<PAGE> 1
EXHIBIT 10.7
ESCROW AGREEMENT
----------------
THIS ESCROW AGREEMENT (the "Agreement") entered into this day of June,
2000, by and among THE FARMERS & MERCHANTS BANK OF BOSWELL, INDIANA (the "Escrow
Agent"), KEEFE, BRUYETTE & WOODS, INC. (the "Sales Agent") and LAFAYETTE
COMMUNITY BANCORP (the "Company").
W I T N E S S E T H:
WHEREAS, the Company is in the process of forming Lafayette Community Bank
(the "Bank"); and
WHEREAS, in connection with the formation or acquisition of the Bank, the
Company is offering up to 1,200,000 shares of its common stock ("Shares") at
$10.00 per Share in accordance with the terms and conditions set forth in the
Prospectus ("Prospectus") dated April 7, 2000 (the "Offering"); and
WHEREAS, in connection with the Offering, the Company will retain Sales
Agent, subject to a separate sales agency agreement, as the Company's exclusive
financial advisor and marketing agent (i) to utilize its best efforts to solicit
subscriptions for the Shares in the Offering and to advise and assist the
Company with respect to the Shares in the Offering; and (ii) to manage the sale
of Shares; and
WHEREAS, the Prospectus set forth as a term and condition of the Offering
that those potential investors desiring to purchase Shares must, among other
things, deliver a check for the full amount of the purchase price of the Shares
for which such investor has subscribed to the Company; and
WHEREAS, the check for payment of the subscription price for the Shares
which the investor has subscribed must be payable to the Escrow Agent, and will
be deposited into the escrow account contemplated by this Agreement all as
described in the Prospectus; and
WHEREAS,in connection with the Offering, the Company desires the Escrow
Agent to serve as escrow agent and the Escrow Agent desires to serve as escrow
agent, as set forth in the Prospectus.
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which is herby
acknowledged, the Company, Sales Agent and Escrow Agent hereby agree as follows:
1. All payments made to Sales Agent for the purchase of Shares in the
Offering which are in the form of a personal, certified or a cashiers' check
shall be made payable to the Escrow Agent.
<PAGE> 2
2. Upon delivery to Sales Agent of any payment made for the purchase of
Shares in the Offering which are in certified or cashiers' checks. Sales Agent
shall, by noon of the next business day following receipt of such payment,
transmit such payment for Shares to the Escrow Agent.
3. The Escrow Agent, upon receipt of any monies from the Company in
connection with the Offering, shall hold such monies as escrow agent for the
Company as follows:
a. Such funds shall be held by the Escrow Agent until funds in the
principal sum of not less than $9,000,000 as payment for the sale
of 900,000 Shares have been deposited therein in accordance with
the terms of the Prospectus. Escrow Agent shall promptly invest the
funds in money market certificates of deposit; any short-term or money
market fund available to such account through Escrow Agent's Trust
Department; U.S. Treasury notes or bills; or such other obligation,
which obligation shall be limited to an obligation guaranteed by the
United States of America or an agency thereof and rated in one of the
top two rating categories by a rating agency of national recognition,
is considered prudent to safeguard principal, earn a reasonable rate
of interest and have funds available within a reasonable time for
distribution when required.
b. At any time and from time to time after at least $9,000,000 have been
deposited in the escrow account as set forth above, upon the written
instruction of the Company, such funds, or a portion thereof, shall be
immediately transferred by the Escrow Agent to a new account in the
name of the Company (the "Company's Account"), and immediately
thereafter, the Company shall have the sole authority to exercise
complete dominion of the Company's Account and shall have the right
to disburse any funds deposited therein in accordance with the
absolute discretion.
c. If funds in the aggregate amount of $9,000,000 have been deposited in
the escrow account as set forth above, then such funds or the
remaining funds in the escrow account shall be immediately transferred
by the Escrow Agent to the Company's Account, and immediately
thereafter, the Company shall have sole authority to exercise complete
dominion of the Company's Account and shall have the right to
disburse any funds deposited therein in accordance with its absolute
discretion.
d. If the sum of $9,000,000 is not deposited in the escrow account by the
end of the offering period (as described in the Prospectus), which
date may be extended not later than fifteen (15) days by the Company,
then the Escrow Agent by the end of the offering period or any
extension thereto, if extended by the Company, shall deliver and pay
the entire balance of the escrow account plus accrued interest, to
each of the investors in accordance with a letter of instruction from
the Company (in the form of Exhibit A attached hereto) designating the
name and address of each investor who
-2-
<PAGE> 3
is entitled to receive such funds at that time the Escrow Agent is
required to make disbursement thereof by the Company.
4. The duties and responsibilities of the Escrow agent will be limited to
those expressly set forth herein, to hold escrow items and to deliver to
recipients under such conditions as herein set forth. The Escrow Agent shall be
fully protected form liability to the Company when relying in good faith on any
written notices, demand certificate or document received from the Company which
it reasonably believes to be genuine. The Escrow Agent shall not be liable to
the Company for any loss or damage not caused by the gross negligence or willful
misconduct of the Escrow Agent.
5. The Escrow Agent shall be compensated for its services as set forth
in Exhibit B attached hereto. Payment of such fee shall be made upon completion
of the Offering.
6. The Escrow Agent may resign by giving 30 days prior notice in writing
to the Company. Upon written notice from the Company to the Escrow Agent of the
appointment of the succeeding escrow agent, the escrow funds, less any fees due
as provided herein, shall be forwarded to such successor escrow agent. In the
event 60 days elapse from the date of the Escrow Agent's notice of resignation,
and no successor escrow agent is appointed, the Escrow Agent shall forward the
balance of the escrow funds to the Company.
7. This Agreement shall be construed, enforced and administered in
accordance with the laws of the State of Indiana without respect to its conflict
of laws provisions.
IN WITNESS WHEREOF, the parties have executed this Agreement by their duly
authorized officers this ____ day of June, 2000.
LAFAYETTE COMMUNITY BANCORP
By:
--------------------------------
David R. Zimmerman, President
THE FARMERS AND MERCHANTS BANK
By:
--------------------------------
William F. Cook, Chairman, President and
Chief Executive Officer
KEEFE, BRUYETTE & WOODS, INC.
By:
--------------------------------
Harold T. Hanley, III, Senior Vice President
-3-
<PAGE> 4
EXHIBIT A
To: _______________________________ , Escrow Agent Transmittal No. ___________
Cumulative Shareholders Record Date ______________________
Account No. ___________________________
Name __________________________________
Subscription Number of Amount of
Number Shares Check Shareholder
------------ --------- ----- -----------
-----------------------------------------------
Number of Total
Shares Deposit
-----------------------------------------------
Total This
Transmittal:
-----------------------------------------------
Previous
Total:
-----------------------------------------------
Cumulative
Total:
-----------------------------------------------
By:
-----------------------------
, President
------------------
<PAGE> 5
EXHIBIT B
SCHEDULE OF CHARGES
ESCROW AGENT COMPENSATION
The Company shall pay to Escrow Agent for services set forth in the Agreement a
total of $1000.00, payable upon completion of the Offering. In no event shall
such compensation be deducted from funds held in the escrow account held by the
Escrow Agent or from the Company Account.
RESIGNATION FEE
There is no resignation fee owed to the Company in the event the Escrow Agent
resigns it duties set forth in the Agreement.
