lending (including the requirements of Regulations
Z and 12 C.F.R. Part 226 and Section 563.99), real estate settlement
procedures, consumer credit
27
protection, equal credit opportunity and all disclosure laws applicable
to such loans, except for violations which, if asserted, would not
result in a material adverse effect on the financial condition, results
of operations or business of Citizens;
(xiv) to the knowledge of Citizens, no employee of Citizens has made
any payment of funds prohibited by law or set aside any funds for any
payment prohibited by law;
(xv) Citizens is in compliance in all material respects with the
applicable financial recordkeeping and reporting requirements of the
Currency and Foreign Transaction Reporting Act of 1970, as amended, and
the rules and regulations thereunder;
(xvi) Citizens and any properties owned or operated by Citizens (I) are
in compliance with all laws, rules and regulations relating to
environmental protection, (II) Citizens has no reason to believe that
it is subject to liability under the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended, or any
similar law, except for violations which, if asserted, would not have a
material adverse effect on Citizen, (III) there are no actions, suits,
regulatory investigations or other proceedings pending or, to the best
knowledge of Citizens threatened against it relating to environmental
protection, and (IV) no disposal, release or discharge of hazardous or
toxic substances, pollutants or contaminants, including petroleum and
gas products, as any of such terms may be defined under federal, state
or local law, has been caused by Citizens or, to the best of its
knowledge, has occurred on, in, at or about any of the facilities or
properties of Citizens except such disposal, release or discharge
which, if discovered, would not have a material adverse effect on
Citizens; and
(xvii) Citizens has filed all federal income and state and local
franchise tax returns required to be filed and have made timely
payments of all taxes shown as due and payable in respect of such
returns, and no deficiency has been asserted with respect thereto by
any taxing authority.
(i) At the Closing Date, Trident shall receive, among other documents, (i)
a copy of the letter from the OTS approving the Conversion and authorizing the
use of the Prospectus, (ii) a copy of the order of the Commission declaring the
Registration Statement effective; (iii) a copy of a letter from the OTS
evidencing the good standing of the Association; (iv) a copy of a Certificate of
Existence in respect of the Company from the Indiana Secretary of State; (v) a
copy of the Company's articles of incorporation certified by the Indiana
Secretary of State; (vi) a copy of the letter from the OTS approving the
Association's Stock Charter; and (vii) a copy of the letter from the FRB
approving the Acquisition.
(j) As soon as available after the Closing Date, Trident shall receive a
certified copy of the Association's Stock Charter executed by the OTS.
(k) Concurrently with the execution of this Agreement, Trident shall have
received letters from Xxxxx Xxxxxxxx LLP, independent certified public
accountants, dated the date hereof and
28
addressed to Trident: (i) confirming that Xxxxx Xxxxxxxx LLP is a firm of
independent public accountants within the meaning of the Act and the Regulations
and 12 C.F.R. ss. 571.2(c)(3) and stating in effect that in Xxxxx Xxxxxxxx LLP's
opinion the financial statements of the Association and the Subsidiaries as are
included in the Prospectus comply as to form in all material respects with the
applicable accounting requirements of the Regulations and generally accepted
accounting principles; (ii) stating in effect that, on the basis of certain
agreed upon procedures (but not an audit examination in accordance with
generally accepted auditing standards) consisting of a reading of the latest
available unaudited interim financial statements of the Association prepared by
the Association, a reading of the minutes of the meetings of the Board of
Directors of the Association, meetings of members of the Association and
consultations with officers of the Association responsible for financial and
accounting matters, nothing came to their attention which caused them to believe
that: (A) such unaudited financial statements are not in conformity with
generally accepted accounting principles applied on a basis substantially
consistent with that of the audited financial statements included in the
Prospectus; or (B) during the period from the date of the latest unaudited
financial statements included in the Prospectus to a specified date not more
than three business days prior to the date hereof, there was any material
increase in borrowings, defined as advances from the FHLB of Indianapolis,
securities sold under agreements to repurchase and any other form of debt other
than deposits of the Association (increases in borrowings will not be deemed to
be material if such increase in total borrowings outstanding does not exceed
$1,000,000); (C) there was any decrease in retained earnings of the Association
at the date of such letter as compared with amounts shown in the latest
unaudited statement of condition included in the Prospectus; or (D) there was
any decrease in net income or net interest income of the Association for the
number of full months commencing immediately after the period covered by the
latest unaudited income statement included in the Prospectus, and ended on the
latest month end prior to the date of the Prospectus or of such letter as
compared to the corresponding period in the preceding year; and (iii) stating
that, in addition to the audit examination of the Association referred to in its
opinion included in the Prospectus and the performance of the procedures
referred to in clause (ii) of this subsection (l), they have compared with the
general accounting records of the Association, which are subject to the internal
controls of the Association, accounting system and other data prepared by the
Association, directly from such accounting records, to the extent specified in
such letter, such amounts and/or percentages set forth in the Prospectus as
Trident may reasonably request; and they have found such amounts and percentages
to be in agreement therewith (subject to rounding).
