Exhibit 1.2
15,370,000 Shares
(subject to increase up to 17,750,500 shares
in the event of an increase in the pro forma market value
of TierOne Corporation's Common Stock)
TIERONE CORPORATION
(a Delaware corporation)
Common Stock
(par value $.01 per share)
AGENCY AGREEMENT
___________, 0000
Xxxxxxx X'Xxxxx & Partners, L.P.
000 Xxxxx Xxxxxx, 0/xx/ Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
TierOne Corporation, a Wisconsin corporation (the "Company"),
and TierOne Bank, a federal savings bank (the "Bank"), hereby confirm their
agreement with Sandler X'Xxxxx & Partners, L.P. ("Sandler X'Xxxxx" or the
"Agent") with respect to the offer and sale by the Company of 15,370,000 shares
(subject to increase up to 17,750,500 shares) of the Company's Common Stock, par
value $.01 per share (the "Common Stock"). The shares of Common Stock to be sold
by the Company are hereinafter called the "Securities." In addition, as
described herein, the Company expects to contribute 500,000 shares of Common
Stock to the TierOne Foundation (the "Foundation"), such shares hereinafter
being referred to as the "Foundation Shares".
The Securities are being offered for sale and the Foundation
Shares are being contributed in accordance with the plan of conversion (the
"Plan") adopted by the Board of Directors of the Bank pursuant to which the Bank
intends to convert from a federally chartered mutual savings bank to a federally
chartered stock savings bank and issue all of its stock to the Company. Pursuant
to the Plan, the Company is offering to the Bank's Employee Stock Ownership Plan
(the "ESOP"), and to certain of the Bank's depositors and borrowers rights to
subscribe for the Securities in a subscription offering (the "Subscription
Offering"). To the extent Securities are not subscribed for in the Subscription
Offering, such Securities may be offered to certain members of the general
public, with preference given to natural persons residing in the counties in
which the Bank's offices are located, in a direct community offering (the
"Community Offering" and together with the Subscription Offering, as each may be
extended or reopened from time to time, the "Subscription and Community
Offering") to be commenced concurrently with, during or promptly after the
Subscription Offering. It is currently
anticipated by the Bank and the Company that any Securities not subscribed for
in the Subscription and Community Offering will be offered, subject to Section 2
hereof, in a syndicated community offering (the "Syndicated Community
Offering"). The Subscription and Community Offering and the Syndicated Community
Offering are hereinafter referred to collectively as the "Offerings," and the
conversion of the Bank from mutual to stock form, the acquisition of the capital
stock of the Bank by the Company and the Offerings are hereinafter referred to
collectively as the "Conversion." It is acknowledged that the number of
Securities to be sold in the Conversion may be increased or decreased as
described in the Prospectus (as hereinafter defined). If the number of
Securities is increased or decreased in accordance with the Plan, the term
"Securities" shall mean such greater or lesser number, where applicable.
In connection with the Conversion and pursuant to the terms of
the Plan as described in the Prospectus, the Company intends to establish the
Foundation. Immediately following the consummation of the Conversion, subject to
the approval of the establishment of the Foundation by the members of the Bank
and compliance with certain conditions as may be imposed by regulatory
authorities, the Company will contribute 500,000 newly issued shares of Common
Stock to the Foundation.
The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-1 (No.
333-85838), including a related prospectus, for the registration of the
Securities and the Foundation Shares under the Securities Act of 1933, as
amended (the "Securities Act"), has filed such amendments thereto, if any, and
such amended prospectuses as may have been required to the date hereof by the
Commission in order to declare such registration statement effective, and will
file such additional amendments thereto and such amended prospectuses and
prospectus supplements as may hereafter be required. Such registration statement
(as amended to date, if applicable, and as from time to time amended or
supplemented hereafter) and the prospectuses constituting a part thereof
(including in each case all documents incorporated or deemed to be incorporated
by reference therein and the information, if any, deemed to be a part thereof
pursuant to the rules and regulations of the Commission under the Securities
Act, as from time to time amended or supplemented pursuant to the Securities Act
or otherwise (the "Securities Act Regulations")), are hereinafter referred to as
the "Registration Statement" and the "Prospectus," respectively, except that if
any revised prospectus shall be used by the Company in connection with the
Subscription and Community Offering or the Syndicated Community Offering which
differs from the Prospectus on file at the Commission at the time the
Registration Statement becomes effective (whether or not such revised prospectus
is required to be filed by the Company pursuant to Rule 424(b) of the Securities
Act Regulations), the term "Prospectus" shall refer to such revised prospectus
from and after the time it is first provided to the Agent for such use.
Concurrently with the execution of this Agreement, the Company
is delivering to the Agent copies of the Prospectus to be used in the
Subscription and Community Offering. Such Prospectus contains information with
respect to the Bank, the Company and the Common Stock.
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SECTION 1. Representations and Warranties.
(a) The Company and the Bank jointly and severally represent and
warrant to the Agent as of the date hereof as follows:
(i) The Registration Statement has been declared effective by the
Commission, no stop order has been issued with respect thereto and no
proceedings therefor have been initiated or, to the knowledge of the
Company and the Bank, threatened by the Commission. At the time the
Registration Statement became effective and at the Closing Time referred to
in Section 2 hereof, the Registration Statement complied and will comply in
all material respects with the requirements of the Securities Act and the
Securities Act Regulations and did not and will 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 not
misleading. The Prospectus, at the date hereof does not and at the Closing
Time referred to in Section 2 hereof will not, include an untrue statement
of a material fact or omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under which
they were made, not misleading; provided, however, that the representations
and warranties in this subsection shall not apply to statements in or
omissions from the Registration Statement or Prospectus made in reliance
upon and in conformity with information with respect to the Agent furnished
to the Company in writing by the Agent expressly for use in the
Registration Statement or Prospectus (the "Agent Information", which the
Company and the Bank acknowledge appears only in the last sentence of the
second paragraph of the section entitled "Market For Our Common Stock" and
in the second paragraph of the section entitled "The Conversion - Marketing
Arrangements."
(ii) The Company has filed with the Department of the Treasury,
Office of Thrift Supervision (the "OTS") the Company's application for
approval of its acquisition of the Bank (the "Holding Company Application")
on Form H-(e)1 promulgated under the savings and loan holding company
provisions of the Home Owners' Loan Act, as amended ("HOLA"), and the
regulations promulgated thereunder. The Company has received written notice
from the OTS of its approval of the acquisition of the Bank, such approval
is in full force and effect and no order has been issued by the OTS
suspending or revoking such approval and no proceedings therefor have been
initiated or, to the knowledge of the Company or the Bank, threatened by
the OTS. At the date of such approval and at the Closing Time referred to
in Section 2, the Holding Company Application complied and will comply in
all material respects with the applicable provisions of HOLA and the
regulations promulgated thereunder.
(iii) Pursuant to the rules and regulations of the OTS governing
the conversion of federally chartered mutual savings banks to stock form
(the "Conversion Regulations"), the Bank has filed with the OTS an
application for conversion on Form AC, and has filed such amendments
thereto and supplementary materials as may have been required to the date
hereof (such application, as amended to date, if applicable, and as from
time to time amended or supplemented hereafter, is hereinafter referred to
as the "Conversion Application"), including copies of the Bank's Proxy
Statement, dated _______________, 2002, relating to the Conversion (the
"Proxy Statement"), and the
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Prospectus. The OTS has, by letter dated ______________, 2002, approved
the Conversion Application, including the Proxy Statement and the
Prospectus, such approval remains in full force and effect and no order
has been issued by the OTS suspending or revoking such approval and no
proceedings therefor have been initiated or, to the knowledge of the
Company or the Bank, threatened by the OTS. At the date of such
approval and at the Closing Time referred to in Section 2, the
Conversion Application complied and will comply in all material
respects with the applicable provisions of the Conversion Regulations.
(iv) At the time of their use, the Proxy Statement and any
other proxy solicitation materials will comply in all material respects
with the applicable provisions of the Conversion Regulations and 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 the
light of the circumstances under which they were made, not misleading.
The Company and the Bank will promptly file the Prospectus and any
additional supplemental sales literature with the Commission and the
OTS. The Prospectus and all supplemental sales literature, as of the
date the Registration Statement became effective and at the Closing
Time referred to in Section 2, complied and will comply in all material
respects with the applicable requirements of the Conversion Regulations
and, at or prior to the time of their first use, will have received all
required authorizations of the OTS for use in final form.
(v) Neither the SEC nor the OTS has, by order or otherwise,
prevented or suspended the use of the Prospectus or any supplemental
sales literature authorized by the Company or the Bank for use in
connection with the Offerings.
(vi) At the Closing Time referred to in Section 2, the Company
and the Bank will have completed the conditions precedent to the
Conversion and the establishment of the Foundation in accordance with
the Plan, the applicable Conversion Regulations and all other
applicable laws, regulations, decisions and orders, including all
material terms, conditions, requirements and provisions precedent to
the Conversion imposed upon the Company or the Bank by the OTS, the
Federal Deposit Insurance Corporation (the "FDIC"), or any other
regulatory authority, other than those which the regulatory authority
permits to be completed after the Conversion.
(vii) Xxxxxx & Company, Inc., which prepared the valuation of
the Bank as part of the Conversion, has advised the Company and the
Bank in writing that it satisfies all requirements for an appraiser set
forth in the Conversion Regulations and any interpretations or
guidelines issued by the OTS and the FDIC with respect thereto.
(viii) The accountants who certified the consolidated financial
statements of the Bank included in the Registration Statement have
advised the Company and the Bank in writing that they are independent
public accountants within the meaning of the Code of Ethics of the
American Institute of Certified Public Accountants (the "AICPA"), and
such accountants are, with respect to the Company, the Bank and each
subsidiary of the Bank, independent certified public accountants as
required by the Securities Act and the Securities Act Regulations.
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(ix) The direct and indirect subsidiaries of the Bank are TMS
Corporation of the Americas, TierOne Investments and Insurance, Inc.
and TierOne Reinsurance Company (collectively, the "Subsidiaries").
Except for the Subsidiaries, the Bank does not, directly or indirectly,
control any other corporation, limited liability company, partnership,
joint venture, association, trust or other business organization. Upon
consummation of the Conversion, the only direct subsidiary of the
Company will be the Bank.
(x) The consolidated financial statements and the related
notes thereto included in the Registration Statement and the Prospectus
present fairly the financial position of the Company, the Bank and the
Subsidiaries at the dates indicated and the results of operations,
retained earnings, equity and cash flows for the periods specified, and
comply as to form in all material respects with the applicable
accounting requirements of the Securities Act Regulations and the
Conversion Regulations; except as otherwise stated in the Registration
Statement, said financial statements have been prepared in conformity
with accounting principles generally accepted in the United States
applied on a consistent basis; and the supporting schedules and tables
included in the Registration Statement present fairly the information
required to be stated therein.
