EXHIBIT 1.2
POCAHONTAS BANCORP, INC.
Up to 2,875,000 Shares
(Anticipated Maximum)
COMMON STOCK
($.01 Par Value)
Subscription Price $10.00 Per Share
AGENCY AGREEMENT
____________, 1997
Friedman, Billings, Xxxxxx & Co., Inc.
0000 Xxxxxxxxxx Xxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
Pocahontas Bancorp, Inc. a Delaware corporation (the "Company"),
Pocahontas Federal Mutual Holding Company (the "MHC") and Pocahontas Federal
Savings and Loan Association, Pocahontas, Arkansas, a federal stock savings bank
(the "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 Friedman, Billings,
Xxxxxx & Co., Inc. (the "Agent") as follows (defined terms used herein shall
have the same definition given in the Prospectus dated ____________, 1998 unless
otherwise defined herein):
Section 1. The Offering. Pocahontas Bancorp, Inc., a Delaware corporation,
will convert first to a federal stock holding company and thereafter to an
interim federal stock savings bank. Thereafter, it will merge into the Bank. The
MHC, in accordance with its Plan of Conversion and Reorganization adopted by its
Board of Directors (the "Plan"), intends to convert to an interim federal stock
savings bank and merge with and into the Bank, pursuant to which the MHC will
cease to exist (the "Conversion"). In connection therewith, each stockholder
other than the MHC immediately prior to the Conversion ("Public Stockholders")
will receive Exchange Shares of the Company's common stock ("Common Stock," or
"Shares") pursuant to a ratio that will result in Public Stockholders owning in
the aggregate immediately after the Conversion the same percentage of the
outstanding shares of Common Stock, before giving effect to (a) the payment of
cash in lieu of fractional shares and (b) the purchase by such stockholders of
additional shares of Common Stock in the Offering.
Pursuant to the Plan and in connection with the Conversion, the Company is
offering up to 2,875,000 shares of its common stock (the "Conversion Stock") in
a subscription and community offering (the "Offerings"). Conversion Stock is
first being offered in a subscription offering with nontransferable subscription
rights being granted, in the following order of priority, to (i) depositors of
the Bank with account balances of $50.00 or more as of the close of business on
September 30, 1996 ("Eligible Account Holders"); (ii) the Bank's KSOP; (iii)
depositors of the Bank with account balances of $50.00 or more as of the close
of business on December 31, 1997 ("Supplemental Eligible Account Holders"); (iv)
depositors of the Bank as of the close of business on ______________, 1998
(other than Eligible Account Holders and Supplemental Eligible Account Holders)
and certain borrowers ("Other Members") and (v) stockholders of the Company,
other than the Mutual Holding Company ("Public Stockholders"). Subscription
rights will expire if not exercised by Noon, Central time, on March __, 1998,
unless extended.
Subject to the prior rights of holders of subscription rights, Conversion
Stock not subscribed for in the Subscription Offering is being offered in the
Community Offering to certain members of the general public to whom a copy of
the Prospectus is delivered, with preference given to natural persons residing
in the Local Community. The Primary Parties reserve the absolute right to reject
or accept any orders in the Community Offering in whole or in part, either at
the time of receipt of an order or as soon as practicable following the
Expiration Date.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-1 (File No. 333-_____) (the
"Registration Statement") containing a prospectus relating to the Offerings for
the registration of the Shares under the Securities Act of 1933 (the "1933
Act"), and has filed such amendments thereof, if any, and such amended
prospectuses as may have been required to the date hereof. The prospectus, as
amended, on file with the Commission at the time the Registration Statement
initially became 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 (the "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.
In accordance with the regulations of the Office of Thrift Supervision
("OTS") governing the conversions of savings associations (the "Conversion
Regulations"), the MHC has filed with the OTS an Application for Conversion on
Form AC (the "Conversion Application"), including the prospectus, and has filed
such amendments thereto, if any, as may have been required by the OTS. The
Conversion Application has been approved by the OTS and the related Prospectus
has been authorized for use by the OTS.
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Section 2. Retention of the Agent; Compensation; Sale and Delivery of the
Shares. Subject to the terms and conditions herein set forth, the Company, the
MHC and the Bank hereby appoint the Agent as their financial advisor and
marketing agent to utilize its best efforts to solicit subscriptions for Shares
of the Company's Common Stock and to advise and assist the Company and the Bank
with respect to the Company's sale of the Shares in the Offerings and in the
areas of market making, research coverage and syndicate formation (if
necessary).
On the basis of the representations, warranties, and agreements herein
contained, but subject to the terms and conditions herein set forth, the Agent
accepts such appointment and agrees to consult with and advise the Company, the
MHC and the Bank as to the matters set forth in the letter agreement ("Letter
Agreement"), dated ____________, 1997, between the Bank and the Agent (a copy of
which is attached hereto as Exhibit A). It is acknowledged by the Company, the
MHC and the Bank that the Agent shall not be required to purchase any Shares and
shall not be obligated to take any action which is inconsistent with all
applicable laws, regulations, decisions or orders. In the event of a Community
Offering, the Agent will assemble and manage a selling group of broker-dealers
which are members of the National Association of Securities Dealers, Inc. (the
"NASD") to participate in the solicitation of purchase orders for shares under a
selected dealers' agreement ("Selected Dealers' Agreement"), the form of which
is set forth as Exhibit B to this Agreement.
The obligations of the Agent pursuant to this Agreement shall terminate
upon the completion or termination or abandonment of the Plan by the Company or
upon termination of the Offerings, but in no event later than 45 days after the
completion of the Subscription Offering (the "End Date"). All fees or expenses
due to the Agent but unpaid will be payable to the Agent in next day funds at
the earlier of the Closing Date (as hereinafter defined) or the End Date. In the
event the Offerings are extended beyond the End Date, the Company, the MHC, the
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 2,125,000 Shares
within the period herein provided, this Agreement shall terminate and the
Company shall refund to any persons who have subscribed for any of the Shares,
the full amount which it may have received from them plus accrued interest as
set forth in the Prospectus; and none of the parties to this Agreement shall
have any obligation to the other parties hereunder, except as set forth in this
Section 2 and in Sections 6, 8 and 9 hereof.
In the event the Offerings are terminated for any reason not attributable
to the action or inaction of the Agent, the Agent shall be paid the fees due to
the date of such termination pursuant to subparagraphs (a) and (b) below.
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If all conditions precedent to the consummation of the Conversion,
including, without limitation, the sale of all Shares required by the Plan to be
sold, are satisfied, the Company agrees to issue, or have issued, the Shares
sold in the Offering and to release for delivery certificates for such Shares on
the Closing Date (as hereinafter defined) against payment to the Company by any
means authorized by the Plan, provided, however, that no funds shall be released
to the Company until the conditions specified in Section 7 hereof shall have
been complied with to the reasonable satisfaction of the Agent and their
counsel. The release of Shares against payment therefor shall be made on a date
and at a place acceptable to the Company, the MHC, the Bank and the Agent (it
being understood that such date shall not be more than ten business days after
termination of the Offering) or such other time or place as shall be agreed upon
by the Company, the MHC, the Bank and the Agent. Certificates for shares shall
be delivered directly to the purchasers in accordance with their directions. The
date upon which the Company shall release or deliver the Shares sold in the
Offering, in accordance with the terms herein, is called the "Closing Date."
The Agent shall receive the following compensation for its services
hereunder:
(a) An advisory and management fee to the Agent in the amount of
$50,000, of which $25,000 has been paid and of which $25,000 will be
paid upon OTS approval of the Plan application. Such fees shall be
deemed to be earned when due. Should the Conversion be 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 fees
accruing through the stage at which point the termination occurred,
including any accrued legal fees expanded by the Agent.
(b) A marketing fee of 1.00% of the aggregate Purchase Price of Common
Stock sold in the Subscription Offering and Community Offering,
excluding those shares purchased by the Bank's officers, directors,
or employees (or members of their immediate families) or by any
KSOP, tax-qualified or stock compensation plans (except IRA's) or
similar plan created by the Bank for some or all of its directors or
employees. The management fee of $50,000 will be subtracted from the
marketing fee.
(c) The decision to utilize other selected Broker-Dealers will be made
jointly by the Agent and the Bank. Selected broker-dealers who
assist in the subscription or purchase, excluding those shares
purchased by the Bank's officers, directors or employees or by any
KSOP, tax-qualified or stock based compensation plans (except IRA's)
or similar plan created by the Bank for some or all of its directors
or employees or by member depositors in the original subscription
phase of the offering, will be paid a fee not to exceed 4% of the
aggregate
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Actual Purchase Price of the shares of common stock sold by them in
the Subscription and/or Community Offerings. The Agent's fee for
such shares shall equal 1.5% of the aggregate Actual Purchase Price
of the shares of common stock sold by selected broker-dealers in the
Subscription and/or Community Offering. Fees with respect to
subscriptions or purchases effected with the assistance of
Registered Representatives employed by a Broker/Dealer other than
the Agent shall be paid to the Agent at Closing and then transmitted
by the Agent to such Broker/Dealer.
(d) The Bank and the Company hereby agree to reimburse the Agent, from
time to time upon the Agent's request, for its reasonable
out-of-pocket expenses, including without limitation, accounting,
communication, travel expenses, and legal fees and expenses, for
amounts not to exceed $29,500. Further, the Bank will reimburse the
Agent for (i) up to $29,500 of legal fees, and (ii) expenses of such
counsel. The Bank will bear the expenses of the Offerings
customarily borne by issuers including, without limitation, OTS,
SEC, "Blue Sky," and NASD filing and registration fees; the fees of
the Bank's accountants, conversion agent, data processor, attorneys,
appraiser, transfer agent and registrar, printing, mailing and
marketing expenses associated with the Conversion; and the fees set
forth under this Section 2.
Full payment of the Agent's actual and accountable expenses, advisory fees
and compensation shall be made in next day funds on the earlier of the Closing
Date or a determination by the Bank to terminate or abandon the Plan.
In the event of an oversubscription or other event, which causes the
Offerings to continue beyond the original expiration date or a resolicitation of
subscribers, the parties agree to renegotiate the expense cap on legal fees
applicable to the Agent.