(l) Concurrently with the execution of this Agreement, Trident shall have
received a letter from Xxxxx Xxxxxxxx LLP, independent certified public
accountants, dated the date hereof and addressed to Trident, stating in effect
that: (i) on the basis of certain agreed upon procedures (but not an audit
examination in accordance with generally accepted auditing standards) consisting
of a reading of the latest available unaudited interim financial statements of
Citizens prepared by Citizens, a reading of the minutes of the meetings of the
Board of Directors of Citizens, and consultations with officers of Citizens
responsible for financial and accounting matters, nothing came to their
attention which caused them to believe that: (A) during the period from the date
of the latest unaudited financial statements included in the Prospectus to a
specified
29
date not more than three business days prior to the date hereof, there was any
material increase in borrowings, defined as advances from the FHLB of
Indianapolis, securities sold under agreements to repurchase and any other form
of debt other than deposits of Citizens (increases in borrowings will not be
deemed to be material if such increase in total borrowings outstanding does not
exceed $1,000,000); (B) there was any decrease in retained earnings of Citizens
at the date of such letter as compared with amounts shown in the latest
unaudited statement of condition included in the Prospectus; or (C) there was
any decrease in net income or net interest income of Citizens for the number of
full months commencing immediately after the period covered by the latest
unaudited income statement included in the Prospectus, and ended on the latest
month end prior to the date of the Prospectus or of such letter as compared to
the corresponding period in the preceding year; and (ii) stating that, in
addition to the performance of the procedures referred to in clause (i) of this
subsection (m), they have compared with the general accounting records of
Citizens, to the extent specified in such letter, such amounts and/or
percentages set forth in the Prospectus as Trident may reasonably request; and
they have found such amounts and percentages to be in agreement therewith
(subject to rounding).
(m) Concurrently with the execution of this Agreement, Trident shall have
received letters from the public accounting firms of Xxxxxxx, Xxxxxx & Xxxxxxxx
and Xxxxxxxxx X. Xxxx & Co., which shall confirm that: (i) each of Xxxxxxx
Xxxxxx & Mulliken and Xxxxxxxxx X. Xxxx & Co. is a firm of independent public
accountants within the meaning of the Act and the Regulations and 12 C.F.R. ss.
571.2(c)(3) and stating in effect that in each of their opinions the financial
statements of Citizens as are included in the Prospectus comply as to form in
all material respects with the applicable accounting requirements of the
Regulations and generally accepted accounting principles. Concurrently with the
execution of this Agreement, Trident also shall have received a letter from
Xxxxxxx, Xxxxxx & Xxxxxxxx stating in effect that, on the basis of certain
agreed upon procedures (but not an audit examination in accordance with
generally accepted auditing standards) consisting of a reading of the latest
available unaudited interim financial statements of Citizens prepared by
Citizens, a reading of the minutes of the meetings of the Board of Directors of
Citizens and consultations with officers of Citizens responsible for financial
and accounting matters, nothing came to their attention which caused them to
believe that such unaudited financial statements are not in conformity with
generally accepted accounting principles applied on a basis substantially
consistent with that of the audited financial statements included in the
Prospectus.
(n) At the Closing Date, Trident shall receive a letter in form and
substance satisfactory to counsel for Trident from Xxxxx Xxxxxxxx LLP,
independent certified public accountants, dated the Closing Date and addressed
to Trident, confirming the statements made by them in the letter delivered by
them pursuant to subsections (k) through (l) inclusive as of a specified date
not more than five (5) business days prior to the Closing Date.
