FOUNDATION BANCORP, INC.
Up to 402,500 Shares of Common Stock
(No Par Value)
Subscription Price $10.00 Per Share
AGENCY AGREEMENT
June _____, 1996
Charles Webb & Company
211 Bradenton Drive
Dublin, Ohio 43017-5034
Ladies and Gentlemen:
Foundation Bancorp, Inc., Cincinnati, Ohio, an Ohio corporation (the
"Company"), and Foundation Savings Bank, Cincinnati, Ohio, an Ohio chartered
mutual savings and loan association (the "Bank"; references to the "Bank"
include the Bank in the mutual or stock form, as indicated by the context), with
its deposit accounts insured by the Savings Association Insurance Fund ("SAIF")
administered by the Federal Deposit Insurance Corporation ("FDIC"), hereby
confirm their agreements with Charles Webb & Company ("Agent") as follows:
Section 1. THE OFFERING. The Company is offering up to 402,500 shares of
common stock, no par value (the "Shares" or "Common Stock") (subject to increase
up to 462,875 shares), in a concurrent subscription offering (the "Subscription
Offering") and community offering (the "Community Offering") in connection with
the conversion of the Bank from an Ohio chartered mutual savings and loan
association to an Ohio chartered stock savings and loan association and the
issuance of all of the Bank's outstanding common stock to the Company (the
"Conversion") pursuant to the Bank's plan of conversion (the "Plan").
Non-transferable rights to subscribe for the Common Stock ("Subscription
Rights") will be granted, in the following priority in the Subscription
Offering: (1) the Bank's depositors with account balances of $50.00 or more as
of May 31, 1995 ("Eligible Account Holders"); (2) the Company's Employee Stock
Ownership Plan (the "ESOP"); and (3) the Bank's depositors with account balances
of $50.00 or more as of June 30, 1996 and who are not Eligible Account Holders
("Supplemental Eligible Account Holders"). The Company will issue such number
of shares of its Common Stock upon the Conversion as is subscribed for up to
402,500 shares (subject to increase up to 462,875 Shares) at a purchase price of
$10.00 per share (the "Purchase Price").
Draft of June 7, 1996
Charles Webb & Company
Page 2
The Company is concurrently offering all shares of Common Stock not
subscribed for in the Subscription Offering, if any, in a direct Community
Offering to members of the general public with a preference to natural persons
residing in Hamilton County, Ohio (the Subscription Offering and Community
Offering are collectively referred to as the "Offering").
It is acknowledged that the purchase of Shares in the Offering is subject
to the maximum and minimum purchase limitations as described in the Plan and
that the Company and the Bank may reject, in whole or in part, any orders
received in the Community Offering. Collectively, these transactions are
referred to herein as the "Conversion."
The Company has filed with the Securities and Exchange Commission
("Commission") a registration statement on Form S-1 (File No. ______________)
("Registration Statement") containing a prospectus relating to the Offering for
the registration of the Shares under the Securities Act of 1933 ("1933 Act"),
and has filed such amendments thereto, if any, and such amended prospectuses as
may have been required to the date hereof. The prospectus, as amended, on file
with the Commission at the time the Registration Statement initially becomes
effective is hereinafter called the "Prospectus," except that if any prospectus
is filed by the Company pursuant to Rule 424(b) or (c) of the rules and
regulations of the Commission under the 1933 Act ("1933 Act Regulations")
differing from the prospectus on file at the time the Registration Statement
initially becomes effective, the term "Prospectus" shall refer to the prospectus
filed pursuant to Rule 424(b) or (c) from and after the time said prospectus is
filed with the Commission.
The Bank has filed with the Office of Thrift Supervision ("OTS") and the
Superintendent of the Ohio Division of Financial Institutions (the "Ohio
Superintendent") an Application for Approval of Conversion on Form AC, including
the Prospectus, and has filed such amendments thereto, if any, as may have been
required by the OTS and the Ohio Superintendent (as so amended, the "Conversion
Application") pursuant to the Home Owners' Loan Act, as amended ("HOLA"), and 12
C.F.R. Part 563b with respect to the OTS and Ohio Revised Code Section 1155.27
and Ohio Administrative Code 1301:2-1-16 with respect to the Ohio Superintendent
(the "Conversion Regulations"). The Conversion Application has been approved
by the OTS and the Ohio Superintendent and the related Prospectus and proxy
statement have been authorized for use by the OTS and the Ohio Superintendent.
In addition, the Company has filed with the OTS an application on Form H-(e)1-S
("Holding Company Application"), and has filed such amendments thereto, if any,
as may have been required by the OTS, to become registered as a savings and loan
holding company under the HOLA.
Section 2. RETENTION OF THE AGENT; COMPENSATION; SALE AND DELIVERY OF THE
SHARES. Subject to the terms and conditions of this Agreement, the Company and
the Bank hereby
Draft of June 7, 1996
Charles Webb & Company
Page 3
appoint Agent as their financial advisor and investment banker to advise and
assist the Company and the Bank with respect to the Company's sale of the Shares
in the Offering.
On the basis of the representations, warranties, and agreements herein
contained, but subject to the terms and conditions of this Agreement, the Agent
accepts such appointment and agrees to furnish the Company and the Bank with
the "Conversion Services" as such term is defined in the letter agreement dated
December 27, 1995 and accepted by the Bank on April 11, 1996 ("Letter
Agreement") between the Bank and Agent. The Agent shall not be required to
purchase any Shares and shall not be obligated to take any action which is
inconsistent with any law, regulation, decision or order applicable to the
Conversion or the Offering. If the Company and the Bank deem necessary, the
Agent will assemble and manage a selling group of broker-dealers which are
members of the National Association of Securities Dealers, Inc. ("NASD") to
participate in the solicitation of purchase orders for shares under a selected
dealers' agreement in the form attached hereto as Exhibit A.
In the event the Company is unable to sell a minimum of 297,500 Shares
during the Offering (including any permitted extensions thereof) herein
provided, this Agreement shall terminate and the Company shall refund to any
persons who have subscribed for any of the Shares, the full amount which it may
have received from them plus accrued interest as set forth in the Prospectus;
and none of the parties to this Agreement shall have any obligation to the other
parties hereunder, except as set forth in this Section 2 and in Sections 9, 11
and 12 hereof.
If all conditions precedent to the consummation of the Conversion,
including, without limitation, the receipt of subscriptions for the minimum
number of Shares permitted to be sold in the Conversion on the basis of the most
recent updated Conversion appraisal, are satisfied, the Company agrees to issue,
or have issued, the Shares sold in the Offering and to release for delivery
certificates for such Shares on the Closing Date (as hereinafter defined)
against payment to the Company by any means authorized by the Plan; provided,
however, that no funds shall be released to the Company until the conditions
specified in Section 10 hereof shall have been complied with to the reasonable
satisfaction of the Agent and its counsel. The release of Shares against
payment therefor shall be made at a time, date and place acceptable to the
Company, the Bank and the Agent. Certificates for Shares shall be delivered
directly to the purchasers in accordance with their directions. The date upon
which the Company shall release or deliver the Shares sold in the Offering, in
accordance with the terms herein, is called the "Closing Date."
The Company and the Bank, jointly and severally, agree as follows:
(a) To pay to the Agent a financial advisory fee of $50,000 for its
services hereunder, payable as follows: $5,000 was payable upon the
execution and delivery of the Letter Agreement; $10,000 was payable
upon filing of the
Draft of June 7, 1996
Charles Webb & Company
Page 4
Registration Statement, Conversion Application and Holding Company
Application; $10,000 was payable upon the mailing of the Prospectus to
the Eligible Account Holders and Supplemental Eligible Account
Holders; and, $25,000 shall be payable upon the closing of the Plan
and the Offering.
(b) In addition to the above fee, the Company and the Bank also agree to
reimburse the Agent, from time to time upon Agent's request, for its
reasonable out-of-pocket expenses, including without limitation,
travel, meals and lodging, photocopying, telephone and facsimile
expenses and NASD and other filing fees. Such reimbursement will be
based upon documentation and will not exceed $5,000 without the prior
approval of the Company and the Bank. The Company and the Bank
further agree to reimburse the Agent for the reasonable legal fees and
expenses of its legal counsel not to exceed $25,000.
(c) The Company and the Bank shall also pay all other expenses of the
Conversion and the Offering, including, without limitation, filing and
registration fees of the OTS, Ohio Superintendent, FDIC, SEC, "Blue
Sky," NASD and Nasdaq, the fees of the Company's and the Bank's
accountants, conversion agent, attorneys, appraiser, transfer agent
and registrar, and data processing, printing, mailing and marketing
expenses associated with the Conversion and the Offering. If Agent
incurs any of such expenses on behalf of the Company or the Bank, they
shall reimburse the Agent, from time to time upon the Agent's request,
for all of such expenses it has incurred on behalf of them or either
of them and the amount thereof shall not be counted against the $5,000
limitation set forth in paragraph (b) above.
(d) Selected broker/dealers who assist in the Offering will be paid a fee
equal to 4.0% of the aggregate Purchase Price of the Shares sold by
them in the Offering. [Agent's total fee for such Shares shall equal
1.5% of the aggregate Purchase Price of the Shares sold by selected
broker/dealers. In the event any fees are paid to Agent pursuant to
this subsection (c), such fees shall be in lieu of, and not in
addition to, the fee paid pursuant to subsection (a) above.] Fees
with respect to purchases effected with the assistance of a
broker/dealer other than Agent shall be transmitted by the Agent to
such broker/dealer. The decision to utilize selected broker/dealers
will be made by the Company and the Bank.
(e) In addition, the Agent shall be paid a fee of $5,000 for the
performance of its duties as conversion agent and to arrange for data
processing services related to the Offering, which the Agent will
subcontract to a third party.
Draft of June 7, 1996
Charles Webb & Company
Page 5
Agent shall be deemed to have earned and shall be entitled to be paid all
of the financial advisory fee set forth above and shall further be entitled to
reimbursement of its out-of-pocket expenses as set forth above should the
Conversion be terminated or abandoned for any reason not attributable to the
action or inaction of the Agent.
The term of the Agent's duties to act as financial advisor and investment
banker to the Company and the Bank under this Agreement and the Letter
Agreement shall expire on April 10, 1997 unless the Conversion is terminated or
abandoned at any time prior to such date, in which case the term of the Agent's
duties shall terminate upon such termination or abandonment. Until such date or
earlier termination or abandonment, Agent shall have the exclusive right to
perform the Conversion Services for the Company and the Bank. Accordingly, they
agree they will not directly or indirectly retain any other financial advisor or
investment banker to perform for them financial advisory or investment banking
services like or similar to the Conversion Services. Thereafter, if the parties
wish to continue the relationship, a fee will be negotiated and an agreement
with respect to specific financial advisory services will be entered into at
that time. Should discussions commence for a specific acquisition transaction
by, or a sale of, the Company or the Bank during the period in which Agent is
acting as a financial advisor to the Company and the Bank, the general financial
advisory and investment banking relationship as set forth in this Section 2 will
terminate with respect to the specific transaction. If the Company or the Bank
and Agent wish to have Agent initiate, negotiate and/or process a specific
transaction, a fee will be negotiated and an agreement will be entered into at
that time.
Section 3. PROSPECTUS; OFFERING. The Shares are to be initially offered in
the Offering at the Subscription Price as defined and set forth on the cover
page of the Prospectus.
