AMENDED AND RESTATED STANDBY PURCHASE AGREEMENT
EXHIBIT 10.2
AMENDED AND RESTATED STANDBY PURCHASE AGREEMENT
THIS AMENDED AND RESTATED STANDBY PURCHASE AGREEMENT (the “Agreement”), made and
entered into as of this ___day of November, 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
non-transferable rights (the “Rights”) to subscribe for and purchase additional Common Shares
at a per share price (the “Subscription Price”) that will be determined by the Company’s
Board of Directors, or a duly authorized committee thereof, prior to distribution of the Rights,
such transaction generally being herein referred to as the “Rights Offering”; and
WHEREAS, the Company and the Purchaser entered into a Standby Purchase Agreement, dated as of
, 2008 (the “Prior Agreement”), and the parties now desire to amend and restate
the Prior Agreement, as more fully set forth below; and
WHEREAS, Purchaser desires to, and hereby does, agree to purchase certain Common Shares
available for issuance upon the expiration of unexercised Rights, subject to the terms and
conditions 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 (b) of this Section and of Section 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 the aggregate
purchase price for which will not exceed $4 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 agreements (collectively, the
“Standby Purchase Agreements”) with certain other parties (collectively with the
Purchaser, the “Standby Purchasers”) on terms substantially similar to this
Agreement, except that they may provide for the purchase of a different maximum number of
Common Shares and different conditions precedent. If the number of Unsubscribed Shares is
less than the aggregate number of Unsubscribed Shares agreed to be purchased by all Standby
Purchasers, the Common Shares available for issuance to Standby Purchasers shall be
allocated as nearly as possible on a pro rata basis among all Standby Purchasers based upon
the number of Common Shares agreed to be purchased by each such Standby Purchaser, after
giving effect to the limitations set forth in Section 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 Section 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 (or as soon as practicable thereafter), 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 date to be not more
than five business days after the foregoing notification and to be specified therein (the date of
the closing 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 no more than one day
after receipt of the notice described in Section 3 above, 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.
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5. Conditions of the Obligations of the Purchaser.
The obligations of the Purchaser to purchase the Standby Shares on the Closing Date are
subject to the following conditions precedent:
(a) The Company shall provide confirmation that the Company has conducted one or more
in-person meetings (including telephonic meetings) with the staff of the Federal Reserve and
the Federal Reserve Bank of Chicago and with the Indiana Department of Financial
Institutions and shall have received satisfactory confirmation (in the reasonable judgment
of executive officers of the Company) that, upon completion of the transactions contemplated
herein, including the Rights Offering and the Exchange Transactions, the Company and Xxxxx
Union Bank and Trust Company (i) will have sufficient regulatory capital to maintain a “well
capitalized” status in light of foreseeable capital requirements, and (ii) will have
submitted a capital plan acceptable to such state or federal bank regulatory authority;
(b) The Subscription Price set by the Company’s board of directors shall not be greater
than the market price as calculated by the volume weighted average trading price on the 20
days preceding the date on which the Rights are priced;
(c) The Purchaser shall be satisfied (in the reasonable judgment of executive officers
of the Purchaser) that its purchase and ownership of Standby Shares and the other
transactions contemplated hereby will not result in the Purchaser being deemed to “control”
the Company within the meaning of the Bank Holding Company Act of 1956 or the Change in Bank
Control Act, provided that the Purchaser provides customary “non-control” commitments to the
Board of Governors of the Federal Reserve System;
(d) All consents and approvals required to be obtained from any governmental authority
or other person in connection with the transactions contemplated hereby shall have been
obtained or all applicable waiting periods and appeal periods shall have expired.
6. Conditions to the Obligations of the Company.
The obligations of the Company to issue the Standby Shares to the Purchaser on the Closing
Date is subject to the following conditions precedent:
(a) 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 evidence thereof has not been
presented to the Company or the Purchaser by the Closing Date; and
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(b) The Purchaser has entered into a lock-up agreement with the Company in the form
attached hereto as Schedule A.
