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EXHIBIT 1.2
COLUMBIA FINANCIAL OF KENTUCKY, INC.
Up to 2,323,000 Shares of Common Stock
(No Par Value)
Purchase Price $10.00 Per Share
AGENCY AGREEMENT
----------------
February __, 1998
Charles Webb & Company
211 Bradenton Avenue
Dublin, Ohio 43017-5034
Ladies and Gentlemen:
Columbia Financial of Kentucky, Inc., Ft. Mitchell, Kentucky, an Ohio
corporation ("Company"), and Columbia Federal Savings Bank, Ft. Mitchell,
Kentucky ("Savings Bank"), a Federally chartered mutual savings bank with its
deposit accounts insured by the Savings Association Insurance Fund ("SAIF")
administered by the Federal Deposit Insurance Corporation ("FDIC"), hereby
confirm their agreement with Charles Webb & Company, a division of Keefe,
Bruyette & Woods, Inc. (the "Agent"), as follows:
SECTION 1. THE OFFERING. The Savings Bank, in accordance with an
amended plan of conversion ("Plan"), adopted by its Board of Directors, intends
to convert from a federally chartered mutual savings bank to a federally
chartered stock savings bank and to issue all of its outstanding capital stock
to the Company. Unless the context requires otherwise, all references to
"Savings Bank" herein shall include the Savings Bank in its mutual and in its
converted form as a federal stock savings bank.
Pursuant to the Plan, the Company will offer and sell up to 2,323,000
(subject to adjustment up to 2,671,450) shares of its common stock, no par value
("Shares" or "Common Stock"), in a subscription offering ("Subscription
Offering") to (i) Eligible Account Holders, (ii) the Savings Bank's ESOP, (iii)
Supplemental Eligible Account Holders and (iv) Other Members, as those terms are
defined in the Plan. The Company shall offer any Shares not subscribed for in
the Subscription Offering for sale in a community offering ("Community Offering"
and, when referred to together with the Subscription Offering, the "Subscription
and Community Offering") to certain members of the general public to whom a copy
of the Prospectus (as hereinafter defined) is delivered, with preference given
first to natural persons who reside in either Boone County or Kenton County,
Kentucky. If any Shares are not subscribed for or purchased in the Subscription
and Community Offering, the Agent, at the request of the Company and the Savings
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Bank, shall seek to form a syndicate of selected registered broker-dealers to
assist in the sale of such Shares on a best efforts basis in a syndicated
community offering ("Syndicated Community Offering"). It is acknowledged that
the purchase of the Shares is subject to the purchase limitations described in
the Plan and that the Company and the Savings Bank may reject, in whole or in
part, any orders received in the Community Offering or the Syndicated Community
Offering. The Subscription Offering, Community Offering and Syndicated Community
Offering are collectively referred to as the "Offering." Collectively, the
Offering and the other activities described in the Plan 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. 333-42523),
including exhibits ("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 and supplements thereto, if
any, and such amended prospectuses and supplemented 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 Savings Bank has filed with the Office of Thrift Supervision
("OTS") an Application for Approval of Conversion, including exhibits
("Conversion Application"), including the Prospectus contained therein, and has
filed such amendments or supplements thereto, if any, as may have been required
pursuant to the Home Owners' Loan Act, as amended ("HOLA"), and 12 C.F.R. Part
563b ("Conversion Regulations"). In addition, the Company has filed with the OTS
an application on Form H-(e)1-S, including exhibits ("Holding Company
Application"), and has filed such amendments or supplements thereto, if any, as
may have been required to become a registered savings and loan holding company
under the HOLA.
SECTION 2. RETENTION OF AGENT; COMPENSATION AND EXPENSES; SALE AND
DELIVERY OF THE SHARES. Subject to the terms and conditions herein set forth,
the Company and the Savings Bank hereby appoint the Agent as their exclusive
financial advisor and marketing agent to utilize its best efforts to solicit
subscriptions for the Shares and to advise and assist the Company and the
Savings Bank with respect to the sale of the Shares in the Offering.
On the basis of the representations and warranties and the agreements
herein, but subject to the terms and conditions herein, the Agent accepts such
appointment and agrees to consult with and advise the Company and the Savings
Bank as to the matters set forth in the letter agreement dated August 18, 1997
("Letter Agreement"), between the Savings Bank and the Agent. The Agent shall
not be required to purchase any Shares or take any action inconsistent
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with all applicable laws, regulations, decisions or orders. In the event of the
Syndicated Community Offering, the Agent shall seek to assemble and manage a
selling group of selected registered 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.
The obligations of the Agent pursuant to this Agreement shall terminate
upon the completion, termination or abandonment of the Plan by the Savings Bank
or upon termination of the Offering, but in no event later than June 30, 1998
("End Date"), unless otherwise specifically provided in this Agreement. All
unpaid fees and expenses due to the Agent shall be payable in next day funds at
the earlier of the Closing Date (as hereinafter defined) or the End Date. In the
event the Offering is extended beyond the End Date, the Company, the Savings
Bank and the Agent may agree to renew this Agreement under mutually acceptable
terms.
In the event the Company is unable to sell a minimum of 1,717,000
Shares within the period herein provided, this Agreement shall terminate and the
Company shall refund to all persons who have subscribed for any of the Shares,
the full amount of their subscriptions 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 8, 9, and 10 hereof.
In the event the Offering is terminated for any reason not attributable
to the action or inaction of the Agent, the Agent shall have earned and be
entitled to be paid the fees and expenses accruing to the date of such
termination pursuant to this Section 2.
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 appraisal report and compliance by the Company and the Savings
Bank of the conditions set forth in Section 7 hereof to the reasonable
satisfaction of the Agent and its counsel, are satisfied, the Company agrees to
issue, or have issued, the Shares sold in the Offering and 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. The release
of Shares against payment therefor shall be made at a time, date and place
mutually acceptable to the Company, the Savings 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 Agent shall receive the following compensation for its services
hereunder:
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(a) A management fee of $25,000, payable in four consecutive
monthly installments, of which $25,000 has been paid.
(b) A success fee equal to (i) 1.5% of the aggregate purchase
price of the Shares sold in the Subscription and Community
Offering to residents of Boone or Kenton County, Kentucky plus
(ii) 1.25% of the aggregate purchase price of the Shares sold
in the Subscription and Community Offering to residents of
counties contiguous to Boone or Kenton County, Kentucky plus
(iii) 0.75% of the aggregate purchase price of the shares sold
in the Subscription and Community Offering to all other
persons, excluding in each case Shares subscribed or purchased
by the Savings Bank's officers, directors or employees (or
their immediate family members) or by the ESOP or any
tax-qualified or stock-based compensation plans (except
Individual Retirement Accounts) or similar plan created by the
Savings Bank for some or all of its directors or employees.
The management fee described in the paragraph (a) will be
applied against the success fee.