Section 4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND BANK. The
Company and the Bank jointly and severally represent and warrant to the Agent as
follows:
(a) The Registration Statement was declared effective by the Commission on
_________________, 1996; and no stop order has been issued with respect thereto
and no proceedings therefore have been initiated or to the best knowledge of the
Company or the Bank threatened by the Commission. At the time the Registration
Statement, including the Prospectus contained therein (including any amendment
or supplement thereto), became effective, the Registration Statement complied as
to form in all material respects with the requirements of the 1933 Act and the
regulations promulgated thereunder and the Registration Statement including the
Prospectus contained therein (including any amendment or supplement thereto),
any Blue Sky Application or any Sales Information (as such terms are defined in
Section 11 hereof) authorized by the Company or the Bank for use in connection
with the Subscription and Community Offering did not contain an untrue statement
of a material fact or omit to state a material fact
Draft of June 7, 1996
Charles Webb & Company
Page 6
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading, and at
the time any Rule 424(b) or (c) Prospectus was filed with or mailed to the
Commission for filing and at the Closing Date referred to in Section 5, the
Registration Statement including the Prospectus contained therein (including any
amendment or supplement thereto) and any Blue Sky Application or any Sales
Information authorized by the Company or the Bank for use in connection with the
Subscription and Community Offering will not contain an 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; provided, however, that the representations and warranties in
this subsection (a) shall not apply to statements or omissions made in reliance
upon and in conformity with written information furnished to the Company or the
Bank by the Agent expressly regarding the Agent for use under the caption
"_______________________" or written statements or omissions from any Sales
Information or information filed pursuant to state securities or blue sky laws
or regulations regarding the Agent.
(b) The Conversion Application was approved by the OTS on__________________
_______, 1996 and by the Ohio Superintendent on _________________, 1996 and the
related Prospectus and the proxy statement of the Bank relating to the special
meeting of members at which the Plan will be considered for approval by the
Bank's eligible voting members have been authorized for use by the OTS and the
Ohio Superintendent. At the time of the approval of the Conversion Application,
including the Prospectus, by the OTS and the Ohio Superintendent and at all
times subsequent thereto until the Closing Date, the Conversion Application,
including the Prospectus, will comply in all material respects with the
Conversion Regulations. The Conversion Application, including the Prospectus,
does 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; provided, however, that the representations and warranties in this
subsection (b) shall not apply to statements or omissions made in reliance upon
and in conformity with written information furnished to the Company or the Bank
by the Agent expressly regarding the Agent for use in the Prospectus under the
caption "_______________________________________" or statements in or omissions
from any Sales Information or information regarding the Agent filed pursuant to
state securities or blue sky laws or regulations.
(c) The Company filed the Holding Company Application with the OTS
pursuant to the HOLA, which was approved on __________________.
(d) No order has been issued by the OTS, Ohio Superintendent, the
Commission, the FDIC (and hereinafter reference to the FDIC shall include the
SAIF), or any other governmental agency preventing or suspending the use of the
Prospectus and no action by or before any
Draft of June 7, 1996
Charles Webb & Company
Page 7
governmental entity to revoke any approval, authorization or order of
effectiveness related to the Conversion is, to the best knowledge of the Company
and the Bank, pending or threatened.
(e) The Plan has been adopted by the Boards of Directors of the Company and
the Bank as required by the Conversion Regulations.
(f) To the best knowledge of the Company, no person has sought to obtain
review of the final action of the OTS or the Ohio Superintendent in approving
the Plan or the Conversion or the OTS in approving the Holding Company
Application pursuant to the HOLA, Conversion Regulations, Blue Sky Laws, or any
other statute or regulation.
(g) The Bank has been duly incorporated and is validly existing as an Ohio
chartered savings and loan association in mutual form of organization in good
standing under the laws of the State of Ohio and upon the Conversion will become
a duly organized and validly existing Ohio chartered and loan association in
capital stock form of organization, in both instances duly authorized to conduct
its business and own its property as described in the Registration Statement and
the Prospectus; the Bank has obtained all licenses, permits and other
governmental authorizations currently required for the conduct of its business
except those that individually or in the aggregate would not materially
adversely affect the financial condition, earnings, capital, assets or
properties of the Company and the Bank taken as a whole; all such licenses,
permits and governmental authorizations are in full force and effect and the
Bank is complying therewith in all material respects; the Bank is duly qualified
as a foreign corporation in each jurisdiction in which the conduct of its
business requires such qualification, except where the failure to be so
qualified in one or more of such jurisdictions would not have a material adverse
effect on the condition, financial or otherwise, or the earnings, capital,
assets, properties or business of the Bank and the Company taken as a whole.
The Bank does not own any equity securities or any equity interest in any
business enterprise except as described in the Prospectus.
(h) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Ohio with corporate
power and authority to own, lease and operate its properties and to conduct its
business as described in the Registration Statement and the Prospectus; and the
Company is qualified to do business as a foreign corporation in each
jurisdiction in which the conduct of its business requires such qualification,
except where the failure to so qualify would not have a material adverse effect
on the condition, financial or otherwise, earnings, capital, assets, properties
or the business, of the Company and the Bank taken as a whole. The Company has
obtained all licenses, permits and other governmental authorizations currently
required for the conduct of its business except those that individually or in
the aggregate would not materially adversely affect the financial condition,
earnings, capital, assets or properties of the Company and the Bank taken as a
whole; all such
Draft of June 7, 1996
Charles Webb & Company
Page 8
licenses, permits and governmental authorizations are in full force and effect,
and the Company is complying therewith in all material respects.
(i) At the Closing Date, the Plan will have been duly adopted by the Board
of Directors of both the Company and the Bank, the Company and the Bank will
have completed all conditions precedent to the Conversion specified in the Plan
and the offer and sale of the Shares will have been conducted in all material
respects in accordance with the Plan, the Conversion Regulations (except as
modified or waived in writing by the OTS and Ohio Superintendent) and with all
other applicable laws, regulations, decisions and orders, including all terms,
conditions, requirements and provisions precedent to the Conversion imposed upon
the Company or the Bank by the OTS, the Ohio Superintendent, the FDIC, the
Commission or any other regulatory authority and in the manner described in the
Prospectus. At the Closing Date, to the best knowledge of the Company and the
Bank, no person will have sought to obtain review of the final action of the OTS
or the Ohio Superintendent in approving the Plan or in approving the Conversion
or the OTS in approving the Holding Company Application pursuant to any statute
or regulation.
(j) The Bank is a member of the Federal Home Loan Bank of Cincinnati
("FHLB-Cincinnati"); the deposit accounts of the Bank are insured by the FDIC
under the SAIF up to applicable limits; and no proceedings for the termination
or revocation of such membership or insurance are to the best knowledge of the
Company or the Bank, pending or threatened.
(k) The Company and the Bank have good and marketable title to all real
property and other assets material to the business of the Company and the Bank
and to those properties and assets described in the Registration Statement and
Prospectus as owned by them, free and clear of all liens, charges, encumbrances
or restrictions, except such as are described in the Registration Statement and
Prospectus or are not material to the business of the Company and the Bank; and
all of the leases and subleases material to the business of the Company and the
Bank under which the Company or the Bank hold properties, including those
described in the Registration Statement and Prospectus, are in full force and
effect.
(l) The Company and the Bank have received an opinion of their special
counsel, Vorys, Sater, Seymour and Pease, Cincinnati, Ohio, with respect to the
federal income tax consequences of the Conversion and an opinion from Clark,
Schaefer, Hackett & Co., independent certified public accountants with respect
to the Ohio income tax consequences of the Conversion as described in the
Registration Statement and Prospectus; and the facts and representations upon
which such opinions are based are truthful, accurate and complete, and neither
the Company nor the Bank has taken any actions inconsistent therewith.
Draft of June 7, 1996
Charles Webb & Company
Page 9
(m) The Company and the Bank have all such power, authority,
authorizations, approvals and orders as may be required to enter into this
Agreement, to carry out the provisions and conditions hereof and in the case of
the Bank, as of the Closing Date, will have such approvals, authority and orders
to issue and sell the capital stock of the Bank to the Company and in the case
of the Company, as of the Closing Date, will have such approvals, authority and
orders to issue and sell the Shares to be sold by the Company as provided herein
and as described in the Prospectus.
(n) The Company and the Bank are not in violation of any directive from
the OTS, Ohio Superintendent, FDIC or any other governmental agency to make any
change in the method of conducting their businesses so as to comply in all
material respects with all applicable statutes and regulations (including,
without limitation, regulations, decisions, directives and orders of the OTS,
Ohio Superintendent and the FDIC); the Company and the Bank have conducted and
are conducting their respective businesses so as to comply in all material
respects with all applicable statutes and regulations (including, without
limitation, regulations, decisions, directives and orders of the OTS, Ohio
Superintendent, the Commission and the FDIC) and, except as set forth in the
Registration Statement and the Prospectus, there is no suit, proceeding, charge
or action before or by any court, regulatory authority or governmental agency or
body, pending or, to the best knowledge of the Company and the Bank, threatened,
which might materially and adversely affect the Conversion, the performance of
this Agreement or the consummation of the transactions contemplated in the Plan
and as described in the Registration Statement and the Prospectus or which might
result in any material adverse change in the condition (financial or otherwise),
earnings, capital, properties, assets or business of the Company or the Bank
taken as a whole or which would materially affect their properties and assets.
(o) The consolidated financial statements and the schedules and notes
thereto which are included in the Registration Statement and which are a part of
the Prospectus fairly present the consolidated financial condition, results of
operations, retained earnings and cash flows of the Bank at the respective dates
thereof and for the respective periods covered thereby and comply as to form in
all material respects with the applicable accounting requirements of Title 12 of
the Code of Federal Regulations and generally accepted accounting principles
("GAAP"). Such financial statements have been prepared in accordance with GAAP
consistently applied through the periods involved (except as noted therein),
present fairly in all material respects the information required to be stated
therein and are consistent with the most recent financial statements and other
reports filed by the Bank with the OTS and the Ohio Superintendent, except that
accounting principles employed in such regulatory filings conform to the
requirements of such authorities and not necessarily to GAAP. The other
financial, statistical and pro forma information and related notes included in
the Prospectus present fairly the information shown therein on a basis
consistent with the audited and unaudited financial statements of the Bank
Draft of June 7, 1996
Charles Webb & Company
Page 10
included in the Registration Statement and the Prospectus, and as to the pro
forma adjustments, the adjustments made therein have been properly applied on
the bases described therein.
(p) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, except as may otherwise be stated
therein: (i) there has not been any material adverse change in the condition,
financial or otherwise, of the Company and the Bank, or in the earnings,
capital, properties or business of the Company and the Bank considered as one
enterprise, whether or not arising in the ordinary course of business; (ii)
there has not been any material increase in the debt of the Bank or in loans
past due 90 days or more or real estate acquired by foreclosure, by deed-in-lieu
of foreclosure or deemed in-substance foreclosure or any material decrease in
surplus and reserves or total assets of the Bank; (iii) neither the Company nor
the Bank has issued any securities or incurred any liability or obligation for
borrowing other than in the ordinary course of business; (iv) there have not
been any transactions entered into by the Company or the Bank, except with
respect to those transactions entered into in the ordinary course of business;
(v) the capitalization, liabilities, assets, properties and business of the
Company and the Bank conform in all material respects to the descriptions
thereof contained in the Prospectus; and (vi) neither the Company nor the Bank
has any material contingent liabilities of any kind, contingent or otherwise,
except as set forth in the Prospectus.
(q) As of the date hereof and as of the Closing Date, neither the Company
nor the Bank is in violation of its articles of incorporation or bylaws or
charter, constitution or bylaws, respectively, (and the Bank will not be in
violation of its charter, constitution or bylaws in capital stock form at the
time of consummation of the Conversion), or in default in the performance or
observance of any material obligation, agreement, covenant, or condition
contained in any contract, lease, loan agreement, indenture or other instrument
to which it is a party or by which it or any of its property may be bound, which
would result in a material adverse change in the condition (financial or
otherwise), earnings, capital assets, properties or business of the Company and
the Bank, considered as one enterprise. The consummation of the Conversion, the
execution, delivery and performance of this Agreement and the consummation of
the transactions herein contemplated have been duly and validly authorized by
all necessary corporate action on the part of the Company and the Bank and this
Agreement has been validly executed and delivered by the Company and the Bank
and is the valid, legal and binding Agreement of the Company and the Bank
enforceable in accordance with its terms, except as the enforceability thereof
may be limited by (i) bankruptcy, insolvency, moratorium, reorganization,
conservatorship, receivership or other similar laws relating to or affecting the
enforcement or creditors' rights generally or the rights of creditors of insured
financial institutions and their holding companies, the accounts of whose
subsidiaries are insured by the FDIC, (ii) general equity principles regardless
of whether such enforceability is considered in a proceeding in equity or at
law, or (iii) laws relating to the safety and soundness of insured depository
Draft of June 7, 1996
Charles Webb & Company
Page 11
institutions and their affiliates as set forth in 12 U.S.C. Section 1818(b), and
except to the extent, if any, that the provisions of Sections 11 and 12 hereof
may be unenforceable as against public policy or by applicable law, including
without limitation Section 23A of the Federal Reserve Act, 12 U.S.C. 371c
("Section 23A").