Section 3. Prospectus; Offering. The Shares are to be initially offered in
the Offerings at the Purchase Price as defined and set forth on the cover page
of the Prospectus.
Section 4. Representations and Warranties. The Company, the MHC and the
Bank jointly and severally represent and warrant to the Agent on the date hereof
as follows:
(a) The Registration Statement was declared effective by the
Commission on _________, 1998. At the time the Registration Statement,
including the Prospectus contained therein (including any amendment or
supplement thereto), became effective, the Registration Statement complied
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 (including any amendment or supplement
thereto), and
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any information regarding the Company or the Bank contained in Sales
Information (as such term is defined in Section 8 hereof) authorized by
the Company or the Bank for use in connection with the Offerings, 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 and at the Closing Date referred to in Section 2, the
Registration Statement, including the Prospectus contained therein
(including any amendment or supplement thereto), any information regarding
the Company or the Bank contained in Sales Information (as such term is
defined in Section 8 hereof) authorized by the Company or the Bank for use
in connection with the Offerings will not contain an untrue statement of a
material fact or omit to state a material fact necessary in order to make
the statements therein, in light of the circumstances under which they
were made, not misleading; provided, however, that the representations and
warranties in this Section 4(a) shall not apply to statements or omissions
made in reliance upon and in conformity with written information furnished
to the Company or the Bank by the Agent expressly regarding the Agent for
use in the Prospectus under the caption "The Conversion-Marketing
Arrangements" or statements in or omissions from any Sales Information or
information filed pursuant to state securities or blue sky laws or
regulations regarding the Agent.
(b) The Conversion Application was approved by the OTS on _________,
1998 and the related Prospectus has been authorized for use by the OTS. At
the time of the approval of the Conversion Application, including the
Prospectus (including any amendment or supplement thereto), by the OTS and
at all times subsequent thereto until the Closing Date, the Conversion
Application, including the Prospectus (including any amendment or
supplement thereto), will comply in all material respects with the
Conversion Regulations except to the extent waived by the OTS. The
Conversion Application, including the Prospectus (including any amendment
or supplement thereto), does not include 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 4(b)
shall not apply to statements or omissions made in reliance upon and in
conformity with written information furnished to the Company, the MHC or
the Bank by the Agent expressly regarding the Agent for use in the
Prospectus contained in the Conversion Application under the caption "The
Conversion-Marketing Arrangements" or statements in or omissions from any
sales information or information filed pursuant to state securities or
blue sky laws or regulations regarding the Agent.
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(c) No order has been issued by the OTS preventing or suspending the
use of the Prospectus and no action by or before any such government
entity to revoke any approval, authorization or order of effectiveness
related to the Conversion is, to the best knowledge of the Company, the
MHC or the Bank, pending or threatened.
(d) At the Closing Date referred to in Section 2, the Plan will have
been adopted by the Boards of Directors of the Company, the MHC and the
Bank and the offer and sale of the Shares will have been conducted in all
material respects in accordance with the Plan, the Conversion Regulations,
and all other applicable laws, regulations, decisions and orders,
including all terms, conditions, requirements and provisions precedent to
the Conversion imposed upon the Company, the MHC or the Bank by the OTS,
the Commission or any other regulatory authority and in the manner
described in the Prospectus. To the best knowledge of the Company, no
person has sought to obtain review of the final action of the OTS in
approving or taking no objection to the Plan or in approving or taking no
objection to the Conversion or the Holding Company Application pursuant to
the Conversion Regulations or any other statute or regulation.
(e) The Bank has been organized and is a validly existing federally
chartered savings and loan association in stock form of organization and
upon the Conversion will continue as such, is duly authorized to conduct
its business and own its property as described in the Registration
Statement and the Prospectus; the Bank has obtained all material licenses,
permits and other governmental authorizations currently required for the
conduct of its business; all such licenses, permits and governmental
authorizations are in full force and effect, and the Bank is in all
material respects complying with all laws, rules, regulations and orders
applicable to the operation of its business; the Bank is existing under
the laws of the United States and is duly qualified as a foreign
corporation to transact business and is in good standing in each
jurisdiction in which its ownership of property or leasing or property or
the conduct of its business requires such qualification, unless the
failure to be so qualified in one or more of such jurisdictions would not
have a material adverse effect on the condition, financial or otherwise,
or the business, operations or income of the Bank. The Bank does not own
equity securities or any equity interest in any other business enterprise
except as described in the Prospectus or as would not be material to the
operations of the Bank. Upon completion of the sale by the Company of the
Shares contemplated by the Prospectus, (i) all of the authorized and
outstanding capital stock of the Bank will continue to be owned by the
Company, and (ii) the Company will have no direct subsidiaries other than
the Bank. The Conversion will have been effected in all material respects
in accordance with all applicable statutes, regulations, decisions and
orders; and, except with respect to the filing of certain post-sale,
post-Conversion reports, and documents in compliance with the 1933 Act
Regulations or the OTS'
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resolutions or letters of approval or no objection taken, all terms,
conditions, requirements and provisions with respect to the Conversion
(except those that are conditions subsequent) imposed by the Commission or
the OTS, if any, will have been complied with by the Company, the MHC and
the Bank in all material respects or appropriate waivers will have been
obtained and all material notice and waiting periods will have been
satisfied, waived or elapsed.
(f) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of Delaware
with corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the Registration
Statement and the Prospectus, and the Company is qualified to do business
as a foreign corporation in each jurisdiction in which the conduct of its
business requires such qualification, except where the failure to so
qualify would not have a material adverse effect on the condition,
financial or otherwise, or the business, operations or income of the
Company. The Company has obtained all material licenses, permits and other
governmental authorizations currently required for the conduct of its
business; all such licenses, permits and governmental authorizations are
in full force and effect, and the Company is in all material respects
complying with all laws, rules, regulations and orders applicable to the
operation of its business.
(g) The MHC has been duly organized and is a validly existing
federally chartered mutual holding company, with corporate power and
authority to own, lease and operate its properties and to conduct its
business as described in the Registration Statement and the Prospectus,
and the MHC is qualified to do business as a foreign corporation in each
jurisdiction in which the conduct of its business requires such
qualification, except where the failure to so qualify would not have a
material adverse effect on the condition, financial or otherwise, or the
business, operations or income of the MHC. The MHC has obtained all
material licenses, permits and other governmental authorizations currently
required for the conduct of its business; all such licenses, permits and
governmental authorizations are in full force and effect, and the MHC is
in all material respects complying with all laws, rules, regulations and
orders applicable to the operation of its business.
(h) The Bank is a member of the Federal Home Loan Bank of Dallas
("FHLB-Dallas"). The deposit accounts of the Bank are insured by the FDIC
up to the applicable limits; and no proceedings for the termination or
revocation of such insurance are pending or, to the best knowledge of the
Company, the MHC or the Bank, threatened. Upon consummation of the
Conversion, the liquidation account for the benefit of Eligible Account
Holders and Supplemental Eligible Account Holders
8
will be duly established in accordance with the requirements of the
Conversion Regulations.
(i) The Company, the MHC and the Bank have good and marketable title
to all real property and other assets material to the business of the
Company, the MHC and the Bank and to those properties and assets described
in the Registration Statement and Prospectus as owned by them, free and
clear of all liens, charges, encumbrances or restrictions, except such as
are described in the Registration Statement and Prospectus or are not
material to the business of the Company, the MHC and the Bank taken as a
whole; and all of the leases and subleases material to the business of the
Company, the MHC and the Bank under which the Company, the MHC or the Bank
hold properties, including those described in the Registration Statement
and Prospectus, are in full force and effect.
(j) The Company, the MHC and the Bank have received an opinion of
their special counsel, Xxxx Xxxxxx Xxxxxx Xxxxxxxx & Xxxxxx ("Xxxx
Xxxxxx"), with respect to the federal income tax consequences of the
conversion of the MHC from mutual to stock form, and the sale of the
Shares as described in the Registration Statement and the Prospectus, and
an opinion from ______________________________ ("_______") with respect to
the Arkansas state income tax consequences of the proposed transaction;
all material aspects of the opinions of Xxxx Xxxxxx and
_____________________________ are accurately summarized in the Prospectus;
and the facts and representations upon which such opinions are based are
truthful, accurate and complete.
(k) The Company, the MHC and the Bank have all such power,
authority, authorizations, approvals and orders as may be required to
enter into this Agreement, to carry out the provisions and conditions
hereof and to issue and sell the Shares to be sold by the Company as
provided herein and as described in the Prospectus.
(l) The Company, the MHC and the Bank are not in violation of any
directive received from the OTS, the FDIC, or any other 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 (including, without limitation, regulations, decisions,
directives and orders of the OTS and the FDIC) and, except as set forth in
the Registration Statement and the Prospectus, there is no suit or
proceeding or charge or action before or by any court, regulatory
authority or governmental agency or body, pending or, to the knowledge of
the Company, the MHC and the Bank, threatened, which might materially and
adversely affect the Conversion, the performance of this Agreement or the
consummation of the transactions contemplated in the Plan and as described
in the Registration Statement
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and the Prospectus or which might result in any material adverse change in
the condition (financial or otherwise), earnings, capital or properties of
the Company, or the Bank, or which would materially affect their
properties and assets.
(m) The financial statements which are included in the Prospectus
fairly present the financial condition, results of operations, retained
earnings and cash flows of the Company and/or the Bank (as applicable) 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 Titles 12 and 17 of the Code of Federal
Regulations and generally accepted accounting principles (including those
requiring the recording of certain assets at their current market value).
Such financial statements have been prepared in accordance with generally
accepted accounting principles consistently applied through the periods
involved, present fairly in all material respects the information required
to be stated therein and are consistent with the most recent financial
statements and other reports filed by the Bank with the OTS and the FDIC,
except that accounting principles employed in such regulatory filings
conform to the requirements of such authorities and not necessarily to
generally accepted accounting principles. 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 Company and/or the
Bank (as applicable) included in the Prospectus, and as to the pro forma
adjustments, the adjustments made therein have been properly applied on
the basis described therein.
