STANDBY PURCHASE AGREEMENT
EXHIBIT 10.3
THIS STANDBY PURCHASE AGREEMENT (the “Agreement”), is made and entered into as of this
6th day of October, 2008, by and between Xxxxx Financial Corporation, an Indiana corporation (the
“Company”), and [name] (the “Purchaser”).
WITNESSETH:
WHEREAS, the Company anticipates issuing to the holders (the “Shareholders”) of its
issued and outstanding Common Shares, without par value (the “Common Shares”), certain
transferable rights (the “Rights”) to subscribe for and purchase additional Common Shares
at a per share price that will be determined by the Company’s Board of Directors, or a duly
authorized committee thereof, prior to distribution of the Rights (the “Subscription
Price”), such transaction generally being herein referred to as the “Rights Offering”;
and
WHEREAS, the Purchaser desires to, and hereby does, agree to serve as a Standby Purchaser for
a specified amount of Common Shares available for issuance upon the expiration of unexercised
Rights, all as is more particularly set forth herein;
NOW, THEREFORE, for and in consideration of the premises, and other good and valuable
consideration the receipt and sufficiency of all of which is hereby acknowledged, the parties
hereto agree as follows:
1. Rights Offering; Registration of the Common Shares.
A registration statement on Form S-3 (the “Registration Statement”) with respect to
the proposed Rights Offering and the Common Shares to be issued and sold to the Purchaser will be
filed with the Securities and Exchange Commission (the “Commission”) and will have been
declared effective by the Commission prior to the distribution of Rights.
2. Purchase and Delivery of Unsubscribed Shares.
(a) Subject to the terms, conditions and limitations herein set forth (including the
provisions of paragraph 5), the Company hereby agrees to issue and sell to the Purchaser, and the
Purchaser hereby agrees to purchase from the Company (the “Standby Commitment”), at the
Subscription Price, a number of Common Shares (the “Standby Shares”) to be determined upon
the expiration of the Rights Offering by reference to the amount of unexercised Rights and the
underlying shares that remain available for issuance in accordance with the Rights Offering after
the issuance of all Common Shares validly subscribed for through the exercise of Rights (including
the exercise of all oversubscription privileges contemplated by the Rights Offering) (such
remaining shares being hereinafter referred to as the “Unsubscribed Shares”). The number
of Standby Shares shall be the lesser of (i) the number of Unsubscribed Shares and (ii) the maximum
number of Unsubscribed Shares that can be purchased by the Purchaser, subject to the
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conditions that the Company will not issue to the Purchaser Common Shares in an amount that
exceeds $1 million.
(b) The Purchaser and the Company hereby acknowledge and agree that the Company has entered
into, or contemplates entering into, one or more other Standby Purchase Agreements with certain
other parties (collectively, the “Standby Purchasers”) on terms substantially similar to
this Agreement, except that they may provide for the purchase of a different maximum number of
Standby Shares in paragraph 2(a) and different conditions precedent in paragraph 5. The
Unsubscribed Shares available for issuance to Standby Purchasers shall be allocated (to the extent
any allocation thereof is necessary) as nearly as possible on a pro rata basis among all Standby
Purchasers (to the extent that any allocation thereof is permitted) based upon the number of
Standby Shares subscribed for by each such Standby Purchaser pursuant to this Agreement (and
without regard to the exercise of Rights received as a shareholder of the Company), after giving
effect to the limitations set forth in paragraph 2(a).
3. The Closing.
As soon as practicable following its determination of the number of Unsubscribed Shares, the
Company shall notify the Purchaser of the number of Standby Shares, if any, to be purchased by the
Purchaser pursuant to paragraph 2(a). The delivery of and payment for the Standby Shares shall
take place at the offices of Xxxxxxxx & Xxxxxxxx, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, at 10:00
a.m., New York time, simultaneously with the closing of the Company’s Rights Offering and the
exchange of certain of the Company’s trust preferred securities for the Company’s Common Shares
(the “Exchange Transactions”) such time and date to be not more than five business days
after the foregoing notification and to be specified therein (the “Closing Time”, the date
of the Closing Time being referred to as the “Closing Date” and the consummation of the
transaction being referred to as the “Closing”).