(xi) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as
otherwise stated therein (A) there has been no material adverse change
in the financial condition, results of operations, business affairs or
prospects of the Company, the Bank and the Subsidiaries considered as
one enterprise, whether or not arising in the ordinary course of
business consistent with past practice, and (B) except for transactions
specifically referred to or contemplated in the Prospectus, there have
been no transactions entered into by the Company, the Bank or any of
the Subsidiaries, other than those in the ordinary course of business
consistent with past practice, which are material with respect to the
Company, the Bank and its subsidiaries, considered as one enterprise.
(xii) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Wisconsin with corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectus and to enter into and perform its obligations under this
Agreement; and the Company is duly qualified as a foreign corporation
to transact business and is in good standing in the State of Nebraska
and in each other jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure to so qualify would not
have a material adverse effect on the financial condition, results of
operations, business affairs or prospects of the Company, the Bank and
the Subsidiaries, considered as one enterprise.
(xiii) Upon consummation of the Conversion and the contribution
of the Foundation Shares as described in the Prospectus, the
authorized, issued and outstanding capital stock of the Company will be
in the range as set forth in the Prospectus under "Our Capitalization"
(except for subsequent issuances, if any, pursuant to reservations,
agreements or employee benefit plans referred to in the Prospectus); no
shares of Common Stock or other capital stock of the Company have been
or will be issued and
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outstanding prior to the Closing Time referred to in Section 2; at
the time of Conversion, the Securities will have been duly 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 stated on the cover page of the Prospectus,
will be duly and validly issued and fully paid and nonassessable
(except as otherwise provided in Section 180.0622(2)(b) of the
Wisconsin Business Corporation Law); the terms and provisions of the
Common Stock and the capital stock of the Company conform to all
statements relating thereto contained in the Prospectus; the
certificates representing the shares of Common Stock conform to the
requirements of applicable law and regulations; and the issuance of
the Securities and the Foundation Shares is not subject to preemptive
or other similar rights.
(xiv) The Bank, as of the date hereof, is a federally chartered
savings bank in mutual form and upon consummation of the Conversion
will be a federally chartered savings bank in stock form, in both
instances with full corporate power and authority to own, lease and
operate its properties and to conduct its business as described in
the Prospectus; the Company, the Bank and the Subsidiaries have
obtained all licenses, permits and other governmental authorizations
currently required for the conduct of their respective businesses or
required for the conduct of their respective businesses as
contemplated by the Holding Company Application and the Conversion
Application, except where the failure to obtain such licenses,
permits or other governmental authorizations would not have a
material adverse effect on the financial condition, results of
operations, business affairs or prospects of the Company, the Bank
and the Subsidiaries considered as one enterprise; all such licenses,
permits and other governmental authorizations are in full force and
effect and the Company, the Bank and the Subsidiaries are in all
material respects in compliance therewith; neither the Company, the
Bank nor any of the Subsidiaries has received notice of any
proceeding or action relating to the revocation or modification of
any such license, permit or other governmental authorization which,
singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, might have a material adverse effect on
the financial condition, results of operations, business affairs or
prospects of the Company, the Bank and the Subsidiaries, considered
as one enterprise; and the Bank is validly existing and in good
standing under the laws of the United States and is qualified as a
foreign corporation in any jurisdiction in which the failure to so
qualify would have a material adverse effect on the financial
condition, results of operations, business affairs or prospects of
the Company, the Bank and the Subsidiaries considered as one
enterprise.
(xv) The deposit accounts of the Bank are insured by the FDIC
up to the applicable limits. Upon consummation of the Conversion, the
liquidation account for the benefit of eligible account holders and
supplemental eligible account holders of the Bank will be duly
established in accordance with the requirements of the Conversion
Regulations. The Bank is a "qualified thrift lender" within the
meaning of 12 U.S.C. Section 1467a(m).
(xvi) Upon consummation of the Conversion, the authorized
capital stock of the Bank will be 45,000,000 shares of common stock,
par value $1.00 per share (the "Bank Common Stock") and 5,000,000
shares of preferred stock, par value $1.00 per
6
share (the "Bank Preferred Stock"), and the issued and outstanding
capital stock of the Bank will be 100 shares of Bank Common Stock and
no shares of the Bank Preferred Stock, and no shares of Bank Common
Stock or Bank Preferred Stock have been or will be issued prior to
the Closing Time referred to in Section 2; and as of the Closing Time
referred to in Section 2, all of the issued and outstanding capital
stock of the Bank will be duly authorized, validly issued and fully
paid and nonassessable and have been issued in compliance with all
federal and state securities laws. The shares of Bank Common Stock to
be issued to the Company will have been duly authorized for issuance
and, when issued and delivered by the Bank pursuant to the Plan
against payment of the consideration calculated as set forth in the
Plan and as described in the Prospectus, will be duly and validly
issued and fully paid and nonassessable, and all such Bank Common
Stock will be owned beneficially and of record by the Company free
and clear of any security interest, mortgage, pledge, lien,
encumbrance or legal or equitable claim; the terms and provisions of
the Bank Common Stock and the Bank Preferred Stock conform to all
statements relating thereto contained in the Prospectus, and the
certificates representing the shares of the Bank Common Stock will
conform with the requirements of applicable laws and regulations; the
issuance of the Bank Common Stock is not subject to preemptive or
similar rights; and there are no other warrants, options or rights of
any kind to acquire additional shares of Bank Common Stock or any
shares of Bank Preferred Stock.
(xvii) As of the time of the consummation of the Conversion,
the Foundation will be duly authorized and incorporated and validly
existing as a non-stock 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 Prospectus; the Foundation will not be a savings and
loan holding company within the meaning of 12 C.F.R. Section 574.2(q)
as a result of the issuance of shares of Common Stock to it in
accordance with the terms of the Plan and in the amounts as described
in the Prospectus; no approvals are required to establish the
Foundation and to contribute the shares of Common Stock thereto as
described in the Prospectus other than those imposed by the OTS and
the FDIC; except as specifically disclosed in the Prospectus and the
Proxy Statement, there are no agreements and/or understandings,
written or oral, between the Company and/or the Bank and the
Foundation with respect to the control, directly or indirectly, over
the voting and the acquisition or disposition of the Foundation
Shares; at the time of the Conversion, the Foundation Shares will
have been duly authorized for issuance and, when issued and
contributed by the Company pursuant to the Plan, will be duly and
validly issued and fully paid and nonassessable (except as otherwise
provided in Section 180.0622(2)(b) of the Wisconsin Business
Corporation Law); and the issuance of the Foundation Shares is not
subject to preemptive or similar rights. The issuance of the
Foundation Shares to the Foundation pursuant to the Plan is
registered pursuant to the Registration Statement.
(xviii) Each Subsidiary has been duly incorporated and is
validly existing as a corporation in good standing under the laws of
the jurisdiction of its incorporation, has full corporate power and
authority to own, lease and operate its properties and to conduct its
business as described in the Registration Statement and Prospectus,
and is duly qualified to transact business and is in good standing in
each jurisdiction in which
7
such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the
failure to so qualify would not have a material adverse effect on the
financial condition, results of operations, business affairs or
prospects of the Company, the Bank and the Subsidiaries considered as
one enterprise; the activities of each Subsidiary are permitted to
subsidiaries of a federally chartered savings bank and a savings and
loan holding company by the rules, regulations, resolutions and
practices of the OTS; all of the issued and outstanding capital stock
of each Subsidiary has been duly authorized and validly issued, is
fully paid and nonassessable and is owned by the Bank, directly, free
and clear of any security interest, mortgage, pledge, lien,
encumbrance or legal or equitable claim; and there are no warrants,
options or rights of any kind to acquire shares of capital stock of
any Subsidiary.
(xix) The Company and the Bank have taken all corporate
action necessary for them to execute, deliver and perform this
Agreement, and this Agreement has been duly executed and delivered
by, and is the valid and binding agreement of, the Company and the
Bank, enforceable in accordance with its terms.
(xx) Subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus
and prior to the Closing Time, except as otherwise may be indicated
or contemplated therein, none of the Company, the Bank or any
Subsidiary will have (A) issued any securities or incurred any
liability or obligation, direct or contingent, or borrowed money,
except borrowings in the ordinary course of business consistent with
past practice from the same or similar sources and in similar amounts
as indicated in the Prospectus, or (B) entered into any transaction
or series of transactions which are material in light of the business
of the Company, the Bank and its subsidiaries, taken as a whole,
excluding the origination, purchase and sale of loans or the purchase
or sale of investment securities or mortgage-backed securities in the
ordinary course of business consistent with past practice.
(xxi) 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 Securities and the
Foundation Shares that has not been obtained and a copy of which has
been delivered to the Agent, except as may be required under the
"blue sky" or state securities laws of various jurisdictions.
(xxii) Neither the Company, the Bank nor any of the
Subsidiaries is in violation of its certificate of incorporation,
organization certificate, articles of incorporation or charter, as
the case may be, or bylaws (and the Bank will not be in violation of
its charter or bylaws in stock form upon consummation of the
Conversion); and neither the Company, the Bank nor any of the
Subsidiaries is in default (nor has any event occurred which, with
notice or lapse of time or both, would constitute a default) in the
performance or observance of any obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which the Company, the
Bank or any of the Subsidiaries is a party or by which it or any of
them may be bound, or to which any of the property or assets of the
Company, the Bank or any of the Subsidiaries is subject, except for
such defaults that
8
would not, individually or in the aggregate, have a material adverse
effect on the financial condition, results of operations, business
affairs or prospects of the Company, the Bank and the Subsidiaries
considered as one enterprise; and there are no contracts or documents
of the Company, the Bank or the Subsidiaries which are required to be
filed as exhibits to the Registration Statement or the Conversion
Application which have not been so filed.
(xxiii) The consummation of the Conversion, the execution,
delivery and performance of this Agreement and the consummation of
the transactions contemplated hereby have been duly authorized by all
necessary corporate action on the part of the Company and the Bank
and do not and 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
Bank or any of the Subsidiaries pursuant to, any contract, indenture,
mortgage, loan agreement, note, lease or other instrument to which
the Company, the Bank or any of the Subsidiaries is a party or by
which it or any of them may be bound, or to which any of the property
or assets of the Company, the Bank or any Subsidiary is subject,
except for such defaults that would not, individually or in the
aggregate, have a material adverse effect on the financial condition,
results of operations, business affairs or prospects of the Company,
the Bank and the Subsidiaries considered as one enterprise; nor will
such action result in any violation of the provisions of the
certificate of incorporation, organization certificate, articles of
incorporation or charter or bylaws of the Company, the Bank or any of
the Subsidiaries, or any applicable law, administrative regulation or
administrative or court decree.
(xxiv) No labor dispute with the employees of the Company,
the Bank or any of the Subsidiaries exists or, to the knowledge of
the Company or the Bank, is imminent or threatened; and the Company
and the Bank are not aware of any existing or threatened labor
disturbance by the employees of any of its principal suppliers or
contractors which might be expected to result in any material adverse
change in the financial condition, results of operations, business
affairs or prospects of the Company, the Bank and the Subsidiaries
considered as one enterprise.