(n) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus; (i) there has not been any
material adverse change, financial or otherwise, in the condition of the
Company, the MHC, the Bank or in the earnings, capital or properties of
the Company, the MHC or the Bank, whether or not arising in the ordinary
course of business; (ii) there has not been any material increase in the
long-term debt of the Bank or in loans past due 90 days or more or real
estate acquired by foreclosure, by deed-in-lieu of foreclosure or deemed
in-substance foreclosure or any material decrease in surplus and reserves
or total assets of the Bank nor has the Company or the Bank issued any
securities or incurred any liability or obligation for borrowing other
than in the ordinary course of business; (iii) there have not been any
material transactions entered into by the Company, the MHC or the Bank,
except with respect to those transactions entered into in the ordinary
course of business; (iv) the capitalization, liabilities, assets,
properties and business of the Company, the MHC and the Bank conform in
all material respects to the descriptions thereof contained in the
Prospectus; and (v) neither the Company, the MHC nor the Bank has any
material contingent liabilities, except as set forth in the Prospectus.
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(o) As of the date hereof and as of the Closing Date, neither the
Company, the MHC nor the 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 material obligation, agreement,
covenant, or condition contained in any material 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; the consummation of the
Conversion, the execution, delivery and performance of this Agreement and
the consummation of the transactions herein contemplated have been duly
and validly authorized by all necessary corporate action on the part of
the Company and the Bank and this Agreement has been validly executed and
delivered by the Company, the MHC and the Bank and is the valid, legal and
binding Agreement of the Company, the MHC and the Bank enforceable in
accordance with its terms, except as the enforceability thereof may be
limited by (i) bankruptcy, insolvency, reorganization, moratorium,
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 Federal savings institutions and
their holding companies, (ii) general equitable principles, (iii) laws
relating to the safety and soundness of insured depository institutions,
and (iv) applicable law or public policy with respect to the
indemnification and/or contribution provisions contained herein, and
except that no representation or warranty need be made as to the effect or
availability of equitable remedies or injunctive relief (regardless of
whether such enforceability is considered in a proceeding in equity or at
law). The consummation of the transactions herein contemplated will not:
(i) conflict with or constitute a breach of, or default under, the
articles of incorporation and bylaws of the Company or the charters and
bylaws of the Bank or the MHC (in either mutual or capital stock form), or
any material contract, lease or other instrument to which the Company, the
MHC or the Bank has a beneficial interest, or any applicable law, rule,
regulation or order; (ii) violate any authorization, approval, judgment,
decree, order, statute, rule or regulation applicable to the Company, the
MHC or the Bank, except for such violations which would not have a
material adverse effect on the financial condition and results of
operations of the Company, the MHC and the 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, the MHC or the Bank.
(p) 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, the MHC or the Bank, in the due performance and observance of any
term, covenant or condition of any indenture, mortgage, deed of trust,
note, bank loan or credit agreement or any other instrument or agreement
to which the Company, the MHC or the Bank is a party or by which any of
them or any of their property is bound or affected except such
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defaults which would not have a material adverse effect on the financial
condition or results of operations of the Company, the MHC and the Bank on
a consolidated basis; 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, the MHC or the Bank, threatened any action or
proceeding wherein the Company, the Bank or the MHC would or might be
alleged to be in default thereunder under circumstances where such action
or proceeding, if determined adversely to the Company, the MHC or the
Bank, would have a material adverse effect on the Company, the MHC and the
Bank, taken as a whole.
(q) 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"; the Shares
will have been duly and validly authorized for issuance and, when issued
and delivered by the Company pursuant to the Plan against payment of the
consideration calculated as set forth in the Plan and in the Prospectus,
will be duly and validly issued, fully paid and non-assessable; no
preemptive rights exist with respect to the Shares; and the terms and
provisions of the Shares 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, the MHC and the 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.
(r) 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 approval or
non-objection, as applicable, of the Commission, the OTS, and any
necessary qualification, notification, registration or exemption under the
securities or blue sky laws of the various states in which the Shares are
to be offered, and except as may be required under the rules and
regulations of the NASD and/or the Nasdaq National Market.
(s) Deloitte & Touche ("Deloitte"), which has certified the
financial statements of the Bank included in the Prospectus as of
September 30, 1997 and 1996 and for each of the years in the three year
period ended September 30, 1997, has advised the Company, the MHC and the
Bank in writing that they are, with respect to the Company, the MHC and
the Bank, independent public accountants within the meaning of the Code of
Professional Ethics of the American Institute of Certified Public
Accountants and Title 121 of the Code of Federal Regulations and Section
571.2(c)(3).
12
(t) RP Financial, LC which has prepared the Bank's Conversion
Valuation Appraisal Report as of ______, 1997 (as amended or supplemented,
if so amended or supplemented) (the "Appraisal"), has advised the Company
in writing that it is independent of the Company, the MHC and the Bank
within the meaning of the Conversion Regulations.
(u) The Company, the MHC and the Bank have timely filed all required
federal, state and local tax returns; the Company, the MHC and the Bank
have paid all taxes that have become due and payable in respect of such
returns, except where permitted to be extended, have made adequate
reserves for similar future tax liabilities and no deficiency has been
asserted with respect thereto by any taxing authority.
(v) The Company, the MHC and the Bank are in compliance 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.
(w) To the knowledge of the Company, the MHC and the Bank, neither
the Company, the MHC, the Bank nor employees of the Company, the MHC or
the Bank have made any payment of funds of the Company, the MHC or the
Bank as a loan for the purchase of the Shares (other than a loan by the
Company to the KSOP) or made any other payment of funds prohibited by law,
and no funds have been set aside to be used for any payment prohibited by
law.
(x) Prior to the Conversion, the Bank had ___________ shares of
authorized capital stock, of which _________ shares were issued and
outstanding, the Company had ______ shares of authorized capital stock, of
which ________ shares were issued and outstanding and the MHC was not
authorized to issue shares. Neither the Bank, the Company nor the MHC has:
(i) other than as described in the Prospectus issued any securities within
the last 18 months (except for notes to evidence other bank loans and
reverse repurchase agreements or other liabilities in the ordinary course
of business or as described in the Prospectus); (ii) had any material
dealings within the 12 months prior to the date hereof with any member of
the NASD, or any person related to or associated with such member, other
than discussions and meetings relating to the proposed offering and
routine purchases and sales of United States government and agency
securities; (iii) entered into a financial or management consulting
agreement except as contemplated hereunder and except for the Letter
Agreement set forth in Exhibit A; and (iv) engaged any intermediary
between the Agents and the Company, the MHC and the Bank in connection
with the offering of the Shares, and no person is being compensated in any
manner for such service.
13
(y) The Company, the MHC and the Bank have not relied upon the Agent
or the Agent's counsel for any legal, tax or accounting advice in
connection with the Conversion.
(z) The Company is not required to be registered under the
Investment Company Act of 1940, as amended.
Any certificates signed by an officer of the Company, the MHC or the 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, the MHC or the Bank to the Agent as to the matters
covered thereby with the same effect as if such representation and warranty were
set forth herein.
Section 5. Representations and Warranties of the Agent. The Agent
represents and warrants to the Company, the MHC and the Bank that:
(a) The Agent is a corporation and is validly existing in good
standing under the laws of the State of Delaware with full power and
authority to provide the services to be furnished to the Bank, the
MHC and the Company hereunder.
(b) The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly
and validly authorized by all necessary action on the part of 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.
(c) Each of the Agent and its employees, 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, including appropriate
licenses and the Company's approvals in the various states in which
securities shall be offered.
(d) 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 will not conflict with, or
result in a breach of, any of the terms, provisions 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 the Agent or any agreement, indenture or other
instrument to which the Agent is a party or by which it or its
property is bound.
14
(e) No approval of any regulatory or supervisory or other public
authority is required in connection with the Agent's execution and
delivery of this Agreement, except as may have been received.
(f) There is no suit or proceeding or charge of action before or by
any court, regulatory authority or government agency or body or, to
the knowledge of the Agent, pending or threatened, which might
materially adversely affect the Agent's performance of this
Agreement.
Section 5.1 Covenants of the Company, the MHC and the Bank. The Company,
the MHC and the Bank hereby jointly and severally covenant with the Agent as
follows:
(a) The Company has filed the Registration Statement with the
Commission. The Company will not, at any time after the date the
Registration Statement is declared effective, file any amendment or
supplement to the Registration Statement without providing the Agent and
its counsel an opportunity to review such amendment or supplement or file
any amendment or supplement to which amendment or supplement the Agent or
its counsel shall reasonably object. (b) The MHC has filed the Conversion
Application with the OTS. The Bank will not, at any time after the
Conversion Application is approved by the OTS, file any amendment or
supplement to such Conversion Application without providing the Agent and
its counsel an opportunity to review such amendment or supplement or file
any amendment or supplement to which amendment or supplement the Agent or
its counsel shall reasonably object.
(c) The Company and the Bank will use their best efforts to cause
any post-effective amendment to the Registration Statement to be declared
effective by the Commission and any post-effective amendment to the
Conversion Application to be approved by the OTS and will immediately upon
receipt of any information concerning the events listed below notify the
Agent: (i) when the Registration Statement, as amended, has become
effective; (ii) when the Conversion Application, as amended, has been
approved by the OTS; (iii) of any comments from the Commission, the OTS or
any other governmental entity with respect to the Conversion or the
transactions contemplated by this Agreement; (iv) of the request by the
Commission, the OTS or any other governmental entity for any amendment or
supplement to the Registration Statement or the Conversion Application or
for additional information; (v) of the issuance by the Commission, the OTS
or any other governmental entity of any order or other action suspending
the Offering or the use of the Registration Statement or the Prospectus or
any other filing of the Company or the Bank under the Conversion
Regulations, or other applicable law, or the threat of any such action;
(vi) the issuance by the Commission, the OTS or any state authority of any
stop order suspending the
15
effectiveness of the Registration Statement or the approval of the
Conversion Application, or of the initiation or threat of initiation or
threat of any proceedings for any such purpose; or (vii) of the occurrence
of any event mentioned in paragraph (h) below. The Company, the MHC and
the Bank will make every reasonable effort (i) to prevent the issuance by
the Commission, the OTS or any state authority of any such order and, if
any such order shall at any time be issued, (ii) to obtain the lifting
thereof at the earliest possible time.