7. Closing Conditions.
The 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
party are, at and as of the Closing, true and correct in all material respects, and to the
additional condition that no stop order suspending the effectiveness of the Registration Statement
with respect to the Rights Offering 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.
8. Certain Agreements of the Purchaser.
The Purchaser acknowledges and agrees that (i) 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 (ii) transfers of the Shares and removal of such legend shall be
subject to Section 6(b) and the Company will, or will direct the transfer agent for the Common
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.
9. 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 under the
laws of the State of Indiana, with full 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 against the Company in accordance with
its terms subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general
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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 to the Purchaser by the
Company 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
(including those reserved for issuance under its employee stock or other benefit
plans) after the issuance of the Standby Shares, the Common Shares validly subscribed
for through the exercise of Rights and the Common Shares acquired in the Exchange
Transactions shall not exceed the number of Common Shares authorized under the
Company’s Restated Articles of Incorporation.
(v) The execution and delivery of this Agreement, the consummation by the Company
of the Rights Offering 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 issuance of the Rights,
and the Common Shares issuable upon exercise thereof, 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 for the declaration of effectiveness of the registration statement in
connection with the Standby Shares or state securities or “blue sky” laws, the Bank
Holding Company Act or the Change in Bank Control Act.
(vi) The Company has delivered to the Purchaser, subject to appropriate
confidentiality commitments and applicable regulatory consents, the Company’s
agreements and understandings with any state or federal bank regulatory authority.
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(b) The Purchaser hereby represents and warrants to the Company as follows:
(i) The Purchaser beneficially owned no Common Shares as of the date of this
Agreement and will, as of the Closing Date, but prior to the purchase of the Standby
Shares, beneficially own no 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.
(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 of the Purchaser, enforceable against the Purchaser 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 Standby Commitment 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 the Purchaser 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 Purchaser, or any
applicable statute or any order, judgment, decree, rule or regulation of any court or
governmental agency or body having jurisdiction over the Purchaser 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 Purchaser of this
Agreement or the consummation by the Purchaser of the Standby Commitment contemplated
by this Agreement, other than those consents, approvals, authorizations, registrations
or qualifications that are identified as conditions precedent to the Purchaser’s
obligation to purchase the Standby Shares on the Closing Date under Section 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
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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 fide nature of the investment intent
and the accuracy of the Purchaser’s representations as expressed herein or otherwise
made pursuant hereto.
(viii) The Purchaser is acquiring the Standby Shares for investment for its 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 the 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 Securities 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 its 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.
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(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 manner that would make the Purchaser members of such a group.
10. Registration Rights.
The Company will use its reasonable best efforts to effect the registration of the resale of
the Standby Shares as soon as reasonably practicable. The Company shall use its reasonable best
efforts to as expeditiously as possible:
(a) prepare and file with the Commission a registration statement with respect to the
resale of such Standby Shares, and thereafter use its reasonable best efforts to cause such
registration statement to become effective as soon as reasonably practicable after the
Closing and to remain effective as provided herein, provided that before filing a
registration statement or any amendments or supplements thereto, the Company will, at the
Company’s expense, furnish or otherwise make available to the Purchaser’s counsel copies of
all such documents proposed to be filed and such other documents reasonably requested by
such counsel, which documents will be subject to review and comment of such counsel at the
Company’s expense;
(b) prepare and file with the Commission such amendments and supplements to such
registration statement as may be necessary to keep such registration statement effective
continuously until all the securities covered by such registration statement have been
disposed of and cause the related prospectus to be supplemented by any prospectus supplement
as may be necessary to comply with the provisions of the Securities Act with respect to the
disposition of the securities covered by such registration statement, and as so supplemented
to be filed pursuant to Rule 424 (or any similar provisions then in force) under the
Securities Act;
(c) furnish to the Purchaser such number of copies, without charge, of such
registration statement, each amendment and supplement thereto, including each preliminary
prospectus, final prospectus, any other prospectus (including any prospectus filed under
Rule 424, Rule 430A or Rule 430B under the Securities Act and any “issuer free writing
prospectus” as such term is defined under Rule 433 promulgated under the Securities Act),