(c) For Shares sold in the Syndicated Community Offering by
selected broker- dealers, the Agent shall receive a fee not to
exceed 5.5% of the aggregate purchase price of the Shares sold
by such selected broker-dealers, and the Agent shall pass on
to such selected broker-dealers an amount competitive with
gross underwriting discounts charged at such time for
comparable amounts of stock sold at a comparable price per
share in a similar market environment. In the event any fees
are paid pursuant to this subsection (c), such fees shall be
in lieu of, and not in addition to, the fees paid pursuant to
subsection (b) above. Fees with respect to purchases effected
with the assistance of broker-dealers other than the Agent
shall be transmitted by the Agent to such broker-dealer.
Whether or not the Conversion is completed or the sale of the Shares by
the Company is consummated, the Company and the Savings Bank jointly and
severally agree to pay or reimburse the Agent, from time to time upon the
Agent's request, for the reasonable legal fees and expenses of its counsel. Such
reimbursement of legal fees will not exceed $35,000.
The Company and the Savings Bank shall bear the expenses of the
Offering customarily borne by issuers including, without limitation, OTS,
Commission, "Blue Sky," and NASD filing and registration fees; the fees of the
Savings Bank's accountants, attorneys, appraiser, transfer agent and registrar,
and other agent fees and expenses; any stock issue or transfer taxes; printing,
mailing and marketing and syndicate expenses associated with the Conversion.
Full payment of the Agent's fees and expenses, as described above,
shall be made in next day funds on the earlier of the Closing Date or the End
Date.
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The Agent further agrees to provide financial advisory assistance to
the Company and the Savings Bank for a period of one year following completion
of the Conversion, including formation of a dividend policy and share repurchase
program, assistance with shareholder reporting and shareholder relations
matters, general advice on mergers and acquisitions and other related financial
matters, without the payment by the Company and the Savings Bank of any fees in
addition to these set forth in this Section 2.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND
ASSOCIATION. The Company and the Savings Bank jointly and severally represent
and warrant to the Agent as follows:
(a) The Registration Statement has been declared effective by the
Commission; at the time the Registration Statement, including the Prospectus
contained therein, became effective, the Registration Statement, including the
Prospectus contained therein, complied as to form in all material respects with
the requirements of the 1933 Act and the 1933 Act Regulations, and the
Registration Statement, including the Prospectus contained therein, and any
information regarding the Company or the Savings Bank contained in Sales
Information (as such term is defined in Section 11 hereof) authorized by the
Company or the Savings Bank for use in connection with the Offering, did not
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
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 the Commission, the
Registration Statement, including the Prospectus contained therein (including
any amendment or supplement thereto), and any information regarding the Company
or the Savings Bank contained in Sales Information (as such term is defined in
Section 8 hereof) authorized by the Company or the Savings Bank for use in
connection with the Offering did 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
Section 3(a) shall not apply to statements or omissions made in reliance upon
and in conformity with written information furnished to the Company or the
Savings Bank by the Agent expressly regarding the Agent for use in the
Prospectus under the captions "Market for Common Shares" and "The
Conversion--Plan of Distribution."
(b) The Conversion Application has been approved by the OTS and the
related Prospectus and the proxy statement of the Savings Bank relating to the
special meeting of members at which the Plan shall be considered for approval by
the Savings Bank's eligible voting members have been authorized for use by the
OTS; at the time of the approval of the Conversion Application, including the
Prospectus contained therein, and as of the date of this Agreement, the
Conversion Application, including the Prospectus, complied as to form in all
material respects with the Conversion Regulations. At the time of the approval
of the Conversion Application, including the Prospectus contained therein, and
as of the date of this Agreement, the Conversion Application, including the
Prospectus contained therein, did not
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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 Section 3(b) shall not
apply to statements or omissions made in reliance upon and in conformity with
written information furnished to the Company or the Savings Bank by the Agent
expressly regarding the Agent for use in the Prospectus under the captions
"Market for Common Shares" and "The Conversion--Plan of Distribution."
(c) The Holding Company Application has been approved by the OTS. At
the time of the approval of the Holding Company Application and as of the date
of this Agreement, the Holding Company Application complied as to form in all
material respects with all applicable regulations.
(d) No order has been issued by the OTS, the Commission or any other
governmental agency preventing or suspending the use of the Prospectus, and no
action by or before any governmental entity to revoke any approval,
authorization or order of effectiveness related to the Conversion is pending or,
to the best knowledge of the Company and the Savings Bank, threatened.
(e) The Plan complies with the Conversion Regulations, has been adopted
by the Boards of Directors of the Savings Bank as required by the Conversion
Regulations and has been acknowledged by the Board of Directors of the Company.
(f) To the best knowledge of the Company and the Savings Bank, no
person has sought to obtain review of the final action of the OTS in approving
the Plan or in approving the Conversion Application or the Holding Company
Application pursuant to the HOLA, the Conversion Regulations, state securities
laws and regulations (collectively, the "Blue Sky Laws"), or any other statute
or regulation.
(g) The Savings Bank is organized and is validly existing as a
federally chartered savings bank in mutual form of organization in good standing
under the laws of the United States and is duly authorized to conduct its
business and own its property as described in the Registration Statement and the
Prospectus; the Savings Bank has obtained all licenses, permits and other
governmental authorizations required for the conduct of its business except
where the failure to obtain such licenses, permits or other governmental
authorizations would not materially adversely affect the financial condition,
earnings, capital, assets or properties of the Company and the Savings Bank
taken as a whole; all such licenses, permits and governmental authorizations are
in full force and effect and the Savings Bank is complying therewith in all
material respects; the Savings Bank is duly qualified as a foreign corporation
to transact business in each jurisdiction in which the failure to be so
qualified in one or more of such jurisdictions would have a material adverse
effect on the financial condition, earnings, capital, assets properties or
business of the Savings Bank.
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(h) The Savings Bank does not own any equity securities or any equity
interest in any business enterprise except as described in the Prospectus.
(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, 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; the
Company is qualified to do business as a foreign corporation in Kentucky and 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, earnings, capital, assets, properties
or the business of the Company; the Company has obtained all licenses, permits
and other governmental authorizations currently required for the conduct of its
business except where the failure to obtain such licenses, permits or other
governmental authorizations would not materially adversely affect the financial
condition, earnings, capital, assets or properties of the Company and the
Savings Bank taken as a whole; and all such licenses, permits and governmental
authorizations are in full force and effect, and the Company is complying in all
material respects therewith.
(j) The Savings Bank is a member of the Federal Home Loan Bank of
Cincinnati ("FHLB-Cincinnati"); the deposit accounts of the Savings Bank are
insured by the FDIC under the SAIF up to applicable legal limits; and no
proceedings for the termination or revocation of such membership or insurance
are pending or, to the best knowledge of the Savings Bank, threatened.