(d) The Company, the MHC and the Bank will deliver to the Agent and
to its counsel two conformed copies of the Registration Statement and the
Conversion Application, as originally filed and of each amendment or
supplement thereto, including all exhibits. Further, the Company, the MHC
and the Bank will deliver such additional copies of the foregoing
documents to counsel to the Agent as may be required for any NASD and blue
sky filings.
(e) The Company, the MHC and the Bank will furnish to the Agent,
from time to time during the period when the Prospectus (or any later
prospectus related to this offering) is required to be delivered under the
1933 Act or the Securities Exchange Act of 1934 (the "1934 Act"), such
number of copies of such Prospectus (as amended or supplemented) 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 (the "1934 Act Regulations"). The Company
authorizes the Agent to use the Prospectus (as amended or supplemented, if
amended or supplemented) in any lawful manner contemplated by the Plan in
connection with the sale of the Shares by the Agent.
(f) The Company, the MHC and the Bank will comply with any and all
material terms, conditions, requirements and provisions with respect to
the Conversion and the transactions contemplated thereby imposed by the
Commission, the OTS, the Conversion Regulations or the OTS, and by the
1933 Act, the 1933 Act Regulations, the 1934 Act and the 1934 Act
Regulations to be complied with prior to or subsequent to the Closing Date
and when the Prospectus is required to be delivered, the Company, the MHC
and the Bank will comply, at their own expense, with all material
requirements imposed upon them by the Commission, the OTS, the Conversion
Regulations or the OTS, and by the 1933 Act, the 1933 Act Regulations, the
1934 Act and the 1934 Act Regulations, including, without limitation, Rule
10b-5 under the 1934 Act, in each case as from time to time in force, so
far as necessary to permit the continuance of sales or dealing in shares
of Common Stock during such period in accordance with the provisions
hereof and the Prospectus.
16
(g) If, at any time during the period when the Prospectus relating
to the Shares is required to be delivered, any event relating to or
affecting the Company, the MHC or the Bank shall occur, as a result of
which it is necessary or appropriate, in the opinion of counsel for the
Company, the MHC and the Bank or in the reasonable opinion of the Agent's
counsel, to amend or supplement the Registration Statement or Prospectus
in order to make the Registration Statement or Prospectus not misleading
in light of the circumstances existing at the time the Prospectus is
delivered to a purchaser, the Company and the Bank will at their expense,
prepare and file with the Commission 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 will amend or supplement the
Registration Statement or Prospectus so that as amended or supplemented it
will not contain an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in light
of the circumstances existing at the time the Prospectus is delivered to a
purchaser, not misleading. For the purpose of this Agreement, the Company,
the MHC and the Bank each will timely furnish to the Agent such
information with respect to itself as the Agent may from time to time
reasonably request.
(h) The Company, the MHC and the Bank will take all necessary
actions, in cooperating with the Agent, and furnish to whomever the Agent
may direct, such information as may be required to qualify or register the
Shares for offering and sale by the Company or to exempt such Shares from
registration, or to exempt the Company as a broker-dealer and its
officers, directors and employees as broker-dealers or agents under the
applicable securities or blue sky laws of such jurisdictions in which the
Shares are required under the Conversion Regulations to be sold or as the
Agent and the Company, the MHC and the Bank may reasonably agree upon;
provided, however, that the Company shall not be obligated to file any
general consent to service of process or to qualify to do business in any
jurisdiction in which it is not so qualified. In each jurisdiction where
any of the Shares shall have been qualified or registered as above
provided, the Company will make and file such statements and reports in
each fiscal period as are or may be required by the laws of such
jurisdiction.
(i) The liquidation account for the benefit of Eligible Account
Holders and Supplemental Eligible Account Holders will be duly established
and maintained by the Bank in accordance with the requirements of the OTS,
and such Eligible Account Holders and Supplemental Eligible Account
Holders who continue to maintain their savings accounts in the Bank will
have an inchoate interest in their pro rata portion of the liquidation
account which shall have a priority superior to that of the holders of
shares of Common Stock in the event of a complete liquidation of the Bank.
17
(j) The Company, the MHC and the Bank will not sell or issue,
contract to sell or otherwise dispose of, for a period of 90 days after
the Closing Date, without the Agent's prior written consent, any shares of
Common Stock other than the Shares or other than in connection with any
plan or arrangement described in the Prospectus.
(k) The Company shall maintain the effectiveness of the registration
of its Common Stock under Section 12 (g) of the 1934 Act for not less than
three (3) years or such shorter period as may be required by the OTS.
(l) During the period during which the Company's Common Stock is
registered under the 1934 Act or for three years from the date hereof,
whichever period is greater, the Company will furnish to its stockholders
as soon as practicable after the end of each fiscal year an annual report
of the Company (including a consolidated balance sheet and statements of
consolidated income, stockholders' equity and cash flows of the Company
and its subsidiaries as at the end of and for such year, certified by
independent public accountants in accordance with Regulation S-X under the
1933 Act and the 1934 Act).
(m) During the period of three years from the date hereof, the
Company will furnish to the Agent: (i) as soon as practicable after such
information is publicly available, a copy of each report of the Company
furnished to or filed with the Commission under the 1934 Act or any
national securities exchange or system on which any class of securities of
the Company is listed or quoted (including, but not limited to, reports on
Forms 10-K, 10-Q and 8-K and all proxy statements and annual reports to
stockholders), (ii) a copy of each other non-confidential report of the
Company mailed to its stockholders or filed with the Commission, the 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 Bank as the Agent may reasonably request; and (iii) from time to time,
such other nonconfidential information concerning the Company or the Bank
as the Agent may reasonably request.
(n) The Company and the Bank will use the net proceeds from the sale
of the Shares in the manner set forth in the Prospectus under the caption
"Use of Proceeds."
(o) Other than as permitted by the Conversion Regulations, the Home
Owners Loan Act of 1933 (the "HOLA"), the 1933 Act, the 1933 Act
Regulations, and the laws of any state in which the Shares are registered
or qualified for sale or exempt
18
from registration, neither the Company, the MHC nor the Bank will
distribute any prospectus, offering circular or other offering material in
connection with the offer and sale of the Shares.
(p) The Company will use its best efforts to (i) encourage and
assist two market makers to maintain a market for the Shares and (ii)
continue to list the Shares on the Nasdaq National Market.
(q) The Bank will maintain appropriate arrangements for depositing
all funds received from persons mailing subscriptions for or orders to
purchase Shares in the Offerings 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 Bank's obligation to refund
payments received from persons subscribing for or ordering Shares in the
Offerings in accordance with the Plan and as described in the Prospectus
or until refunds of such funds have been made to the persons entitled
thereto or withdrawal authorizations canceled in accordance with the Plan
and as described in the Prospectus. The Bank will maintain such records of
all funds received to permit the funds of each subscriber to be separately
insured by the FDIC (to the maximum extent allowable) and to enable the
Bank to make the appropriate refunds of such funds in the event that such
refunds are required to be made in accordance with the Plan and as
described in the Prospectus.
(r) The Company and the Bank will take such actions and furnish such
information as are reasonably requested by the Agent in order for the
Agent to ensure compliance with the NASD's "Interpretation Relating to
Free Riding and Withholding."
(s) Neither the Bank nor the MHC will amend the Plan of Conversion
without notifying the Agent prior thereto.
(t) The Company shall assist the Agent, if necessary, in connection
with the allocation of the Shares in the event of an oversubscription and
shall provide the Agent with any information necessary to assist the
Company in allocating the Shares in such event and such information shall
be accurate and reliable.
(u) Prior to the Closing Date, the Company, the MHC and the Bank
will inform the Agent of any event or circumstances of which it is aware
as a result of which the Registration Statement, the Conversion
Application and/or Prospectus, as then amended or supplemented, would
contain an untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein not misleading.
19
Section 5.2 Covenants of the Agent. The Agent hereby covenants with
the Company, the MHC and the Bank as follows:
(a) During the period when the Prospectus is used, the Agent will
comply, in all material respects and at its own expense, with all
requirements imposed upon it by the OTS and, to the extent applicable, by
the 1933 Act and the 1934 Act and the rules and regulations promulgated
thereunder.
(b) The Agent shall return unused prospectuses, if any, to the
Company promptly upon the completion of the Conversion.
(c) The Agent will distribute the Prospectuses or offering materials
in connection with the sales of the common stock only in accordance with
OTS regulations, the 1933 Act and the rules and regulations promulgated
thereunder.
(d) The Agent shall assist the Bank in maintaining arrangements for
the deposit of funds and the making of refunds, as appropriate (as
described in Section 5.1(r)), and shall perform the allocation of shares
in the event of an oversubscription, in conformance with the Plan and
applicable regulations and based upon information furnished to the Agent
by the Bank (as described in Section 5.1(v)).
Section 6. Payment of Expenses. Whether or not the Conversion is completed
or the sale of the Shares by the Company is consummated, the Company, the MHC
and the Bank jointly and severally agree to pay or reimburse the Agent for: (a)
all filing fees in connection with all filings with the NASD; (b) any stock
issue or transfer taxes which may be payable with respect to the sale of the
Shares; (c) all reasonable expenses of the Conversion including but not limited
to the Company, the MHC and the Bank's attorneys' fees, transfer agent,
registrar and other agent charges, fees relating to auditing and accounting or
other advisors and costs of printing all documents necessary in connection with
the Conversion; and (d) all reasonable out-of-pocket expenses incurred by the
Agent not to exceed $29,500 (including legal fees and expenses). Such
out-of-pocket expenses include, but are not limited to, travel, communications
and postage. However, such out-of-pocket expenses do not include expenses
incurred with respect to the matters set forth in (a) or (b) above. In the event
the Company is unable to sell a minimum of 2,125,000 Shares or the Conversion is
terminated or otherwise abandoned, the Company, the MHC and the Bank shall
reimburse the Agent in accordance with Section 2 hereof.