(r) No default exists, and no event has occurred which with notice or
lapse of time, or both, would constitute a material default on the part of the
Company or the Bank, in the due performance and observance of any term, covenant
or condition of any indenture, mortgage, deed of trust, note, bank loan or
credit agreement or any other instrument or agreement to which the Company or
the Bank is a party or by which any of them or any of their property is bound or
affected except such defaults which would not have a material adverse affect on
the condition, financial or otherwise, earnings, capital, assets, properties or
business of the Company and the Bank considered as one enterprise; such
agreements are in full force and effect; and no other party to any such
agreements has instituted or, to the best knowledge of the Company or the Bank,
threatened any action or proceeding wherein the Company or the Bank might be
alleged to be in default thereunder under circumstances where such action or
proceeding, if determined adversely to the Company or the Bank, would have a
material adverse effect on the Company and the Bank considered as one
enterprise.
(s) Upon consummation of the Conversion, the authorized, issued and
outstanding equity capital of the Company will be within the range set forth in
the Prospectus under the caption "Capitalization," and no shares of Common Stock
have been or will be issued and outstanding prior to the Closing Date referred
to in Section 2; the Shares will have been duly and validly authorized for
issuance and, when issued and delivered by the Company pursuant to the Plan
against payment of the consideration calculated as set forth in the Plan and in
the Prospectus, will be duly and validly issued, fully paid and nonassessable;
no preemptive rights exist with respect to the Shares; and the terms and
provisions of the Shares will conform to the description thereof contained in
the Registration Statement and the Prospectus. Upon the issuance of the Shares,
good title to the Shares will be transferred from the Company to the purchasers
thereof against payment therefor, subject to such claims as may be asserted
against the purchasers thereof by third-party claimants.
(t) No approval, authorization, consent or other order of any regulatory
or supervisory or other public authority is required to be obtained by the
Company or the Bank in connection with the execution and delivery of this
Agreement or the issuance of the Shares except for the approval of the OTS, the
Ohio Superintendent, the Commission and any necessary qualification,
notification, registration or exemption under the securities or blue sky laws of
the various states in which the Shares are to be offered, and except as may be
required under the rules and regulations of the NASD and the Nasdaq Stock
Market.
Draft of June 7, 1996
Charles Webb & Company
Page 12
(u) Clark, Schaefer, Hackett & Co., which has certified the
____________________ financial statements of the Bank as of
_______________________________ and for each of the years in the three year
period ended _______________________, which are included in the Registration
Statement and the Prospectus, are, with respect to the Company and the Bank,
independent public accountants within the meaning of the Code of Professional
Ethics of the American Institute of Certified Public Accountants, the Conversion
Regulations and the 1933 Act Regulations.
(v) Keller & Company, Inc., which has prepared the Bank's Conversion
Valuation Appraisal Report as of ____________________, as amended or
supplemented, if so amended or supplemented ("Appraisal"), is independent of the
Company and the Bank within the meaning of the Conversion Regulations.
(w) The Company and the Bank have timely filed all required federal, state
and local tax returns; the Company and the Bank have paid all taxes that have
become due and payable in respect of such returns, and except where permitted to
be extended, have made adequate reserves for similar future tax liabilities and
no deficiency has been asserted with respect thereto by any taxing authority.
(x) The Bank is in compliance in all material respects with the applicable
financial record-keeping and reporting requirements of the Currency and Foreign
Transactions Reporting Act of 1970, as amended, and the regulations and rules
thereunder.
(y) Neither the Company nor the Bank have made any payment of funds of the
Bank as a loan for the purchase of the Shares or made any other payment of funds
prohibited by law, and no funds have been set aside to be used for any payment
prohibited by law.
(z) Prior to the Conversion, the Bank was not authorized to issue shares
of capital stock and neither the Company nor the Bank: (i) issued any securities
within the last 18 months (except for notes to evidence other bank loans or
other liabilities in the ordinary course of business or as described in the
Prospectus and with respect to the Company; (ii) had any dealings within the 12
months prior to the date hereof with any member of the NASD, or any person
related to or associated with such member, other than discussions and meetings
relating to the proposed Offering and purchases and sales of United States
government and agency and other securities in the ordinary course of business;
(iii) entered into a financial or management consulting agreement except as
contemplated hereunder and except for the Letter Agreement; and (iv) engaged any
intermediary between the Agent and the Company and the Bank in connection with
the Offering, and no person is being compensated in any manner for such service.
Draft of June 7, 1996
Charles Webb & Company
Page 13
(aa) The Company and the Bank have not relied upon the Agent or the Agent's
counsel for any legal, tax or accounting advice in connection with the
Conversion.
(bb) The Company is not required to be registered under the Investment
Company Act of 1940, as amended.
(cc) All documents delivered by the Bank or the Company or their
representatives in connection with the issuance and sale of the Common Stock, or
in connection with the Agent's exercise of due diligence, were on the dates on
which they were delivered, accurate and complete in all material respects.
(dd) The records of account holders, depositors, borrowers and other
members of the Bank are accurate and complete in all material respects. Agent
shall have no liability to any person for the accuracy, reliability and
completeness of such records or for any denial or reduction of a subscription to
purchase Common Stock, whether as a result of a properly calculated allocation
pursuant to the Plan or otherwise, based upon such records.
(ee) To the best knowledge of the Company and the Bank, the Company and the
Bank are in compliance with all laws, rules and regulations relating to
environmental protection, and neither the Company nor the Bank has been notified
or is otherwise aware that either of them is potentially liable, or is
considered potentially liable, under the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, or any other Federal, state
or local environmental laws and regulations. To the best knowledge of the
Company and the Bank, no action, suits, regulatory investigations or other
proceedings are pending, or to the best knowledge of the Company and the Bank,
threatened against the Company or the Bank relating to environmental protection,
nor does the Company or the Bank have any reason to believe any such proceedings
may be brought against either of them. To the best knowledge of the Company and
the Bank, 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 occurred on, in, at
or about any of the facilities or properties of the Company or the Bank.
Any certificates signed by an officer of the Company or the Bank pursuant
to the conditions of this Agreement and delivered to the Agent or their counsel
that refers to this Agreement shall be deemed to be a representation and
warranty by the Company or the Bank to the Agent as to the matters covered
thereby with the same effect as if such representation and warranty were set
forth herein.
Draft of June 7, 1996
Charles Webb & Company
Page 14
Section 5. REPRESENTATIONS AND WARRANTIES OF THE AGENT. Agent represents
and warrants to the Company and the Bank that:
(a) Agent is a corporation and is validly existing in good standing under
the laws of the State of Ohio with full power and authority to provide the
services to be furnished to the Bank and the Company hereunder.
(b) The execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby have been duly and validly authorized by
all necessary action on the part of Agent, and this Agreement has been duly and
validly executed and delivered by Agent and is the legal, valid and binding
agreement of Agent, enforceable in accordance with its terms.
(c) Agent and its employees, and to the best knowledge of Agent, its
agents and representatives, who shall perform any of the services hereunder
shall be duly authorized and empowered, and shall have all licenses, approvals
and permits necessary to perform such services; and Agent is a registered
selling agent in each of the jurisdictions in which the Shares are to be offered
by the Company in reliance upon Agent as a registered selling agent as set forth
in the blue sky memorandum prepared with respect to the Offering.
(d) The execution and delivery of this Agreement by Agent, the
consummation of the transactions contemplated hereby and compliance with the
terms and provision hereof will not materially conflict with, or result in a
material breach of, any of the terms, provision or conditions of, or constitute
a material default (or event which with notice or lapse of time or both would
constitute a default) under, the articles of incorporation of Agent or any
material agreement, indenture or other instrument to which Agent is a party or
by which it or its property is bound.
(e) No approval of any regulatory or supervisory or other public authority
is required in connection with Agent's execution and delivery of this Agreement,
except as may have been received.
(f) There is no suit or proceeding or charge or action before or by any
court, regulatory authority or government agency or body or, to the knowledge of
Agent, pending or threatened, which might materially and adversely affect
Agent's performance of this Agreement.
Section 6. COVENANTS OF THE COMPANY AND THE BANK. The Company and the Bank
hereby jointly and severally covenant with the Agent as follows:
Draft of June 7, 1996
Charles Webb & Company
Page 15
(a) The Company will not, at any time after the date the Registration
Statement is declared effective, file any amendment or supplement to the
Registration Statement without providing the Agent and its counsel an
opportunity to review such amendment or supplement or file any amendment or
supplement to which the Agent or its counsel shall reasonably object.
(b) The Bank will not, at any time after the Conversion Application is
approved by the OTS and the Ohio Superintendent, file any amendment or
supplement to such Conversion Application without providing the Agent and its
counsel an opportunity to review such amendment or supplement or file any
amendment or supplement to which the Agent or its counsel shall reasonably
object.
(c) The Company will not file any amendment or supplement to such Holding
Company Application without providing the Agent and its counsel an opportunity
to review such amendment or supplement or file any amendment or supplement to
which the Agent or its counsel shall reasonably object.
(d) The Company and the Bank will use their best efforts to cause any
post-effective amendment to the Registration Statement to be declared effective
by the Commission and any post-effective amendment to the Conversion Application
to be approved by the OTS and the Ohio Superintendent and will immediately upon
receipt of any information concerning the events listed below notify the Agent:
(i) when the Registration Statement, as amended, has become effective; (ii) when
the Conversion Application, as amended, has been approved by the OTS and the
Ohio Superintendent; (iii) when the Holding Company Application, as amended, has
been approved by the OTS; (iv) of any comments from the Commission, the OTS, the
Ohio Superintendent, or any other governmental entity with respect to the
Conversion or the transactions contemplated by this Agreement; (v) of the
request by the Commission, the OTS, the Ohio Superintendent, or any other
governmental entity for any amendment or supplement to the Registration
Statement, the Conversion Application or the Holding Company Application, or for
additional information; (vi) of the issuance by the Commission, the OTS, the
Ohio Superintendent or any other governmental entity of any order or other
action suspending the Offering or the use of the Registration Statement or the
Prospectus or any other filing of the Company or the Bank under the Conversion
Regulations, or other applicable law, or the threat of any such action; (vii)
the issuance by the Commission, the OTS, the Ohio Superintendent, or any other
governmental authority of any stop order suspending the effectiveness of the
Registration Statement or the approval of the Conversion Application or Holding
Company Application, or of the initiation or threat of initiation or threat of
any proceedings for any such purpose; or (viii) of the occurrence of any event
mentioned in paragraph (h) below. The Company and the Bank will make every
reasonable effort (i) to prevent the issuance by the Commission, the OTS, the
Ohio Superintendent, or any state authority of any such order and,
Draft of June 7, 1996
Charles Webb & Company
Page 16
if any such order shall at any time be issued, (ii) to obtain the lifting
thereof at the earliest possible time.
(e) The Company and the Bank will deliver to the Agent and to its counsel
two conformed copies of the Registration Statement, the Conversion Application
and the Holding Company Application, as originally filed and of each amendment
or supplement thereto, including all exhibits. The Company and the Bank also
will deliver such additional copies of the foregoing documents to counsel to the
Agent as may be required for any NASD filings.
(f) The Company and the Bank will furnish to the Agent, from time to time
during the period when the Prospectus is required to be delivered under the 1933
Act or the Securities Exchange Act of 1934 ("1934 Act"), such number of copies
of such Prospectus as the Agent may reasonably request for the purposes
contemplated by the 1933 Act, the 1933 Act Regulations, the 1934 Act or the
rules and regulations promulgated under the 1934 Act ("1934 Act Regulations").