all exhibits and other documents filed therewith and such other documents as the Purchaser
may reasonably request in order to facilitate the disposition of the Standby Shares, and
upon request a copy of any and all transmittal letters or other correspondence to or
received from, the Commission or any other governmental entity relating to such offer;
(d) register or qualify (or exempt from registration or qualification) such Standby
Shares, and keep such registration or qualification (or exemption therefrom) effective,
under such other securities or blue sky laws of such jurisdictions as the
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Purchaser reasonably requests (provided that the Company will not be required
to (i) qualify generally to do business in any jurisdiction where it would not otherwise be
required to qualify but for this subsection, (ii) subject itself to taxation in any such
jurisdiction or (iii) consent to general service of process in any such jurisdiction);
(e) notify the Purchaser (at any time when a prospectus relating thereto is required to
be delivered under the Securities Act), upon discovery that, or upon the discovery of the
happening of any event that makes any statement made in the registration statement or
related prospectus or any document incorporated or deemed to be incorporated therein by
reference untrue in any material respect or that requires the making of any changes in such
registration statement, prospectus or documents and, as soon as reasonably practicable,
prepare and furnish to the Purchaser a reasonable number of copies of a supplement or
amendment to such prospectus so that, in the case of the registration statement, it will not
contain any untrue statement of material fact or omit to state any material fact required to
be stated therein or necessary to make the statements therein, not misleading, and that in
the case of any prospectus, it will not contain any untrue statement of a material fact or
omit to state any material fact necessary in order to make the statement therein, in light
of the circumstances in which they were made, not misleading;
(f) notify the Purchaser (i) when such registration statement or the prospectus or any
prospectus supplement or post-effective amendment has been filed and, with respect to such
registration statement or any post-effective amendment, when the same has become effective,
(ii) of any request by the Commission for amendments or supplements to such registration
statement or to amend or to supplement such prospectus or for additional information, (iii)
of the issuance by the Commission of any stop order suspending the effectiveness of such
registration statement or the initiation of any proceedings for any of such purposes and
(iv) of the receipt by the Company of any notification with respect to the suspension of the
qualification or exemption from qualification of any of the Standby Shares for sale in any
jurisdiction, or the initiation or threatening of any proceeding for such purpose;
(g) cause all such Standby Shares to be listed on the New York Stock Exchange or on the
principal stock exchange on which the Common Shares or any similar securities issued by the
Company are then listed if the Common Shares are not then listed;
(h) if requested by the Purchaser, promptly include in a prospectus supplement or
amendment such information as the Purchaser may reasonably request in order to permit the
intended method of distribution of such securities and make all required filings of such
prospectus supplement or such amendment as soon as practicable after the Company has
received such request;
(i) cooperate with the Purchaser to facilitate the timely preparation and delivery of
certificates (not bearing any legends) representing Standby Shares to be sold;
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(j) upon reasonable notice, make available for inspection by the Purchaser and the
Purchaser’s counsel all financial and other records, pertinent corporate documents and
documents relating to the business of the Company, and cause the Company’s officers,
directors, employees and independent accountants to supply all information reasonably
requested by any such seller, underwriter, attorney, accountant or agent in connection with
such Registration statement, provided that it shall be a condition to such inspection and
receipt of such information that the inspecting person (i) enter into a confidentiality
agreement in form and substance reasonably satisfactory to the Company and (ii) agree to
minimize the disruption to the Company’s business in connection with the foregoing;
(k) in the event of the issuance of any stop order suspending the effectiveness of a
registration statement, or of any order suspending or preventing the use of any related
prospectus or ceasing trading of any securities included in such registration statement for
sale in any jurisdiction, use every reasonable effort to promptly obtain the withdrawal of
such order;
(l) bear all expenses incidental to the resale of the Standby Shares by the Purchaser,
including all registration and filing fees, fees and expenses of compliance with securities
or blue sky laws, word processing, duplicating and printing expenses, messenger, telephone
and delivery expenses, and fees and disbursements of counsel for the Company and all
independent certified public accountants and other persons retained by the Company; provided
that no expenses borne by the Company shall relate to underwriting discounts or commissions
or fees of counsel incurred by the Purchaser; and
(m) use its reasonable best efforts to timely file all reports and other documents
required to be filed by it under the Securities Act and the Securities Exchange Act of 1934,
as amended, and the rules and regulations adopted by the Commission thereunder, and it will
take such further action as the Purchaser may reasonably request, to the extent required
from time to time to enable the Purchaser to sell shares of Standby Shares without
registration under the Securities Act within the limitation of the exemptions provided by
(i) Rule 144 or Regulation S under the Securities Act, as such rules may be amended from
time to time or (ii) any similar rule or regulation hereafter adopted by the Commission.