4. Delivery of Standby Shares.
At the Closing, the Standby Shares to be purchased by the Purchaser hereunder, registered in
the name of the Purchaser or such of its nominees as the Purchaser may specify at least three days
prior to the Closing Date, shall be delivered by or on behalf of the Company to the Purchaser, for
the Purchaser’s account, against delivery by the Purchaser of the purchase price therefor in
immediately available funds in the form of one or more federal funds checks or a wire transfer to
an account designated by the Company.
5. Conditions of the Obligations of the Purchaser.
The Company will not issue any of the Standby Shares to the Purchaser hereunder if, in the
opinion of the Company, the Purchaser is required to obtain prior clearance or approval of such
transaction from any state or federal bank regulatory authority and if such approval or clearance
has not been obtained or if satisfactory
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evidence thereof has not been presented to the Company or the Purchaser by the Closing Date.
6. Certain Agreements of the Purchasers.
The Purchaser agrees with the Company that the certificates representing the Standby Shares
shall bear a legend (and the Company’s share register shall bear a notation) substantially to the
following effect and the Company will, or will direct the transfer agent for the Conml0n Shares to,
remove the legend on the certificates at such time as they are no longer subject to this
restriction:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933 OR ANY
OTHER SECURITIES LAWS AND MAY NOT BE OFFERED, SOLD, PLEDGED, DELIVERED OR
OTHERWISE TRANSFERRED UNLESS REGISTERED UNDER SUCH LAWS OR AN EXEMPTION FROM SUCH
REGISTRATION IS AVAILABLE. THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF
AGREES TO COMPLY WITH ALL SUCH RESTRICTIONS ON TRANSFER.
7. Representations and Warranties.
(a) The Company hereby represents and warrants to the Purchaser as follows:
(i) The Company is a corporation duly incorporated and validly existing
corporation in good standing under the laws of the State of Indiana, with power and
authority (corporate and other) to perform its obligations under this Agreement.
(ii) The execution, delivery and performance of this Agreement by the Company
and the consummation by the Company of the transactions contemplated hereby have
been duly authorized by all necessary corporate action of the Company; and this
Agreement, when duly executed and delivered by the Purchaser, will constitute a
valid and legally binding instrument of the Company enforceable in accordance with
its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors’ rights and to general equity principles.
(iii) The Rights and the Standby Shares have been duly authorized by the
Company; the Rights, when issued and delivered by the Company, will constitute
valid and legally binding obligations of the Company subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors’ rights and to general
equity principles; and the Standby Shares, when issued and delivered by the Company
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against payment therefor as contemplated hereby, will be validly issued, fully
paid and non-assessable.
(iv) The aggregate number of the Company’s Common Shares that will be
outstanding after the issuance of the Standby Shares, the Common Shares validly
subscribed for through the exercise of Rights, and the Common Shares that will be
outstanding after the Exchange Transactions shall not, collectively, exceed the
number of Common Shares authorized under the Company’s Restated Articles of
Incorporation, net of the Common Shares currently reserved for issuance under its
employee stock or other benefit plans.
(v) The execution and delivery of this Agreement, the consummation by the
Company of the Rights Offering and the Standby Commitment herein contemplated, and
the compliance by the Company with the terms hereof, do not and will not violate
the Restated Articles of Incorporation or By-laws of the Company, or result in a
breach or violation of any of the terms or provisions of, or constitute a default
under, any indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company is a party or by which the Company is bound or to
which any of its properties or assets are subject, with such exceptions as would
not have a material adverse effect on the financial condition of the Company, or
any applicable statute or any order, judgment, decree, rule or regulation of any
court or governmental agency or body having jurisdiction over the Company or any of
its properties or assets; and no consent, approval, authorization, order,
registration or qualification of or with any such court or governmental agency or
body is required for the valid authorization, execution, delivery and performance
by the Company of this Agreement, the issue of the Rights and the Standby Shares or
the consummation by the Company of the other transactions contemplated by this
Agreement, except such consents, approvals, authorizations, registrations or
qualifications as may be required under Federal or state securities or “blue sky”
laws, the Bank Holding Company Act of 1956, as amended, or the Change in Bank
Control Act, as amended.
(b) The Purchaser hereby represents and warrants to the Company as follows:
(i) The Purchaser does not beneficially own any Common Shares as of the date
of this Agreement and will not, as of the Closing Date, beneficially own any Common
Shares.