The Company authorizes the Agent to use the Prospectus in any lawful manner
contemplated by the Plan in connection with the sale of the Shares.
(g) The Company and the Bank will comply with any and all terms,
conditions, requirements and provisions with respect to the Conversion and the
transactions contemplated thereby imposed by the Commission, the OTS and the
Ohio Superintendent to be complied with subsequent to the Closing Date and when
the Prospectus is required to be delivered, the Company and the Bank will
comply, at their own expense, with all requirements imposed upon them by the
Commission, the OTS and the Ohio Superintendent, including, without limitation,
Rule 10b-5 under the 1934 Act, in each case as from time to time in force, so
far as necessary to permit the continuance of sales or dealing in shares of
Common Stock during such period in accordance with the provisions hereof and the
Prospectus.
(h) If, at any time during the period when the Prospectus relating to the
Shares is required to be delivered, any event relating to or affecting the
Company or the Bank shall occur, as a result of which it is necessary or
appropriate, in the opinion of counsel for the Company and the Bank or in the
opinion of the Agent's counsel, to amend or supplement the Registration
Statement or Prospectus in order to make the Registration Statement or
Prospectus not misleading in light of the circumstances existing at the time the
Prospectus is delivered to a purchaser, the Company and the Bank will, at their
expense, prepare and file with the Commission, the OTS and the Ohio
Superintendent and furnish to the Agent a reasonable number of copies of an
amendment or amendments of, or a supplement or supplements to, the Registration
Statement or Prospectus (in form and substance satisfactory to the Agent and its
counsel after a reasonable time for review) which will amend or supplement the
Registration Statement or Prospectus so that as amended or supplemented it will
not contain an untrue statement of a material fact or omit to state a material
fact necessary in order to make the
Draft of June 7, 1996
Charles Webb & Company
Page 17
statements therein, in light of the circumstances existing at the time the
Prospectus is delivered to a purchaser, not misleading. For the purpose of this
Agreement, the Company and the Bank each will timely furnish to the Agent such
information with respect to itself as the Agent may from time to time reasonably
request.
(i) The Company and the Bank will take all necessary actions, in
cooperating with the Agent, and furnish to whomever the Agent may direct, such
information as may be required to qualify or register the Shares for offering
and sale by the Company or to exempt such Shares from registration, or to exempt
the Company as a broker-dealer and its officers, directors and employees as
broker-dealers or Agent under the Blue Sky Laws of such jurisdictions in which
the Shares are required under the Conversion Regulations to be sold or as the
Agent and the Company and the Bank may reasonably agree upon; provided, however,
that the Company shall not be obligated to file any general consent to service
of process or to qualify to do business in any jurisdiction in which it is not
so qualified. In each jurisdiction where any of the Shares shall have been
qualified or registered as above provided, the Company will make and file such
statements and reports in each fiscal period as are or may be required by the
laws of such jurisdiction.
(j) The liquidation account for the benefit of Eligible Account Holders
and Supplemental Eligible Account Holders will be duly established and
maintained in accordance with the Conversion Regulations.
(k) The Company and the Bank will not sell or issue, contract to sell or
otherwise dispose of, for a period of 90 days after the Closing Date, without
the Agent's prior written consent, any shares of Common Stock other than in
connection with any plan or arrangement described in the Prospectus.
(l) The Company shall register its Common Stock under Section 12(g) of the
1934 Act concurrent with the Offering pursuant to the Plan and shall request
that such registration be effective upon completion of the Conversion. The
Company shall maintain the effectiveness of such registration for not less than
three years.
(m) For so long as the Common Stock is registered under the 1934 Act or
for three years from the date hereof, whichever period is greater, the Company
will furnish to its stockholders as soon as practicable after the end of each
fiscal year an annual report of the Company (including a consolidated balance
sheet and statements of consolidated income, stockholders' equity and cash flows
of the Company and its subsidiaries as at the end of and for such year,
certified by independent public accountants in accordance with Regulation S-X
under the 1933 Act and the 1934 Act).
Draft of June 7, 1996
Charles Webb & Company
Page 18
(n) During the period of three years from the date hereof, the Company
will furnish to the Agent: (i) as soon as practicable after such information is
publicly available, a copy of each report of the Company furnished to or filed
with the Commission under the 1934 Act or any national securities exchange or
system on which any class of securities of the Company is listed or quoted
(including, but not limited to, reports on Forms 10-K, 10-Q and 8-K and all
proxy statements and annual reports to stockholders), (ii) a copy of each other
non-confidential report of the Company mailed to its stockholders or filed with
the Commission, the Ohio Superintendent or any other supervisory or regulatory
authority or any national securities exchange or system on which any class of
securities of the Company is listed or quoted, each press release and material
news items and additional documents and information with respect to the Company
or the Bank as the Agent may reasonably request; and (iii) from time to time,
such other nonconfidential information concerning the Company or the Bank as the
Agent may reasonably request.
(o) The Company and the Bank 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."
(p) Neither the Company nor the Bank will distribute any prospectus,
offering circular or other offering material in connection with the offer and
sale of the Shares without first notifying the Agent and unless permitted by the
Conversion Regulations, the 1933 Act, the 1933 Act Regulations and state
securities or blue sky laws in any state in which the Shares are registered or
qualified for sale or exempt from registration.
(q) The Company will use its best efforts to (i) encourage and assist two
market makers to establish and maintain a market for the Shares and (ii) list
the Shares on a national securities exchange or on the Nasdaq Stock Market
effective on or prior to the Closing Date.
(r) The Bank will maintain appropriate arrangements for depositing all
funds received from persons mailing subscriptions for or orders to purchase
Shares in the Offering in an interest bearing account as described in the
Prospectus until the Closing Date and satisfaction of all conditions precedent
to the release of the Bank's obligation to refund payments received from persons
subscribing for or ordering Shares in the Offering in accordance with the Plan
and as described in the Prospectus or until refunds of such funds have been made
to the persons entitled thereto or withdrawal authorizations canceled in
accordance with the Plan and as described in the Prospectus. The Bank will
maintain such records of all funds received to permit the funds of each
subscriber to be separately insured by the FDIC (to the maximum extent
allowable) and to enable the Bank to make the appropriate refunds of such funds
in the event that such funds are required to be made in accordance with the Plan
and as described in the Prospectus.
Draft of June 7, 1996
Charles Webb & Company
Page 19
[(s) The Company will register as a savings and loan holding company under
the HOLA within 90 days of the Closing Date.]
(t) The Company and the Bank will take such actions and furnish such
information as are reasonably requested by the Agent in order for the Agent to
ensure compliance with the NASD's "Interpretation Relating to Free Riding and
Withholding."
(u) The Bank will not amend the Plan of Conversion in any manner that, in
the reasonable opinion of the Agent, would materially and adversely affect the
sale of the shares or the terms of this Agreement without first notifying and
receiving the consent of the Agent.
(v) The records of account holders, depositors, borrowers and other
members of the Bank are complete in all material respects. Agent shall have no
liability to any person for the accuracy, reliability and completeness of such
records or for any denial or reduction of a subscription to purchase Common
Stock, whether as a result of a properly calculated allocation pursuant to the
Plan or otherwise, based upon such records.
(w) The Agent shall assist the Company in connection with the allocation
of the Shares in the event of an oversubscription and the Company shall provide
the Agent with all information necessary for the allocation of the Shares and
such information shall be accurate and reliable.
(x) Prior to the Closing Date, the Company and the Bank will inform the
Agent of any event or circumstances of which they are aware as a result of which
the Registration Statement, the Conversion Application and/or Prospectus, as
then amended or supplemented, would contain an untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements
therein not misleading.
(y) Prior to the Closing Date, the Plan shall have been approved by the
eligible voting members of the Bank in accordance with the Conversion
Regulations and the provisions of Bank's mutual charter, constitution and
bylaws.
(z) The Bank and the Company will conduct the Conversion in accordance
with the Plan, all applicable laws and regulations and in the manner described
in the Prospectus.
(aa) The Company will comply with the provisions of Rule 158 of the 1933
Act Regulations.
(bb) The Company will file with the Commission, within the time period
specified by statute or regulation, a report on Form SR pursuant to Rule 463 of
the 1933 Act Regulations.
Draft of June 7, 1996
Charles Webb & Company
Page 20
(cc) The Company and the Bank will take all necessary action, in
cooperation with the Agent, to quality the Shares for offering and sale under
the applicable Blue Sky laws of such states of the United States and other
jurisdictions as the Conversion Regulations and the Plan require and as the
Agent and the Company have agreed; provided, however, that the Company and the
Bank shall not be obligated to file any general consent to service of process or
to quality as a foreign corporation in any jurisdiction in which it is not so
qualified; and in each jurisdiction in which the shares have been so qualified,
the Company and the Bank will comply in all material respects will all
undertakings or commitments made by them under the Blue Sky Laws.
(dd) The Company and the Bank will use all reasonable efforts to comply
with, or cause to be complied with, the conditions precedent to the several
obligations of the Agent specified in Section 10 hereof.
(ee) The Company and the Bank will conduct their businesses in material
compliance with all applicable federal and state laws, rules, regulations,
decisions, directives and orders, including all decisions, directives and orders
of the Commission, the OTS, the Ohio Superintendent and the FDIC.
(ff) Upon completion of the sale by the Company of the Shares contemplated
by the Prospectus, (i) the Bank will have been converted pursuant to the Plan to
an Ohio chartered stock savings and loan association, (ii) all of the authorized
and outstanding capital stock of the Bank will be owned by the Company, and
(iii) the Company will have no direct or indirect subsidiaries other than the
Bank. The Conversion will have been effected in accordance with all applicable
statutes, regulations, decisions and orders; and all terms, conditions,
requirements and provisions with respect to the Conversion (except those that
are conditions subsequent) imposed by the Commission, the OTS, the Ohio
Superintendent or any other governmental agency, if any, will have been complied
with by the Company and the Bank in all material respects or appropriate waivers
will have been obtained and all notice and waiting periods will have been
satisfied, waived or elapsed.
(gg) The consummation of the transactions herein contemplated will not
conflict with or constitute a breach of, or default under, the articles of
incorporation and bylaws of the Company or the charter and bylaws of the Bank
(in either mutual or capital stock form); the consummation of the transactions
herein contemplated will not conflict with or constitute a breach of, or default
under, any material contract, lease or other instrument to which the Company or
the Bank has a beneficial interest, or any applicable law, rule, regulation or
order or violate any authorization, approval, judgment, decree, order, statute,
rule or regulation applicable to the Company or the Bank, except for such
conflicts or violations which would not have a material adverse effect on the
condition, financial or otherwise, and results of operations of the Company and
the Bank; with the exception of the liquidation account established in the
Draft of June 7, 1996
Charles Webb & Company
Page 21
Conversion, the consummation of the transactions herein contemplated will not
result in the creation of any lien, charge or encumbrance upon any property of
the Company or the Bank.
Section 7. COVENANTS OF AGENT. Agent hereby covenants with the Company and
the Bank as follows:
(a) During the period when the Prospectus is used, Agent will comply, in
all material respects with all requirements imposed upon it by the OTS, the Ohio
Superintendent and, to the extent applicable, by the 1933 Act, the 1933 Act
Regulations, the 1934 Act and the 1934 Act Regulations, and Agent shall remain a
registered selling agent in all such jurisdictions in which the Company is so
relying for the sale of Shares as set forth in the blue sky memorandum with
respect to the Offering until the Conversion is consummated or terminated.
(b) Agent will distribute the Prospectus in connection with the sales of
the Common Stock in accordance with Conversion Regulations, the 1933 Act and the
1933 Act Regulations.
Section 8. [This Section intentionally left blank.]
Section 9. PAYMENT OF EXPENSES. Whether or not the Conversion is
completed or the sale of the Shares by the Company is consummated, the Company
and the Bank jointly and severally agree to pay or reimburse the Agent for: (a)
all filing fees in connection with all filings with the NASD or other regulatory
agencies and all stock exchanges or markets; (b) any stock issue or transfer
taxes which may be payable with respect to the sale of Shares; (c) all
reasonable expenses of the Conversion, including, but not limited to, the
Company and the Bank's attorneys' fees, transfer agent, registrar and other
agent charges, fees relating to auditing and accounting or other advisors and
costs of printing all documents necessary in connection with the Conversion; and
(d) all reasonable out-of-pocket expenses incurred by the Agent not to exceed
$5,000 (exclusive of legal fees and expenses which are not to exceed $25,000).