Upon the request of the Purchaser, the Company will deliver to such person a written
statement as to whether it has complied with such information requirements, and, if not, the
specifics thereof.
11. [Reserved.]
12. Termination.
(a) Either of the parties hereto may terminate this Agreement (i) if the transactions
contemplated hereby are not consummated by December 31, 2008; (ii) all requisite approvals
are not obtained prior to the Closing in the event any required federal (including, without
limitation, the Board of Governors of the Federal Reserve System) or
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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; or (iii) upon mutual assent of the parties hereto.
(b) The Company and the Purchaser hereby agree that any termination of this Agreement
pursuant to Section 12(a), or the termination of the Rights Offering for any reason
whatsoever by the Company shall be without liability of the Company or the Purchaser.
13. Future Acquisitions of Shares.
The Purchaser acknowledges that the Company’s existing rights agreement permits newly-issued
shares directly from the Company, but limits future purchases by holders of greater than 14.9% of
the total number of outstanding Common Shares and the Purchaser agrees that during the period
beginning on the date hereof and continuing until the sale of its Standby Shares, it will not bid
for, purchase, contract to purchase or otherwise acquire, any Common Shares or interests therein
without the prior written consent of the Company.
14. Indemnification.
(a) In connection with the registration of Standby Shares pursuant to this Agreement,
the Company shall indemnify and hold harmless the Purchaser, its officers and directors,
each broker or any other person acting on behalf of the Purchaser and each other person, if
any, who controls any of the foregoing persons within the meaning of the Securities Act
against any losses, claims, damages or liabilities, joint or several, (or actions in respect
thereof) to which any of the foregoing persons may become subject under the Securities Act
or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in the registration statement under which such Standby Shares were
registered under the Securities Act, any preliminary prospectus or final prospectus
contained therein or otherwise filed with the Commission, any amendment or supplement
thereto or any document incident to registration or qualification of any Standby Shares, or
arise out of or are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein not
misleading, and shall reimburse such seller, such officer or director, such broker or such
other person acting on behalf of the Purchaser and each such controlling person for any
legal or other expenses reasonably incurred by any of them in connection with investigating
or defending any such loss, claim, damage, liability or action; provided,
however, that the Company shall not be liable in any such case to the extent that
any such loss, claim, damage, liability or action arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in such
registration statement, preliminary prospectus, final prospectus, amendment, supplement or
document incident to registration or qualification of any Standby Shares in reliance upon
and in conformity with written information furnished to
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the Company through an instrument duly executed by the Purchaser specifically for use
in the preparation thereof.