(k) The Company and the Savings Bank have good and marketable title to
all real property and good title to all other assets material to the business of
the Company and the Savings Bank and to those properties and assets described in
the Registration Statement and Prospectus as owned buy them, free and clear of
all liens, charges, encumbrances or restrictions, except as described therein or
are not material to the business of the Company and the Savings Bank, taken as a
whole; and all of the leases and subleases material to the business of the
Company and the Savings Bank, including those described in the Registration
Statement and Prospectus, are in full force and effect and the Company and the
Savings Bank are complying therewith in all material respects.
(l) The Company and the Savings Bank have received an opinion of Vorys,
Sater, Seymour and Pease LLP, Cincinnati, Ohio, with respect to the federal
income tax consequences of the Conversion and an opinion from VonLehman &
Company, Inc., with respect to the Kentucky 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 true, accurate
and complete, and neither the Company nor the Savings Bank has taken any actions
inconsistent therewith.
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(m) The Company and the Savings Bank have all such power, authority,
authorizations, approvals and orders, except approval or confirmation of the
final appraisal of the Savings Bank, as may be required to enter into this
Agreement, to carry out the provisions and conditions hereof and to issue and
sell (i) the capital stock of the Savings Bank to the Company and (ii) the
Shares to be sold by the Company as provided herein and as described in the
Prospectus; 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 Savings Bank and this Agreement has
been validly executed and delivered by the Company and the Savings Bank and is
the valid, legal and binding Agreement of the Company and the Savings 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 or (ii) general equity principles
regardless of whether such enforceability is considered in a proceeding in
equity or at law and except to the extent, if any, that the provisions of
Sections 8 and 9 hereof may be unenforceable as against public policy.
(n) The execution, delivery and performance of this Agreement by the
Company and the Savings Bank will not: (i) 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 Savings Bank (in either mutual or capital stock
form), or any material contract, lease or other instrument to which the Company
or the Savings Bank is a party, or any applicable law, rule, regulation or
order; (ii) violate any authorization, approval, judgement, decree, order,
statute, rule or regulation applicable to the Company or the Savings Bank,
except for such violation which would not have a material adverse effect on the
financial condition and results of operations of the Company and the Savings
Bank on a consolidated basis; or (iii) with the exception of the liquidation
account established in the Conversion, result in the creation of any material
lien, charge or encumbrance upon any property of the Company or the Savings
Bank.
(o) 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 (other than in connection with the incorporation of the
Company); the Shares 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 non-assessable, except that
Shares purchased by the ESOP with funds borrowed from the Company will not be
fully paid to the extent payment therefor in cash has not been received by the
Company; no preemptive rights exist with respect to the Shares (except for
Subscription Rights granted pursuant to the Plan); and the terms and provisions
of the Shares
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will conform in all material respects to the description thereof contained in
the Registration Statement and the Prospectus. To the best knowledge of the
Company and the Savings Bank, 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.
(p) The Company and the Savings Bank are not in violation of any
directive from the OTS, FDIC or any other governmental agency to make any
material change in the method of conducting their businesses so as to comply in
all material respects with all applicable statutes and regulations 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 Savings Bank, threatened, which might materially and adversely affect
the Conversion, the performance of this Agreement, the consummation of the
transactions contemplated by the Plan and as described in the Registration
Statement and the Prospectus or which might have a material adverse affect on
the financial condition, earnings, capital, properties, assets or business of
the Company or the Savings Bank, taken as a whole.
(q) The financial statements of the Savings Bank which are included in
the Registration Statement, the Conversion Application and the Prospectus
present fairly the financial condition, results of operations, retained earnings
and cash flows of the Savings 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 the Conversion
Regulations, Regulation S-X of the Commission, and generally accepted accounting
principles ("GAAP") consistently applied through the periods involved (except as
noted therein). Such financial statements are consistent with the most recent
financial statements and other reports filed by the Savings Bank with the OTS,
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 Savings
Bank 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.
(r) 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 financial
condition, earnings, capital, properties or business of the Company and the
Savings Bank, considered as one enterprise, whether or not arising in the
ordinary course of business; (ii) there has not been any material increase in
loans past due 90 days or more or in real estate acquired by foreclosure, by
deed-in-lieu of foreclosure, or deemed in-substance foreclosure, (iii) there has
not been any material decrease in surplus and reserves or total assets of the
Savings Bank, (iv) neither the Company nor the Savings Bank has
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issued any securities or incurred any liability or obligation for borrowing
other than in the ordinary course of business; (v) there have not been any
transactions entered into by the Company or the Savings Bank, except with
respect to those transactions entered into in the ordinary course of business;
(vi) the properties and business of the Company and the Savings Bank conform in
all material respects to the descriptions thereof contained in the Prospectus;
and (vii) neither the Company nor the Savings Bank has any material contingent
liabilities except as disclosed in the Prospectus.
(s) Neither the Company nor the Savings Bank is in violation of its
articles of incorporation or bylaws or charter or bylaws, as applicable, or in
default in the performance or observance of any 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 effect on the financial
condition, earnings, capital, assets, properties or business of the Company and
the Savings Bank, considered as one enterprise.
(t) No default exists, and no event has occurred which with notice or
lapse of time, or both, would constitute a default on the part of the Company or
the Savings 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
Savings 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
effect on the financial condition, earnings, capital, assets, properties or
business of the Company and the Savings Bank, considered as one enterprise; and
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 and the
Savings Bank, threatened any action or proceeding wherein the Company or the
Savings Bank might be alleged to be in default thereunder under circumstances
where such action or proceeding, if determined adversely to the Company or the
Savings Bank, would have a material adverse effect on the financial condition,
earnings, capital, assets, properties or business of Company and the Savings
Bank, considered as one enterprise.
(u) No approval of any regulatory or supervisory or other public
authority is required in connection with the execution and delivery of this
Agreement or the issuance of the Shares, except for the approvals of the OTS and
the Commission, and any necessary qualification, notification, registration or
exemption under the Blue Sky Laws of the various jurisdictions in which the
Shares are to be offered.
(v) VonLehman & Company, Inc., which has certified the financial
statements of the Savings Bank contained in the Registration Statement,
Conversion Application, and the Prospectus, are, with respect to the Company and
the Savings Bank, independent public
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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.
(w) Keller & Company, Inc., which has prepared the Conversion Valuation
Appraisal Report as of November 28, 1997, as amended or supplemented, if so
amended or supplemented ("Appraisal"), is independent of the Company and the
Savings Bank within the meaning of the Conversion Regulations.
(x) The Company and the Savings Bank have timely filed all required
federal, state and local tax returns; and the Company and the Savings Bank have
paid all taxes due and payable in respect of such returns, except where
permitted to be extended, and have made adequate reserves for similar future tax
liabilities and no deficiency has been asserted with respect thereto by any
taxing authority.