(xxv) Each of the Company, the Bank and the Subsidiaries
have good and marketable title to all properties and assets for which
ownership is material to the business of the Company, the Bank or the
Subsidiaries and to those properties and assets described in the
Prospectus as owned by them, free and clear of all liens, charges,
encumbrances or restrictions, except such as are described in the
Prospectus or are not material in relation to the business of the
Company, the Bank and the Subsidiaries considered as one enterprise;
and all of the leases and subleases material to the business of the
Company, the Bank or the Subsidiaries under which the Company, the
Bank or the Subsidiaries hold properties, including those described
in the Prospectus, are valid and binding agreements in full force and
effect, enforceable in accordance with their terms.
(xxvi) None of the Company, the Bank nor the Subsidiaries
are in violation of any directive from the Commission, the OTS, the
FDIC or any other governmental authority to make any material change
in the method of conducting their respective businesses; the Bank and
the Subsidiaries have conducted and are conducting
9
their business so as to comply in all material respects with all
applicable statutes, regulations and administrative and court decrees
(including, without limitation, all regulations, decisions,
directives and orders of the Commission, the OTS and the FDIC).
(xxvii) There is no action, suit or proceeding before or by
any court or governmental agency or body, domestic or foreign, now
pending, or, to the knowledge of the Company or the Bank, threatened,
against or affecting the Company, the Bank or any of the Subsidiaries
which is required to be disclosed in the Registration Statement
(other than as disclosed therein), or which might result in any
material adverse change in the financial condition, results of
operations, business affairs or prospects of the Company, the Bank
and the Subsidiaries considered as one enterprise, or which might
materially and adversely affect the properties or assets thereof or
which might materially and adversely affect the consummation of the
Conversion or the performance of this Agreement; all pending legal or
governmental proceedings to which the Company, the Bank or any
Subsidiary is a party or of which any of their respective property or
assets is the subject which are not described in the Registration
Statement, including ordinary routine litigation incidental to the
business, are considered in the aggregate not material.
(xxviii) The Bank has obtained opinions of its outside legal
and tax advisors with respect to the legality of the Securities and
the Foundation Shares to be issued and the state and local income tax
and federal income tax consequences of the Conversion (including
franchise tax, sales or use tax, license fee on foreign corporations,
stock transfer tax, real property transfer gain tax and real estate
transfer tax), copies of which are filed as exhibits to the
Registration Statement; all material aspects of the aforesaid
opinions are accurately summarized in the Prospectus; the facts and
representations upon which such opinions are based are truthful,
accurate and complete in all material respects; and neither the Bank
(including the Subsidiaries) nor the Company has taken or will take
any action inconsistent therewith.
(xxix) The Company is not and, upon completion of the
Conversion and the Offerings and sale of the Common Stock and the
application of the net proceeds therefrom, will not be, required to
be registered under the Investment Company Act of 1940, as amended.
(xxx) All of the loans represented as assets on the most
recent consolidated financial statements or in selected consolidated
financial and other data of the Bank included in the Prospectus meet
or are exempt from all requirements of federal, state or local law
pertaining to lending, including without limitation truth in lending
(including the requirements of Regulations Z and 12 C.F.R. Part 226
and Section 560.210), real estate settlement procedures, consumer
credit protection, equal credit opportunity and all disclosure laws
applicable to such loans, except for violations which, if asserted,
would not result in a material adverse effect on the financial
condition, results of operations, business affairs or prospects of
the Company, the Bank and the Subsidiaries considered as one
enterprise.
(xxxi) The Company, the Bank and each of the Subsidiaries
carries, or is covered by, insurance in such amounts and covering
such risks as is adequate for the
10
conduct of their respective businesses and the value of their
respective properties as is customary for companies engaged in
similar industries.
(xxxii) The Company, the Bank and each of the Subsidiaries
maintains a system of internal accounting controls sufficient to
provide reasonable assurance that (a) transactions are executed in
accordance with management's general or specific authorizations; (b)
transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted accounting
principles and to maintain asset accountability; (c) access to assets
is permitted only in accordance with management's general or specific
authorization; and (d) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
(xxxiii) Each of the Company, the Bank and each Subsidiary is
in compliance in all material respects with all presently applicable
provisions of the Employee Retirement Income Security Act of 1974, as
amended, including the regulations and published interpretations
thereunder ("ERISA"); no "reportable event" (as defined in ERISA) has
occurred with respect to any "pension plan" (as defined in ERISA) for
which the Company, the Bank or any Subsidiary, respectively, would
have any liability; each of the Company, the Bank and each Subsidiary
has not incurred and does not expect to incur liability under (i)
Title IV of ERISA with respect to termination of, or withdrawal from,
any "pension plan" or (ii) Sections 412 or 4971 of the Internal
Revenue Code of 1986, as amended, including the regulations and
published interpretations thereunder (the "Code"); and each "pension
plan" for which the Company, the Bank and any Subsidiary would have
any liability that is intended to be qualified under Section 401(a)
of the Code is so qualified in all material respects and nothing has
occurred, whether by action or by failure to act, which would cause
the loss of such qualification.
(xxxiv) To the Company's best knowledge, there are no
affiliations or associations (as such terms are defined by the
National Association of Securities Dealers, Inc. ("NASD")) between
any member of the NASD and any of the Company's officers, directors
or 5% or greater securityholders.
(xxxv) With the exception of the intended loan to the ESOP
by the Company to enable the ESOP to purchase shares of Common Stock
in an amount of up to 8% of the Common Stock issued in connection
with the Conversion, none of the Company, the Bank or the
Subsidiaries or employees of the Bank or the Subsidiaries has made
any payment of funds of the Company or the Bank or the Subsidiaries
as a loan for the purchase of the Common Stock 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.
(xxxvi) The Company, the Bank and the Subsidiaries are in
compliance in all material respects with the applicable financial
recordkeeping and reporting requirements of the Currency and Foreign
Transaction Reporting Act of 1970, as amended, and the rules and
regulations thereunder.
11
(xxxvii) None of the Company, the Bank nor the Subsidiaries nor
any properties owned or operated by the Company, the Bank or the
Subsidiaries is in violation of or liable under any Environmental Law
(as defined below), except for such violations or liabilities that,
individually or in the aggregate, would not have a material adverse
effect on the financial condition, results of operations, business
affairs or prospects of the Company, the Bank and the Subsidiaries
considered as one enterprise. There are no actions, suits or
proceedings, or demands, claims, notices or investigations (including,
without limitation, notices, demand letters or requests for information
from any environmental agency) instituted or pending, or to the
knowledge of the Company or the Bank threatened, relating to the
liability of any property owned or operated by the Company, the Bank or
the Subsidiaries, under any Environmental Law. For purposes of this
subsection, the term "Environmental Law" means any federal, state, local
or foreign law, statute, ordinance, rule, regulation, code, license,
permit, authorization, approval, consent, order, judgment, decree,
injunction or agreement with any regulatory authority relating to (i)
the protection, preservation or restoration of the environment
(including, without limitation, air, water, vapor, surface water,
groundwater, drinking water supply, surface soil, subsurface soil, plant
and animal life or any other natural resource), and/or (ii) the use,
storage, recycling, treatment, generation, transportation, processing,
handling, labeling, production, release or disposal of any substance
presently listed, defined, designated or classified as hazardous, toxic,
radioactive or dangerous, or otherwise regulated, whether by type or by
quantity, including any material containing any such substance as a
component.
(xxxviii) The Company, the Bank and the Subsidiaries have filed
all federal income and state and local income and franchise tax returns
required to be filed and have made timely payments of all taxes shown as
due and payable in respect of such returns, and no deficiency has been
asserted with respect thereto by any taxing authority. The Company and
the Bank have no knowledge of any tax deficiency which has been or could
be asserted against the Company, the Bank or the Subsidiaries.
(xxxix) The Company has received approval, subject to
regulatory approval to consummate the Offerings and issuance, to have
the Securities and the Foundation Shares listed on the National Market
System of the National Association of Securities Dealers' Automated
Quotation System (the "Nasdaq") effective as of the Closing Time
referred to in Section 2 hereof.
(xl) The Company will file a registration statement for the
Common Stock under Section 12 of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and such registration statement will be
effective on or prior to the Closing Time.
(b) Any certificate signed by any officer of the Company or the Bank
or the Subsidiaries and delivered to either of the Agent or counsel for the
Agent shall be deemed a representation and warranty by the Company and the Bank
to the Agent and, for purposes of the opinion to be delivered to the Agent
pursuant to Section 5(b)(2) hereof, to the counsel for the Agent as to the
matters covered thereby.
12
SECTION 2. Appointment of Sandler X'Xxxxx; Sale and Delivery of the
Securities; Closing.
On the basis of the representations and warranties herein contained and
subject to the terms and conditions herein set forth, the Company hereby
appoints Sandler X'Xxxxx as its agent to consult with and advise the Company,
and to assist the Company with the solicitation of subscriptions and purchase
orders for Securities in connection with the Company's sale of Common Stock in
the Offerings. On the basis of the representations and warranties herein
contained, and subject to the terms and conditions herein set forth, Sandler
X'Xxxxx accepts such appointment and agrees to use its best efforts to assist
the Company with the solicitation of subscriptions and purchase orders for
Securities in accordance with this Agreement; provided, however, that the Agent
shall not be obligated to take any action which is inconsistent with any
applicable laws, regulations, decisions or orders. The services to be rendered
by Sandler X'Xxxxx pursuant to this appointment include the following: (i)
consulting as to the securities marketing implications of any aspect of the Plan
or related corporate documents; (ii) reviewing with the Board of Directors the
independent appraiser's appraisal of the Common Stock; (iii) reviewing all
offering documents, including the Prospectus, stock order form and related
offering materials (it being understood that preparation and filing of such
documents is the sole responsibility of the Company and the Bank and their
counsel); (iv) assisting in the design and implementation of a marketing
strategy for the Offerings; (v) assisting the Company and the Bank in obtaining
all requisite regulatory approvals; (vi) assisting Bank management in preparing
for meetings with potential investors and broker-dealers; and (vii) providing
such other general advice and assistance as may be requested to promote the
successful completion of the Offerings.
The appointment of the Agent hereunder shall terminate upon the
earliest to occur of (a) forty-five (45) days after the last day of the
Subscription and Community Offering, unless the Company and the Agent agree in
writing to extend such period and the OTS agrees to extend the period of time in
which the Securities may be sold, or (b) the receipt and acceptance of
subscriptions and purchase orders for all of the Securities, or (c) the
completion of the Syndicated Community Offering.
If any of the Securities remain available after the expiration of both
the Subscription and Community Offering, at the request of the Company and the
Bank, Sandler X'Xxxxx will seek to form a syndicate of registered brokers or
dealers ("Selected Dealers") to assist in the solicitation of purchase orders of
such Securities on a best efforts basis, subject to the terms and conditions set
forth in a selected dealers' agreement (the "Selected Dealers' Agreement"),
substantially in the form set forth in Exhibit A to this Agreement. Sandler
X'Xxxxx will endeavor to limit the aggregate fees to be paid by the Company and
the Bank under any such Selected Dealers' Agreement to an amount competitive
with gross underwriting discounts charged at such time for underwritings of
comparable amounts of stock sold at a comparable price per share in a similar
market environment; provided, however, that the aggregate fees payable to
Sandler X'Xxxxx and Selected Dealers shall not exceed 7.0% of the aggregate
purchase price of the Securities sold by such Selected Dealers. Sandler X'Xxxxx
will endeavor to distribute the Securities among the Selected Dealers in a
fashion which best meets the distribution objective of the Company and the
requirements of the Plan, which may result in limiting the allocation of stock
to certain Selected Dealers. It is understood that in no event shall Sandler
X'Xxxxx be obligated to act as a Selected Dealer or to take or purchase any
Securities.