Section 7. Conditions to the Agent's Obligations. The Agent's obligations
hereunder, as to the Shares to be delivered at the Closing Date, are subject, to
the extent not waived by the Agent, to the condition that all representations
and warranties of the Company,
20
the MHC and the Bank herein are, at and as of the commencement of the Offerings
and at and as of the Closing Date, true and correct in all material respects,
the condition that the Company, the MHC and the 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, the MHC and the Bank shall
have conducted the Conversion in all material respects in accordance with
the Plan, the Conversion Regulations, and all other applicable laws,
regulations, decisions and orders, including all terms, conditions,
requirements and provisions precedent to the Conversion imposed upon them
by the OTS.
(b) The Registration Statement shall have been declared effective by
the Commission, the Conversion 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, the MHC's or the Bank's knowledge, threatened by the
Commission, the OTS or any state authority.
(c) At the Closing Date, the Agent shall have received:
(1) The favorable opinion, dated as of the Closing Date and
addressed to the Agent and for its benefit, of Xxxx Xxxxxx, special
counsel for the Company, the MHC and the Bank, in form and substance
to the effect that:
(i) The Company has been duly incorporated and is
validly existing as a corporation under the laws of the State of
Delaware 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. All of the
outstanding capital stock of the Company is duly authorized and
validly issued, fully paid and non-assessable.
(ii) The Bank has been duly organized and is a validly
existing federal savings association in capital stock form of
organization, duly authorized to conduct its business and own its
property as described in the Registration Statement and Prospectus.
All of the outstanding capital stock of the Bank is duly authorized
and validly issued, fully paid and non-assessable
21
and owned by the Company, free and clear of any liens, encumbrances,
claims or other restrictions.
(iii) The MHC has been duly organized and is a validly
existing federal mutual holding company duly authorized to conduct
its business and own its property as described in the Registration
Statement and Prospectus.
(iv) The Bank is a member of the FHLB-Dallas. The
deposit accounts of the Bank are insured by the FDIC up to the
maximum amount allowed under law and no proceedings for the
termination or revocation of such insurance are pending or, to such
counsel's Actual Knowledge, threatened; the description of the
liquidation account as set forth in the Prospectus under the caption
"The Conversion and Reorganization-Liquidation Rights" to the extent
that such information constitutes matters of law and legal
conclusions has been reviewed by such counsel and is accurate in all
material respects.
(v) Upon consummation of the Conversion, the authorized,
issued and outstanding capital stock of the Company will be within
the range set forth in the Prospectus under the caption
"Capitalization," and except for shares issued as described in the
Prospectus or pursuant to employee stock benefit plans described in
the Prospectus in the section titled "Management of the Bank --
Executive Compensation," no shares of Common Stock have been issued
prior to the Closing Date; at the time of the Conversion, the Shares
subscribed for pursuant to the Offerings will have been duly and
validly authorized for issuance, and when issued and delivered by
the Company pursuant to the Plan against payment of the
consideration calculated as set forth in the Plan and the
Prospectus, will be duly and validly issued and fully paid and
non-assessable; the issuance of the Shares is not subject to
preemptive rights and the terms and provisions of the Shares conform
in all material respects to the description thereof contained in the
Prospectus. To such counsel's Actual 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.
(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, the MHC, and the Bank; and this Agreement is a valid
and binding obligation of the Company, the MHC and the Bank,
enforceable in accordance with its terms, except as the
enforceability thereof may be limited by (i) bankruptcy,
22
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, (ii) general equitable principles, (iii)
laws relating to the safety and soundness of insured depository
institutions, and (iv) applicable law or public policy with respect
to the indemnification and/or contribution provisions contained
herein, including, without limitation, the provisions of Section 23A
and 23B of the Federal Reserve Act, and except that no opinion need
to be expressed as to the effect or availability of equitable
remedies or injunctive relief (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
(vii) The Conversion Application has been approved by
the OTS and the Prospectus has been authorized for use by the OTS
and no action has been taken, and to such counsel's Actual
Knowledge, none is pending or threatened, to revoke any such
authorization or approval.
(viii) The Plan has been duly adopted by the required
vote of the directors of the Company, the MHC and the Bank and,
based upon the certificate of the inspector of election, by the
members of the MHC, the stockholders of the Company and the
stockholders of the Bank.
(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 federal or Delaware regulatory agency is required in connection
with the execution and delivery of this Agreement, the issuance of
the Shares and the consummation of the Conversion, except as may be
required under the securities or blue sky laws of various
jurisdictions (as to which no opinion need be rendered) and except
as may be required under the rules and regulations of the NASD
and/or the Nasdaq National Market (as to which no opinion need be
rendered).
(x) The Registration Statement is effective under the
1933 Act and no stop order suspending the effectiveness has been
issued under the 1933 Act or proceedings therefor initiated or, to
such counsel's Actual 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,
complied as to form in all material respects with the requirements
of the Conversion Regulations, the HOLA and all applicable rules and
regulations promulgated thereunder (other
23
than the financial statements, the notes thereto, and other tabular,
financial, statistical and appraisal data included therein, as to
which no opinion need be rendered).
(xii) At the time that the Registration Statement became
effective, (i) the Registration Statement (as amended or
supplemented, if so amended or supplemented) (other than the
financial statements, the notes thereto and other tabular,
financial, statistical and appraisal data included therein, as to
which no opinion need be rendered) complied as to form in all
material respects with the requirements of the 1933 Act and the 1933
Act Regulations, and (ii) the Prospectus (other than the financial
statements, the notes thereto and other tabular, financial,
statistical and appraisal data included therein, as to which no
opinion need be rendered) complied as to form in all material
respects with the requirements of the 1933 Act, the 1933 Act
Regulations, the Conversion Regulations and federal law.
(xiii) The terms and provisions of the Shares of the
Company conform, in all material respects, to the description
thereof contained in the Registration Statement and Prospectus, and
the form of certificate used to evidence the Shares is in due and
proper form.
(xiv) There are no legal or governmental proceedings
pending or to such counsel's Actual Knowledge, threatened which are
required to be disclosed in the Registration Statement and
Prospectus, other than those disclosed therein, and to such
counsel's Actual Knowledge, all pending legal and governmental
proceedings to which the Company, the MHC or the Bank is a party or
of which any of their property is the subject, which are not
described in the Registration Statement and the Prospectus,
including ordinary routine litigation incidental to the Company's,
the MHC's or the Bank's business, are, considered in the aggregate,
not material.
(xv) To such counsel's Actual Knowledge, there are no
material 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 thereto other than
those described or referred to therein or filed as exhibits thereto
in the Conversion Application, the Registration Statement or the
Prospectus. The description in the Conversion Application, the
Registration Statement and the Prospectus of such documents and
exhibits is accurate in all material respects and fairly presents
the information required to be shown.
24
(xvi) To such counsel's Actual Knowledge, the Company,
the MHC and the Bank have conducted the Conversion, in all material
respects, in accordance with all applicable requirements of the Plan
and the HOLA and regulations thereunder, and the Plan complies in
all material respects with all applicable Delaware and federal laws,
rules, regulations, decisions and orders including, but not limited
to, the Conversion Regulations (except where a written waiver has
been received); no order has been issued by the OTS, the Commission
or any state authority to suspend the Offerings or the use of the
Prospectus, and no action for such purposes has been instituted or,
to such counsel's Actual Knowledge, threatened by the OTS or the
Commission or any state authority and, to such counsel's Actual
Knowledge, no person has sought to obtain regulatory or judicial
review of the final action of the OTS approving the Plan, the
Conversion Application or the Prospectus.
(xvii) To such counsel's Actual Knowledge, the Company,
the MHC and the Bank have obtained all material federal and Delaware
licenses, permits and other governmental authorizations currently
required for the conduct of their businesses and all such licenses,
permits and other governmental authorizations are in full force and
effect, and the Company, the MHC and the Bank are in all material
respects complying therewith, except where the failure to have such
licenses, permits and other governmental authorizations or the
failure to be in compliance therewith would not have a material
adverse affect on the business or operations of the Bank, the MHC
and the Company, taken as a whole.
(xviii) To such counsel's Actual Knowledge, neither the
Company, the MHC nor the Bank is in violation of its articles of
incorporation, bylaws, or charter, as applicable, or, to such
counsel's Actual Knowledge, in default or violation of any
obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, loan agreement, note, lease or other
instrument to which it is a party or by which it or its property may
be bound except for such defaults or violations which would not have
a material adverse impact on the financial condition or results of
operations of the Company, the MHC nor the Bank on a consolidated
basis; to such counsel's Actual Knowledge, the execution and
delivery of this Agreement, the occurrence of the obligations herein
set forth and the consummation of the transactions contemplated
herein will not conflict with or constitute a breach of, or default
under, or result in the creation or imposition of any lien, charge
or encumbrance upon any property or assets of the Company, the MHC
or the Bank pursuant to any material contract, indenture, mortgage,
loan agreement, note, lease or other instrument to which the
Company, the MHC or the Bank is
25
a party or by which any of them may be bound, or to which any of the
property or assets of the Company, the MHC or the Bank is subject
(other than the establishment of a liquidation account), and such
action will not result in any violation of the provisions of the
articles of incorporation, bylaws or charter, as applicable, of the
Company, the MHC or the Bank, or any applicable federal or Delaware
law, act, regulation (except that no opinion need be rendered with
respect to the securities or blue sky laws of various jurisdictions
or the rules and regulations of the NASD and/or the Nasdaq National
Market) or order or court order, writ, injunction or decree.
(xix) The Company's articles of incorporation and bylaws
comply in all material respects with the General Corporation Law
("GCL") of the State of Delaware. The Bank's and the MHC's charter
and bylaws comply in all material respects with the HOLA and the
rules and regulations of the OTS.
(xx) To such counsel's Actual Knowledge, neither the
Company, the MHC nor the Bank is in violation of any directive from
the OTS or the FDIC to make any material change in the method of
conducting its respective business.
(xxi) The information in the Prospectus under the
captions "Regulation," "The Conversion," "Restrictions on
Acquisition of the Company" and "Description of Capital Stock of
Pocahontas Bancorp," to the extent that such information constitutes
matters of law, summaries of legal matters, documents or
proceedings, or legal conclusions, has been reviewed by such counsel
and is correct in all material respects. The description of the
Conversion process under the caption "The Conversion" in the
Prospectus has been reviewed by such counsel and is in all material
respects correct. The discussion of statutes or regulations
described or referred to in the Prospectus are accurate summaries
and fairly present the information required to be shown. The
information under the caption "The Conversion-Tax Aspects" has been
reviewed by such counsel and constitutes a correct summary of the
opinions rendered by Xxxx Xxxxxx and Deloitte to the Company, the
MHC and the Bank with respect to such matters.