(y) The Savings Bank complies in all material respects with the
applicable financial recordkeeping and reporting requirements of the Currency
and Foreign Transactions Reporting Act of 1970, as amended, and the regulations
and rules thereunder.
(z) To the knowledge of the Company and the Savings Bank, neither the
Company nor the Savings Bank has lent any funds for the purchase of Shares or
has 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.
(aa) Neither the Company nor the Savings Bank has: (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 except for shares issued in connection with the incorporation
of the Company); (ii) had any dealings within the immediate prior 12 months with
any NASD member, or any person related to or associated with such member, other
than discussions and meetings relating to the 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 other than the Agent in connection with the
Offering, and no person is being compensated in any manner for such service.
(bb) The Company and the Savings Bank have not relied upon the Agent or
the Agent's counsel for any legal, tax or accounting advice in connection with
the Conversion.
(cc) All documents delivered by the Savings Bank or the Company or
their representatives in connection with the issuance and sale of the Common
Stock and the Agent's exercise of due diligence, were, on the dates on which
they were delivered, accurate and
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complete in all material respects or were amended in writing to be accurate and
complete in all material respects.
(dd) The records of Eligible Account Holders, Supplemental Eligible
Account Holders and Other Members are accurate and complete in all material
respects.
(ee) To the best knowledge of the Company and the Savings Bank, the
Company and the Savings Bank comply with all laws, rules and regulations
relating to environmental protection, and neither the Company nor the Savings
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; no action,
suit, regulatory investigation or other proceeding is pending, or to the best
knowledge of the Company and the Savings Bank, threatened against the Company or
the Savings Bank relating to environmental protection, nor does the Company or
the Savings Bank have any reason to believe any such proceedings may be brought
against either of them; and to the best knowledge of the Company and the Savings
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 facilities or properties owned or leased by the Company or the
Savings Bank or in which the Savings Bank has a security interest.
Any certificate signed by an officer of the Company or the Savings Bank
pursuant to the conditions of this Agreement and delivered to the Agent or its
counsel that refers to this Agreement shall be deemed to be a representation and
warranty by the Company or the Savings Bank to the Agent as to the matters
covered thereby with the same effect as if such representation and warranty were
set forth herein.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE AGENT.
The Agent represents and warrants to the Company and the Savings Bank
that:
(a) Keefe, Bruyette & Woods, Inc. is a corporation in good standing
under the laws of the State of New York with full power and authority to provide
the services to be furnished to the Savings Bank and the Company hereunder;
Charles Webb & Company is an unincorporated division of Keefe, Bruyette & Woods,
Inc.
(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 corporate action on the part of the Agent, and this Agreement has
been duly and validly executed and delivered by the Agent and is the legal,
valid and binding agreement of the Agent, enforceable in accordance with its
terms, except as the enforceability thereof may be limited by
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(i) bankruptcy, insolvency, moratorium, reorganization, conservatorship,
receivership or other similar laws relating to or affecting the enforcement or
creditors' rights generally, or (ii) general equity principles regardless of
whether such enforceability is considered in a proceeding in equity or at law.
(c) The execution and delivery of this Agreement by the Agent, the
consummation of the transactions contemplated hereby and compliance with the
terms and provisions hereof shall not conflict with, or result in a breach of,
any of the terms, provision or conditions of, or constitute a default (or event
which with notice or lapse of time or both would constitute a default) under,
the articles of incorporation of Keefe, Bruyette & Woods, Inc. or any material
agreement, indenture or other instrument to which the Agent is a party or by
which it or its property is bound.
(d) The Agent and its employees, and to the best knowledge of the
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.
(e) No approval of any regulatory, supervisory or other public
authority other than the NASD is required in connection with the Agent execution
and delivery of this Agreement, and the approval of the NASD has been received.
(f) There is no suit, proceeding, charge, or action before or by any
court, regulatory authority or government agency or body pending or, to the best
knowledge of the Agent, threatened, which might materially and adversely affect
the Agent performance of this Agreement.
SECTION 5. COVENANTS OF THE COMPANY AND THE SAVINGS BANK. The Company
and the Savings Bank hereby jointly and severally covenant with the Agent as
follows:
(a) The Company will not file any amendment or supplement to the
Registration Statement without providing the Agent and its counsel an
opportunity to review such amendment or supplement, and will not file any
amendment or supplement to which the Agent or its counsel shall reasonably
object.
(b) The Savings Bank will not file any amendment or supplement to the
Conversion Application without providing the Agent and its counsel an
opportunity to review such amendment or supplement, and will not file any
amendment or supplement to which the Agent or its counsel shall reasonably
object.
(c) At any time after the Holding Company Application is approved by
the OTS, the Company will not file any amendment or supplement to the Holding
Company Application
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without providing the Agent and its counsel an opportunity to review such
amendment or supplement, and will not file any amendment or supplement to which
the Agent or its counsel will reasonably object.
(d) The Company and the Savings Bank shall notify the Agent in writing
of any violation of its articles of incorporation and bylaws, in the case of the
Company, and its charter and bylaws, in the case of the Savings Bank, at any
time after the date hereof and prior to the Closing Date. Unless waived in
writing by the Agent, which waiver shall not be unreasonably withheld, the
Company shall not be in violation of its articles of incorporation or bylaws,
and the Savings Bank shall not be in violation of its charter or bylaws, at any
time after the date hereof and prior to the Closing Date.
(e) The Company and the Savings 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-approval amendment to the Conversion
Application to be approved by the OTS, and will immediately notify the Agent
upon receipt of any information concerning any of the following events: (i) when
any post-effective amendment to the Registration Statement has become effective;
(ii) when any post-approval amendment to the Conversion Application has been
approved; (iii) when any post-approval amendment to the Holding Company
Application has been approved; (iv) when any comments from the Commission, the
OTS, or any other governmental entity are issued with respect to the
Registration Statement, Conversion Application, Holding Company Application, or
the transactions contemplated by this Agreement; (v) when any request is made by
the Commission, the OTS or any other governmental entity for any amendment or
supplement to the Registration Statement, the Conversion Application or the
Holding Company Application, or for any other additional information; (vi) when
the Commission, the OTS or any other governmental entity issues any order or
takes or threatens any action to suspend the Offering, the effectiveness of the
Registration Statement, or the use of the Prospectus or any other filing of the
Company or the Savings Bank under the Conversion Regulations, or other
applicable law; (vii) the issuance by the Commission, the OTS or any other
governmental authority of any stop order suspending the effectiveness of the
Registration Statement or the approval of the Conversion Application or the
Holding Company Application, or of the initiation or threat of initiation of any
proceedings for any such purpose; or (viii) the occurrence of any event
mentioned in paragraph (j) below; and the Company and the Savings Bank will make
every reasonable effort to prevent the issuance by the Commission, the OTS or
any state authority of any order referred to in (vi) and (vii) above, and if any
such order shall at any time be issued, to obtain the lifting thereof at the
earliest possible time.