13
In the event the Company is unable to sell at least the total minimum
of the Securities, as set forth on the cover page of the Prospectus, within the
period herein provided, this Agreement shall terminate and the Company shall
refund to any persons who have subscribed for any of the Securities the full
amount which it may have received from them, together with interest as provided
in the Prospectus, and no party to this Agreement shall have any obligation to
the others hereunder, except for the obligations of the Company and the Bank as
set forth in Sections 4, 6(a) and 7 hereof and the obligations of the Agent as
provided in Sections 6(b) and 7 hereof. Appropriate arrangements for placing the
funds received from subscriptions for Securities or other offers to purchase
Securities in special interest-bearing accounts with the Bank until all
Securities are sold and paid for were made prior to the commencement of the
Subscription Offering, with provision for refund to the purchasers as set forth
above, or for delivery to the Company if the total minimum of the Securities are
sold.
If at least the total minimum of Securities, as set forth on the cover
page of the Prospectus, are sold, the Company agrees to issue or have issued the
Securities sold and to release for delivery certificates for such Securities at
the Closing Time against payment therefor by release of funds from the special
interest-bearing accounts referred to above. The closing shall be held at the
_____________________ offices of ___________________________, at 10:00 a.m.,
local time, or at such other place and time as shall be agreed upon by the
parties hereto, on a business day to be agreed upon by the parties hereto. The
Company shall notify the Agent by telephone, confirmed in writing, when funds
shall have been received for all the Securities. Certificates for Securities
shall be delivered directly to the purchasers thereof in accordance with their
directions. Notwithstanding the foregoing, certificates for Securities purchased
through Selected Dealers shall be made available to the Agent for inspection at
least 48 hours prior to the Closing Time at such office as the Agent shall
designate. The hour and date upon which the Company shall release for delivery
all of the Securities, in accordance with the terms hereof, is herein called the
"Closing Time."
The Company will pay any stock issue and transfer taxes which may be
payable with respect to the sale of the Securities.
In addition to reimbursement of the expenses specified in Section 4
hereof, the Agent will receive the following compensation for its services
hereunder:
(a) One and one-eighth percent (1.125%) of the aggregate purchase price
(the "Purchase Price") of the Securities sold in the Subscription and Community
Offering, excluding Securities purchased by the ESOP and by any director,
officer or employee of the Company, the Bank or any Subsidiary or members of
their immediate families (which term shall mean parents, grandparents, spouse,
siblings, children and grandchildren); and
(b) with respect to any Securities sold by an NASD member firm
(including Sandler X'Xxxxx) under the Selected Dealers' Agreement in the
Syndicated Community Offering, (i) the compensation payable to Selected Dealers
under any Selected Dealer's Agreement; (ii) any sponsoring dealer's fees; and
(iii) a management fee to Sandler X'Xxxxx of one and one-eighth percent
(1.125%). Any fees payable to Sandler X'Xxxxx for Securities sold by Sandler
X'Xxxxx under any such agreement shall be limited to an aggregate of seven
percent (7.0%) of the
14
Purchase Price of the Securities sold by Sandler X'Xxxxx and other NASD member
firms under such Selected Dealer's Agreement.
If this Agreement is terminated by the Agent in accordance with the
provisions of Section 9(a) hereof or the Conversion is terminated by the
Company, no fee shall be payable by the Company to Sandler X'Xxxxx; provided,
however, that the Company shall reimburse the Agent for all of its out-of-pocket
expenses (inclusive of fees and disbursements of counsel) incurred prior to
termination up to a maximum of $75,000. In addition, the Company shall be
obligated to pay the fees and expenses as contemplated by the provisions of
Section 4 hereof in the event of any such termination.
All fees payable to the Agent hereunder shall be payable in immediately
available funds at Closing Time, or upon termination of this Agreement, as the
case may be.
SECTION 3. Covenants of the Company.
The Company and the Bank covenant with the Agent as follows:
(a) The Company and the Bank will prepare and file such amendments or
supplements to the Registration Statement, the Prospectus, the Conversion
Application and the Proxy Statement as may hereafter be required by the
Securities Act Regulations or the Conversion Regulations or as may hereafter be
reasonably requested by the Agent. Following completion of the Subscription and
Community Offering, in the event of a Syndicated Community Offering, the Company
will (i) promptly prepare and file with the Commission a post-effective
amendment to the Registration Statement relating to the results of the
Subscription and Community Offering, any additional information with respect to
the proposed plan of distribution and any revised pricing information or (ii) if
no such post-effective amendment is required, will file with, or mail for filing
to, the Commission a prospectus or prospectus supplement containing information
relating to the results of the Subscription and Community Offering and pricing
information pursuant to Rule 424 of the Securities Act Regulations, in either
case in a form acceptable to the Agent. The Company and the Bank will notify the
Agent immediately, and confirm the notice in writing, (i) of the effectiveness
of any post-effective amendment of the Registration Statement, the filing of any
supplement to the Prospectus and the filing of any amendment to the Conversion
Application, (ii) of the receipt of any comments from the OTS or the Commission
with respect to the transactions contemplated by this Agreement or the Plan,
(iii) of any request by the Commission or the OTS for any amendment to the
Registration Statement or the Conversion Application or any amendment or
supplement to the Prospectus or for additional information, (iv) of the issuance
by the OTS of any order suspending the Offerings or the use of the Prospectus or
the initiation of any proceedings for that purpose, (v) of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or the initiation of any proceedings for that purpose, and (vi) of the
receipt of any notice with respect to the suspension of any qualification of the
Securities for offering or sale in any jurisdiction. The Company and the Bank
will make every reasonable effort to prevent the issuance of any stop order and,
if any stop order is issued, to obtain the lifting thereof at the earliest
possible moment.
15
(b) The Company and the Bank will give the Agent notice of its
intention to file or prepare any amendment to the Holding Company Application,
the Conversion Application or the Registration Statement (including any
post-effective amendment) or any amendment or supplement to the Prospectus
(including any revised prospectus which the Company proposes for use in
connection with the Syndicated Community Offering of the Securities which
differs from the prospectus on file at the Commission at the time the
Registration Statement becomes effective, whether or not such revised prospectus
is required to be filed pursuant to Rule 424(b) of the Securities Act
Regulations), will furnish the Agent with copies of any such amendment or
supplement a reasonable amount of time prior to such proposed filing or use, as
the case may be, and will not file any such amendment or supplement or use any
such prospectus to which the Agent or counsel for the Agent may object.
(c) The Company and the Bank will deliver to the Agent as many signed
copies and as many conformed copies of the Conversion Application and the
Registration Statement as originally filed and of each amendment thereto
(including exhibits filed therewith or incorporated by reference therein) as the
Agent may reasonably request, and from time to time such number of copies of the
Prospectus as the Agent may reasonably request.
(d) During the period when the Prospectus is required to be delivered,
the Company and the Bank will comply, at their own expense, with all
requirements imposed upon them by the OTS, by the applicable Conversion
Regulations, as from time to time in force, and by the Securities Act, the
Securities Act Regulations, the Exchange Act, and the rules and regulations of
the Commission promulgated thereunder, including, without limitation, Regulation
M under the Exchange Act, 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.
(e) If any event or circumstance shall occur as a result of which it is
necessary, in the opinion of counsel for the Agent, to amend or supplement the
Prospectus in order to make the Prospectus not misleading in the light of the
circumstances existing at the time it is delivered to a purchaser, the Company
and the Bank will forthwith amend or supplement the Prospectus (in form and
substance satisfactory to counsel for the Agent) so that, as so amended or
supplemented, the Prospectus will not include an untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances existing at the time it is delivered
to a purchaser, not misleading, and the Company and the Bank will furnish to the
Agent a reasonable number of copies of such amendment or supplement. For the
purpose of this subsection, the Company and the Bank will each furnish such
information with respect to itself as the Agent may from time to time reasonably
request.
(f) The Company and the Bank will take all necessary action, in
cooperation with the Agent, to qualify the Securities for offering and sale
under the applicable securities laws of such states of the United States and
other jurisdictions as the Conversion Regulations may require and as the Agent
and the Company have agreed; provided, however, that the Company and the Bank
shall not be obligated to file any general consent to service of process to
qualify as a foreign corporation in any jurisdiction in which it is not so
qualified. In each jurisdiction in which the Securities have been so qualified,
the Company and the Bank will file such statements
16
and reports as may be required by the laws of such jurisdiction to continue such
qualification in effect for a period of not less than one year from the
effective date of the Registration Statement.
(g) The Company authorizes Sandler X'Xxxxx and any Selected Dealers to
act as agent of the Company in distributing the Prospectus to persons entitled
to receive subscription rights and other persons to be offered Securities having
record addresses in the states or jurisdictions set forth in a survey of the
securities or "blue sky" laws of the various jurisdictions in which the
Offerings will be made (the "Blue Sky Survey").
(h) The Company will make generally available to its security holders
as soon as practicable, but not later than 60 days after the close of the period
covered thereby, an earnings statement (in form complying with the provisions of
Rule 158 of the Securities Act Regulations) covering a twelve month period
beginning not later than the first day of the Company's fiscal quarter next
following the "effective date" (as defined in said Rule 158) of the Registration
Statement.
(i) During the period ending on the third anniversary of the
expiration of the fiscal year during which the closing of the transactions
contemplated hereby occurs, the Company will furnish to its shareholders as soon
as practicable after the end of each such fiscal year an annual report
(including consolidated statements of financial condition and consolidated
statements of income, shareholders' equity and cash flows, certified by
independent public accountants) and, as soon as practicable after the end of
each of the first three quarters of each fiscal year (beginning with the fiscal
quarter ending after the effective date of the Registration Statement),
consolidated summary financial information of the Company, the Bank and its
subsidiaries for such quarter in reasonable detail. In addition, such annual
report and quarterly consolidated summary financial information shall be made
public through the issuance of appropriate press releases at the same time or
prior to the time of the furnishing thereof to shareholders of the Company.
(j) During the period ending on the third anniversary of the
expiration of the fiscal year during which the closing of the transactions
contemplated hereby occurs, the Company will furnish to the Agent (i) as soon as
publicly available, a copy of each report or other document of the Company
furnished generally to shareholders of the Company or furnished to or filed with
the Commission under the Exchange Act or any national securities exchange or
system on which any class of securities of the Company is listed, and (ii) from
time to time, such other information concerning the Company as the Agent may
reasonably request.
(k) The Company and the Bank will conduct the Conversion (including
the formation and operation of the Foundation) in all material respects in
accordance with the Plan, the Conversion Regulations and all other applicable
regulations, decisions and orders, including all applicable terms, requirements
and conditions precedent to the Conversion imposed upon the Company or the Bank
by the OTS.