(o) All corporate proceedings and action taken by the Company or the
Association in connection with the issuance and sale of the Shares and the
Acquisition as herein contemplated and all opinions and certificates mentioned
above or elsewhere in this Agreement shall be reasonably satisfactory in form
and substance to Trident and their counsel.
30
All such opinions, certificates, letters and documents prepared for
Trident's reliance shall be in compliance with the provisions hereof only if
they are, in the reasonable opinion of Trident and their counsel, satisfactory
to Trident and their counsel. Any certificates signed by an officer or director
of the Company, the Association or Citizens prepared for Trident's reliance and
delivered to Trident or to counsel for Trident shall be deemed a representation
and warranty by the Company, the Association and Citizens to Trident as to the
statements made therein. If any condition to Trident's obligations hereunder to
be fulfilled prior to or at the Closing Date is not so fulfilled, Trident may
terminate this Agreement or, if Trident so elects, may waive any such conditions
which have not been fulfilled, or may extend the time of their fulfillment. If
Trident terminates this Agreement in accordance with the foregoing, the Company
or the Association shall reimburse Trident for its accountable expenses as
provided in Section 3(d) of this Agreement.
7. Indemnification. The Company and the Association, jointly and severally,
hereby agree to indemnify and hold harmless Trident, its officers, directors and
employees and each person, if any, who controls Trident within the meaning of
Section 15 of the Act or Section 20(a) of the Exchange Act:
(a) Against any and all loss, liability, claim, damage and expense
whatsoever, including, but not limited to, legal fees and expenses, reasonably
incurred by Trident in investigating, preparing to defend or defending against
any action, proceeding or claim (whether commenced or threatened) (i) arising
out of any misrepresentation by the Company or the Association in this
Agreement, including, but not limited to, the breach of any representation or
warranty set forth in this Agreement, or any breach of warranty by the Company
or the Association with respect to this Agreement or (ii) arising out of or
based upon any untrue or alleged untrue statement of a material fact or the
omission or alleged omission of a material fact required to be stated or
necessary to make not misleading any statements contained in (I) the
Registration Statement or the Prospectus or (II) any application (including, but
not limited to, the Form AC) or other document or communication (hereinafter
collectively referred to in this Section 7 as the "Applications") prepared or
executed by or on behalf of the Company or the Association or based upon written
information furnished by or on behalf of the Company or the Association with the
consent of the Company or the Association to effect the Conversion, the
Acquisition or qualify the Shares under the securities law of the United States
or any state or filed with the Commission, the OTS or the FRB, unless such
statement or omission was made in reliance upon and in conformity with written
information furnished to the Company or the Association with respect to Trident
by or on behalf of Trident expressly for use in the Prospectus or any amendment
or supplement thereof or in any Application. This indemnity shall be in addition
to any liability the Company or the Association may have to Trident otherwise.
(b) Against any and all loss, liability, claim, damage and expense
whatsoever to the extent of the aggregate amount paid in settlement of any
litigation, 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, if such
settlement is effected with the written consent of the Company or the
Association.
31
(c) Against any and all expenses whatsoever (including the fees and
disbursements of counsel chosen by Trident) reasonably incurred in
investigating, preparing or defending against any litigation, 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, to the extent that any such expense is not
paid under subsection (a) or (b) of this Section 7.
(d) Trident hereby agrees to indemnify and hold harmless the Company and
the Association, their respective officers, directors and employees and each
person, if any, who controls the Company and the Association within the meaning
of Section 15 of the Act or Section 20(a) of the Exchange Act, to the same
extent as the foregoing indemnity from the Company and the Association to
Trident, but only with respect to statements or omissions, if any, made in the
Prospectus or any amendment or supplement thereof or in any Application in
reliance upon, and in conformity with, written information furnished to the
Company or the Association with respect to Trident by or on behalf of Trident
expressly for use in the Prospectus or in any Application.