(f) As of the Closing Date, the Savings Bank shall have all approvals
and authority to issue and sell the capital stock of the Savings Bank to the
Company and the Company shall have such approvals and orders to issue and sell
the Shares as provided for herein and as described in the Prospectus.
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(g) The Company and the Savings Bank shall 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
Savings Bank shall also deliver such additional copies of the foregoing
documents to counsel to the Agent as may be required for any NASD filings.
(h) The Company and the Savings 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"); and the Company and the Savings Bank authorize the Agent to use
the Prospectus in any lawful manner contemplated by the Plan in connection with
the sale of the Shares.
(i) The Company and the Savings 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 and the OTS
and by the 1933 Act, the 1933 Act Regulations, the 1934 Act and the 1934 Act
Regulations, to be complied with subsequent to the Closing Date; and when the
Prospectus is required to be delivered, the Company and the Savings Bank shall
comply, at their own expense, with all requirements imposed upon them by the
Commission and the OTS, and by the 1933 Act, the 1933 Act Regulations, the 1934
Act and the 1934 Act Regulations, 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.
(j) If, at any time during the period when the Prospectus is required
to be delivered, any event relating to or affecting the Company or the Savings
Bank shall occur, as a result of which it is necessary or appropriate, in the
opinion of counsel for the Company and the Savings 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, the
Company and the Savings Bank shall, at their own expense, prepare and file with
the Commission and the OTS 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 shall amend or
supplement the Registration Statement or Prospectus, so that as amended or
supplemented the Registration Statement and the Prospectus shall 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 existing
at the time the Prospectus is delivered to a purchaser, not misleading.
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(k) The Company and the Savings Bank shall conduct the Conversion,
including the offer and sale of the Shares, in all material respects in
accordance with the Plan and 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 the Company
or the Savings Bank by the Commission, the OTS or any other regulatory authority
and in the manner described in the Prospectus.
(l) The Company and the Savings Bank shall each timely furnish to the
Agent such information with respect to them as the Agent may from time to time
reasonably request.
(m) The Company shall take all necessary action required to register
the Shares for offering and sale by the Company or to exempt such Shares from
registration and to exempt the Company as a broker-dealer and its officers,
directors and employees as broker-dealers or agents under the Blue Sky Laws of
such jurisdictions in which the Agent and the Company and the Savings 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; and in each
jurisdiction where any of the Shares shall have been qualified or registered the
Company shall prepare and file, at its own expense, such statements and reports
as may be required by the laws of such jurisdiction.
(n) The liquidation account for the benefit of Eligible Account Holders
and Supplemental Eligible Account Holders shall be duly established and
maintained by the Savings Bank in accordance with the Conversion Regulations.
(o) The Company and the Savings Bank shall not sell or issue, contract
to sell or otherwise dispose of, for a period of 180 days after the Closing
Date, without the prior written consent of the Agent, any shares of Common Stock
other than in connection with any plan or arrangement described in the
Prospectus.
(p) The Common Stock shall be the subject of an effective registration
statement under Section 12(g) of the 1934 Act as of the Closing Date and the
Company shall maintain the effectiveness of such registration for not less than
three years.
(q) During the period during which the Common Stock is registered under
the 1934 Act or for three years from the Closing Date, whichever period is
greater, the Company shall furnish to its stockholders as soon as practicable
after the end of each fiscal year an annual report in accordance with Rule
14a-3(b) of the 1934 Act Regulations.
(r) During the period of three years from the Closing Date, the Company
shall 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
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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 OTS 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 Savings Bank as the Agent may reasonably request; and (iii) from
time to time, such other non-confidential information concerning the Company or
the Savings Bank as the Agent may reasonably request.
(s) The Company and the Savings 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."
(t) The Company will not distribute any prospectus (as defined in
Section 2(10) of the 1933 Act) other than the Prospectus and the Sales
Information (as defined in Section 8 hereof) in connection with the offer and
sale of the Shares without first notifying the Agent.
(u) The Company shall use its best efforts to (i) encourage and assist
three 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.
(v) The Savings Bank will maintain appropriate arrangements for
depositing all funds received from persons mailing subscriptions for or orders
to purchase Shares in the Offering on an interest bearing basis at the rate
described in the Prospectus until the Closing Date and satisfaction of all
conditions precedent to the release of the Savings 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 cancelled in accordance with the Plan and as described
in the Prospectus. The Savings 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 Savings Bank to make
the appropriate refunds of such funds in the event that such refunds are
required to be made in accordance with the Plan and as described in the
Prospectus.
(w) The Company will register as a savings and loan holding company
under the HOLA within 90 days of the Closing Date.
(x) The Company and the Savings 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."
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(y) The Savings Bank will not amend the Plan of Conversion without
notifying the Agent prior thereto.
(z) The Company and the Savings Bank will assist Webb, if necessary, in
connection with the allocation of the Shares in the event of an oversubscription
and will provide Webb with any information necessary in allocating the Shares in
such event.
(aa) The Company and the Savings Bank shall comply with the provisions
of Rule 158 of the 1933 Act Regulations.
(bb) The Company shall report the use of proceeds of the Offering
pursuant to Rule 463 of the 1933 Act Regulations.
(cc) The Company and the Savings Bank shall 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 7 hereof.
(dd) Until the Closing Date, the Company and the Savings Bank shall
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 and the FDIC.
(ee) Upon completion of the sale by the Company of the Shares
contemplated by the Prospectus, (i) the Savings Bank shall have been converted
pursuant to the Plan to a federally chartered stock savings bank, (ii) all of
the authorized and outstanding capital stock of the Savings Bank shall be owned
by the Company, (iii) the Company shall have no direct subsidiaries other than
the Savings Bank, and (iv) the Conversion shall 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 or any
other governmental agency, if any, shall have been complied with by the Company
and the Savings Bank in all material respects or appropriate waivers shall have
been obtained and all notice and waiting periods shall have been satisfied,
waived or elapsed.
SECTION 6. COVENANTS OF THE AGENT. The Agent hereby covenants with the
Company and the Savings Bank as follows:
(a) During the Offering, the Agent shall comply, in all material
respects with all requirements imposed upon it by the OTS and, to the extent
applicable, by the 1933 Act, the 1933 Act Regulations, the 1934 Act and the 1934
Act Regulations.
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(b) The Agent shall 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 7. CONDITIONS TO THE AGENT'S OBLIGATIONS. The Agent's
obligations hereunder are subject, to the extent not waived in writing by the
Agent, to the condition that all representations and warranties of the Company
and the Savings 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 Savings Bank shall have 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 Savings Bank shall have
conducted the Conversion in all material respects 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 FDIC, 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 Holding
Company Application approved by the OTS not later than 5:30 p.m. 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 Company's and the Savings Bank's knowledge, threatened by
the Commission, the OTS 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 for their benefit, of Vorys, Sater, Seymour and
Pease LLP, counsel for the Company and the Savings Bank, in form and
substance to the effect that:
(i) The Company has been duly incorporated and is
validly existing and 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 in Kentucky and 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
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financial condition, results of operations, assets, properties
or business of the Company.