(ii) The Purchaser has the full legal right and requisite power and authority
to enter into this Agreement. The Purchaser is of the full age of majority and is
legally competent to execute this Agreement.
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(iii) The execution, delivery and performance of this Agreement by the
Purchaser and the consummation by the Purchaser of the transactions contemplated
hereby, when duly executed and delivered by the Company, will constitute a valid
and legally binding instrument, enforceable in accordance with its terms subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar
laws of general applicability relating to or affecting creditors’ rights and to
general equity principles.
(iv) The Purchaser is not insolvent and has sufficient cash funds on hand to
purchase the Standby Shares on the terms and conditions contained in this Agreement
and will have such funds on the Closing Date.
(v) The execution and delivery of this Agreement, the consummation by the
Purchaser of the transactions herein contemplated and the compliance by the
Purchaser with the terms hereof do not and will not conflict with, or result in a
breach or violation of any of the terms or provisions of, or constitute a default
under any indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Purchaser is a party or by which any of the Purchaser’s
properties or assets are bound, or any applicable law, rule, regulation, judgment,
order or decree of any government, governmental instrumentality or court, domestic
or foreign, having jurisdiction over the Purchaser or any of the Purchaser’s
properties or assets; and no consent, approval, authorization, order, registration
or qualification of or with any government, governmental instrumentality or court,
domestic or foreign, is required for the valid authorization, execution, delivery
and performance by the Purchaser of this Agreement or the consummation by the
Purchaser of the transactions contemplated by this Agreement, other than as
contemplated by paragraph 5.
(vi) The Purchaser has not entered into any contracts, arrangements,
understandings or relationships (legal or otherwise) with any other person or
persons with respect to any securities of the Company, including but not limited to
transfer or voting of any of the securities, finder’s fees, joint ventures, loan or
option arrangements, puts or calls, guarantees of profits, division of profits or
loss, or the giving or withholding of proxies; and the Purchaser does not own any
securities of the Company which are pledged or otherwise subject to a contingency
the occurrence of which would give another person voting power or investment power
over such securities.
(vii) The Purchaser understands that any Standby Shares have not been
registered under the Securities Act of 1933 (the “Securities Act”), by
reason of a specific exemption from the registration provisions of the Act, the
availability of which depends upon, among other things, the bona
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fide nature of the investment intent and the accuracy of such Purchaser’s
representations as expressed herein or otherwise made pursuant hereto.
(viii) The Purchaser is acquiring the Standby Shares for investment for the
Purchaser’s own account, not as a nominee or agent, and not with the view to, or
for resale in connection with, any distribution thereof not in compliance with
applicable securities laws, and such Purchaser has no present intention of selling,
granting any participation in, or otherwise distributing the same, except in
compliance with applicable securities laws.
(ix) The Standby Shares will not be offered for sale, sold or otherwise
transferred by the Purchaser except pursuant to a registration statement or in a
transaction exempt from, or not subject to, registration under the Securities Act
and any applicable state securities laws. Except pursuant to a registration
statement covering the Standby Shares or as permitted by an exemption from
registration under the Act, the Purchaser has not and will not solicit offers for,
or offer to sell, the Standby Shares by means of any general solicitation or
general advertising within the meaning of Rule 502(c) under Regulation D under the
Securities Act or in any manner involving a public offering within the meaning of
the Securities Act.
(x) The Purchaser has such knowledge and experience in financial and business
matters that it is capable of evaluating the merits and risks of the investment in
the Standby Shares being acquired hereunder. The Purchaser is an “accredited
investor” within the meaning of Rule 501(a) under the Securities Act. The
Purchaser understands and is able to bear any economic risks associated with such
investment (including, without limitation, the necessity of holding the Standby
Shares for an indefinite period of time). The Purchaser is able to afford a
complete loss of such investment. The Purchaser has received or has had full
access to all the information it considers necessary or appropriate for deciding
whether to purchase the Standby Shares and has had an opportunity to ask questions
and receive answers regarding the terms and conditions of the Standby Shares. The
Purchaser has consulted with the Purchaser’s attorney, financial advisor or tax
advisor on any aspects of the transaction it deems necessary, including the risks
thereof.
(xi) The Purchaser is not acting in concert with any other Standby Purchaser,
is not members of a “group” (within the meaning of Section 13(d)(3) of the Exchange
Act) with any other Standby Purchaser and has no current intention to act in the
future in a mal1l1er that would make the Purchaser members of such a group.
