Exhibit 1.2
8,021,250 Shares
(subject to increase up to 9,224,438 shares
in the event of an oversubscription)
FIRST LINCOLN BANCSHARES INC.
(a Delaware corporation)
Common Stock
(par value $.01 per share)
AGENCY AGREEMENT
, 1998
--------------------
SANDLER X'XXXXX & PARTNERS, L.P.
Two World Trade Center, 000xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
First Lincoln Bancshares Inc., a Delaware corporation (the "Company"), and
First Federal Lincoln 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 8,021,250 shares
(subject to increase up to 9,224,438 shares in the event of an oversubscription)
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 shares of Common Stock in an amount equal to 6% of the shares of
Common Stock sold in the Offerings (as hereinafter defined) to The First Federal
Lincoln 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 tax qualified employee benefit
plans, including the Employee Stock Ownership Plan (the "ESOP") (collectively,
the "Employee Plans"), 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 certain depositors of the
Bank's wholly-owned subsidiary, First Federal Lincoln Bank - Iowa (the "Iowa
Bank"), and certain natural persons residing in the counties in which the Bank's
(including the Iowa 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 following 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 3
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 has established 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 newly issued shares of Common Stock to the
Foundation in an amount equal to 6% of the Securities sold in the Offerings, or
between 355,725 and 481,275 shares of Common Stock (subject to increase in
certain circumstances to 553,466 shares).
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-1 (No. 333-42197), 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.
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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.
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 (which the Company and the Bank
acknowledge appears only in the first two paragraphs of the section
captioned "The Conversion-Marketing and Underwriting Arrangements" of the
Prospectus).
(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-S 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 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 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
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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 ______________, 199__, relating to the
Conversion (the "Proxy Statement"), and the Prospectus. The OTS has, by
letter dated __________, 199__, approved the Conversion Application, 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 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 and supporting schedules 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
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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.
(ix) The direct and indirect subsidiaries of the Bank are the
Iowa Bank, First Federal Lincoln Holding Corporation - Nebraska, FFL
Holding Corporation -Iowa, TMS Corporation of the Americas, and First
Financial Investments & Insurance Corporation (collectively, the
"Subsidiaries"). Except for the Subsidiaries, the Bank does not, directly
or indirectly, own any equity interest in or control any other corporation,
limited liability company, partnership, joint venture, association, trust
or other business organization.
(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 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; said financial statements have
been prepared in conformity with generally accepted accounting principles
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
Delaware 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
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outstanding capital stock of the Company will be as set forth in the
Prospectus under "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 have been or will be issued
and 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; 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 Iowa Bank,
as of the date hereof, is a federally chartered savings bank 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 each of the Bank and the Iowa Bank is 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. The Bank is not required to be
registered as a savings and loan holding company under HOLA.
(xv) The deposit accounts of each of the Bank and the Iowa 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
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with the requirements of the Conversion Regulations. Each of the Bank and
the Iowa 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 share (the "Bank Preferred Stock"),
and the issued and outstanding capital stock of the Bank will be 1,000
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
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. 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) The Foundation has been duly authorized and 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 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; 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 will constitute an offer and sale of such
shares registered pursuant to the Registration Statement.
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(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 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, except as enforcement thereof may be limited by bankruptcy,
insolvency or other laws affecting the enforceability of the rights of
creditors generally and judicial limitations on the right of specific
performance and except as the enforceability of indemnification and
contribution provisions may be limited by applicable securities laws.
(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 of the Bank 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 is 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 mortgaged-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
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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 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 any of
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 or any of
its subsidiaries 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 by-laws 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
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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 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; and there are no
contracts or documents of the Company or the Bank or any of the
Subsidiaries which are required to be filed as exhibits to the Registration
Statement or the Conversion Application which have not been so filed.
(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 required to be registered under the
Investment Company Act of 1940, as amended.
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(xxx) All of the loans represented as assets on the most recent
consolidated financial statements or consolidated selected financial
information 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 563.99), 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) To the knowledge of the Company and the Bank, 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 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.
(xxxii) 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.
(xxxiii) None of the Company, the Bank nor the Subsidiaries nor
any properties owned, operated or held as collateral 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, operated or held as collateral 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.
-11-
(xxxiv) 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.
(xxxv) 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 American Stock Exchange ("AMEX")
effective as of the Closing Time referred to in Section 2 hereof.
(xxxvi) The Company has filed 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 became
effective concurrent with the effectiveness of the Registration Statement.
(b) Any certificate signed by any officer of the Company or the Bank
or the Subsidiaries and delivered to either of the Agent or to counsel for the
Agent shall be deemed a representation and warranty by the Company and the Bank
to the Agent and to the counsel for the Agent as to the matters covered thereby.
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 Subscription and Community Offering and the Syndicated Community Offering.
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 docu ments, 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.