(ii) The Savings Bank is a validly existing federal
savings bank in the mutual form of organization under the laws
of the United States of America and, upon the consummation of
the Conversion, shall be a validly existing federal savings
bank in the capital stock form of organization under the laws
of the United States, 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; and upon consummation of the Conversion, all of
the issued and outstanding capital the stock of the Savings
Bank shall be duly authorized and, upon payment therefor,
shall be validly issued, fully paid and non-assessable, and
all such capital stock shall be owned of record and, to such
counsel's knowledge beneficially by the Company free and clear
of any liens, encumbrances or claims.
(iii) The Savings Bank is a member of the
FHLB-Cincinnati; the deposit accounts of the Savings Bank are
insured by the FDIC under the SAIF up to the maximum amount
allowed under law; and, to such counsel's knowledge, no
proceedings for the termination or revocation of such
membership or insurance are pending or threatened.
(iv) Upon consummation of the Conversion, the
authorized, issued and outstanding capital stock of the
Company shall be within the range set forth in the Prospectus
under the caption "Capitalization," and except for shares
issued upon incorporation of the Company, no shares of Common
Stock have been issued prior to the Closing Date; upon
consummation of the Conversion, the Shares subscribed for
pursuant to the Offering 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, shall
be duly and validly issued, fully paid and non-assessable,
except that Shares purchased by the ESOP with funds borrowed
from the Company are not fully paid to the extent payment
therefor in cash has not been received by the Company; except
for subscription rights granted pursuant to the Plan, the
issuance of the Shares is not subject to preemptive rights;
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 complies with
applicable law. To such counsel's knowledge, 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.
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(v) The Conversion Application and the Holding
Company Application have been approved by the OTS and the
Prospectus and the proxy statement of the Savings Bank has
been authorized for use by the OTS; and no action is pending
or, to such counsel's knowledge, threatened to revoke any such
authorizations or approvals.
(vi) 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 the Company and the Savings Bank; and this
Agreement is a valid and binding obligation of the Company and
the Savings Bank, enforceable against the Company and the
Savings Bank in accordance with its terms, except as the
enforceability thereof may be limited (a) 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, (b) by general equitable
principles, regardless of whether such enforceability is
considered in a proceeding in equity or at law, (c) by laws
relating to the safety and soundness of insured depository
institutions or (d) by applicable law or public policy with
respect to the indemnification and contribution provisions
contained herein, including without limitation the provisions
of Sections 23A and 23B of the Federal Reserve Act.
(vii) The execution, delivery and performance of this
Agreement and the incurrence of the obligations set forth
herein by the Company and the Savings Bank do not (a) result
in any violation of any applicable law or regulation (except
that no opinion need be rendered with respect to the Blue Sky
Laws of various jurisdictions), (b) conflict with or violate
the articles of incorporation and bylaws of the Company or the
charter and bylaws of the Savings Bank in mutual or stock
form, or (c) to such counsel's knowledge, constitute a breach
of, or default under (or an event 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 upon any property or assets of the Savings Bank or
the Company pursuant to any contract, indenture, mortgage,
loan agreement, note, lease or other instrument to which the
Company or the Savings Bank is a party or by which any of them
may be bound, or to which any of the property or assets of the
Company or the Savings Bank is subject that, individually or
in the aggregate would have a material adverse effect on the
financial condition, results of operations or business of the
Company and the Savings Bank.
(viii) The Plan has been duly adopted by the vote of
the directors of the Savings Bank as required by the
Conversion Regulations and, based upon the certificate of the
inspectors of election, approved by the eligible voting
members
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of the Savings Bank in accordance with the Conversion
Regulations and the Savings Bank's charter and bylaws.
(ix) Subject to the satisfaction of the conditions to
the OTS 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 Blue Sky Laws of various
jurisdictions or the rules and regulations of the NASD (as to
which no opinion need be rendered).
(x) The Registration Statement has been declared
effective under the 1933 Act and no stop order suspending the
effectiveness has been issued or proceedings therefor
initiated or, to such counsel's knowledge, threatened by the
Commission.
(xi) At the time the Conversion Application,
including the Prospectus contained therein, was approved by
the OTS, the Conversion Application, including the Prospectus
contained therein (other than the financial statements, the
notes thereto, financial tables, and other 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 Conversion
Regulations.
(xii) At the time that the Registration Statement
became effective, the Registration Statement, including the
Prospectus (other than the 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.
(xiii) To such counsel's knowledge, there are no
legal or governmental proceedings pending or threatened
against the Company or the Savings Bank or principals of the
Company or the Savings Bank that are required to be disclosed
in the Registration Statement and the Prospectus other than
those disclosed therein .
(xiv) To 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 the Prospectus or required to be filed as
exhibits to the Registration Statement or the Conversion
Application other than those described or referred to therein
or filed as exhibits thereto; the descriptions in the
Conversion Application, the
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Registration Statement and the Prospectus of the contracts,
indentures, mortgages, loan agreements, notes, leases or other
instruments filed as exhibits thereto are accurate in all
material respects and fairly present the information required
to be shown.
(xv) To such counsel's knowledge, the Company and the
Savings Bank have conducted the Conversion in all material
respects in accordance with the Plan, the Conversion
Regulations and the HOLA; the Plan complies with the HOLA and
the Conversion Regulations; no order has been issued by the
OTS, 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 such counsel's knowledge,
threatened; and, to such counsel's knowledge, no person has
sought to obtain regulatory or judicial review of the final
action of the OTS approving the Plan, the Conversion
Application, the Holding Company Application or the
Prospectus.
(xvi) To such counsel's knowledge, the Company and
the Savings 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 Savings Bank, taken as a whole, and, to such counsel's
knowledge, all such licenses, permits and other governmental
authorizations are in full force and effect, and, to such
counsel's knowledge, the Company and the Savings Bank are in
all materials respects complying therewith.
(xvii) To such counsel's knowledge, neither the
Company nor the Savings Bank is in violation of its articles
of incorporation and bylaws, or charter and bylaws,
respectively, nor, to such counsel's knowledge, in default
(nor has any event occurred which, with notice or lapse of
time or both, would constitute a default) in the performance
or observance of any obligation, agreement, covenant or
condition contained in any material contract, indenture,
mortgage, loan agreement, note, lease or other instrument to
which the Company or the Savings Bank is a party or by which
the Company, the Savings Bank or any of their property may be
bound in any respect that would have a material adverse effect
upon the financial condition, results of operations or
business of the Company and the Savings Bank, taken as a
whole.
(xviii) To such counsel's knowledge, neither the
Company nor the Savings Bank is in violation of any directive
from the OTS or the FDIC to make any material change in the
method of conducting its business.