In giving such opinion, such counsel may rely as to all
matters of fact on certificates of officers or directors of the
Company, the MHC and the Bank and certificates of public officials.
Such counsel's opinion shall be limited to matters governed by
federal laws and by the State of Delaware General Corporation Law.
With respect to matters involving the application of
26
Delaware law, such counsel may rely, to the extent it deems proper
and as specified in its opinion, upon the opinion of local counsel
(providing that such counsel states that it believes the Agent is
justified in relying upon such specified opinion or opinions). The
opinion of Xxxx Xxxxxx shall be governed by the Legal Opinion Accord
("Accord") of the American Bar Association Section of Business Law
(1991). The term "Actual Knowledge" as used herein shall have the
meaning set forth in the Accord. 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, the MHC or the Bank shall have received a copy of such
proceedings, order, stop order or action. In addition, such opinion
may be limited to present statutes, regulations and judicial
interpretations and to facts as they presently exist; in rendering
such opinion, such counsel need assume no obligation to revise or
supplement it should the present laws be changed by legislative or
regulatory action, judicial decision or otherwise; and such counsel
need express no view, opinion or belief with respect to whether any
proposed or pending legislation, if enacted, or any proposed or
pending regulations or policy statements issued by any regulatory
agency, whether or not promulgated pursuant to any such legislation,
would affect the validity of the Conversion or any aspect thereof.
Such counsel may assume that any agreement is the valid and binding
obligation of any parties to such agreement other than the Company,
the MHC or the Bank.
In addition, such counsel shall provide a letter stating that
during the preparation of the Conversion Application, the
Registration Statement and the Prospectus, they participated in
conferences with certain officers of, the independent public and
internal accountants for, and other representatives of the Company,
the MHC and the Bank, at which conferences the contents of the
Conversion Application, the Registration Statement and the
Prospectus and related matters were discussed and, while such
counsel has not confirmed the accuracy or completeness of or
otherwise verified the information contained in the Conversion
Application, the Registration Statement or the Prospectus, and does
not assume any responsibility for such information, based upon such
conferences and a review of documents deemed relevant for the
purpose of rendering their opinion (relying as to materiality as to
factual matters on certificates of officers and other factual
representations by the Company, the MHC and the Bank), nothing has
come to their attention that would lead them to believe that the
Conversion Application, the Registration Statement, the Prospectus,
or any amendment or supplement thereto (other than the financial
statements, the notes thereto, and other tabular, financial,
statistical and appraisal data included therein as to which no
opinion need be rendered)
27
contained an untrue statement of a material fact or omitted 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.
(2) The favorable opinion, dated as of the Closing Date and
addressed to the Agent and for its benefit, of the Bank's local
counsel, in form and substance to the effect that, to the best of
such counsel's knowledge, (i) the Company, the MHC and the Bank have
good and marketable title to all properties and assets which are
material to the business of the Company, the MHC and the Bank and to
those properties and assets described in the Registration Statement
and Prospectus, as owned by them, free and clear of all liens,
charges, encumbrances or restrictions, except such as are described
in the Registration Statement and Prospectus, or are not material in
relation to the business of the Company, the MHC and the Bank
considered as one enterprise; (ii) all of the leases and subleases
material to the business of the Company, the MHC and the Bank under
which the Company, the MHC and the Bank hold properties, as
described in the Registration Statement and Prospectus, are in full
force and effect; (iii) to counsel's actual knowledge based on
certificates of officers, the Bank is duly qualified as a foreign
corporation to transact business and is in good standing in each
jurisdiction in which its ownership of property or leasing of
property or the conduct of its business requires such qualification,
unless the failure to be so qualified in one or more of such
jurisdictions would not have a material adverse effect on the
condition, financial or otherwise, or the business, operations or
income of the Bank; and (iv) the MHC is duly qualified as a foreign
corporation to transact business and is in good standing in each
jurisdiction in which its ownership of property or leasing of
property or the conduct of its business requires such qualification,
unless the failure to be so qualified in one or more of such
jurisdictions would not have a material adverse effect on the
condition, financial or otherwise, or the business, operations or
income of the MHC.
(3) The favorable opinion, dated as of the Closing Date, of
Peabody & Xxxxx, the Agent's counsel, with respect to such matters
as the Agent may reasonably require. Such opinion may rely upon the
opinions of counsel to the Company, the MHC and the Bank, and as to
matters of fact, upon certificates of officers and directors of the
Company, the MHC and the Bank delivered pursuant hereto or as such
counsel shall reasonably request.
(d) At the Closing Date, the Agents 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 MHC and the Bank,
28
both dated as of such Closing Date, to the effect that: (i) they have
reviewed the Prospectus and, in their opinion, at the time the Prospectus
became authorized for final use, the Prospectus did not contain any untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements therein, in light of the circumstances under
which they were made, not misleading; (ii) since the date the Prospectus
became authorized for final use, no material adverse change in the
condition, financial or otherwise, or in the earnings, capital, properties
or business of the Company, the MHC and the Bank has occurred and, to
their knowledge, 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) since the respective dates as of which information is
given in the Registration Statement and Prospectus, there has been no
material adverse change in the condition, financial or otherwise, or in
the earnings, capital or properties of the Company, the MHC or the Bank,
independently, or of the Company, the MHC and the Bank considered as one
enterprise, whether or not arising in the ordinary course of business;
(iv) the representations and warranties in Section 4 are true and correct
with the same force and effect although expressly made at and as of the
Closing Date; (v) the Company, the MHC and the Bank have complied in all
material respects with all agreements and satisfied all conditions on
their part to be performed or satisfied at or prior to the Closing Date
and will comply in all material respects with all obligations to be
satisfied by them after Conversion; (vi) no stop order suspending the
effectiveness of the Registration Statement has been initiated or, to the
best knowledge of the Company, the MHC or the Bank, threatened by the
Commission or any state authority; (vii) no order suspending the
Offerings, the Conversion or the effectiveness of the Prospectus has been
issued and no proceedings for that purpose are pending or, to the best
knowledge of the Company, the MHC or the Bank, threatened by the OTS, the
Commission or any state authority; and (viii) to the best knowledge or the
Company or the 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
condition, financial or otherwise (other than as a result of a change in
law or regulation and affecting the savings association industry as a
whole), or in the earnings or business of the Company, the MHC or the Bank
independently, or of the Company, the MHC and the Bank considered as one
enterprise, from that as of the latest dates as of which such condition is
set forth in the Prospectus other than transactions referred to or
contemplated therein; (iii) the Company, the MHC or the Bank shall not
have received from the OTS or the FDIC any direction (oral or written) to
make any material change in the method of conducting their business with
which it has not complied (which direction, if any, shall have been
disclosed to the Agents) or which materially and
29
adversely would affect the business, operations or financial condition or
income of the Company, the MHC and the Bank considered as one enterprise;
(iv) the Company, the MHC and the Bank shall not have been in default (nor
shall any event have occurred which, with notice or lapse of time or both,
would constitute a default) under any provision of any agreement or
instrument relating to any outstanding indebtedness; (v) 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, the MHC or the Bank, threatened against the
Company, the MHC or the Bank or affecting any of their properties wherein
an unfavorable decision, ruling or finding would materially and adversely
affect the business operations, financial condition or income of the
Company, the MHC and the Bank considered as one enterprise; and (vi) the
Shares have been qualified or registered for offering and sale or exempted
therefrom under the securities or blue sky laws of the jurisdictions as
the Agents shall have requested and as agreed to by the Company and the
Bank.
(f) Concurrently with the execution of this Agreement, the Agents
shall receive a letter from Deloitte dated as of the date of the
Prospectus and addressed to the Agent: (i) confirming that Deloitte is a
firm of independent public accountants within the meaning of Rule 101 of
the Code of Professional Ethics of the American Institute of Certified
Public Accountants and applicable regulations of the OTS and FDIC and
stating in effect that in Deloitte's opinion the financial statements of
the Company and/or the Bank (as applicable) as of September 30, 1997 and
1996 and for each of the three years in the period ended September 30,
1997, as are included in the Prospectus and covered by their opinion
included therein, comply as to form in all material respects with the
applicable accounting requirements and related published rules and
regulations of the OTS, the FDIC, the SEC and the 1933 Act; (ii) a
statement from Deloitte in effect that, on the basis of certain agreed
upon procedures (but not an audit in accordance with generally accepted
auditing standards) consisting of a reading of the latest available
unaudited interim consolidated financial statements of the Company
prepared by the Company, a reading of the minutes of the meetings of the
Board of Directors of the Company and the Bank and consultations with
officers of the Company and the Bank responsible for financial and
accounting matters, nothing came to their attention which caused them to
believe that: (A) the unaudited financial statements included in the
Prospectus, are not in conformity with the 1933 Act, applicable accounting
requirements of the OTS, the FDIC, and the SEC and generally accepted
accounting principles applied on a basis substantially consistent with
that of the audited financial statements included in the Prospectus; or
(B) during the period from the date of the latest unaudited consolidated
financial statements included in the Prospectus to a specified date not
more than three business days prior to the date of the Prospectus, except
as has been described in the Prospectus, there was any material increase
in
30
borrowings, other than normal deposit fluctuations, by the Company or the
Bank; or (C) there was any decrease in consolidated net assets of the
Company or the Bank at the date of such letter as compared with amounts
shown in the latest unaudited consolidated statement of condition included
in the Prospectus; and (iii) a statement from Deloitte that, in addition
to the audit referred to in their opinion included in the Prospectus and
the performance of the procedures referred to in clause (ii) of this
subsection (f), they have compared with the general accounting records of
the Company and the Bank, which are subject to the internal controls of
the Company and the Bank, the accounting system and other data prepared by
the Company and the Bank, 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
reported on the results of such comparisons.