Such out-of-pocket expenses include, but are not limited to, travel,
communications and postage. However, such out-of-pocket expenses do not include
expenses incurred with respect to the matters set forth in (a) or (b) above. In
the event the Company is unable to sell a minimum of 297,500 Shares or the
Conversion is terminated or otherwise abandoned, the Company and the Bank shall
reimburse the Agent in accordance with Section 2 hereof and shall pay all
expenses required to be paid by this Section 9.
Section 10. CONDITIONS TO THE AGENT'S OBLIGATIONS. The Agent's
obligations hereunder, as to the Shares to be delivered at the Closing Date, are
subject, to the extent not waived by the Agent, to the condition that all
representations and warranties of the Company and the Bank herein are, at and as
of the commencement of the Offering and at and as of the Closing Date, true and
correct in all material respects, the condition that the Company and the Bank
shall have
Draft of June 7, 1996
Charles Webb & Company
Page 22
performed all of their obligations hereunder to be performed on or before such
dates, and to the following further conditions:
(a) At the Closing Date, the Company and the Bank shall have conducted the
Conversion in accordance with the Plan, the Conversion Regulations, and all
other applicable laws, regulations, decisions and orders, including all terms,
conditions, requirements and provisions precedent to the Conversion imposed upon
them by the OTS, the Ohio Superintendent, the Commission and any state
securities agency.
(b) The Registration Statement shall have been declared effective by the
Commission, the Conversion Application approved by the OTS and the Ohio
Superintendent, and the Holding Company Application approved by the OTS not
later than 5:30 pm. on the date of this Agreement, or with the Agent's consent
at a later time and date; and at the Closing Date, no stop order suspending the
effectiveness of the Registration Statement shall have been issued under the
1933 Act or proceedings therefore initiated or threatened by the Commission, or
any state authority and no order or other action suspending the authorization of
the Prospectus or the consummation of the Conversion shall have been issued or
proceedings therefore initiated or, to the best of the Company's and the Bank's
knowledge, threatened by the Commission, the OTS, the Ohio Superintendent or any
other federal or state authority.
(c) At the Closing Date, the Agent shall have received:
(1) The favorable opinion, dated as of the Closing Date and addressed
to the Agent and for its respective benefit, of Vorys, Sater, Seymour and
Pease, Cincinnati, Ohio, counsel for the Company and the Bank, in form and
substance satisfactory to counsel for the Agent to the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Ohio and has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Registration Statement and the Prospectus; and the Company is
qualified to do business as a foreign corporation and in good standing
in each jurisdiction in which the conduct of its business requires
such qualification, except where the failure to so qualify would not
have a material adverse effect on the financial condition, results of
operations, assets, properties or business of the Company.
(ii) The Bank has been duly incorporated and is validly existing
as an Ohio chartered savings and loan association in mutual form of
organization in good standing under the laws of the State of Ohio and,
upon consummation of the
Draft of June 7, 1996
Charles Webb & Company
Page 23
Conversion, will become a duly organized and validly existing Ohio
chartered savings and loan association in capital stock form of
organization in good standing under the laws of the State of Ohio, in
both instances with full corporate power and authority to conduct its
business and own its property as described in the Registration
Statement and Prospectus; the Bank is duly qualified as a foreign
corporation to transact business in each jurisdiction in which the
failure to so qualify would have a material adverse effect on the
financial condition, results of operations or the business of the
Bank; and upon consummation of the Conversion, all of the issued and
outstanding capital stock of the Bank will be duly authorized and,
upon payment therefor, will be validly issued, fully paid and
nonassessable and all such capital stock will be owned of record, and
to the best of such counsel's knowledge, beneficially by the Company,
free and clear of any liens, encumbrances or claims.
(iii) The Bank is a member of the FHLB-Cincinnati. The deposit
accounts of the Bank are insured by the FDIC under the SAIF up to the
maximum amount allowed under law and, to the best of such counsel's
knowledge, no proceedings for the termination or revocation of such
membership or insurance are pending or threatened.
(iv) The description of the liquidation account as set forth in
the Prospectus under the caption "The Conversion--Liquidation Rights",
to the extent that such information constitutes matters of law or
legal conclusions, has been reviewed by such counsel and is accurate
in all material respects.
(v) Upon consummation of the Conversion, the authorized, issued
and outstanding capital stock of the Company will be within the range
set forth in the Prospectus under the caption "Capitalization," and no
shares of Common Stock have been issued prior to the Closing Date; at
the time of the Conversion, the Shares subscribed for pursuant to the
Offering will have been duly and validly authorized for issuance, and
when issued and delivered by the Company pursuant to the Plan against
payment of the consideration calculated as set forth in the Plan and
the Prospectus, will be duly and validly issued and fully paid and
non-assessable; the issuance of the Shares is not subject to
preemptive rights and the terms and provisions of the Shares conform
to the description thereof contained in the Prospectus and the form of
certificate used to evidence the Common Stock is in due and proper
form and complies with all applicable statutory requirements and the
regulations of the OTS and the Ohio Superintendent.
Draft of June 7, 1996
Charles Webb & Company
Page 24
(vi) The execution and delivery of this Agreement and the
consummation of the transactions contemplated thereby have been duly
and validly authorized by all necessary action on the part of the
Company and the Bank; and this Agreement is a valid and binding
obligation of the Company and the Bank, enforceable in accordance with
its terms, except as rights to indemnity and contribution thereunder
may be limited under applicable law and except as the enforceability
thereof may be limited by bankruptcy, insolvency, moratorium,
reorganization, conservatorship, receivership or other similar laws
now or hereafter in effect relating to or affecting the enforcement of
creditors' rights generally or the rights of creditors of savings
institutions and their holding companies or by general equitable
principles, regardless of whether such enforceability is considered in
a proceeding in equity or at law; and to the best of such counsel's,
the execution and delivery of this Agreement, the incurrence of the
obligations herein set forth and the consummation of the transactions
contemplated will not conflict with or constitute a breach of, or
default under, and no event has occurred which, with notice or lapse
of time or both, would constitute a default under or result in the
creation or imposition of any lien, charge or encumbrance that would
have a material adverse effect on the financial condition, results of
operations or business of the Company and the Bank taken as a whole,
upon any property or assets of the Company or the Bank pursuant to any
material contract, indenture, mortgage, loan agreement, note, lease or
other instrument to which the Company or the Bank is a party or by
which either of them may be bound, or to which any of the property or
assets of the Company or the Bank is subject (other than the
establishment of a liquidation account), nor will such execution or
delivery result in any violation of the provisions of the charter or
bylaws of the Company or the Bank, or any applicable federal or Ohio
law, act or regulation (except that no opinion need be rendered with
respect to the securities or blue sky laws of various jurisdictions or
the rules and regulations of the NASD).
(vii) The Conversion Application has been approved by the OTS and
the Ohio Superintendent and the Prospectus and the proxy statement of
the Bank has been authorized for use by the OTS and the Ohio
Superintendent. The OTS has approved the Holding Company Application,
and the purchase by the Company of all of the issued and outstanding
capital stock of the Bank has been authorized by the OTS and the Ohio
Superintendent and no action is pending or to the best of such
counsel's knowledge, threatened to revoke any such authorizations or
approvals.
Draft of June 7, 1996
Charles Webb & Company
Page 25
(viii) The Plan has been duly adopted by the required vote of the
directors of the Company and the Bank and approved by the eligible
voting members of the Bank in accordance with the Conversion
regulations and the applicable requirements of the Bank's charter,
constitution and bylaws.
(ix) Subject to the satisfaction of the conditions to the OTS and
the Ohio Superintendent approval of the Conversion, no further
approval, registration, authorization, consent or other order of or
notice to any governmental agency is required in connection with the
execution and delivery of this Agreement, the issuance of the Shares
and the consummation of the Conversion, except as may be required
under the securities or blue sky laws of various jurisdictions (as to
which no opinion need be rendered) and except as may be required under
the rules and regulations of the NASD (as to which no opinion need be
rendered).
(x) The Registration Statement is effective under the 1933 Act
and no stop order suspending the effectiveness has been issued under
the 1933 Act or proceedings therefor initiated or, to the best of such
counsel's knowledge, threatened by the Commission or any other
governmental agency.
(xi) At the time the Conversion Application, including the
Prospectus contained therein, was approved by the OTS and the Ohio
Superintendent, the Conversion Application, including the Prospectus
contained therein, complied as to form in all material respects with
the requirements of the Conversion Regulations (other than the
financial statements, the notes thereto, financial tables, and other
financial, statistical and appraisal data including therein, as to
which no opinion need be rendered).
(xii) At the time that the Registration Statement became
effective, (i) the Registration Statement (except as to financial
statements, the notes thereto, financial tables, financial,
statistical and appraisal data included therein, as to which no
opinion need be rendered) complied as to form in all material respects
with the requirements of the 1933 Act and the 1933 Act Regulations,
and (ii) the Prospectus (other than the financial statements, the
notes thereto and other tabular, financial, statistical and appraisal
data included therein, as to which no opinion need be rendered)
complied as to form in all material respects with the requirements of
the 1933 Act and the 1933 Act Regulations.
(xiii) To the best of such counsel's knowledge, there are no
legal or governmental proceedings pending or threatened which are
required to be disclosed in the Registration Statement and Prospectus,
other than those disclosed
Draft of June 7, 1996
Charles Webb & Company
Page 26
therein, and all pending legal and governmental proceedings to which
the Company or the Bank is a party or of which any of their property
is the object, which are not described in the Registration Statement
and the Prospectus, including ordinary routine litigation incidental
to the Company's or the Bank's business, are not material.
(xiv) To the best of such counsel's knowledge, there are no
contracts, indentures, mortgages, loan agreements, notes, leases or
other instruments required to be described or referred to in the
Conversion Application, the Registration Statement or required to be
filed as exhibits thereto other than those described or referred to
therein or filed as exhibits thereto and the descriptions thereof are
accurate.
(xv) The Company and the Bank have conducted the Conversion in
all material respects in accordance with the Plan and the Conversion
Regulations; the Plan complies with the Conversion Regulations; to the
best of such counsel's knowledge, no order has been issued by the OTS,
the Ohio Superintendent, the Commission or any state authority to
suspend the Offering or the use of the Prospectus, and no action for
such purposes has been instituted or, to the best of such counsel's
knowledge, threatened by the OTS, the Ohio Superintendent or the
Commission or any state authority and, to the best of such counsel's
knowledge, no person has sought to obtain regulatory or judicial
review of the final action of the OTS or the Ohio Superintendent as
applicable, approving or taking no objection to the Plan, the
Conversion Application, the Holding Company Application or the
Prospectus, as the case may be.
(xvi) To the best of such counsel's knowledge, the Company and
the Bank have obtained all licenses, permits and other governmental
authorizations currently required for the conduct of their respective
businesses as described in the Registration Statement and Prospectus,
except for licenses, approvals or authorizations the failure of which
to have would not result in a material adverse change in the financial
condition, results of operation or the business of the Company and the
Bank taken as a whole, and all such licenses, permits and other
governmental authorizations are in full force and effect, and the
Company and the Bank are in all materials respects complying
therewith.
(xvii) To the best of such counsel's knowledge, neither the
Company nor the Bank is in violation of its charter, constitution or
bylaws, or in default or violation in the performance or observance of
any obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, loan
Draft of June 7, 1996
Charles Webb & Company
Page 27
agreement, note, lease or other instrument to which the Company or the
Bank is a party or by which the Company or the Bank or any of their
property may be bound in any respect that would have a material
adverse effect on the financial condition or results of operations of
the Company and the Bank taken as a whole.
(xviii) To the best of such counsel's knowledge, neither the
Company nor the Bank is in violation of any directive from the OTS,
the Ohio Superintendent or the FDIC to make any material change in the
method of conducting its respective business.