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(xix) The information in the Prospectus under the
captions "Regulation," "The Conversion," "Certain Restriction
on Acquisition of the Company," "Taxation," and "Description
of Capital Stock," 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 accurate and complete 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 Savings Bank and
certificates of public officials. All references to "to such counsel's
knowledge" in such opinion shall refer to the actual and conscious awareness of
facts or other information of the individual Vorys, Sater, Seymour and Pease LLP
attorneys who have been actively involved in the transactions contemplated by
this Agreement or the preparation of such opinion. 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 Savings Bank,
or their counsel, shall have received a copy of such proceedings, order, stop
order or action and such counsel need not regard any litigation or governmental
proceeding to be "threatened" unless the potential litigant or governmental
authority has manifested to the management of the Company or the Savings Bank or
to such counsel, a present intention to initiate such litigation or proceeding.
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 Savings Bank.
In addition, such counsel shall provide a letter stating that during
the preparation of the Registration Statement, Conversion Application and the
Prospectus, such counsel participated in conferences with certain officers and
other representatives of the Savings Bank and the Company, representatives of
the Agent, counsel to the Agent, representatives of the independent public
accountants for the Savings 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 Savings 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,
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).
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(2) The favorable opinion, dated as of the Closing Date, of
Breyer & Aguggia, Washington, D.C., counsel to the Agent, with respect
to such matters as the Agent may reasonably require. Such opinion may
rely, as to matters of fact, upon certificates of officers and
directors of the Company and the Savings 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 Chief Financial Officer of the Company and a
certificate of the Chief Executive Officer and the Chief Financial Officer of
the Savings Bank, both dated as of the Closing Date, that state that: (i) they
have reviewed the Prospectus and, at the time the Prospectus became authorized
for final use, the Prospectus did not contain any untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading; (ii) since the respective dates as of which information is given in
the Registration Statement and the Prospectus and as of the Closing Date, no
material adverse change in the financial condition or in the earnings, capital,
properties or business of the Company and the Savings 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 7 have been satisfied;
(iii) the representations and warranties in Section 3 are true and correct with
the same force and effect as though expressly made at and as of the Closing
Date; (iv) the Company and the Savings 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 the Closing Date; (v) no stop order
suspending the effectiveness of the Registration Statement is pending or, to the
knowledge of the Company or the Savings Bank, threatened by the Commission or
any state authority; (vi) no order suspending the Offering, the Conversion, or
the effectiveness of the Prospectus has been issued and no proceedings for that
purpose are pending or, to the knowledge of the Company or the Savings Bank,
threatened by the OTS, the Commission, or any other authority; and (vii) to the
knowledge of the Company or the Savings Bank, no person has sought to obtain
review of the final action of the OTS 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 financial
condition, or in the earnings or business of the Company and the Savings 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 Savings Bank shall not have
received any directive from the OTS or the FDIC 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 Savings Bank, considered as one enterprise; (iii)
the Company and the Savings 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
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Charles Webb & Company
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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 knowledge of the Company and
the Savings Bank, threatened against the Company or the Savings 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 Savings Bank, considered as one
enterprise; and (v) where required, the Shares have been qualified or registered
for offering and sale under the Blue Sky Laws of the jurisdictions in which the
Shares have been offered for sale.
(f) Concurrently with the execution of this Agreement, the Agent shall
receive a letter from VonLehman & Company Inc. dated the date hereof and
addressed to the Agent: (i) confirming that VonLehman & Company Inc. are
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 financial statements of the Savings Bank as of
September 30, 1997 and 1996 and for the years ended September 30, 1997, 1996 and
1995 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 financial
statements of the Savings Bank prepared by the Savings Bank, a reading of the
minutes of the meetings of the Boards of Directors of the Savings Bank and the
Company and the members of the Savings Bank, and consultations with officers of
the Savings 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 Savings 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 financial statements included in the Prospectus
to a specified date not more than three business days prior to the date hereof,
there was any increase in borrowings or in non-performing assets by the Company
or the Savings Bank; and (C) except as otherwise discussed in the Prospectus,
there was any decrease in retained earnings of the Savings Bank at the date of
such letter as compared with amounts shown in the latest audited statement of
condition included in the Prospectus or there was any decrease in net income or
net interest income of the Savings Bank for the number of full months commencing
immediately after the period covered by the latest audited 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
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records of the Company and/or the Savings Bank, as applicable, which are subject
to the internal controls of the Company's and/or the Savings Bank's, as
applicable, accounting system and other data prepared by the Company and/or the
Savings 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 the Agent 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
VonLehman & Company Inc. 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, dated the Closing Date and addressed to the Agent, (i) confirming that
said firm is independent of the Company and the Savings 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 Savings Bank expressed
in the appraisal as most recently updated, remains in effect.
(i) The Company and the Savings Bank shall not have sustained since the
date of the latest audited 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) a
copy of the letters from the OTS approving the Conversion Application and the
Holding Company 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 OTS evidencing the existence of the
Savings 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 Savings Bank's insurance of accounts; (vi) a certificate of the
FHLB-Cincinnati evidencing the Savings Bank's membership therein, and (vii) any
other documents that the Agent shall reasonably request.
(k) As soon as available after the Closing Date, the Agent shall
receive a copy of the Savings Bank's federal stock charter as executed by the
OTS.
(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
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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 Nasdaq Stock Market or by order of the Commission or any other
governmental authority; (ii) a general moratorium on the operations of
commercial banks, Kentucky or federal savings and loan associations or a general
moratorium on the withdrawal of deposits from commercial banks, Kentucky or
federal 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 items (i) through (iii) 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 8. INDEMNIFICATION.
(a) The Company and the Savings Bank jointly and severally agree to
indemnify and hold harmless the Agent, 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 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
related to the Conversion or any action taken by the Agent where acting as agent
of the Company and the Savings Bank, including without limitation the denial or
reduction of a subscription or order to purchase Common Stock based upon the
deposit records of the Savings Bank or otherwise; (ii) 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), Prospectus (or any amendment or supplement thereto), the Conversion
Application (or any amendment or supplement thereto), the Holding Company
Application (or any amendment or supplement thereto), or any blue sky
application or other instrument or document executed by the Company or the
Savings Bank or based upon written information supplied by the Company or the
Savings 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 Savings Bank
based upon written or oral information furnished by or on behalf of the Company
or the Savings Bank, whether or not filed
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in any jurisdiction, in order to qualify or register the Shares or to claim an
exemption therefrom under the securities laws thereof; (iii) 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 (iv) arise from any theory of liability
whatsoever relating to or arising from or based upon the Registration Statement
(or any amendment or supplement thereto), Prospectus (or any amendment or
supplement thereto), the Conversion Application (or any amendment or supplement
thereto), the Holding Company 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), Prospectus (or any amendment or supplement
thereto), the Conversion Application (or any amendment or supplement thereto),
the Holding Company Application (or any amendment or supplement thereto), any
Blue Sky Application or Sales Information made in reliance upon and in
conformity with information furnished in writing to the Company or the Savings
Bank by the Agent regarding the Agent; and provided further, however, that the
Company and the Savings Bank shall not be liable under the foregoing
indemnification provision to the extent that any loss, claim, damage, liability
or action is found in a final judgment by a court of competent jurisdiction to
have resulted from the Agent's bad faith or gross negligence.