(g) At the Closing Date, the Agent shall receive a letter from
Deloitte 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 7, 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 RP
Financial, LC, dated the date thereof and addressed to counsel for the
Agent (i) confirming that said firm is independent of the Company, the MHC
and the Bank and is experienced and expert in the area of corporate
appraisals within the meaning of Title 12 of the Code of Federal
Regulations, Part 303, (ii) stating in effect that the Appraisal prepared
by such firm complies in all material respects with the applicable
requirements of Title 12 of the Code of Federal Regulations, and (iii)
further stating that their opinion of the aggregate pro forma market value
of the Company, the MHC and the Bank expressed in their Appraisal dated as
of _______, 1997, and most recently updated, remains in effect.
(i) The Company, the MHC and the 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 letter from the OTS approving the Conversion Application and
authorizing the use of the Prospectus; (ii) a copy of the order from the
Commission declaring the Registration Statement effective; (iii)
certificates from the OTS evidencing the existence of the Bank
31
and the MHC; (iv) certificates of good standing from the State of Delaware
evidencing the good standing of the Company; (v) a certificate from the
FDIC evidencing the Bank's insurance of accounts, and (vi) a certificate
of the FHLB-Dallas evidencing the Bank's membership thereof.
(k) Subsequent to the date hereof, there shall not have occurred any
of the following: (i) a suspension or limitation in trading in securities
generally on the New York Stock Exchange or in the over-the-counter
market, or quotations halted generally on the Nasdaq National Market, or
minimum or maximum prices for trading have been fixed, or maximum ranges
for prices for securities have been required by either of such exchanges
or the NASD or by order of the Commission or any other governmental
authority; (ii) a general moratorium on the operations of commercial banks
or federal savings associations or a general moratorium on the withdrawal
of deposits from commercial banks or federal savings 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 if the effect of such a declaration
or decline, in the Agent's reasonable judgment, makes it impracticable or
inadvisable to proceed with the Offerings 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, the MHC and the 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 expense (including fees and
disbursements of counsel) incurred by the Agent or any of them in
connection with investigating, preparing or defending any actions,
proceedings or claims (whether commenced or threatened) to the extent such
losses, claims, damages, liabilities or actions: (i) arise out of or are
based upon any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement (or any amendment or
supplement thereto), preliminary or final Prospectus (or any amendment or
supplement thereto), the Conversion Application (or any amendment or
supplement thereto), or any blue sky application or other instrument or
document executed by the Company, the MHC or the Bank based upon written
information supplied by the Company, the MHC or the Bank filed in any
state or
32
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, the MHC or the
Bank with their consent or based upon written or oral information
furnished by or on behalf of the Company, the MHC or the Bank, whether or
not filed in any jurisdiction, in order to qualify or register the Shares
or to claim an exemption therefrom under the securities laws thereof; (ii)
arise out of or based upon the omission or alleged omission to state in
any of the foregoing documents or information, a material fact required to
be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading; or (iii)
arise from any theory of liability whatsoever relating to or arising from
or based upon the Registration Statement (or any amendment or supplement
thereto), preliminary or final Prospectus (or any amendment or supplement
thereto), the Conversion Application (or any amendment or supplement
thereto), any Blue Sky Application or Sales Information or other
documentation distributed in connection with the Conversion; provided,
however, that no indemnification is required under this paragraph (a) to
the extent such losses, claims, damages, liabilities or actions arise out
of or are based upon any untrue material statement or alleged untrue
material statements in, or material omission or alleged material omission
from, the Registration Statement (or any amendment or supplement thereto),
preliminary or final Prospectus (or any amendment or supplement thereto),
the Conversion Application, any Blue Sky Application or Sales Information
made in reliance upon and in conformity with information furnished in
writing to the Company or the Bank by the Agent regarding the Agent and
provided further that such indemnification shall be to the extent
permitted by the OTS and the FDIC.
(b) The Agent agrees to indemnify and hold harmless the Company, the
MHC and the Bank, their directors and officers and each person, if any,
who controls the Company, the MHC or the Bank within the meaning of
Section 15 of the 1933 Act or Section 20(a) of the 1934 Act against any
and all loss, liability, claim, damage or expense whatsoever (including
but not limited to settlement expenses), joint or several, which they, or
any of them, may suffer or to which they, or any of them may become
subject under all applicable federal and state laws or otherwise, and to
promptly reimburse the Company, the MHC, the Bank, and any such persons
upon written demand for any expenses (including reasonable fees and
disbursements of counsel) incurred by them, or any of them, in connection
with investigating, preparing 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
33
Registration Statement (or any amendment or supplement thereto), the
Conversion Application (or any amendment or supplement thereto) or the
preliminary or final 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 was omitted from, the Registration Statement (or any amendment or
supplement thereto), the preliminary or final Prospectus (or any amendment
or supplement thereto) or the Conversion Application (or any amendment or
supplement thereto), any Blue Sky Application or Sales Information in
reliance upon and in conformity with information furnished in writing to
the Company or the Bank by the Agent regarding the Agent. In no case shall
the Agent be liable or responsible for any amount in excess of the fees
received by the Agent pursuant to Section 2 of this Agreement.
(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 8 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 contained in this Section 8 and in Section 9
hereof and the representations and warranties of the Company, the MHC and
the Bank set forth in this Agreement shall remain operative and in full
force and effect regardless of: (i) any
34
investigation made by or on behalf of the Agent or its officers, directors
or controlling persons, agents or employees or by or on behalf of the
Company, the MHC or the Bank or any officers, directors or controlling
persons, agents or employees of the Company, the MHC or the Bank; (ii)
deliver 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 Bank or the Agent, the Company,
the Bank and the Agent shall contribute to the aggregate losses, claims, damages
and liabilities (including any investigation, legal and other expenses incurred
in connection with, and any amount paid in settlement of, any action, suit or
proceeding of any claims asserted, but after deducting any contribution received
by the Company, the Bank or the Agent from persons other than the other party
thereto, who may also be liable for contribution) in such proportion so that the
Agent shall be responsible for that portion represented by the percentage that
the fees paid to the Agent pursuant to Section 2 of this Agreement (not
including expenses) bears to the gross proceeds received by the Company from the
sale of the Shares in the Offerings and the Company and the Bank shall be
responsible for the balance. If, however, the allocation provided above is not
permitted by applicable law or if the indemnified party failed to give the
notice required under Section 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 Bank on the one hand and the Agent on the other in connection
with the statements or omissions which resulted in such losses, claims, damages
or liabilities (or actions, proceedings or claims in respect thereto), but also
the relative benefits received by the Company and the Bank on the one hand and
the Agent on the other from the Offerings (before deducting expenses). 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 or
alleged omission to state a material fact relates to information supplied by the
Company and/or the Bank on the one hand or the Agent on the other and the
parties' relative intent, good faith, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company, the
Bank and the Agent agree that it would not be just and equitable if contribution
pursuant to this Section 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 liable for any loss, liability, claim, damage or expense
or be required to contribute any amount which in the aggregate exceeds the
amount paid (excluding reimbursable expenses) to
35
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 0000
Xxx) shall be entitled to contribution from any person who was not found guilty
of such fraudulent misrepresentation. The obligations of the Company and the
Bank under this Section 9 and under Section 8 shall be in addition to any
liability which the Company and the Bank may otherwise have. For purposes of
this Section 9, each of the Agent's, the Company's or the Bank's officers and
directors and each person, if any, who controls the Agent or the Company or the
Bank within the meaning of the 1933 Act and the 1934 Act shall have the same
rights to contribution as the Agent, the Company or the Bank. Any party entitled
to contribution, promptly after receipt of notice of commencement of any action,
suit, claim or proceeding against such party in respect of which a claim for
contribution may be made against another party under this Section 9, will notify
such party from whom contribution may be sought, but the omission to so notify
such party shall not relieve the party from whom contribution may be sought from
any other obligation it may have hereunder or otherwise than under this Section
9.
Section 10. Survival of Agreements, Representations and Indemnities. The
respective indemnities of the Company, the Bank and the Agent and the
representations and warranties and other statements of the Company and the Bank
set forth in or made pursuant to this Agreement shall remain in full force and
effect, regardless of any termination or cancellation of this Agreement or any
investigation made by or on behalf of the Agent, the Company, the Bank or any
controlling person referred to in Section 8 hereof, and shall survive the
issuance of the Shares, and any legal representative, successor or assign of the
Agent, the Company, the Bank, and any such controlling person shall be entitled
to the benefit of the respective agreements, indemnities, warranties and
representations.
Section 11. Termination. The Agent may terminate its obligations under
this Agreement by giving the notice indicated below in this Section 11 at any
time after this Agreement becomes effective as follows:
(a) In the event the Company fails to sell all of the Shares by
___________, 1998, and in accordance with the provisions of the Plan or as
required by the Conversion Regulations, and applicable law, this Agreement
shall terminate upon refund by the Bank to each person who has subscribed
for or ordered any of the Shares the full amount which it may have
received from such person, together with interest as provided in the
Prospectus, and no party to this Agreement shall have any obligation to
the other hereunder, except for payment by the Company and/or the Bank as
set forth in Sections 2(a) and (d), 6, 8 and 9 hereof.
36
(b) 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, the MHC and the Bank of such cancellation in writing or by
telegram at any time at or prior to the Closing Date, and any such
cancellation shall be without liability of any party to any other party
except as otherwise provided in Sections 2, 6, 8 and 9 hereof.
(c) If the Agent elects to terminate this Agreement as provided in
this Section, the Company, the MHC and the Bank shall be notified promptly
by the Agent by telephone or telegram, confirmed by letter.
The Company, the MHC and the Bank may terminate this Agreement in the
event the Agent is in material breach of the representations and warranties or
covenants contained in Section 5 and such breach has not been cured after the
Company and the Bank have provided the Agent with notice of such breach.
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, delivered or telegraphed and confirmed to Friedman,
Billings, Xxxxxx & Co., Inc., 0000 00xx Xxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxx
00000-0000, Attention: Xxxxx Xxxxxxxxxx (with a copy to Peabody & Xxxxx, 0000
00xx Xxxxxx, X.X., Xxxxx 000, Xxxxxxxxxx, X.X. 00000, Attention: Xxxxxxx X.