(b) In connection with the registration of Standby Shares under the Securities Act, the
Purchaser shall indemnify and hold harmless (in the same manner and to the same extent as
set forth in the preceding paragraph of this Section) the Company, each director of the
Company, each officer of the Company who shall sign such registration statement, each other
person acting on behalf of the Company and each person who controls any of the foregoing
persons within the meaning of the Securities Act with respect to any statement or omission
from such registration statement, any preliminary prospectus or final prospectus contained
therein or otherwise filed with the Commission, any amendment or supplement thereto or any
document incident to registration or qualification of any Standby Shares, if such statement
or omission was made in reliance upon and in conformity with written information furnished
to the Company through an instrument duly executed by the Purchaser specifically for use in
connection with the preparation of such registration statement, preliminary prospectus,
final prospectus, amendment, supplement or document; provided, however, that
the obligation to indemnify will be limited to an amount equal to the net proceeds actually
received by the Purchaser from the sale of Standby Shares effected pursuant to such
registration.
(c) Promptly after receipt by an indemnified party of notice of the commencement of any
action involving a claim referred to in the preceding paragraphs, such indemnified party
will, if a claim in respect thereof is made against an indemnifying party, give written
notice to the latter of the commencement of such action (it being understood that no delay
in delivering or failure to deliver such notice shall relieve the indemnifying persons from
any liability or obligation hereunder unless (and then solely to the extent that) the
indemnifying person is prejudiced by such delay and/or failure). In case any such action is
brought against an indemnified party, the indemnifying party will be entitled to participate
in and to assume the defense thereof, jointly with any other indemnifying party similarly
notified to the extent that it may wish, with counsel reasonably satisfactory to such
indemnified party, and after notice from the indemnifying party to such indemnified party of
its election so to assume the defense thereof, the indemnifying party shall not be
responsible for any legal or other expenses subsequently incurred by the latter in
connection with the defense thereof; provided, however, that if any
indemnified party shall have reasonably concluded that there may be one or more legal or
equitable defenses available to such indemnified party which are additional to or conflict
with those available to the indemnifying party, or that such claim or litigation involves or
could have an effect upon matters beyond the scope of the indemnity agreement provided for
herein, the indemnifying party shall not have the right to assume the defense of such action
on behalf of such indemnified party and such indemnifying party shall reimburse such
indemnified party and any person controlling such indemnified party for that portion of the
fees and expenses of any counsel retained by the indemnified party which is reasonably
related to the matters covered by the indemnity agreement provided for herein.
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(d) If the indemnification provided for above is held by a court of competent
jurisdiction to be unavailable to an indemnified party with respect to any loss, claim,
damage, liability or action referred to herein, then the indemnifying party, in lieu of
indemnifying such indemnified party hereunder, shall contribute to the amounts paid or
payable by such indemnified party as a result of such loss, claim, damage, liability or
action in such proportion as is appropriate to reflect the relative fault of the
indemnifying party on the one hand and of the indemnified party on the other in connection
with the statements or omissions which resulted in such loss, claim, damage or liability as
well as any other relevant equitable considerations. The relative fault of the indemnifying
party and of the indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the indemnifying party
or by the indemnified party and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission. The Company
and the Purchaser agree that it would not be just and equitable if contributions pursuant to
this paragraph were determined by pro rata allocation or by any other method of allocation
that did not take into account the equitable considerations referred to herein. The amount
paid or payable to an indemnified party as a result of the losses, claims, damages,
liabilities or expenses referred to above shall be deemed to include any legal or other
expenses reasonably incurred in connection with investigating or defending the same.
Notwithstanding the foregoing, in no event shall the amount contributed by the Purchaser
exceed the aggregate net offering proceeds received by the Purchaser from the sale of its
Standby Shares.
15. 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 [name], [address].
16. 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 its rights or obligations hereunder to any other
person or entity without the prior written consent of the Company.
17. Governing Law.
This Agreement shall be governed by, and construed in accordance with, the laws of the State
of New York.
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18. 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.
19. Other Matters.
This Agreement amends and restates the Prior Agreement in its entirety. Unless the context
requires otherwise, all references to the “date of the Agreement” or the “date hereof” set forth
herein shall be deemed to be references to , 2008.