(l) The Company and the Bank will use the net proceeds received by
them from the sale of the Securities in the manner specified in the Prospectus
under "How Our Net Proceeds Will Be Used."
17
(m) The Company will report the use of proceeds from the Offerings on
its first periodic report filed with the Commission pursuant to Section 13(a) or
15(d) of the Exchange Act and on any subsequent periodic reports as may be
required pursuant to Rule 463 of the Securities Act Regulations.
(n) The Company will maintain the effectiveness of the Exchange Act
Registration Statement for not less than three years and will comply in all
material respects with its filing obligations under the Exchange Act. The
Company will use its best efforts to effect and maintain the listing of the
Common Stock on the Nasdaq or the American Stock Exchange or the New York Stock
Exchange for not less than three years.
(o) 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."
(p) Other than in connection with any employee benefit plan or
arrangement described in the Prospectus, the Company will not, without the prior
written consent of the Agent, sell or issue, contract to sell or otherwise
dispose of, any shares of Common Stock other than the Securities and the
Foundation Shares for a period of 180 days following the Closing Time.
(q) During the period beginning on the date hereof and ending on the
later of the third anniversary of the Closing Time or the date on which the
Agent receives full payment in satisfaction of any claim for indemnification or
contribution to which it may be entitled pursuant to Sections 6 or 7,
respectively, neither the Company nor the Bank shall, without the prior written
consent of the Agent, take or permit to be taken any action that could result in
the Bank Common Stock becoming subject to any security interest, mortgage,
pledge, lien or encumbrance; provided, however, that this covenant shall be null
and void if the Board of Governors of the Federal Reserve System, by regulation,
policy statement or interpretative release, or by written order or written
advice addressed to the Bank or the Agent specifically addressing the provisions
of Section 6(a) hereof, permits indemnification of the Agent by the Bank as
contemplated by such provisions.
(r) The Company and the Bank will comply with the conditions imposed
by or agreed to with the OTS in connection with its approval of the Holding
Company Application and the Conversion Application including those conditions
relating to the establishment and the operation of the Foundation; the Company
and the Bank shall use their best efforts to ensure that the Foundation submits
within the time frames required by applicable law a request to the Internal
Revenue Service to be recognized as a tax-exempt organization under Section
501(c)(3) of the Internal Revenue Code of 1986, as amended (the "Code"); the
Company and the Bank will take no action which will result in the possible loss
of the Foundation's tax exempt status; and neither the Company nor the Bank will
contribute any additional assets to the Foundation until such time that such
additional contributions will be deductible for federal and state income tax
purposes.
18
(s) During the period ending on the first anniversary of the Closing
Time, the Bank will comply with all applicable laws and regulations necessary
for the Bank to continue to be a "qualified thrift lender" within the meaning of
12 U.S.C. Section 1467a(m).
(t) The Company shall not deliver the Securities until the Company and
the Bank have satisfied each condition set forth in Section 5 hereof, unless
such condition is waived in writing by the Agent.
(u) The Company or the Bank will furnish to Sandler X'Xxxxx as early
as practicable prior to the Closing Time, but no later than two (2) full
business days prior thereto, a copy of the latest available unaudited interim
consolidated financial statements of the Bank and the Subsidiaries which have
been read by KPMG LLP, as stated in their letters to be furnished pursuant to
subsections (e) and (f) of Section 5 hereof.
(v) The Company will promptly register as a savings and loan holding
company under HOLA following the Closing Time.
(w) Prior to the Closing Time, each of the Company and the Bank will
conduct its business in compliance in all material respects with all applicable
federal and state laws, rules, regulations, decisions, directives and orders,
including all decisions, directives and orders of the OTS.
(x) The Bank will not amend the Plan in any manner that would affect
the sale of the Securities or the terms of this Agreement.
(y) The Company and the Bank will not, prior to the Closing Time,
incur any liability or obligation, direct or contingent, or enter into any
material transaction, other than in the ordinary course of business consistent
with past practice, except as contemplated by the Prospectus.
(z) The Company and the Bank will use all reasonable efforts to comply
with, or cause to be complied with, the conditions precedent to the several
obligations of the Agent specified in Section 5 hereof.
SECTION 4. Payment of Expenses.
The Company and the Bank jointly and severally agree to pay all
expenses incident to the performance of their obligations under this Agreement,
including but not limited to (i) the cost of obtaining all securities and bank
regulatory approvals, (ii) the preparation, printing and filing of the
Registration Statement and the Conversion Application, each as originally filed
and of each amendment thereto, (iii) the preparation, issuance and delivery of
the certificates for the Securities to the purchasers in the Offerings, (iv) the
fees and disbursements of the Company's and the Bank's counsel, accountants,
appraiser and other advisors, (v) the qualification of the Securities under
securities laws in accordance with the provisions of Section 3(f) hereof,
including filing fees and the fees and disbursements of the Agent's counsel in
connection therewith and in connection with the preparation of the Blue Sky
Survey, (vi) the printing and delivery to the Agent (in such quantities as the
Agent shall reasonably request) of copies of the Registration Statement as
originally filed and of each amendment thereto and the
19
printing and delivery of the Prospectus and any amendments or supplements
thereto to the purchasers in the Offerings and the Agent (in such quantities as
the Agent shall reasonably request), (vii) the printing and delivery to the
Agent of copies of a Blue Sky Survey, and (viii) the fees and expenses incurred
in connection with the listing of the Securities on the Nasdaq. In the event the
Agent incurs any such fees and expenses on behalf of the Bank or the Company,
the Bank will reimburse the Agent for such fees and expenses whether or not the
Conversion is consummated; provided, however, that the Agent shall not incur any
substantial expenses on behalf of the Bank or the Company pursuant to this
Section without the prior approval of the Bank.
The Company and the Bank jointly and severally agree to pay certain
expenses incident to the performance of the Agent's obligations under this
Agreement, regardless of whether the Conversion is consummated, including (i)
the filing fees paid or incurred by the Agent in connection with all filings
with the NASD, and (ii) all reasonable out-of-pocket expenses (including legal
fees and expenses) incurred by the Agent relating to the filings with the NASD.
All fees and expenses to which the Agent is entitled to reimbursement under this
paragraph of this Section 4 shall be due and payable upon receipt by the Company
or the Bank of a written accounting therefor setting forth in reasonable detail
the expenses incurred by the Agent.
SECTION 5. Conditions of Agent's Obligations.
The Company, the Bank and the Agent agree that the issuance and the
sale of Securities and all obligations of the Agent hereunder are subject to the
accuracy of the representations and warranties of the Company and the Bank
herein contained as of the date hereof and the Closing Time, to the accuracy of
the statements of officers and directors of the Company and the Bank made
pursuant to the provisions hereof, to the performance by the Company and the
Bank of their obligations hereunder, and to the following further conditions:
(a) No stop order suspending the effectiveness of the Registration
Statement shall have been issued under the Securities Act or proceedings
therefor initiated or threatened by the Commission, no order suspending the
Offerings or authorization for final use of the Prospectus shall have been
issued or proceedings therefor initiated or threatened by the OTS and no order
suspending the sale of the Securities in any jurisdiction shall have been
issued.
(b) At Closing Time, the Agent shall have received:
(1) The favorable opinion, dated as of Closing Time, of
Elias, Matz, Xxxxxxx & Xxxxxxx, L.L.P., special counsel for the Company
and the Bank, in form and substance satisfactory to counsel for the Agent,
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
Wisconsin.
(ii) The Company has full 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 to
enter into and perform its obligations under this Agreement.
20
(iii) The Company is duly qualified as a foreign corporation
to transact business and is in good standing in the State of Nebraska
and in each other jurisdiction in which such qualification is required
whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure to so qualify would not
have a material adverse effect upon the financial condition, results
of operations, business affairs or prospects of the Company, the Bank
and the Subsidiaries, considered as one enterprise. The Company is
registered as a savings and loan holding company under HOLA.
(iv) Upon consummation of the Conversion, and the issuance
of the Foundation Shares to the Foundation immediately upon completion
thereof, the authorized, issued and outstanding capital stock of the
Company will be within the range as set forth in the Prospectus under
"Our Capitalization" and no shares of Common Stock have been or will
be issued and outstanding prior to the Closing Time.
(v) The Securities and the Foundation Shares have been
duly and validly authorized for issuance and sale and, when issued and
delivered by the Company pursuant to the Plan against payment of the
consideration calculated as set forth in the Plan, or contributed by
the Company pursuant to the Plan in the case of the Foundation Shares,
as the case may be, will be duly and validly issued and fully paid and
nonassessable (except as otherwise provided by Section 180.0622(2)(b)
of the Wisconsin Business Corporation Law).
(vi) The issuance of the Securities and the Foundation
Shares is not subject to preemptive or other similar rights arising by
operation of law or under the Company's articles of incorporation or,
to the best of their knowledge after due inquiry, otherwise.
(vii) The Bank has been at all times since the date hereof
and prior to the Closing Time validly existing and in good standing
under the laws of the United States of America as a federally
chartered savings bank of mutual form, and, at Closing Time, has
become duly organized, validly existing and in good standing under the
laws of the United States of America as a federally chartered savings
bank of stock form, in both instances with full 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 Bank is duly qualified as a foreign corporation in
each jurisdiction in which the failure to so qualify would have a
material adverse effect upon the financial condition, results of
operations, business affairs or prospects of the Bank.
(viii) The Bank is a member in good standing of the Federal
Home Loan Bank of Topeka and the deposit accounts of the Bank are
insured by the FDIC up to the applicable limits.
(ix) Each Subsidiary of the Bank is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
21
incorporation, and each of the Subsidiaries has full corporate power and
authority to own, lease and operate its properties and to conduct its
business as described in the Registration Statement and is duly qualified
as a foreign corporation to transact business and is in good standing in
each jurisdiction in which the failure to so qualify would have a material
adverse effect upon the financial condition, results of operations,
business affairs or prospects of the Company, the Bank and the
Subsidiaries, taken as a whole; the activities of each Subsidiary are
permitted to subsidiaries of a savings association holding company and of a
federally chartered savings bank by the rules, regulations, resolutions and
practices of the OTS; all of the issued and outstanding capital stock of
each Subsidiary has been duly authorized and validly issued, is fully paid
and nonassessable and is owned by the Bank, directly or through
subsidiaries, free and clear of any security interest, mortgage, pledge,
lien, encumbrance, claim or equity.
(x) The Foundation has been duly incorporated and is validly
existing as a non-stock 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
Prospectus; the Foundation is not a savings and loan holding company within
the meaning of 12 C.F.R. Section 574.2(q) as a result of the issuance of
shares of Common Stock to it in accordance with the terms of the Plan and
in the amounts as described in the Prospectus; no approvals are required to
establish the Foundation and to contribute the shares of Common Stock
thereto as described in the Prospectus other than those set forth in any
written notice or order of approval or non-objection of the Conversion, the
Conversion Application or the Holding Company Application, copies of which
were provided to the Agent prior to the Closing Time; and the issuance of
the Foundation Shares to the Foundation is registered pursuant to the
Registration Statement.