(e) Promptly after receipt by an indemnified party under this Section 7 of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 7, notify the indemnifying party of the commencement thereof; provided,
however, that the omission to so notify the indemnifying party will not relieve
the indemnifying party from any liability which it may have to any indemnified
party otherwise than under this Section 7. In case any such action is brought
against any indemnified party, and the indemnified party notifies the
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate therein and, to the extent that the indemnifying party
may wish, jointly with any other indemnifying party similarly notified, to
assume the defense thereof, with counsel satisfactory to such indemnified party,
and after notice from the indemnifying party to such indemnified party of the
indemnifying party's election so to assume the defense thereof, the indemnifying
party will not be liable to such indemnified party under this Section 7 for any
legal or other expenses subsequently incurred by such indemnified party in
connection with the defense thereof, other than the reasonable cost of
investigation, except as otherwise provided herein. In the event the
indemnifying party elects to assume the defense of any such action and retain
counsel acceptable to the indemnified party, the indemnified party may retain
additional counsel, but shall bear the fees and expenses of such counsel unless
(i) the indemnifying party shall have specifically authorized the indemnified
party to retain such counsel or (ii) the parties to such suit include such
indemnifying party and the indemnified party, and such indemnified party shall
have been advised by counsel that one or more material legal defenses may be
available to the indemnified party which may not be available to the
indemnifying party, in which case the indemnifying party shall not be entitled
to assume the defense of such suit notwithstanding the indemnifying party's
obligation to bear the fees and expenses of such counsel. An indemnifying party
against whom indemnity may be sought shall not be liable to indemnify an
indemnified party under this Section 7 if any settlement of any such action is
effected without such indemnifying party's consent.
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8. Contribution.
(a) In order to provide for just and equitable contribution in
circumstances in which the indemnity provided for in Section 7 of this Agreement
is for any reason held to be unavailable to Trident other than in accordance
with its terms, the Company and/or the Association and Trident shall contribute
to the aggregate losses, liabilities, claims, damages and expenses of the nature
contemplated by such indemnity incurred by the Company and/or the Association
and Trident (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company and/or the Association on the one hand and
Trident on the other from the offering of the Shares or, (ii) if the allocation
provided by clause (i) above 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 Company and/or the
Association on the one hand and Trident on the other, in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities or judgments, as well as any other relevant equitable
considerations. The relative benefits received by the Company and/or the
Association, on the one hand, and Trident, on the other, shall be deemed to be
in the same proportions as the total proceeds from the Conversion (before
deducting expenses) received by the Company and/or the Association bear to the
total fees received by Trident under this Agreement. The relative fault of the
Company and/or the Association on the one hand and Trident on the other shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company and/or the
Association or by Trident, the relative intent of the parties, the knowledge of
the parties, access to information, and opportunity to correct or prevent such
statement or omission.
(b) The Company and the Association and Trident 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 in the immediately preceding
paragraph. The amount paid or payable by an indemnified party as result of the
losses, claims, damages, liabilities or judgments referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 8, Trident shall not be required
to contribute any amount in excess of the amount by which fees owed Trident
pursuant to this Agreement exceed the amount of any damages which Trident has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section ll(f) of the Act) shall be
entitled to contribution from any person who is not guilty of such fraudulent
misrepresentation.
9. Survival of Agreements, Representations and Indemnities. The
respective indemnities of the Company and the Association and Trident and the
representations and warranties of the Company and the Association set forth in
or made pursuant to this Agreement shall remain in full force and effect
regardless of any termination or cancellation of this Agreement or any
33
investigation made by or on behalf of Trident or the Company or the Association
or any controlling person or indemnified party referred to in Section 7 of this
Agreement, and shall survive any termination of this Agreement and/or the
issuance of the Shares. Any successor or assign of Trident, the Company or the
Association, any such controlling person and any legal representative of
Trident, the Company or the Association, and any such controlling person of
Trident, the Company or the Association shall be entitled to the benefit of the
respective agreements, indemnities, warranties and representations contained in
this Agreement.
10. Termination. Trident may terminate this Agreement by giving notice at
any time after this Agreement becomes effective, as follows:
(a) If any domestic or international event or act or occurrence has
materially disrupted the United States securities markets such as to make
impracticable, in Trident's opinion, proceeding with the offering of the Shares;
or if trading on the New York Stock Exchange shall have been suspended or if
limits in prices or volumes or the manner of trading shall have been imposed by
the New York Stock Exchange; or if the United States shall have become involved
in a war or major hostilities; or if a general banking moratorium has been
declared by a state or federal authority; or if a moratorium in foreign exchange
trading by major international banks or persons has been declared; or if there
shall have been a material adverse change in the capitalization, condition or
business of the Company, the Association or Citizens; or if the Company, the
Association or Citizens shall have sustained a material or substantial loss by,
but not limited to, fire, flood, accident, hurricane, earthquake, theft,
sabotage or other calamity or malicious act, whether or not said loss shall have
been insured; if there shall have been a material adverse change in the
condition or prospects of the Company, the Association or Citizens, considered
as one enterprise; or if Trident elects to terminate this Agreement under any
other section of this Agreement.