-12-
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 Subscrip tion 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 Xxxxxx
X'Xxxxx and Selected Dealers shall not exceed 7% of the aggregate purchase price
of the Securities sold by such Selected Dealers. Xxxxxx 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.
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 all 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
-13-
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 three-eighths percent (1.375%) of the aggregate Purchase
Price (as defined in the Prospectus) of the Securities sold in the Subscription
and Community Offering, excluding the Foundation Shares and shares purchased by
(i) any employee benefit plan of the Company or the Bank established for the
benefit of their respective directors, officers and employees, and (ii) any
director, officer or employee of the Company or the Bank 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 (other
than Sandler X'Xxxxx) under the Selected Dealers' Agreement in the Syndicated
Community Offering, (i) the compensation payable to Selected Dealers under any
Selected Dealers' Agreement, (ii) any sponsoring dealer's fees, and (iii) a
management fee to Sandler X'Xxxxx of one and three-eighths percent (1.375%).
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 one and three-eighths
percent (1.375%) of the Purchase Price of such Securities.
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; however, the
Company shall reimburse the Agent for all of its reasonable out-of-pocket
expenses incurred prior to termination, including the reasonable fees and
disbursements of counsel for the Agent in accordance with the provisions of
Section 4 hereof.
All fees payable to the Agent hereunder shall be payable in
immediately available funds at Closing Time, or upon the termination of this
Agreement, as the case may be. In recognition of the long lead times involved
in the conversion process, the Bank agrees to make advance payments to the Agent
in the aggregate amount of $50,000, $25,000 of which has been previously paid
and the remaining $25,000 of which shall be payable upon execution hereof, which
shall be credited against any fees or reimbursement of expenses payable
hereunder.
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
-14-
Conversion Regulations or as may hereafter be requested by the Agent. Following
completion of the Subscription and Community Offering, in the event of a
Syndicated Community Offering, the Company and the Bank 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 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.
(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 Holding Company Application, 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
-15-
by the Securities Act, the Securities Act Regulations, the Securities Exchange
Act of 1934, as amended (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 or 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 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 stockholders as soon
as practicable after the end of each such fiscal year an annual report
(including consolidated statements of financial condition and consolidated
-16-
statements of income, stockholders' 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 stockholders 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 stockholders 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 "Use of Proceeds."
(m) 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 obligation under the Exchange Act. The
Company will use its best efforts to effect and maintain the listing of the
Common Stock on AMEX for not less than three years.
(n) 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 National Association of Securities Dealers, Inc.'s
"Interpretation Relating to Free-Riding and Withholding."
(o) 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 for a period of
180 days following the Closing Time.
(p) 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, which consent shall not be unreasonably withheld, take or
-17-
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.
(q) 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 with the FDIC in connection with their approval or non-
objection of, or non-objection to, 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.
(r) During the period ending on the first anniversary of the Closing
Time, the Bank will, and will cause the Iowa Bank to, comply with all applicable
laws and regulations necessary for each of the Bank and the Iowa Bank to
continue to be a "qualified thrift lender" within the meaning of 12 U.S.C.
Section 1467a(m).
(s) 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.
(t) 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 its subsidiaries which have
been read by KPMG Peat Marwick LLP, as stated in their letters to be furnished
pursuant to subsections (e) and (f) of Section 5 hereof.
(u) The Company will promptly register as a savings and loan holding
company under HOLA following the Closing Time.
(v) Prior to the Closing Date, 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.
(w) The Bank will not amend the Plan in any manner that would affect
the sale of the Securities or the terms of this Agreement.
(x) 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.
-18-
(y) 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 printing and
filing of the Registration Statement 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 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 AMEX. 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 National Association of Securities Dealers, Inc., and (ii) all
reasonable out of pocket expenses incurred by the Agent relating to the
Offerings, including, without limitation, advertising, promotional, syndication
and travel expenses and fees and expenses of the Agent's counsel. 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
-19-
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 Xxxxxxx,
Xxxxxx & Xxxxxxxx, 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 in good standing under the laws of the
State of Delaware.
(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.
(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.
(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 as set forth in the
Prospectus under "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.
(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 certificate of
incorporation or, to the best of their knowledge and information
after due inquiry, otherwise.
-20-
(vii) The Bank has been at all times since the date hereof
and prior to the Closing Time duly organized, and is 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. The Bank
is not required to register as a savings and loan holding company
under HOLA.
(viii) The Bank and the Iowa Bank are each members in good
standing of the Federal Home Loan Bank of Topeka and the deposit
accounts of the Bank and the Iowa Bank are each insured by the
FDIC up to the applicable limits.