(xi) Upon consummation of the Conversion, all of the issued and
outstanding capital stock of the Bank when issued and delivered pursuant to
the Plan against payment of consideration calculated as set forth in the
Plan and set forth in the Prospectus, will be duly authorized and validly
issued and fully paid and nonassessable, and all such capital stock will be
owned beneficially and of record by the Company free and clear of any
security interest, mortgage, pledge, lien, encumbrance, claim or equity.
(xii) The OTS has approved the Holding Company Application and
the Conversion Application and no action is pending, or to the best of such
counsel's knowledge after due inquiry, threatened respecting the Holding
Company Application or the Conversion Application or the acquisition by the
Company of all of the Bank's issued and outstanding capital stock; the
Holding Company Application and the Conversion Application comply as to
form with the applicable requirements of the OTS, includes all documents
required to be filed as exhibits thereto, and is, to the best of such
counsel's knowledge after due inquiry, truthful, accurate and complete; and
the Company is duly authorized to become a
22
savings association holding company and is duly authorized to own all of
the issued and outstanding capital stock of the Bank to be issued pursuant
to the Plan.
(xiii) The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby, including the
establishment of the Foundation and the contribution thereto of the
Foundation Shares, have been duly and validly authorized by all necessary
action on the part of each of the Company and the Bank, and this Agreement
constitutes the legal, valid and binding agreement of each of the Company
and the Bank, enforceable in accordance with its terms, except as rights to
indemnity and contribution hereunder may be limited under applicable law
(it being understood that such counsel may avail itself of customary
exceptions concerning the effect of bankruptcy, insolvency or similar laws
and the availability of equitable remedies); the execution and delivery of
this Agreement, the incurrence of the obligations herein set forth and the
consummation of the transactions contemplated herein will not result in any
violation of the provisions of the articles of incorporation, charter or
bylaws of the Company, the Bank or any of the Subsidiaries; and the
execution and delivery of this Agreement, the incurrence 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,
and no event has occurred which, with notice or lapse of time or both,
would constitute a default under, or result in the creation or imposition
of any lien, charge or encumbrance, that, individually or in the aggregate,
would have a material adverse effect on the financial condition, results of
operations, business affairs or prospects of the Company, the Bank and the
Subsidiaries considered as one enterprise, upon any property or assets of
the Company, the Bank or the Subsidiaries pursuant to any contract,
indenture, mortgage, loan agreement, note, lease or other instrument to
which the Company, the Bank or the Subsidiaries is a party or by which any
of them may be bound, or to which any of the property or assets of the
Company, the Bank or the Subsidiaries is subject.
(xiv) The Prospectus has been duly authorized by the OTS for final
use pursuant to the Conversion Regulations and no action is pending, or to
the best of such counsel's knowledge after due inquiry, is threatened, by
the OTS to revoke such authorization.
(xv) The Registration Statement is effective under the Securities
Act and no stop order suspending the effectiveness of the Registration
Statement has been issued under the Securities Act or, to the best
knowledge of such counsel after due inquiry, proceedings therefor initiated
or threatened by the Commission.
(xvi) No further approval, authorization, consent or other order of
any public board or body is required in connection with the execution and
delivery of this Agreement, the issuance of the Securities 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.
23
(xvii) At the time the Registration Statement became effective, the
Registration Statement (other than the financial statements and financial
and statistical data included therein, as to which no opinion need be
rendered) complied as to form in all material respects with the
requirements of the Securities Act and the Securities Act Regulations and
the Conversion Regulations.
(xviii) The Common Stock conforms to the description thereof
contained in the Prospectus, and the form of certificate used to evidence
the Common Stock is in due and proper form and complies with all applicable
statutory requirements.
(xix) There are no legal or governmental proceedings pending or
threatened against or affecting the Company, the Bank or the Subsidiaries
which are required, individually or in the aggregate, to be disclosed in
the Registration Statement and Prospectus, other than those disclosed
therein, and all pending legal or governmental proceedings to which the
Company, the Bank or any of the Subsidiaries is a party or to which any of
their property is subject which are not described in the Registration
Statement, including ordinary routine litigation incidental to the
business, are, considered in the aggregate, not material.
(xx) The information in the Prospectus under "Dividends,"
"Business of TierOne Bank - Legal Proceedings," "Regulation," "Taxation,"
"The Conversion," "Restrictions on Acquisitions of Us and TierOne Bank and
Related Anti-Takeover Provisions" and "Description of Our Capital Stock" to
the extent that it constitutes matters of law, summaries of legal matters,
documents or proceedings, or legal conclusions, has been reviewed by them
and is complete and accurate in all material respects.
(xxi) To the best of such counsel's knowledge, there are no
contracts, indentures, mortgages, loan agreements, notes, leases or other
instruments required to be described or referred to in the Registration
Statement or to be filed as exhibits thereto other than those described or
referred to therein or filed as exhibits thereto, the descriptions thereof
or references thereto are correct, and no default exists, and no event has
occurred which, with notice or lapse of time or both, would constitute a
default, in the due performance or observance of any material obligation,
agreement, covenant or condition contained in any contract, indenture,
mortgage, loan agreement, note, lease or other instrument so described,
referred to or filed.
(xxii) The Plan and the establishment and funding of the Foundation
have been duly authorized by the Board of Directors of the Company and the
Board of Directors of the Bank and the OTS's approval of the Plan remains
in full force and effect; the Bank's charter has been amended, effective
upon consummation of the Conversion and the filing of such amended charter
with the OTS, to authorize the issuance of permanent capital stock; the
Company and the Bank have conducted the Conversion and the funding of the
Foundation
24
in all material respects in accordance with applicable requirements of the
Conversion Regulations, the Plan and all other applicable regulations,
decisions and orders thereunder, including all material applicable terms,
conditions, requirements and conditions precedent to the Conversion imposed
upon the Company or the Bank by the OTS and no order has been issued by the
OTS to suspend the Conversion or the Offerings and no action for such
purpose has been instituted or threatened by the OTS; and, to the best of
such counsel's knowledge after due inquiry, no person has sought to obtain
review of the final action of the OTS in approving the Conversion
Application (which includes the Plan which provides for the establishment
of the Foundation) or the Holding Company Application.
(xxiii) To the best of such counsel's knowledge after due
inquiry, the Company and the Bank and the Subsidiaries have obtained all
licenses, permits and other governmental authorizations currently required
for the conduct of their respective businesses as described in the
Registration Statement and the Prospectus, and all such licenses, permits
and other governmental authorizations are in full force and effect, and the
Company and the Bank and the Subsidiaries are in all material respects
complying therewith.
(xxiv) Neither the Company, the Bank nor any of the
Subsidiaries is in violation of its certificate of incorporation,
organization certificate, articles of incorporation or charter, as the case
may be, or bylaws (and the Bank will not be in violation of its charter in
stock form upon consummation of the Conversion) or in default (nor has any
event occurred which, with notice or lapse of time or both, would
constitute a default) in the performance or observance of any obligation,
agreement, covenant or condition contained in any contract, indenture,
mortgage, loan agreement, note, lease or other instrument to which the
Company, the Bank or any of the Subsidiaries is a party or by which the
Company, the Bank or any of the Subsidiaries or any of their property may
be bound.
(xxv) The Company is not and, upon completion of the
Conversion and the Offerings and the sale of the Common Stock and the
application of the net proceeds therefrom, will not be required to be
registered as an investment company under the Investment Company Act of
1940.
(2) The favorable opinion, dated as of Closing Time, of Xxxxx
& Lardner, counsel for the Agent, with respect to the matters set forth in
Section 5(b)(1)(i), (iv), (v), (vi) (solely as to preemptive rights arising by
operation of law), (xiii) (solely as to the execution, delivery and
enforceability of this Agreement), (xvii) and (xviii) and such other matters as
the Agent may reasonably require.
(3) In giving their opinions required by subsections (b)(l) and
(b)(2), respectively, of this Section, Elias, Matz, Xxxxxxx & Xxxxxxx, L.L.P.
and Xxxxx & Lardner shall each additionally state that nothing has come to their
attention that would lead them to believe that the Registration Statement
(except for financial statements and schedules and other financial or
statistical data included therein, as to which counsel need make no
25
statement), at the time it became effective, 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 not misleading
or that the Prospectus (except for financial statements and schedules and
other financial or statistical data included therein, as to which counsel
need make no statement), at the time the Registration Statement became
effective or at Closing Time, included an untrue statement of a material
fact or omitted to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. In giving their opinions, Elias, Matz, Xxxxxxx &
Xxxxxxx, L.L.P. and Xxxxx & Xxxxxxx may rely as to matters of fact on
certificates of officers and directors of the Company and the Bank and
certificates of public officials, and as to certain matters of Nebraska law
upon the opinion of KPMG LLP, which opinion shall be in form and substance
satisfactory to counsel for the Agent.
(c) At Closing Time referred to in Section 2, the Company and the
Bank shall have satisfied in all material respects the conditions precedent to
the Conversion in accordance with the Plan, the applicable Conversion
Regulations and all other applicable laws, regulations, decisions and orders,
including all terms, conditions, requirements and provisions precedent to the
Conversion imposed upon the Company or the Bank by the OTS, or any other
regulatory authority other than those which the OTS permits to be completed
after the Conversion.
(d) At Closing Time, there shall not have been, since the date hereof
or since the respective dates as of which information is given in the
Registration Statement and the Prospectus, any material adverse change in the
financial condition, results of operations, business affairs or prospects of the
Company, the Bank and the Subsidiaries considered as one enterprise, whether or
not arising in the ordinary course of business consistent with past practice,
and the Agent shall have received a certificate of the chief executive officer
of the Company and of the Bank, the President of the Company and the Bank and
the chief financial or chief accounting officer of the Company and of the Bank,
dated as of Closing Time, to the effect that (i) there has been no such material
adverse change, (ii) there shall have been no material transaction entered into
by the Company or the Bank or the Subsidiaries from the latest date as of which
the financial condition of the Company or the Bank is set forth in the
Registration Statement and the Prospectus other than transactions referred to or
contemplated therein and transactions in the ordinary course of business
consistent with past practice, (iii) neither the Company nor the Bank shall have
received from the OTS any direction (oral or written) to make any material
change in the method of conducting its business with which it has not complied
(which direction, if any, shall have been disclosed to the Agent) or which
materially and adversely would affect the business affairs, financial condition,
results of operations or prospects of the Company, the Bank and the Subsidiaries
considered as one enterprise, (iv) the representations and warranties in Section
1 hereof are true and correct with the same force and effect as though expressly
made at and as of the Closing Time, (v) the Company and the Bank have complied
with all agreements and satisfied all conditions on their part to be performed
or satisfied at or prior to Closing Time, (vi) no stop order suspending the
effectiveness of the Registration Statement has been issued and no proceedings
for that purpose have been initiated or threatened by the Commission and (vii)
no order suspending the Offerings or the authorization for final use of the
Prospectus has been issued and no proceedings for that purpose have been
initiated or threatened by the OTS or the FDIC and no person has sought to
obtain regulatory or judicial review of the action of the OTS in approving the
Plan in accordance with the Conversion Regulations nor has any person sought
26
to obtain regulatory or judicial review of the action of the OTS in approving
the Holding Company Application.