Xxxxxxx, Esq.) and, if sent to the Company, the MHC and the Bank, shall be
mailed, delivered or telegraphed and confirmed to the Company, the MHC and the
Bank at 000 Xxxx Xxxxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000-0000, Attention: Xxxx
Xxxxxx, President and Chief Executive Officer (with a copy to Xxxx Xxxxxx,
Attention: Xxxxxx Xxxxxxxx, Esq.)
Section 13. Parties. The Company, the MHC and the Bank shall be entitled
to act and rely on any request, notice, consent, waiver or agreement purportedly
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, the MHC
or the Bank, when the same shall have been given by the undersigned or any other
officer of the Company, the MHC or the Bank. This Agreement shall inure solely
to the benefit of, and shall be binding upon, the Agent, the Company, the MHC,
the Bank, and their respective successors, legal representatives and assigns,
and no other person shall have or be construed to have any legal or equitable
right, remedy or claim under or in respect of or by virtue of this Agreement or
any provision herein contained. It is understood and agreed that this Agreement
is the exclusive agreement among the parties
37
hereto, and supersedes any prior agreement among the parties and may not be
varied except in writing signed by all the parties.
Section 14. Closing. The closing for the sale of the Shares shall take
place on the Closing Date at such location as mutually agreed upon by the Agent
and the Company, the MHC and the Bank. At the closing, the Company, the MHC and
the Bank shall deliver to the Agent in next day funds the commissions, fees and
expenses due and owing to the Agent as set forth in Sections 2 and 6 hereof and
the opinions and certificates required hereby and other documents deemed
reasonably necessary by the Agent shall be executed and delivered to effect the
sale of the Shares as contemplated hereby and pursuant to the terms of the
Prospectus.
Section 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 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 Delaware.
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.
38
If the foregoing correctly sets forth the arrangement among the Company,
the MHC, the 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,
POCAHONTAS BANCORP, INC. POCAHONTAS FEDERAL SAVINGS
AND LOAN ASSOCIATION
By: By:
---------------------------------- ----------------------------------
Xxxx Xxxxxx Xxxx Xxxxxx
President and Chief Executive President and Chief Executive
Officer Officer
POCAHONTAS FEDERAL MUTUAL
HOLDING COMPANY
By:
----------------------------------
Xxxx Xxxxxx
President and Chief Executive
Officer
Accepted as of the date first above written
FRIEDMAN, BILLINGS, XXXXXX & CO., INC.
By:
----------------------------------
Xxxxx Xxxxxxxxxx
Vice President
39
EXHIBIT B
POCAHONTAS BANCORP, INC.
Up to 2,875,000 Shares (Anticipated Maximum)
(Par Value $.01 Per Share)
Selected Dealers' Agreement
______________, 1998
Gentlemen:
We have agreed to assist Pocahontas Federal Savings and Loan Association
(the "Bank"), a federally chartered stock savings bank, and the Bank's federal
mutual holding company, Pocahontas Federal Mutual Holding Company (the "MHC"),
in connection with the offer and sale of up to 2,875,000 shares of the
conversion common stock, par value $.01 per share (the "Common Stock") of
Pocahontas Bancorp, Inc. (the "Company"), a Delaware corporation, to be issued
in connection with the conversion of the MHC. The total number of shares of
Common Stock to be offered may be decreased to a minimum of 25 shares. The price
per share has been fixed at $10.00. The Common Stock, the number of shares to be
issued, and certain of the terms on which they are being offered, are more fully
described in the enclosed Prospectus dated _________, 1998 (the "Prospectus").
In connection with the Conversion, the Company, on a best-efforts basis is
offering for sale between 2,125,000 and 2,875,000 shares (the "Shares") of the
Common Stock, in a Subscription Offering, as defined, as contemplated by Office
of Thrift Supervision (the "OTS") Regulation. Any Shares not sold in the
Subscription Offering will be offered to the general public in a community
offering (the "Community Offering") giving preference to residents of the Bank's
Local Community, as defined in the Prospectus.
The Subscription and Community Offerings are being conducted under a Plan
of Conversion (the "Plan") adopted by the Bank and the MHC pursuant to which the
MHC intends to convert from a federal mutual holding company to an interim
federal stock savings bank and simultaneously merge with and into the Company
(the "Conversion"). As part of the Conversion, the Company will sell the Common
Stock to the public as provided for in the Plan. The Subscription and Community
Offerings are further being conducted in accordance with the regulations of the
OTS subject to the restrictions contained in the Plan.
The Common Stock is also being offered in accordance with the Plan by
broker/dealers licensed by the National Association of Securities Dealers, Inc.
("NASD"), which have been approved by the Bank ("Approved Brokers").
B-1
We are offering the selected dealers (of which you are one) the
opportunity to participate in the solicitation of offers to buy the Common Stock
and we will pay you a fee in the amount of four percent (4%) of the dollar
amount of the Common Stock sold on behalf of the Company by you, as evidenced by
the authorized designation of your firm on the order form or forms for payment
therefor to the special account established by the Bank for the purpose of
holding such funds. It is understood, of course, that payment of your fee will
be made only out of compensation received by us for the Common Stock sold on
behalf of the Company by you, as evidenced in accordance with the preceding
sentence. As soon as practicable after the closing date of the offering, we will
remit to you, only out of our compensation as provided above, the fees to which
you are entitled hereunder.
Each order form for the purchase of Common Stock must set forth the
identity and address of each person to whom the certificates for such Common
Stock should be issued and delivered. Such order form also must clearly identify
your firm in order for you to receive compensation. You shall instruct any
subscriber who elects to send his order form to you to make any accompanying
check payable to "Pocahontas Bancorp, Inc."
This offer is made subject to the terms and conditions herein set forth
and is made only to selected dealers who are members in good standing of the
NASD who are to comply with all applicable rules of the NASD, including, without
limitation, the NASD's Interpretation With Respect to Free-Riding and
Withholding and Section 24 of Article III of the NASD's Rules of Fair Practice.
Orders for Common Stock will be subject to confirmation and we, acting on
behalf of the Company, the MHC and the Bank, reserve the right in our unfettered
discretion to reject any order in whole or in part, to accept or reject orders
in the order of their receipt or otherwise, and to allot. Neither you nor any
other person is authorized by the Company, the MHC and the Bank, or by us to
give any information or make any representations other than those contained in
the Prospectus in connection with the sale of any of the Common Stock. No
selected dealer is authorized to act as agent for us when soliciting offers to
buy the Common Stock from the public or otherwise. No selected dealer shall
engage in any stabilizing (as defined in Rule 10b-7 promulgated under the
Securities Exchange Act of 1934) with respect to the Company's Common Stock
during the offering.
We and each selected dealer assisting in selling Common Stock pursuant
hereto agree to comply with the applicable requirements of the Securities
Exchange Act of 1934 and applicable state rules and regulations. Each
customer-carrying selected dealer that is not a $250,000 net capital reporting
broker/dealer agrees that it will not use a sweep arrangement and that it will
transmit all customer checks by noon of the next business day after receipt
thereof. In addition, we and each selected dealer confirm that the Securities
and Exchange Commission interprets Rule 15c2-8 promulgated under the Securities
Exchange Act of 1934 as
B-2
requiring that a Prospectus be supplied to each person who is expected to
receive a confirmation of sale 48 hours prior to delivery of such person's order
form.
We and each selected dealer further agree that to the extent that your
customers desire to pay for shares with funds held by or to be deposited with
us, in accordance with the interpretations of the Securities and Exchange
Commission of Rule 15c2-4 promulgated under the Securities and Exchange Act of
1934, either (a) upon receipt of an executed order form or direction to execute
an order form on behalf of a customer to forward the offering price of the
Common Stock ordered on or before twelve noon Delaware time of the next business
day following receipt or execution of an order form by us to the Company for
deposit in a segregated account or (b) to solicit indications of interest in
which event (i) we will subsequently contact any customer indicating interest to
confirm the interest and give instructions to execute and return an order form
or to receive authorization to execute the order form on the customer's behalf,
(ii) we will mail acknowledgments of receipt of orders to each customer
confirming interest on the business day following such confirmation, (iii) we
will debit accounts of such customers on the third business day (the "Debit
Date") following receipt of the confirmation referred to in (i), and (iv) we
will forward complete order forms together with such funds to the Company on or
before twelve noon on the next business day and each selected dealer
acknowledges that if the procedure in (b) is adopted, our customers' funds are
not required to be in their accounts until the Debit Date.
Unless earlier terminated by us, this Agreement shall terminate upon the
closing date of the Conversion. We may terminate this Agreement or any
provisions hereof any time by written or telegraphic notice to you. Of course,
our obligations hereunder are subject to the successful completion of the
Conversion.
You agree that at any time or times prior to the termination of this
Agreement you will, upon our request, report to us the number of shares of
Common Stock sold on behalf of the Company by you under this Agreement.
We shall have full authority to take such actions as we may deem advisable
in respect of all matters pertaining to the offering. We shall be under no
liability to you except for lack of good faith and for obligations expressly
assumed by us in this Agreement.
Upon application to us, we will inform you as to the states in which we
believe the Common Stock has been qualified for sale under, or are exempt from
the requirements of, the respective blue sky laws of such states, but we assume
no responsibility or obligation as to your rights to sell Common Stock in any
state.
Additional copies of the Prospectus and any supplements thereto will be
supplied in reasonable quantities upon request.
B-3
Any notice from us to you shall be deemed to have been duly given if
mailed, telephoned, or telegraphed to you at the address to which this Agreement
is mailed.
This Agreement shall be construed in accordance with the laws of the State
of Delaware.
Please confirm your agreement hereto by signing and returning the
confirmations accompanying this letter at once to us at Friedman, Billings,
Xxxxxx & Co., Inc., Potomac Tower, 0000 Xxxxxxxxxx Xxxxxx Xxxxx, Xxxxxxxxx,
Xxxxxxxx 00000. The enclosed duplicate copy will evidence the agreement between
us.
FRIEDMAN, BILLINGS, XXXXXX & CO., INC.
By:
----------------------------------
Xxxxx Xxxxxxxxxx
Vice President
CONFIRMED AS OF:
, 1997
(Name of Dealer)
By:
----------------------------------
Its:
---------------------------------
B-4