(xix) The information in the Prospectus under the captions
"Regulation," "The Conversion -- Tax Aspects," "Restriction on
Acquisition of the Company and the Bank," "Federal and State Taxation
(with respect to federal taxation only)," "Description of Capital
Stock of the Company," and "Description of the Capital Stock of the
Bank," to the extent that such information constitutes matters of law,
summaries of legal matters, documents or proceedings, or legal
conclusions, has been reviewed by such counsel and is correct in all
material respects.
In giving such opinion, such counsel may rely as to all matters of fact on
certificates of officers or directors of the Company and the Bank and
certificates of public officials. For purposes of such opinion, no proceedings
shall be deemed to be pending, no order or stop order shall be deemed to be
issued, and no action shall be deemed to be instituted unless, in each case, a
director or executive officer of the Company or the Bank shall have received a
copy of such proceedings, order, stop order or action. Such counsel may assume
that any agreement is the valid and binding obligation of any parties to such
agreement other than the Company or the Bank.
In addition, such counsel shall provide a letter stating that during the
preparation of the Registration Statement, Conversion Application and the
Prospectus, counsel participated in conferences with certain officers and other
representatives of the Bank and the Company, representatives of Agent, counsel
to Agent, representatives of the independent public accountants for the Bank and
the Company at which the contents of the Registration Statement, the Conversion
Application and the Prospectus and related matters were discussed and, although
they are not passing upon and do not assume the responsibility for the accuracy,
completeness or fairness of the statements contained in the Registration
Statement, the Conversion Application and Prospectus, on the basis of the
foregoing (relying as to factual matters on certificates of officers and other
factual representations by the Bank and the Company), nothing has come to such
counsel's attention that caused them to believe that the Registration Statement
at the time it was declared effective by the SEC or the Prospectus as of its
date and as of the Closing Date,
Draft of June 7, 1996
Charles Webb & Company
Page 28
contained or contains any untrue statement of a material fact or omitted or
omits to state any material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading (it being understood that such counsel shall express
no comment or opinion with respect to the financial statements, schedules and
other financial information and statistical and stock valuation data included,
or statistical methodology employed, in the Registration Statement, Conversion
Application and Prospectus).
(2) The favorable opinion, dated as of the Closing Date, of
Keating, Muething & Klekamp, Cincinnati, Ohio, the Agent's counsel,
with respect to such matters as the Agent may reasonably require.
Such opinion may rely upon the opinions of counsel to the Company and
the Bank, and as to matters of fact, upon certificates of officers and
directors of the Company and the Bank delivered pursuant hereto or as
such counsel shall reasonably request.
(d) At the Closing Date, the Agent shall receive a certificate of the
Chief Executive Officer and the principal financial or accounting officer of the
Company and a certificate of the Chief Executive Officer and the principal
financial or accounting officer of the Bank, both dated as of the Closing Date,
that states: (i) they have carefully reviewed the Prospectus and, in their
opinion, 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 respective dates as of which information is given in the Registration
Statement and the Prospectus and since the date the Prospectus became authorized
for final use, no material adverse change in the condition, financial or
otherwise, or in the earnings, capital, properties or business of the Company
and the Bank considered as one enterprise has occurred and no other event has
occurred, which should have been set forth in an amendment or supplement to the
Prospectus which has not been so set forth, and the conditions set forth in this
Section 10 have been satisfied; (iii) the representations and warranties of the
Company and Bank made hereunder are true and correct with the same force and
effect a though expressly made at and as of the Closing Date; (iv) the Company
and the Bank have complied with all agreements and satisfied all conditions on
their part to be performed or satisfied at or prior to the Closing Date and will
comply in all material respects with all obligations to be satisfied by them
after Conversion; (v) no stop order suspending the effectiveness of the
Registration Statement has been initiated or, to the best knowledge of the
Company
Draft of June 7, 1996
Charles Webb & Company
Page 29
or the Bank, threatened by the Commission or any state authority; (vi) no
order suspending the Offering, the Conversion, the acquisition of all of the
shares of the Bank by the Company or the effectiveness of the Prospectus has
been issued and no proceedings for that purpose are pending or, to the best
knowledge of the Company or the Bank, threatened by the OTS, the Ohio
Superintendent, the Commission, the FDIC or any state authority; and (vii) to
the best knowledge of the Company or the Bank, no person has sought to obtain
review of the final action of the OTS or the Ohio Superintendent approving
the Plan.
(e) Prior to and at the Closing Date: (i) in the reasonable opinion of the
Agent, there shall have been no material adverse change in the condition,
financial or otherwise, or in the earnings or business of the Company and the
Bank considered as one enterprise, from that as of the latest dates as of which
such condition is set forth in the Prospectus other than transactions referred
to or contemplated therein; (ii) the Company or the Bank shall not have received
from the OTS, the Ohio Superintendent or the FDIC any direction (oral or
written) to make any material change in the method of conducting their business
with which it has not complied (which directive, if any, shall have been
disclosed to the Agent) or which materially and adversely would affect the
business, operations or financial condition or income of the Company and the
Bank considered as one enterprise; (iii) the Company and the Bank shall not have
been in default (nor shall an event have occurred which, with notice or lapse of
time or both, would constitute a default) under any provision of any agreement
or instrument relating to any outstanding indebtedness; (iv) no action, suit or
proceedings, at law or in equity or before or by any federal or state
commission, board or other administrative agency, shall be pending or, to the
best knowledge of the Company or the Bank, threatened against the Company or the
Bank or affecting any of their properties wherein an unfavorable decision,
ruling or finding would materially and adversely affect the business operations,
financial condition or income of the Company and the Bank considered as one
enterprise; and (v) the Shares have been qualified or registered for offering
and sale or exempted therefrom under the securities or blue sky laws of the
jurisdictions as the Agent shall have requested and as agreed to by the Company
and the Bank.
(f) Concurrently with the execution of this Agreement, the Agent shall
receive a letter from Clark, Schaefer, Hackett & Co. dated the date hereof and
addressed to the Agent: (i) confirming that Clark, Schaefer, Hackett & Co. is a
firm of independent public accountants within the meaning of the 1933 Act, the
1933 Act Regulations, 12 CFR Section 571.2(c)(3) and the Code of Professional
Ethics of the American Institute of Certified Public Accountants, and stating in
effect that in their opinion the consolidated financial statements of the Bank
as of __________________ and for the fiscal years ended _____________________
___________________________ as are included in the Registration Statement and
the Prospectus and covered by their opinion included therein comply as to form
in all material respects with the applicable accounting requirements of the 1933
Act, the 1933 Act Regulations, the Conversion Regulations, and GAAP applied
consistently; (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 consolidated financial statements of the Bank prepared by the Bank, a
reading of the minutes of the meetings of the Boards of Directors of the Bank
and the Company and the members of the Bank and consultations with
Draft of June 7, 1996
Charles Webb & Company
Page 30
officers of the Bank responsible for financial and accounting matters, nothing
came to its attention which caused it to believe that: (A) the unaudited
financial statements of the Bank included in the Prospectus are not in
conformity with GAAP applied on a basis substantially consistent with that of
the audited financial statements included in the Prospectus; and (B) during the
period from that date of the latest audited consolidated financial statements
included in the Prospectus to a specified date not more than five business days
prior to the date hereof, there was any increase in borrowings or in
non-performing assets by the Company or the Bank; and (C) except as otherwise
discussed in the Prospectus there was any decrease in consolidated retained
earnings of the Bank at the date of such letter as compared with amounts shown
in the latest audited consolidated statement of condition included in the
Prospectus or there was any decrease in consolidated net income or net interest
income of the Bank for the number of full months commencing immediately after
the period covered by the latest audited consolidated income statement included
in the Prospectus and ended on the latest month end prior to the date of the
Prospectus or in such letter as compared to the corresponding period in the
preceding year (included in the Recent Developments Section of the Prospectus);
and (iii) stating that, in addition to the audit referred to in its opinion
included in the Prospectus and the performance of the procedures referred to in
clause (ii) of this subsection (f), it has compared with the general accounting
records of the Company and/or the Bank, as applicable, which are subject to the
internal controls of the Company's and/or the Bank's, as applicable, accounting
system and other data prepared by the Company and/or the Bank, as applicable,
directly from such accounting records, to the extent specified in such letter,
such amounts and/or percentages set forth in the Prospectus as you may
reasonably request, and they have found such amounts and percentages to be in
agreement therewith.
(g) At the Closing Date, the Agent shall receive a letter from Clark,
Schaefer, Hackett & Co. dated the Closing Date, addressed to the Agent,
confirming the statements made by them in the letter delivered by them pursuant
to subsection (f) of this Section 10, the "specified date" referred to in clause
(ii) of subsection (f) thereof to be a date specified in such letter, which
shall not be more than three business days prior to the Closing Date.
(h) At the Closing Date, the Agent shall receive a letter from Keller &
Company, Inc., dated the date thereof and addressed to counsel for the Agent,
(i) confirming that said firm is independent of the Company and the Bank and is
experienced and expert in the area of corporate appraisals within the meaning of
the Conversion Regulations, (ii) stating in effect that the Appraisal prepared
by such firm complies in all material respects with the applicable requirements
of the Conversion Regulations, and (iii) further stating that its opinion of the
aggregate pro forma market value of the Company and the Bank expressed in the
Appraisal as most recently updated, remains in effect.
Draft of June 7, 1996
Charles Webb & Company
Page 31
(i) The Company and the Bank shall not have sustained since the date of
the latest audited consolidated financial statements included in the Prospectus
any material loss or interference with their businesses from fire, explosion,
flood or other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise than as set
forth or contemplated in the Registration Statement and Prospectus.
(j) At or prior to the Closing Date, the Agent shall receive: (i) copies
of the letters from the OTS and the Ohio Superintendent approving the Conversion
Application and authorizing the use of the Prospectus; (ii) a copy of the order
from the Commission declaring the Registration Statement effective; (iii) a
certificate from the Ohio Superintendent evidencing the existence of the Bank;
(iv) a certificate of good standing from the State of Ohio evidencing the good
standing of the Company; (v) a certificate from the FDIC evidencing the Bank's
insurance of accounts; (vi) a certificate of the FHLB-Cincinnati evidencing the
Bank's membership thereof; (vii) a copy of the letter from the OTS approving the
Holding Company Application, and (viii) any other documents that the Agent shall
reasonably request.
(k) As soon as available after the Closing Date, the Agent shall receive,
upon request, a copy of the Bank's Ohio stock charter.
(l) Subsequent to the date hereof, there shall not have occurred any of
the following: (i) a suspension or limitation in trading in securities generally
on the New York Stock Exchange or in the over-the-counter market, or quotations
halted generally on the Nasdaq Stock Market, or minimum or maximum prices for
trading have been fixed, or maximum ranges for prices for securities have been
required by either of such exchanges or the NASD or by order of the Commission
or any other governmental authority; (ii) a general moratorium on the operations
of commercial banks, Ohio or federal Banks or savings and loan associations or a
general moratorium on the withdrawal of deposits from commercial banks, Ohio or
federal Banks or savings and loan associations declared by federal or state
authorities; (iii) the engagement by the United States in hostilities which have
resulted in the declaration, on or after the date hereof, of a national
emergency or war; or (iv) a material decline in the price of equity or debt
securities in the effect of any of the above in the Agent's reasonable judgment,
makes it impracticable or inadvisable to proceed with the Offering or the
delivery of the Shares on the terms and in the manner contemplated in the
Registration Statement and Prospectus.
Section 11. INDEMNIFICATION.