(e) At the time of the execution of this Agreement, the Agent shall have
received from KPMG LLP a letter dated such date, in form and substance
satisfactory to the Agent, to the effect that (i) they are independent public
accountants with respect to the Company, the Bank and the Subsidiaries within
the meaning of the Code of Ethics of the American Institute of Certified Public
Accountants, the Securities Act and the Securities Act Regulations and the
Conversion Regulations; (ii) it is their opinion that the consolidated financial
statements included in the Registration Statement and covered by their opinions
therein comply as to form in all material respects with the applicable
accounting requirements of the Securities Act and the Securities Act
Regulations; (iii) based upon limited procedures as agreed upon by the Agent and
KPMG LLP set forth in detail in such letter, nothing has come to their attention
which causes them to believe that (A) the unaudited financial statements of the
Bank and the Subsidiaries included in the Registration Statement do not comply
as to form in all material respects with the applicable accounting requirements
of the Securities Act, the Securities Act Regulations and the Conversion
Regulations or are not presented in conformity with generally accepted
accounting principles applied on a basis substantially consistent with that of
the audited financial statements included in the Registration Statement and the
Prospectus, (B) the unaudited amounts of net interest income and net income set
forth under "Selected Consolidated Financial and Other Data of the Bank" in the
Registration Statement and the Prospectus do not agree with the amounts set
forth in unaudited consolidated financial statements as of and for the dates and
periods presented under such captions or such amounts were not determined on a
basis substantially consistent with that used in determining the corresponding
amounts in the audited financial statements included in the Registration
Statement, (C) at a specified date not more than five days prior to the date of
this Agreement, there has been any increase in the consolidated long term or
short term debt of the Bank and the Subsidiaries or any decrease in consolidated
total assets, the allowance for loan losses, total deposits or net worth of the
Bank and the Subsidiaries, in each case as compared with the amounts shown in
the ___________ ___, 2002 balance sheet included in the Registration Statement
or, (D) during the period from ___________ ___, 2002 to a specified date not
more than five days prior to the date of this Agreement, there were any
decreases, as compared with the corresponding period in the preceding year, in
total interest income, net interest income, net interest income after provision
for loan losses, income before income tax expense or net income of the Bank and
the Subsidiaries, except in all instances for increases or decreases which the
Registration Statement and the Prospectus disclose have occurred or may occur;
and (iv) in addition to the examination referred to in their opinions and the
limited procedures referred to in clause (iii) above, they have carried out
certain specified procedures, not constituting an audit, with respect to certain
amounts, percentages and financial information which are included in the
Registration Statement and the Prospectus and which are specified by the Agent,
and have found such amounts, percentages and financial information to be in
agreement with the relevant accounting, financial and other records of the
Company, the Bank and the Subsidiaries identified in such letter.
(f) At Closing Time, the Agent shall have received from KPMG LLP a
letter, dated as of Closing Time, to the effect that they reaffirm the
statements made in the letter furnished pursuant to subsection (e) of this
Section, except that the specified date referred to shall be a date not more
than five days prior to Closing Time.
27
(g) At Closing Time, the Securities shall have been approved for
listing on the Nasdaq upon notice of issuance.
(h) At Closing Time, the Agent shall have received a letter from
Xxxxxx & Company, Inc., dated as of the Closing Time, confirming its appraisal.
(i) At Closing Time, counsel for the Agent shall have been furnished
with such documents and opinions as they may reasonably require for the purpose
of enabling them to pass upon the issuance and sale of the Securities and
Foundation Shares as herein contemplated and related proceedings, or in order to
evidence the accuracy of any of the representations or warranties, or the
fulfillment of any of the conditions, herein contained; and all proceedings
taken by the Company in connection with the issuance and sale of the Securities
and Foundation Shares as herein contemplated shall be satisfactory in form and
substance to the Agent and counsel for the Agent.
(j) At any time prior to Closing Time, (i) there shall not have
occurred any material adverse change in the financial markets in the United
States or elsewhere or any outbreak of hostilities or escalation thereof or
other calamity or crisis the effect of which, in the judgment of the Agent, are
so material and adverse as to make it impracticable to market the Securities or
to enforce contracts, including subscriptions or orders, for the sale of the
Securities, and (ii) trading generally on the Nasdaq, the American Stock
Exchange or the New York Stock Exchange shall not have been suspended, and
minimum or maximum prices for trading shall not have been fixed, or maximum
ranges for prices for securities have been required, by any of said Exchanges or
by order of the Commission or any other governmental authority, and a banking
moratorium shall not have been declared by either Federal or New York
authorities.
SECTION 6. Indemnification.
(a) The Company and the Bank, jointly and severally, agree to
indemnify and hold harmless the Agent, each person, if any, who controls the
Agent, within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act, and its respective partners, directors, officers, employees
and agents as follows:
(i) from and against any and all loss, liability, claim,
damage and expense whatsoever, as incurred, related to or arising out of
the Conversion (including the establishment of the Foundation and the
contribution of the Foundation Shares thereto by the Company) or any action
taken by the Agent where acting as agent of the Company or the Bank or
otherwise as described in Section 2 hereof;
(ii) from and against any and all loss, liability, claim,
damage and expense whatsoever, as incurred, based upon or arising out of
any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement (or any amendment thereto), or the
omission or alleged omission therefrom of a material fact required to be
stated therein or necessary to make the statements therein not misleading
or arising out of any untrue statement or alleged untrue statement of a
material fact contained in the Proxy Statement or Prospectus (or any
amendment or supplement thereto) or the omission or alleged omission
therefrom of a material fact necessary in
28
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading;
(iii) from and against any and all loss, liability, claim, damage
and expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or of any claim
whatsoever described in clauses (i) or (ii) above, if such settlement is
effected with the written consent of the Company or the Bank, which consent
shall not be unreasonably withheld; and
(iv) from and against any and all expense whatsoever, as
incurred (including, subject to Section 6(c) hereof, the fees and
disbursements of counsel chosen by the Agent), reasonably incurred in
investigating, preparing for or defending against any litigation, or any
investigation, proceeding or inquiry by any governmental agency or body,
commenced or threatened, or any claim whatsoever described in clauses (i)
or (ii) above, to the extent that any such expense is not paid under (i),
(ii) or (iii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense (i) to the extent arising out of any untrue
statement or alleged untrue statement of a material fact contained in the
Prospectus (or any amendment or supplement thereto) or the omission or alleged
omission therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading which was made in reliance upon and in conformity with the Agent
Information.
(b) The Agent agrees to indemnify and hold harmless the Company, the
Bank, their directors, their trustees, each of their officers who signed the
Registration Statement, and each person, if any, who controls the Company or the
Bank within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act against any and all loss, liability, claim, damage and expense
described in the indemnity contained in subsection (a) of this Section, as
incurred, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, of a material fact made in the Prospectus (or
any amendment or supplement thereto) in reliance upon and in conformity with the
Agent Information.
(c) Each indemnified party shall give notice as promptly as reasonably
practicable to each indemnifying party of any action commenced against it in
respect of which indemnity may be sought hereunder, but failure to so notify an
indemnifying party shall not relieve such indemnifying party from any obligation
to provide indemnification hereunder unless such indemnifying party is
materially prejudiced by the failure to provide such notice or relieve such
indemnifying party from any liability which it may have otherwise than on
account of this Agreement. An indemnifying party may participate at its own
expense in the defense of any such action. In no event shall the indemnifying
parties be liable for fees and expenses of more than one counsel (in addition to
no more than one local counsel in each separate jurisdiction in which any action
or proceeding is commenced) separate from their own counsel for all indemnified
parties in connection with any one action or separate but similar or related
actions in the same jurisdiction arising out of the same general allegations or
circumstances.
29
(d) The Company and the Bank also agree that the Agent shall not have
any liability (whether direct or indirect, in contract or tort or otherwise) to
the Bank, the Company, its security holders or the Bank's or the Company's
creditors relating to or arising out of the engagement of the Agent pursuant to,
or the performance by the Agent of the services contemplated by, this Agreement.
(e) In addition to, and without limiting, the provisions of Section
(6)(a)(iv) hereof, in the event that the Agent, any person, if any, who controls
the Agent within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act or any of its partners, directors, officers, employees or
agents is requested or required to appear as a witness or otherwise gives
testimony in any action, proceeding, investigation or inquiry brought by or on
behalf of or against the Company, the Bank, the Agent or any of its respective
affiliates or any participant in the transactions contemplated hereby in which
the Agent or such person or agent is not named as a defendant, the Company and
the Bank jointly and severally agree to reimburse the Agent or such other
persons for all reasonable and necessary out-of-pocket expenses incurred by it
or them in connection with preparing or appearing as a witness or otherwise
giving testimony and to compensate the Agent in an amount to be mutually agreed
upon.
SECTION 7. Contribution.
In order to provide for just and equitable contribution in
circumstances in which the indemnity agreement provided for in Section 6 hereof
is for any reason held to be unenforceable by the indemnified parties although
applicable in accordance with its terms, the Company, the Bank and the Agent
shall contribute to the aggregate losses, liabilities, claims, damages and
expenses of the nature contemplated by said indemnity agreement incurred by the
Company or the Bank and the Agent, as incurred, in such proportions (i) that the
Agent is responsible for that portion represented by the percentage that the
maximum aggregate marketing fees appearing on the cover page of the Prospectus
bears to the maximum aggregate gross proceeds appearing thereon and the Company
and the Bank are jointly and severally responsible for the balance or (ii) if,
but only if, the allocation provided for in clause (i) is for any reason held
unenforceable, in such proportion as is appropriate to reflect not only the
relative benefits to the Company and the Bank on the one hand and the Agent on
the other, as reflected in clause (i), but also the relative fault of the
Company and the Bank on the one hand and the Agent on the other, as well as any
other relevant equitable considerations; provided, however, that no person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. For purposes of this Section,
each person, if any, who controls the Agent within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act shall have the same rights
to contribution as the Agent, and each director of the Company, each director of
the Bank, each officer of the Company who signed the Registration Statement, and
each person, if any, who controls the Company or the Bank within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act shall have
the same rights to contribution as the Company and the Bank. Notwithstanding
anything to the contrary set forth herein, to the extent permitted by applicable
law, in no event shall the Agent be required to contribute an aggregate amount
in excess of the aggregate marketing fees to which the Agent is entitled and
actually paid pursuant to this Agreement.
30
SECTION 8. Representations, Warranties and Agreements to Survive
Delivery.
All representations, warranties and agreements contained in this
Agreement, or contained in certificates of officers of the Company or the Bank
submitted pursuant hereto, shall remain operative and in full force and effect,
regardless of any investigation made by or on behalf of the Agent or any
controlling person, or by or on behalf of the Company, and shall survive
delivery of the Securities.
SECTION 9. Termination of Agreement.