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IN WITNESS WHEREOF, and intending to be legally bound thereby, each of the Purchaser and the
Company has signed or caused to be signed its name, all as of the day and year first above written.
| XXXXX FINANCIAL CORPORATION |
||||
| By: | /s/ Xxxxxxx X. Xxxxxx | |||
| Name: | Xxxxxxx X. Xxxxxx | |||
| Title: | Chairman & CEO | |||
| [name] | ||||
Schedule A
LOCK-UP AGREEMENT
, 2008
Xxxxx Financial Corporation
Ladies and Gentlemen:
In connection with your anticipated issuance to the holders of your issued and outstanding Common
Shares, no par value (the “Common Shares”), certain
non-transferable rights (the
“Rights”) to subscribe for and purchase additional Common Shares (such transaction
generally being herein referred to as the “Rights Offering”) and a private placement sale
to us of any unsubscribed-for Common Stock (the “Standby Shares”) pursuant to the Standby
Purchase Agreement, dated as of October ___, 2008, (the “Standby Purchase Agreement”), we
agree that any transaction in your Common Shares will be subject to this agreement (the
“Agreement”). Capitalized terms used herein and not otherwise defined herein shall have
the meanings set forth in the Standby Purchase Agreement.
In connection with the sale and purchase of the Standby Shares, and for other good and valuable
consideration the receipt and sufficiency of which is hereby acknowledged, the undersigned agrees
as follows:
Except as set forth below, it will not, directly or indirectly, without the prior written consent
of the Company, offer, sell, contract to sell, pledge, make any short sale or otherwise dispose of
(or enter into any transaction which is designed to, or might reasonably be expected to, result in
the disposition of, whether by actual disposition or effective economic disposition due to cash
settlement or otherwise, by the undersigned, any affiliate of the undersigned or any person in
privity with the undersigned) or establish or increase a put equivalent position or liquidate or
decrease a call equivalent position within the meaning of Section 16 of the Securities Exchange Act
of 1934, as amended, and the rules and regulations of the Securities and Exchange Commission
promulgated thereunder with respect to, the Standby Shares. The foregoing restriction is expressly
agreed to preclude the undersigned from engaging in any hedging or other transaction which is
designed to or which reasonably could be expected to lead to or result in a sale or disposition of
the undersigned’s Standby Shares even if such Shares would be disposed of by someone other than the
undersigned. The provisions in this paragraph shall not restrict the transfer of Standby Shares to
an affiliate as long as the affiliate transferee agrees for the benefit of the Company to be bound
by the terms hereof.
Its obligations under the paragraph above shall terminate upon termination of the Standby Purchase
Agreement and (i) with respect to 25% of the Standby Shares, 60 days after the Closing Date, (ii)
with respect to 50% of the Standby Shares, 120 days after the Closing Date, (iii) with respect to
75% of the Standby Shares, 180 days after the Closing Date and (iv) with respect to 100% of the
Standby Shares, 240 days after the Closing Date. In no event will this lock-up
agreement be any more restrictive than any other lock-up or similar agreement agreed to in
connection with the Exchange Transactions and the undersigned and the Company agree to make any
necessary amendments hereto promptly upon execution of any more favorable agreement.
Notwithstanding the foregoing, the undersigned may terminate this Agreement and its obligations
hereunder at any time, effective upon the undersigned’s giving you written notice of termination,
in the event any bank regulatory authority, including the Board of Governors of the Federal Reserve
System, the Indiana Department of Financial Institutions or any of the staffs thereof, (i)
initiates, or notifies the undersigned in writing that it intends to initiate, any proceeding to
determine whether we “control” the Company within the meaning of the Bank Holding Company Act, the
Indiana Financial Institutions Act, Ind. Code § 28-2-16-1 or any other federal or state banking
laws or (ii) otherwise notifies us in writing or publicly discloses that such regulatory authority
believes that we may control or have the ability to exert a controlling influence over the Company
within the meaning of such laws.
You hereby agree that you may release us from this Agreement with your prior written consent at any
time.
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