(a) The Company and the Bank jointly and severally agree to indemnify and
hold harmless the Agent, each of its officers, directors, agents, servants and
employees and each person, if any, who controls the Agent within the meaning of
Section 15 of the 1933 Act or Section 20(a) of the 1934 Act, against any and all
loss, liability, claim, damage or expense
Draft of June 7, 1996
Charles Webb & Company
Page 32
whatsoever (including but not limited to settlement expenses), joint or several,
that the Agent or any of them may suffer or to which the Agent and any such
persons may become subject under all applicable federal or state laws or
otherwise, and to promptly reimburse the Agent and any such persons upon written
demand for any expenses (including reasonable fees and disbursements of counsel)
incurred by the Agent or any of them in connection with investigating, preparing
to defend or defending any actions, proceedings or claims (whether commenced or
threatened) to the extent such losses, claims, damages, liabilities or actions:
(i) arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact or omission or alleged omission contained in the
Registration Statement (or any amendment or supplement thereto), final
Prospectus (or any amendment or supplement thereto), the Conversion Application
(or any amendment or supplement thereto), the Holding Company Application or any
blue sky application or other instrument or document executed by the Company or
the Bank or based upon written information supplied by the Company or the Bank
filed in any state or jurisdiction to register or qualify any or all of the
Shares or to claim an exemption therefrom, or provided to any state or
jurisdiction to exempt the Company as a broker-dealer or its officers, directors
and employees as broker-dealers or agents, under the securities laws thereof
(collectively, the "Blue Sky Application"), or any application or other
document, advertisement, oral statement or communication ("Sales Information")
prepared, made or executed by or on behalf of the Company or the Bank based upon
written or oral information furnished by or on behalf of the Company or the
Bank, whether or not filed in any jurisdiction, in order to qualify or register
the Shares or to claim an exemption therefrom under the securities laws thereof;
(ii) arise out of or based upon the omission or alleged omission to state in any
of the foregoing documents or information, 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; or (iii) arise from
any theory of liability whatsoever relating to or arising from or based upon the
Registration Statement (or any amendment or supplement thereto), final
Prospectus (or any amendment or supplement thereto), the Conversion Application
(or any amendment or supplement thereto), any Blue Sky Application or Sales
Information or other documentation distributed in connection with the
Conversion; provided, however, that no indemnification is required under this
paragraph (a) to the extent such losses, claims, damages, liabilities or actions
arise out of or are based upon any untrue material statement or alleged untrue
material statements in, or material omission or alleged material omission from,
the Registration Statement (or any amendment or supplement thereto), preliminary
or final Prospectus (or any amendment or supplement thereto), the Conversion
Application, any Blue Sky Application or Sales Information made in reliance upon
and in conformity with information furnished in writing to the Company or the
Bank by the Agent regarding the Agent, it being understood and agreed that the
only such information furnished by the Agent consists of the information
described as such in subsection (b) below.
(b) The Agent agrees to indemnify and hold harmless the Company and the
Bank, each of their respective directors and officers and each person, if any,
who controls either the
Draft of June 7, 1996
Charles Webb & Company
Page 33
Company or the Bank within the meaning of Section 15 of the 1933 Act or Section
20(a) of the 1934 Act against any and all loss, liability, claim, damage or
expense whatsoever (including but not limited to settlement expenses), joint or
several, which they, or any of them, may suffer or to which they, or any of them
may become subject under all applicable federal and state laws or otherwise, and
to promptly reimburse the Company, the Bank, and any such persons upon written
demand for any expenses (including reasonable fees and disbursements of counsel)
incurred by them, or any of them, in connection with investigating, preparing to
defend or defending any actions, proceedings or claims (whether commenced or
threatened) to the extent such losses, claims, damages, liabilities or actions
arise out of or are based upon any untrue statement or alleged untrue statement
of a material fact contained in the Registration Statement (or any amendment or
supplement thereto), the Conversion Application (or any amendment or supplement
thereto) or the Prospectus (or any amendment or supplement thereto), or are
based upon the omission or alleged omission to state in any of the foregoing
documents a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided, however, that the Agent's obligations under this
Section 11.(b) shall exist only if and only to the extent (i) that such untrue
statement or alleged untrue statement was made in, or such material fact or
alleged material fact was omitted from, the Registration Statement (or any
amendment or supplement thereto), the Prospectus (or any amendment or supplement
thereto) or the Conversion Application (or any amendment or supplement thereto),
and Blue Sky Application or Sales Information in reliance upon and in conformity
with information furnished in writing to the Company or the Bank by the Agent
regarding the Agent.
(c) Each indemnified party shall give prompt written notice to each
indemnifying party of any action, proceeding, claim (whether commenced or
threatened), or suit instituted against it in respect of which indemnity may be
sought hereunder, but failure to so notify an indemnifying party shall not
relieve it from any liability which it may have on account of this Section 11 or
otherwise. An indemnifying party may participate at its own expense in the
defense of such action. In addition, if it so elects within a reasonable time
after receipt of such notice, an indemnifying party, jointly with any other
indemnifying parties receiving such notice, may assume defense of such action
with counsel chosen by it and approved by the indemnified parties that are
defendants in such action, unless such indemnified parties reasonably object to
such assumption on the ground that there may be legal defenses available to them
that are different from or in addition to those available to such indemnifying
party. If an indemnifying party assumes the defense of such action, the
indemnifying parties shall not be liable for any fees and expenses of counsel
for the indemnified parties incurred thereafter in connection with such action,
proceeding or claim, other than reasonable costs of investigation. In no event
shall the indemnifying parties be liable for the fees and expenses of more than
one separate firm of attorneys (and any special counsel that said firm may
retain) for each indemnified party in connection with any one action, proceeding
or claim or separate but similar or related actions,
Draft of June 7, 1996
Charles Webb & Company
Page 34
proceedings or claims in the same jurisdiction arising out of the same general
allegations or circumstances. No indemnifying party shall, without the prior
written consent of the indemnified party, effect any settlement of any pending
or threatened action in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunder by such indemnified
party unless such settlement includes an unconditional release of such
indemnified party from all liability on any claims that are the subject matter
of such action.
(d) The agreements in this Section 11 and in Section 12 hereof and the
representations and warranties of the Company and the Bank set forth in this
Agreement shall remain operative and in full force and effect regardless of: (i)
any investigation made by or on behalf of the Agent or any officers, directors
or controlling persons, agents or employees of the Agent or by or on behalf of
the Company or the Bank or any officers, directors or controlling persons,
agents or employees of the Company or the Bank; (ii) delivery of and payment
hereunder for the Shares; or (iii) any termination of this Agreement. To the
extent applicable, the Company's and the Bank's obligations under this Section
11 are subject to and limited by public policy and the provisions of applicable
law, including the provisions of Section 23A.
Section 12. CONTRIBUTION. In order to provide for just and equitable
contribution in circumstances in which the indemnification provided for in
Section 11 is due in accordance with its terms but is for any reason held by a
court to be unavailable from the Company, the Bank or the Agent, as the case may
be, the Company, the Bank and the Agent shall contribute to the aggregate
losses, claims, damages and liabilities (including any investigation, legal and
other expenses incurred in connection with, and any amount paid in settlement
of, any action, suit or proceeding of any claims asserted, but after deducting
any contribution received by the Company, the Bank or the Agent from persons
other than the other party thereto, who may also be liable for contribution) in
such proportion so that the Agent is responsible for that portion represented by
the percentage that the fees paid to the Agent pursuant to Section 2 of this
Agreement (not including expenses) bears to the gross proceeds received by the
Company from the sale of the Shares in the Offering and the Company and the Bank
shall be responsible for the balance. If, however, the allocation provided
above is not permitted by applicable law or if the indemnified party failed to
give the notice required under Section 11 above, then each indemnifying party
shall contribute to such amount paid or payable by such indemnified party in
such proportion as is appropriate to reflect not only such relative fault of the
Company and the Bank on the one hand and the Agent on the other in connection
with the statements or omissions which resulted in such losses, claims, damages
or liabilities (or actions, proceedings or claims in respect thereto), but also
the relative benefits received by the Company and the Bank on the one hand and
the Agent on the other from the Offering (before deducting expenses). The
relative benefits received by the Company and the Bank on the one hand and the
Agent on the other shall be deemed to be in the same proportion as the total
gross proceeds from the Offering received by the Company bear to the total fees
(excluding expenses) received by the
Draft of June 7, 1996
Charles Webb & Company
Page 35
Agent. The relative fault shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission alleged omission to state a material fact relates to information
supplied by the Company and/or the Bank on the one hand or the Agent on the
other and the parties' relative intent, good faith, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company, the Bank and the Agent agree that it would not be just and
equitable if contribution pursuant to this Section 12 were determined by pro
rata allocation or by any other method of allocation which does not take into
account the equitable considerations referred to above in this Section 12. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions, proceedings or claims in respect
thereof) referred to above in this Section 12 shall be deemed to include any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action, proceeding or claim.
It is expressly agreed that the Agent shall not be liable for any loss,
liability, claim, damage or expense or be required to contribute any amount
which in the aggregate exceeds the amount paid (excluding reimbursable expenses)
to the Agent under this Agreement. It is understood that the above stated
limitation on the Agent's liability is essential to the Agent and that the Agent
would not have entered into this Agreement if such limitation had not been
agreed to by the parties to this Agreement. No person found guilty of any
fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933
Act) shall be entitled to contribution from any person who was not found guilty
of such fraudulent misrepresentation. The obligations of the Company and the
Bank under this Section 12 and under Section 11 shall be in addition to any
liability which the Company and the Bank may otherwise have. For purposes of
this Section 12, each of the Agent's, the Company's or the Bank's officers and
directors and each person, if any, who controls the Agent or the Company or the
Bank within the meaning of the 1933 Act and the 1934 Act shall have the same
rights to contribution as the Agent, the Company or the Bank. Any party
entitled to contribution, promptly after receipt of notice of commencement of
any action, suit, claim or proceeding against such party in respect of which a
claim for contribution may be made against another party under this Section 12,
will notify such party from whom contribution may be sought, but the omission to
so notify such party shall not relieve the party from whom contribution may be
sought from any other obligation it may have hereunder or otherwise than under
this Section 12. To the extent applicable, the Company's and Bank's obligations
under this Section 12 are subject to and limited by public policy and the
provisions of applicable law, including the provision of Section 23A. In no
case shall the Agent be required to contribute any amount in excess of the fees
received by the Agent pursuant to Section 2 of this Agreement.
Section 13. SURVIVAL OF AGREEMENTS, REPRESENTATIONS AND INDEMNITIES. The
respective indemnities and agreements of the Company, the Bank and the Agent and
the representations and warranties and other statements of the Company and the
Bank set forth in or made pursuant to this Agreement shall remain in full force
and effect, regardless of any termination or cancellation
Draft of June 7, 1996
Charles Webb & Company
Page 36
of this Agreement or any investigation made by or on behalf of the Agent, the
Company, the Bank or any controlling person referred to in Section 11 hereof,
and shall survive the issuance of the Shares, and any legal representative,
successor or assign of the Agent, the Company, the Bank, and any such
controlling person shall be entitled to the benefit of the respective
agreements, indemnities, warranties and representations.
Section 14. TERMINATION. The Agent may terminate its obligations under
this Agreement by giving the notice indicated below in this Section 14 at any
time after this Agreement becomes effective as follows:
(a) In the event the Company fails to sell the required minimum number of
Shares by the End Date, and in accordance with the provisions of the Plan or as
required by the Conversion Regulations, and applicable law, this Agreement shall
terminate upon refund by the Bank to each person who has subscribed for or
ordered any of the Shares the full amount which it may have received from such
person, together with interest as provided in the Prospectus, and no party to
this Agreement shall have any obligation to the other hereunder, except for
payment by the Company and/or the Bank to the Agent as set forth in Sections 2,
9, 11 and 12 hereof.
(b) If any of the conditions specified in Section 10 shall not have been
fulfilled when and as required by this Agreement, unless waived in writing, by
the Closing Date, this Agreement and all of the Agent's obligations hereunder
may be canceled by the Agent by notifying the Company and the Bank of such
cancellation as provided in Section 15 hereof in writing or by telegram at any
time at or prior to the Closing Date, and any such cancellation shall be without
liability of any party to any other party except as otherwise provided in
Sections 2, 9, 11 and 12 hereof.
(c) If the Agent elects to terminate this Agreement with respect to it as
provided in this Section 14, the Company and the Bank shall be notified promptly
by the Agent by telephone or telecopy, confirmed by letter.