(a) The Agent may terminate this Agreement, by notice to the Company,
at any time at or prior to Closing Time (i) if there has been, since the date of
this Agreement or since the respective dates as of which information is given in
the Registration Statement, any material adverse change in the financial
condition, results of operations, business affairs or prospects of the Company
or the Bank, or the Company, the Bank and the Subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, or (ii)
if there has occurred any material adverse change in the financial markets in
the United States or elsewhere or any outbreak of hostilities or escalation
thereof or other calamity or crisis the effect of which, in the judgment of the
Agent, are so material and adverse as to make it impracticable to market the
Securities or to enforce contracts, including subscriptions or orders, for the
sale of the Securities, (iii) or if trading generally on the Nasdaq, the
American Stock Exchange or the New York Stock Exchange has been suspended, or
minimum or maximum prices for trading have been fixed, or maximum ranges for
prices for securities have been required, by any of said Exchanges or by order
of the Commission or any other governmental authority, or if a banking
moratorium has been declared by either Federal or New York authorities, (iv) if
any condition specified in Section 5 shall not have been fulfilled when and as
required to be fulfilled, (v) if there shall have been such material adverse
change in the condition or prospects of the Company or the Bank or the
prospective market for the Company's securities as in the Agent's good faith
opinion would make it inadvisable to proceed with the offering, sale or delivery
of the Securities, (vi) if in the Agent's good faith opinion, the aggregate
value for the Securities established by Xxxxxx & Company, Inc. is not reasonable
or equitable under then prevailing market conditions, or (vii) if the Conversion
is not consummated on or prior to ___________ ___, 2002.
(b) If this Agreement is terminated pursuant to this Section, such
termination shall be without liability of any party to any other party except as
provided in Sections 2 and 4 hereof relating to the reimbursement of expenses
and except that the provisions of Sections 6 and 7 hereof shall survive any
termination of this Agreement.
SECTION 10. Notices.
All notices and other communications hereunder shall be in writing
and shall be deemed to have been duly given if mailed or transmitted by any
standard form of telecommunication. Notices to the Agent shall be directed to
the Agent at 000 Xxxxx Xxxxxx, 0/xx/ Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, attention
of Xxxxxxxx X. Xxxxxx, Managing Director, facsimile number: (000) 000-0000;
notices to the Company and the Bank shall be directed to either of them at 00xx
& "X" Xxxxxxx, Xxxxxxx, Xxxxxxxx 00000, attention of Xxxxxxx X.
00
Xxxxxxxxx, Xxxxxxxx of the Board and Chief Executive Officer, facsimile number:
(000) 000-0000.
SECTION 11. Parties.
This Agreement shall inure to the benefit of and be binding upon the
Agent, the Company and the Bank and their respective successors. Nothing
expressed or mentioned in this Agreement is intended or shall be construed to
give any person, firm or corporation, other than the Agent, the Company and the
Bank and their respective successors and the controlling persons and partners,
and officers and directors referred to in Sections 6 and 7 and their heirs and
legal representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision herein or therein contained. This
Agreement and all conditions and provisions hereof and thereof are intended to
be for the sole and exclusive benefit of the Agent, the Company and the Bank and
their respective successors, and said controlling persons and partners, and
officers and directors and their heirs and legal representatives, and for the
benefit of no other person, firm or corporation.
SECTION 12. Entire Agreement; Amendment.
This Agreement represents the entire understanding of the parties
hereto with reference to the transactions contemplated hereby and supersedes any
and all other oral or written agreements heretofore made, except for the
engagement letter dated March 4, 2002, by and between the Agent and the Bank,
relating to the Agent's providing conversion agent services to the Company and
the Bank in connection with the Conversion. No waiver, amendment or other
modification of this Agreement shall be effective unless in writing and signed
by the parties hereto.
SECTION 13. Governing Law and Time.
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York applicable to agreements made and to be
performed in said State without regard to the conflicts of laws provisions
thereof. Unless otherwise noted, specified times of day refer to Eastern time.
SECTION 14. Severabilty.
Any term or provision of this Agreement which is invalid or
unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective
to the extent of such invalidity or unenforceability without rendering invalid
or unenforceable the remaining terms and provisions of this Agreement or
affecting the validity or enforceability of any of the terms or provisions of
this Agreement in any other jurisdiction. If any provision of this Agreement is
so broad as to be unenforceable, the provision shall be interpreted to be only
so broad as is enforceable.
SECTION 15. Headings.
Sections headings are not to be considered part of this Agreement,
are for convenience and reference only, and are not to be deemed to be full or
accurate descriptions of the contents of any paragraph or subparagraph.
32
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
between the Agent, the Company and the Bank in accordance with its terms.
Very truly yours,
TIERONE CORPORATION
By:____________________________
Title: Chairman of the Board and
Chief Executive Officer
TIERONE BANK
By:____________________________
Title: Chairman of the Board and
Chief Executive Officer
CONFIRMED AND ACCEPTED,
as of the date first above written:
Sandler X'Xxxxx & Partners, L.P.
By: Sandler X'Xxxxx & Partners Corp.,
the sole general partner
By: _______________________
Title: Principal
33
Exhibit A
---------
TIERONE CORPORATION
17,750,500 Shares
(Maximum Offered in Conversion)
Common Stock
(Par Value $0.01 Per Share)
SELECTED DEALER'S AGREEMENT
__________, 2002
We have agreed to assist TierOne Corporation (the "Company") in
connection with the offer and sale of shares (the "Shares") of Common Stock, par
value $0.01 per share, of the Company, to be issued in connection with the
conversion of TierOne Bank, a federally chartered savings bank (the "Bank"),
from mutual to stock form. The Company in connection with its plan to effect
such conversion, offered ___________ Shares for subscription by certain of the
Bank's depositors and the Bank's employee stock ownership plan in a subscription
offering, and certain members of the general public in a concurrent direct
community offering. The Shares which were not subscribed for pursuant to such
subscription and direct community offerings are being offered to the public in a
syndicated community offering (the "Syndicated Community Offering") in
accordance with the conversion regulations of the Office of Thrift Supervision
(the "OTS"). The Shares, the bases on which the number of Shares to be issued
may change, and certain of the terms on which they are being offered are more
fully described in the enclosed Prospectus (the "Prospectus").
We are offering to Selected Dealers (of which you are one) the
opportunity to participate in the solicitation of offers to buy the Shares in
the Syndicated Community Offering and we will pay you a fee in the amount of
______________ percent (_______) of the dollar amount of the Shares sold on
behalf of the Company by you. The number of Shares sold by you shall be
determined based on the authorized designation of your firm on the order form or
forms for such Shares accompanying the funds transmitted for payment therefor
(whether in the form of a check payable to the Bank or a withdrawal from an
existing account at the Bank) to the special account established by the Company
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 Shares
sold on behalf of the Company by you, as evidenced in accordance with the
preceding sentence. The Bank has requested us to invite you to become a
"Sponsoring Dealer," that is, a Selected Dealer who solicits offers which result
in the sale on behalf of the Bank of at least _________ Shares. You may become a
Sponsoring Dealer (subject to your fulfillment of the requirement in the
preceding sentence) by checking the box on the confirmation at the end of this
letter. If you become a Sponsoring Dealer, you shall be entitled to an
additional fee in the amount of ____ percent (______%) of the dollar amount of
the Shares sold on behalf of the Company by you as evidenced in the manner set
forth above.
Each order form for the purchase of Shares must set forth the
----
identity, address and tax identification number of each person ordering Shares
-------- ------- --- -------------- ------
regardless of whether the Shares will be
registered in street name or in the purchaser's name. Such order form should
clearly identify your firm.
As soon as practicable after all the Shares are sold, we will remit to
you, out of our compensation as provided above, the fees to which you are
entitled hereunder, including your Sponsoring Dealer fee.
This offer is made subject to the terms and conditions herein set
forth and is made only to Selected Dealers which are (i) members in good
standing of the National Association of Securities Dealers, Inc. ("NASD") which
agree to comply with all applicable rules of the NASD, including, without
limitation, the NASD's Interpretation With Respect to Free-Riding and
Withholding and Rule 2740 of the NASD's Conduct Rules, or (ii) foreign dealers
not eligible for membership in the NASD which agree (A) not to sell any Shares
within the United States, its territories or possessions or to persons who are
citizens thereof or resident therein and (B) in making other sales to comply
with the above-mentioned NASD Interpretation, Rules 2730, 2740 and 2750 of the
above-mentioned Conduct Rules as if they were NASD members and Rule 2420 of such
Conduct Rules as it applies to non-member brokers or dealers in a foreign
country.
Orders for Shares will be strictly subject to confirmation and we,
acting on behalf of the Company, reserve the right in our absolute 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 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 Shares. No Selected Dealer is authorized to act as agent
for us when soliciting offers to buy the Shares from the public or otherwise. No
Selected Dealer shall engage in any transaction prohibited by Regulation M
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 Shares pursuant
hereto agree to comply with the applicable requirements of the Securities
Exchange Act of 1934 and applicable rules and regulations issued by the Federal
Reserve Board and the OTS. 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 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 to the extent that our
customers desire to pay for Shares with funds held by or to be deposited with
us, in accordance with the interpretation of the Securities and Exchange
Commission of Rule 15c2-4 promulgated under the Securities 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 syndicated community offering
price for the Shares ordered on or before 12:00 noon on the business day
following receipt or execution of an order form by us to the Bank for deposit in
a segregated account or (b) to solicit indications of interest in which event
(i) we will subsequently contact any customers indicating interest to confirm
the interest and give instructions to execute and return an order form or to
receive authorization to execute an order form on their behalf, (ii) we will
mail acknowledgements of receipt of orders to each customer confirming interest
on the business day
2
following such confirmation, (iii) we will debit accounts of such customers on
the fifth business day (the "debit date") following receipt of the confirmation
referred to in (i), and (iv) we will forward completed order forms together with
such funds to the Bank on or before 12:00 noon on the next business day
following the debit date for deposit in a segregated account. We acknowledge
that if the procedure in (b) is adopted, our customer's funds are not required
to be in their accounts until the debit date. We and each Selected Dealer
further acknowledge that, in order to use the foregoing "sweep arrangements," we
comply with the net capital requirements for broker/dealers under Rule
15c3-1(a)(1) of the Securities Exchange Act of 1934.
Unless earlier terminated by us, this Agreement shall terminate 45
full business days after the date hereof, but may be extended by us for an
additional period or periods not exceeding 30 full business days in the
aggregate. We may terminate this Agreement or any provisions hereof at any time
by written or telegraphic notice to you. Of course, our obligations hereunder
are subject to the successful completion of the offering, including the sale of
all of the Shares.
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 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 to 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 Shares have 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 Shares in any state.
Additional copies of the Prospectus and any supplements thereto will
be supplied in reasonable quantities upon request.
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 New York.
3
Please confirm your agreement hereto by signing and returning the
confirmation accompanying this letter at once to us at Sandler X'Xxxxx &
Partners, L.P., 000 Xxxxx Xxxxxx, 0/xx/ Xxxxx, Xxx Xxxx, Xxx Xxxx 00000. The
enclosed duplicate copy will evidence the agreement between us.
Very truly yours,
SANDLER X'XXXXX & PARTNERS, L.P.
By:_____________________________________
CONFIRMED AND ACCEPTED
As of the date first above written:
_____________________________________
By:__________________________________
4