(ix) The Iowa Bank is validly existing and in good standing
under the laws of the United States of America as a federally
chartered savings bank of stock form. Each other Subsidiary of
the Bank has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the jurisdiction
of its incorporation, and each of the Iowa Bank and the other
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 (including the Iowa Bank) 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
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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
constitute an offer and sale of such shares 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 duly 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
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 and information after due
inquiry, truthful, accurate and complete; and the Company is duly
authorized to become a 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 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
charter or by-laws of the Company,
-22-
the Bank or any of the Subsidiaries; and, to the best of such
counsel's knowledge after due inquiry, 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 of such counsel's knowledge 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.
(xvii) At the time the Registration Statement became
effective, the Registration Statement (other than the financial
statements 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.
-23-
(xix) To the best of such counsel's knowledge after due
inquiry, 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 "Dividend
Policy," "Federal and State Taxation," "Regulation," "The
Conversion," "Restrictions on Acquisitions of the Company and the
Bank," "Description of Capital Stock of the Company" and
"Description of Capital Stock of the Bank," 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 after due
inquiry, 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 has been duly authorized by the Board of
Directors of the Company and the Board of Directors of the Bank
and, to the best of such counsel's knowledge after due inquiry,
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; to the
best of such counsel's knowledge after due inquiry, the Company
and the Bank have conducted the Conversion 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, to the best of such counsel's
knowledge after due inquiry, no order has been issued by the OTS
to suspend the Offerings and no action for such purpose has been
instituted or threatened by the OTS; and, to the best of such
counsel's
-24-
knowledge after due inquiry, no person has sought to obtain
review of the final action of the OTS in approving the Plan 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 charter (and the Bank will
not be in violation of its charter in stock form upon
consummation of the Conversion) or, to the best of such counsel's
knowledge after due inquiry, 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 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, Xxxxxxx, Xxxxxx & Xxxxxxxx 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 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
-25-
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, Xxxxxxx, Xxxxxx & Xxxxxxxx
and Xxxxx & Lardner 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 Delaware law upon the
opinion of ______________, which opinions 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 competed 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 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 cause of business consistent with past practice,
(iii) neither the Company, the Bank, nor the Iowa 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 or the Subsidiaries, (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 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 Peat Marwick 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
-26-
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
and supporting schedules 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 Peat Marwick 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 and supporting schedules 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 _____________, 199__ balance
sheet included in the Registration Statement or, (D) during the period from
______________, 199__ 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 Peat
Marwick LLP a letter, dated as of Closing Time, to the effect that they reaffirm
the statements made in the letter furnished pursuant to subsection (d) of this
Section, except that the specified date referred to shall be a date not more
than five days prior to Closing Time.
(g) At Closing Time, the Securities shall have been approved for
listing on AMEX upon notice of issuance.
-27-
(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 require for the purpose of enabling
them to pass upon the issuance and sale of the Securities 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 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 either AMEX 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 either 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, without limitation, as a result of any breach of any
representation, warranty or covenant made by the Company or the Bank in
this Agreement) 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 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;
-28-
(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 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 written
information relating to the Agent furnished to the Company or the Bank by the
Agent expressly for use in the Prospectus (or any amendment or supplement
thereto), which information the Company and the Bank acknowledge is included
only in the first two paragraphs of the section captioned "The Conversion-
Marketing and Underwriting Arrangements" of the Prospectus (the "Agent
Information").
(b) The Agent agrees to indemnify and hold harmless the Company, the
Bank, their directors, each of their officers who signed the Registration
Statement, and each person, if any, who controls the Company 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,
except to the extent that any loss, claim, damage or liability is found in a
final judgment by a court of competent jurisdiction to have resulted primarily
from the Agent's bad faith, willful misconduct or gross negligence.
(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.
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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 either AMEX 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 either 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 price 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 June 30, 1999.
(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 Section 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 Two World Trade Center, 104th Floor, New York,
New York 10048, attention of Xxxxxxxxx X. Xxxxxx, Principal; notices to the
Company and the Bank shall be directed to either of them at 00xx & "X" Xxxxxxx,
Xxxxxxx, Xxxxxxxx 00000, attention of ______________________,
__________________.
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,
-31-
firm or corporation, other than the Agent, the Company and the Bank and their
respective successors and the controlling persons 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 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
October 7, 1997, by and between the Agent and the Company 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. SEVERABILITY. 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.
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,
FIRST LINCOLN BANCSHARES INC.
By: ___________________________________
Title:
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FIRST FEDERAL LINCOLN BANK
By: ____________________________________
Title:
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: _________________________________
[Name]
Vice President
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Exhibit A
---------
FIRST LINCOLN BANCSHARES INC.
9,224,438 Shares
(Maximum Offered in Conversion)
Common Stock
(Par Value $0.01 Per Share)
SELECTED DEALER'S AGREEMENT
__________, 1998
We have agreed to assist First Lincoln Bancshares Inc. (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 First Federal Lincoln 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 9,224,438 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
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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 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.
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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., Xxx Xxxxx Xxxxx Xxxxxx, 000xx 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:__________________________________
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