The Company and the Bank may terminate this Agreement in the event the
Agent is in material breach of the representation and warranties or covenants
contained in Sections 5 and 7 and such breach has not been cured after the
Company and the Bank have provided the Agent with notice of such breach.
The Agent may terminate this Agreement with respect to the Company and the
Bank in the event either the Company or the Bank, respectively, is in material
breach of the representation and warranties or covenants contained in Sections
4, 4.(a) and 6 and such breach has not been cured after the Agent has provided
the Company and the Bank with notice of such breach.
Draft of June 7, 1996
Charles Webb & Company
Page 37
This Agreement may also be terminated by mutual written consent of the
parties hereto.
Section 15. NOTICES. All communications hereunder, except as herein
otherwise specifically provided, shall be in writing and if sent to Agent shall
be mailed, delivered or telecopied and confirmed to Charles Webb & Company, 211
Bradenton, Dublin, Ohio 43017-5034, Attention: Patricia A. McJoynt (with a copy
to Keating, Muething & Klekamp, 1800 Provident Tower, One East Fourth Street,
Cincinnati, Ohio 45202, Attention: James R. Whitaker, Esquire) and, if sent to
the Company and the Bank, shall be mailed, delivered or telecopied and confirmed
to the Company and the Bank at 25 Garfield Place, Cincinnati, Ohio 45202,
Attention: Laird L. Lazelle, President and Chief Executive Officer (with a copy
to Vorys, Sater, Seymour and Pease, Suite 2100, Atrium Two, 221 East Fourth
Street, Post Office Box 0236, Cincinnati, Ohio 45201-0236, Attention:
__________________________, Esquire).
Section 16. PARTIES. The Company and the Bank shall be entitled to act
and rely on any request, notice, consent, waiver or agreement purportedly given
on behalf of Agent, when the same shall have been given by any officer of the
Agent. Agent shall be entitled to act and rely on any request, notice, consent,
waiver or agreement purportedly given on behalf of the Company or the Bank, when
the same shall have been given by any officer of either the Company or the Bank.
This Agreement shall inure solely to the benefit of, and shall be binding upon,
the Agent, the Company, the Bank, 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.
Section 17. ENTIRE AGREEMENT. It is understood and agreed that this
Agreement is the exclusive agreement among the paries hereto, and supersedes any
prior agreement among the parties (except for specific references herein to the
Letter Agreement) and may not be varied except in writing signed by all the
parties.
Section 18. CLOSING. The closing for the sale of the Shares shall take
place on the Closing Date at such location as mutually agreed upon by the Agent
and the Company and the Bank. At the closing, the Company and the Bank shall
deliver to the Agent in same day funds the commissions, fees and expenses due
and owing to the Agent as set forth in Sections 2 and 9 hereof and the opinions
and certificates required hereby and other documents deemed reasonably necessary
by the Agent shall be executed and delivered to effect the sale of the Shares as
contemplated hereby and pursuant to the terms of the Prospectus.
Section 19. PARTIAL INVALIDITY. In the event that any term, provision or
covenant herein 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 said term, provision or covenant
Draft of June 7, 1996
Charles Webb & Company
Page 38
to any other circumstances or situation shall not be affected thereby, and each
term, provision or covenant herein shall be valid and enforceable to the full
extent permitted by law.
Section 20. CONSTRUCTION. This Agreement shall be governed by and
construed in accordance with the laws of the State of Ohio, except to the extent
that federal law shall apply, without regard to principles of conflicts of laws.
The Company and Bank each hereby submits to the non-exclusive jurisdiction of
the Federal and State courts in Hamilton County, Ohio in any suit or proceeding
arising out of or relating to this Agreement or the transactions contemplated
hereby.
Section 21. COUNTERPARTS. This Agreement may be executed in separate
counterparts, each of which so executed and delivered shall be an original, but
all of which together shall constitute but one and the same instrument.
Draft of June 7, 1996
Charles Webb & Company
Page 39
If the foregoing correctly sets forth the arrangement among the Agent, the
Company and the Bank, please indicate acceptance thereof in the space provided
below for that purpose, whereupon this letter and Agent's acceptance shall
constitute a binding agreement.
Very truly yours,
FOUNDATION BANCORP, INC FOUNDATION SAVINGS BANK
By: ______________________ By: _____________________
Laird L. Lazelle Laird L. Lazelle
President and Chief President and Chief
Executive Officer Executive Officer
Accepted as of the date first above written.
CHARLES WEBB & COMPANY
By: ______________________
Patricia A. McJoynt
Executive Vice President
Draft of June 7, 1996
EXHIBIT A
FOUNDATION BANCORP, INC.
Up to 402,500 Shares (Anticipated Maximum)
(No Par Value)
SELECTED DEALERS' AGREEMENT
___________________, 1996
Gentlemen:
We have agreed to assist Foundation Savings Bank, Cincinnati, Ohio, an Ohio
chartered mutual savings and loan association (the "Bank"), in connection with
the offer and sale of up to 402,500 shares of the common stock, no par value
("Common Stock"), of Foundation Bancorp, Inc., Cincinnati, Ohio, an Ohio
corporation (the "Company"), to be issued in connection with the conversion of
the Bank from the mutual to stock form of ownership pursuant to the Home Owners'
Loan Act, as amended, and 12 C.F.R. Part 563b with respect to federal law and
Ohio Revised Code Section 1155.27 and Ohio Administrative Code 1301:2-1-16 with
respect to Ohio law. The total number of shares of Common stock to be offered
may be decreased to a minimum of 297,500 shares. The price per share has been
fixed at $10.00. The Common Stock, the number of shares to be issued, and
certain of the terms on which they are being offered, are more fully described
in the enclosed Prospectus dated _____________, 1996 ("Prospectus"). In
connection with the Conversion, the Company, on a best efforts basis, is
offering for sale between $2,975,000 of shares and $4,025,000 of shares of the
Common Stock ("Shares"), in a Subscription Offering (as defined in the
Prospectus). Any Shares not sold in the Subscription Offering will be offered
to the general public in the Community Offering (as defined in the Prospectus)
giving preference to natural persons residing in Hamilton County, Ohio.
The Subscription and Community Offerings are being conducted under a plan
of conversion, as amended ("Plan"), adopted by the Bank's Board of Directors.
Pursuant to the Plan, the Bank intends to convert from an Ohio chartered mutual
savings and loan association to an Ohio chartered stock savings and loan
association and concurrently become the wholly-owned subsidiary of the Company
("Conversion"). The Subscription and Community Offerings are further being
conducted in accordance with the regulations of the Office of Thrift Supervision
and the Superintendent of the Ohio Division of Financial Institution and subject
to the provisions contained in the Plan.
The Common Stock is also being offered in accordance with the Plan by
broker/dealers licensed by the National Association of Securities Dealers, Inc.
("NASD") which have been approved by the Bank ("Approved Brokers").
We are offering the Approved Brokers (of which you are one) the opportunity
to participate in the solicitation of offers to buy the Common Stock and we will
pay your a fee in the amount of ____ percent (____%) of the dollar amount of the
Common Stock sold on behalf of the Company by you, as evidenced by the
authorized designation of your firm on the order form or forms for payment
therefor to the special account established by the Bank for the purpose of
holding such funds. It is understood, of course, that payment of your fee will
be made only out of compensation received by us for the Common Stock sold on
behalf of the Company by you, as evidenced in accordance with the preceding
sentence. As soon as practicable after the closing date of the offering, We
will remit to you, only out of our compensation as provided above, the fees to
which you are entitled hereunder.
Each order form for the purchase of Common Stock must set forth the
identity and address of each person to whom the certificates for such Common
Stock should be issued and delivered. Such order form also must clearly
identify you firm in order for you to receive compensation. You shall instruct
any subscriber who elects to send his order form to you to make any accompanying
check payable to "Foundation Bancorp, Inc."
This offer is made subject to the terms and conditions herein set forth and
is made only to Approved Brokers who are members in good standing of the NASD
who are to comply with all applicable rules of the NASD, including, without
limitation, the NASD's Interpretation With Respect to Free-Riding and
Withholding and Section 24 of Article III of the NASD's Rules of Fair Practice.
Orders for Common Stock will be subject to confirmation and we, acting on
behalf of the Company and the Bank, reserve the right in our unfettered
discretion to reject any order in whole or in part, to accept or reject orders
in the order of their receipt or otherwise, and to allot. Neither you nor any
other person is authorized by the Company and the Bank, or by us to give any
information or make any representations other than those contained in the
Prospectus in connection with the sale of any of the Common Stock. No Approved
Broker is authorized to act as agent for us when soliciting offers to buy the
Common Stock from the public or otherwise. No Approved Broker shall engage in
any stabilizIng (as defined in Rule 10b-7 promulgated under the Securities
Exchange Act of 1934) with respect to the Company's Common Stock during the
offering.
We and each Approved Broker assisting in selling Common Stock pursuant
hereto agree to comply with the applicable requirements of the Securities
Exchange Act of 1934 and applicable state rules and regulations. Each
customer-carrying selected dealer that is not a $250,000 net capital reporting
broker/dealer agrees that it will not use a sweep arrangement and that it will
transmit all customer checks by noon of the next business day after receipt
thereof. In addition, we and each selected dealer confirm that the Securities
and Exchange Commission
interprets Rule 15c2-8 promulgated under the Securities Exchange Act of 1934 as
requiring that a Prospectus be supplied to each person who is expected to
receive a confirmation of sale 48 hours prior to delivery of such person's order
form.
We and each Approved Broker further agree that to the extent that your
customers desire to pay for shares with funds held by or to be deposited with
us, in accordance with the interpretations of the Securities and Exchange
Commission of Rule 15c2-4 promulgated under the Securities Exchange Act of 1934,
either (a) upon receipt of an executed order form or direction to execute an
order form on behalf of a customer to forward the offering price of the Common
Stock ordered on or before noon of the next business day following receipt or
execution of an order form by us to the Company for deposit in a segregated
account or (b) to solicit indications of interest in which event (i) we will
subsequently contact any customer indicating interest to confirm the interest
and give instructions to execute and return an order form or to receive
authorization to execute the order form on the customer's behalf, (ii) we will
mail acknowledgments of receipt of orders to each customer confirming interest
on the business day following such confirmation, (iii) we will debit accounts of
such customers of the fifth business day ("Debit Date") following receipt of the
confirmation referred to in (i), and (iv) we will forward complete order forms
together with such funds to the Company on or before twelve noon on the next
business day and each selected dealer acknowledges that if the procedure in (b)
is adopted, our customers' funds are not required to be in their accounts until
the Debit Date.
Unless earlier terminated by us, this Agreement shall terminate upon the
closing date of the Conversion. We may terminate this Agreement or any
provisions hereof any time by written or telegraphic notice to you. Of course,
our obligations hereunder are subject to the successful completion of the
Conversion.
You agree that at any time or times prior to the termination of this
Agreement you will, upon our request, report to us the number of shares of
Common Stock sold on behalf of the Company by you under this Agreement.
We shall have full authority to take such actions as we may deem advisable
in respect of all matters pertaining to the offering. We shall be under no
liability to you except for lack of good faith and for obligations expressly
assumed by us in this Agreement.
Upon application to us, we will inform you as to the states in which we
believe the Common Stock has been qualified for sale under, or are exempt from
the requirements of, the respective blue sky laws of such states, but we assume
no responsibility or obligation as to your rights to sell Common Stock in any
state.
Additional copies of the Prospectus and any supplements thereto will be
supplied in reasonable quantities upon request
Any notice from us to you shall be deemed to have been duly given if
mailed, telephoned, or telegraphed to you at the address to which this Agreement
is mailed.
This Agreement shall be construed in accordance with the laws of the State
of Ohio.
Please confirm your agreement hereto by signing and returning the
confirmations accompanying this letter at once to us at Charles Webb & Company,
211 Bradenton, Dublin, Ohio 43017. The enclosed duplicate copy will evidence
the agreement between us.
CHARLES WEBB & COMPANY
By:____________________________________
Patricia A. McJoynt
Executive Vice President
CONFIRMED AS OF:
_______________________ , 1996
_______________________
(Name of Dealer)
By: __________________
Its: __________________
365223.2