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8. Registration Rights.
The Company hereby agrees as follows:
(i) to file a registration statement under the Securities Act in respect of
Purchaser’s Standby Shares;
(ii) to use its reasonable best efforts to cause such registration statement
to become effective under the Securities Act concurrently with the Closing or as
promptly as practicable thereafter;
(iii) to use its reasonable best efforts to cause such registration statement
to remain effective until all the Standby Shares have been sold, including through
filing of any post-effective amendments necessary to maintain effectiveness of the
registration statement;
(iv) to use its reasonable best efforts to register or qualify the shares
covered by such registration statement under state securities and blue sky laws if
necessary and to keep such registrations effective until all the Standby Shares
have been sold;
(v) to use its reasonable best efforts to cause all Standby Shares to be
listed on the New York Stock Exchange or on the principal securities exchange on
which the Common Shares or similar securities are then listed if the Common Shares
are not then so listed; and
(vi) to promptly notify the Purchasers or any order enjoining or suspending
the use or effectiveness of the registration statement or qualification of the
Standby Shares in any jurisdiction and to use its reasonable best efforts to obtain
a withdrawal of any such order, suspension or disqualification as promptly as
practicable.
9. Closing Conditions.
The respective obligations of the Purchaser and the Company to consummate the purchase and
sale of the Standby Shares shall be subject, in the discretion of the Company or the Purchaser, as
the case may be, to the condition that all representations and warranties and other statements of
the other xxxxx are, at and as of the Closing Time, true and correct in all material respects, the
condition that the other xxxxx shall have performed all of its obligations hereunder theretofore to
be performed in all material respects, and to the additional condition that no stop order
suspending the effectiveness of the Registration Statement or any amendment or supplement thereto
shall have been issued and no proceeding for that purpose shall have been initiated or threatened
by the Commission.
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10. Termination.
(a) Either of the parties hereto may terminate this Agreement (i) if the transactions
contemplated hereby are not consummated by December 31, 2008 through no fault of the Purchaser; or
(ii) in the event any required federal (including, without limitation, the Board of Governor’s of
the Federal Reserve) or state approvals for the transactions contemplated hereby is not obtained on
conditions reasonably satisfactory despite the Company’s or the Purchaser’s reasonable efforts to
obtain such approvals. In addition, this Agreement shall terminate upon mutual consent of the
parties hereto.
(b) The Company and the Purchaser hereby agree that any termination of this Agreement pursuant
to paragraph 10(a), or the termination of the Rights Offering for any reason whatsoever by the
Company (other than, in either case, termination in the event of a breach of this Agreement by the
Purchaser or misrepresentation of any of the statements made herein by the Purchaser) shall be
without liability of the Company or the Purchaser.
11. Notices.
All communications hereunder will be in writing and, if to the Company, will be mailed,
delivered or telecopied and confirmed to it, at the offices of the Company at 000 Xxxxxxxxxx
Xxxxxx, Xxxxxxxx, Xxxxxxx 00000, Xxxxxx Xxxxxxx, First Vice President General Counsel, Facsimile
(000) 000-0000; and if to the Purchaser, will be mailed, delivered or telecopied and confirmed to
it at [address].
12. Binding Effect.
This Agreement shall be binding upon, and shall inure solely to the benefit of, each of the
parties hereto, and each of their respective heirs, executors, administrators, successors and
permitted assigns, and no other person shall acquire or have any right under or by virtue of this
Agreement. The Purchaser may not assign any of the Purchaser’s rights or obligations hereunder to
any other person or entity without the prior written consent of the Company.
13. Governing Law.
This Agreement shall be governed by, and construed in accordance with, the laws of the State
of New York.
14. Execution in Counterparts.
This Agreement may be executed in any number of counterparts, each of which counterparts when
so executed shall be deemed to be an original, but all such respective counterparts shall together
constitute but one and the same instrument.
IN WITNESS WHEREOF, and intending to be legally bound thereby, each of the Purchaser and Xxxxx
Financial Corporation has signed or caused to be signed its name, all as of the day and year first
above written.
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| XXXXX FINANCIAL CORPORATION |
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| By: | ||||
| Name: | Xxxx Xxxxxx | |||
| Title: | Chairman & CEO | |||
| [name] |
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| By: | ||||
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