(b) If Trident elects to terminate this Agreement as provided in this
Section 10, the Company and the Association shall be notified promptly by
Trident by telephone or telegram, confirmed by letter.
(c) If this Agreement is terminated by Trident for any of the reasons set
forth in subsection (a) of this Section 10, the Company or the Association shall
reimburse Trident for any expenses incurred by them and reimbursable in
accordance with Section 3(d)(ii) and (iii) of this Agreement.
11. Notices. All communications hereunder, except as herein otherwise
specifically provided, shall be in writing and:
If sent to Trident, shall be mailed, delivered or telegraphed and confirmed to:
Trident Securities, Inc.
0000 Xxx Xxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxx Xxxxxxxx 00000
34
Attention: Xx. Xxxxxxx Xxxxxxx
with a copy to:
Xxxxxxx X. Xxxxxxxx, Esq.
Xxxxxxx Xxxxxxxx & Xxxx
0000 X Xxxxxx, X.X. Xxxxx 000
Xxxxxxxxxx, X.X. 00000
If sent to the Company or the Association, shall be mailed, delivered or
telegraphed and confirmed to:
Madison First Federal Savings and Loan Association
000 Xxxxxx Xxxxx
X.X. Xxx 000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxxx
with a copy to:
Xxxxxxx X. Xxxxxx, Esq.
Xxxxxx & Xxxxxxxxx
1313 Merchants Bank Building
00 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
12. Parties. The Company and the Association shall be entitled to act and
rely on any request, notice, consent, waiver or agreement purportedly given on
behalf of Trident when the same shall have been given by the undersigned.
Trident shall be entitled to act and rely on any request, notice, consent,
waiver or agreement purportedly given on behalf of the Company or the
Association, when the same shall have been given by the undersigned or any other
officer of the Company or the Association. This Agreement shall inure solely to
the benefit of, and shall be binding upon, Trident, the Company, the Association
and the controlling persons and indemnified parties referred to in Section 7 of
this Agreement, and their respective successors, legal representatives and
assigns, and no other person shall have or be construed to have any legal or
equitable right, remedy or claim under, or in respect of, or by virtue of, this
Agreement or any provision herein contained.
13. Closing. At the Closing, Trident shall submit a list of the persons
subscribing for the Shares and the number of Shares so subscribed. The Company
or the Association shall deliver to Trident in immediately available funds the
fees, commissions and remaining expenses due and owing to Trident as set forth
in Section 3(d) of this Agreement and the opinions and certificates required
hereby and other documents deemed reasonably necessary by Trident shall be
executed and delivered to effect the sale of the Shares as contemplated hereby
and pursuant to the terms of the Xxxxxxxxxx.
00
00. Partial Invalidity. In the event that any term, provision or covenant
of this Agreement or the application thereof to any circumstance or situation
shall be invalid or unenforceable, in whole or in part, the remainder hereof and
the application of such term, provision or covenant to any other circumstance or
situation shall not be affected thereby, and each term, provision or covenant of
this Agreement shall be valid and enforceable to the full extent permitted by
law.
15. Construction. This Agreement shall be construed in accordance with
the substantive laws of the State of Indiana, except to the extent that federal
law applies.
16. Counterparts. This Agreement may be executed in separate
counterparts, each of which when so executed and delivered shall be an original,
but all of which together shall constitute but one and the same instrument.
If the foregoing correctly sets forth the understanding between Trident
and the Company and the Association, please so indicate in the space provided
below for that purpose, whereupon it shall constitute a binding agreement
between Trident and the Company and the Association.
Very truly yours,
RIVER VALLEY BANCORP
By:
-------------------------------------
Xxxxx X. Xxxxx
President and Chief Executive Officer
MADISON FIRST FEDERAL SAVINGS AND LOAN ASSOCIATION
36
By:
-------------------------------------
Xxxxx X. Xxxxx
President and Chief Executive Officer
Accepted as of the date first above written.
TRIDENT SECURITIES, INC.
By:
------------------------
Xxxxxxx X. Xxxxxxx
President
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