(b) The Agent agrees to indemnify and hold harmless the Company and the
Savings Bank, their directors and officers and each person, if any, who controls
the Company or the Savings 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 Savings 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 8(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
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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 Savings 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, proceedings or claims in
the same jurisdiction arising out of the same general allegations or
circumstances.
(d) The agreements in this Section 8 and in Section 9 hereof and the
representations and warranties of the Company and the Savings 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 their officers,
directors or controlling persons, agents or employees or by or on behalf of the
Company or the Savings Bank or any officers, directors or controlling persons,
agents or employees of the Company or the Savings Bank; (ii) delivery of and
payment hereunder for the Shares; or (iii) any termination of this Agreement.
SECTION 9. CONTRIBUTION. In order to provide for just and equitable
contribution in circumstances in which the indemnification provided for in
Section 8 is due in accordance with its terms but is for any reason held by a
court to be unavailable from the Company, the Savings Bank or the Agent, as the
case may be, the Company, the Savings 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 Savings Bank or the
Agent from persons other than the other party thereto,
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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 and
expenses paid to the Agent pursuant to Section 2 of this Agreement bears to the
gross proceeds received by the Company from the sale of the Shares in the
Offering, and the Company and the Savings 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 8 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
Savings 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 Savings 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 Savings Bank, on the one hand,
and the Agent, on the other, shall be deemed to be in the same proportion as the
gross proceeds from the Offering received by the Company bear to the total fees
and expenses received by the 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 or the Savings 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 Savings Bank and the Agent agree that it
would not be just and equitable if contribution pursuant to this Section 9 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 9. 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 9 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 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 Savings Bank under this Section 9 and under Section 8 shall be in addition
to any liability which the Company and the Savings Bank may otherwise have. For
purposes of this Section 9, each of the Agent's, the Company's or the Savings
Bank's officers and directors and each person, if any, who controls the Agent or
the Company or the Savings 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
Savings 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
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a claim for contribution may be made against another party under this Section 9,
shall 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 9. To the extent applicable, the Company's, the Savings
Bank's and the Agent's obligations under this Section 9 are subject to and
limited by public policy and the provisions of applicable law.
SECTION 10. SURVIVAL OF AGREEMENTS, REPRESENTATIONS AND INDEMNITIES.
The respective indemnities of the Company, the Savings Bank and the Agent, and
the representations and warranties and other statements of the Company, the
Savings Bank and the Agent set forth in or made pursuant to this Agreement,
shall remain in full force and effect, regardless of any termination or
cancellation of this Agreement or any investigation made by or on behalf of the
Agent, the Company, the Savings Bank or any controlling person referred to in
Section 8 hereof, and shall survive the issuance of the Shares, and any legal
representative, successor or assign of the Agent, the Company, the Savings Bank,
and any such controlling person shall be entitled to the benefit of the
respective agreements, indemnities, warranties and representations.
SECTION 11. TERMINATION. (a) The Agent may terminate its obligations
under this Agreement by giving the notice indicated below in subsection (b) at
any time after this Agreement becomes effective as follows:
(i) 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
Savings 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
as set forth in Sections 2, 8, 9 and 10 hereof.
(ii) If any of the conditions specified in Section 7 shall not
have been fulfilled when and as required by this Agreement unless
waived in writing, or 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 Savings Bank of such cancellation as
provided in Section 12 hereof in writing or 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, 8, 9 and 10 hereof.
(iii) In the event either the Company or the Savings Bank is
in material breach of the representation and warranties or covenants
contained in Sections 3 and 5 and such breach has not been cured after
the Agent has provided the Company and the Savings Bank with notice of
such breach.
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(b) If the Agent elects to terminate this Agreement with respect to it
as provided in this Section 11, the Company and the Savings Bank shall be
notified promptly by telephone, confirmed by letter.
(c) The Company and the Savings Bank may terminate this Agreement with
respect to the Agent in the event the Agent is in material breach of the
representations and warranties or covenants contained in Sections 4 and 6 and
such breach has not been cured after the Company and the Savings Bank have
provided the Agent with notice of such breach.
(d) This Agreement may also be terminated by mutual written consent of
the parties hereto.
SECTION 12. NOTICES. All communications hereunder, except as herein
otherwise specifically provided, shall be mailed in writing and if sent to the
Agent shall be mailed or delivered and confirmed to Charles Webb & Company, 211
Bradenton, Dublin, Ohio 43017- 5034, Attention: Patricia A. McJoynt (with a copy
to Breyer & Aguggia, 1300 I Street, N.W., Suite 470 East, Washington, D.C.
20005, Attention: John F. Breyer, Jr., Esquire), if sent to the Company and the
Savings Bank, shall be mailed or delivered and confirmed to the Company and the
Savings Bank at 2497 Dixie Highway, Ft. Mitchell, Kentucky 41017, Attention:
Robert V. Lynch (with a copy to Vorys, Sater, Seymour and Pease, 221 E. Fourth
Street, Cincinnati, Ohio 45201, Attention: John C. Vorys).
SECTION 13. PARTIES. The Company and the Savings Bank shall be entitled
to act and rely on any request, notice, consent, waiver or agreement given on
behalf of the Agent when the same shall have been given by the undersigned. The
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 Savings Bank,
when the same shall have been given by the undersigned or any other officer of
the Company or the Savings Bank. This Agreement shall inure solely to the
benefit of, and shall be binding upon, the Agent, the Company, the Savings 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 14. 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 15. 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
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Charles Webb & Company
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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 16. CONSTRUCTION. This Agreement shall be construed in
accordance with the laws of the State of New York, except to the extent that
federal law shall apply.
SECTION 17. 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.
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If the foregoing correctly sets forth the arrangement among the
Company, the Savings Bank, and the Agent, please indicate acceptance thereof in
the space provided below for that purpose, whereupon this letter and the Agent's
acceptance shall constitute a binding agreement.
Very truly yours,
COLUMBIA FINANCIAL OF COLUMBIA FEDERAL SAVINGS BANK
KENTUCKY, INC.
By: By:
-------------------------------------- ----------------------------
Robert V. Lynch Robert V. Lynch
President President
Accepted as of the date first above written
CHARLES WEBB & COMPANY, A
DIVISION OF KEEFE, BRUYETTE
& WOODS, INC.
By:
----------------------------------------
Patricia A. McJoynt
Executive Vice President