Exhibit 1.2.
3,565,000 Shares
(subject to increase up to 4,099,750 Shares
in the event of an oversubscription)
FIRST FEDERAL BANKSHARES, INC.
(a Delaware corporation)
Common Stock
(par value $.01 per share)
AGENCY AGREEMENT
________________, 0000
XXXXXXX X'XXXXX & PARTNERS, L.P.
Two World Trade Center, 104th Floor
New York, New York 10048
INVESTMENT BANK SERVICES, INC.
The 1000 Building
0000 Xxxxxxxx'x Xxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
First Federal Bankshares, Inc., a Delaware corporation (the "Company"),
First Federal Bankshares, M.H.C., a federally chartered mutual holding company
(the "MHC") and First Federal Savings Bank of Siouxland, a federally chartered
stock savings bank (the "Bank"), hereby confirm their agreement with Sandler
X'Xxxxx & Partners, L.P. ("Sandler X'Xxxxx") and Investment Bank Services, Inc.
("IBS") (together the "Agents" or individually an "Agent"), with respect to the
offer and sale by the Company of 3,565,000 shares (subject to increase up to
4,099,750 shares in the event of an oversubscription) of the Company's common
stock, par value $.01 per share (the "Common Stock"), and in connection with the
conversion of the MHC (additional shares will be issued in exchange for the
Bank's stock currently held by stockholders other than the MHC). The shares of
Common Stock to be sold by the Company pursuant to the MHC's and Bank's Plan of
Conversion and Reorganization (the "Plan") are hereinafter called the
"Securities."
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The Securities are being offered for sale in accordance with the Plan
pursuant to which the MHC will be converted from a mutual holding company to a
stock holding company and, as a part of the Conversion (as hereinafter defined),
the Bank will become a wholly owned subsidiary of the Company. Specifically, (i)
the Bank will organize the Company as a direct subsidiary of the Bank; (ii) the
Company will organize an interim savings bank as a wholly owned federal stock
savings bank subsidiary of the Company (the "Interim Savings Bank"); (iii) the
MHC will convert into an interim federal stock savings association and
simultaneously merge with and into the Bank and the Bank's common stock held by
the MHC will be canceled; (iv) the Interim Savings Bank will merge with and into
the Bank, the Company's stock held by the Bank will be canceled, the Interim
Savings Bank stock held by the Company will become Bank common stock and the
Bank's minority stockholders will receive common stock of the Company; and (v)
the Company will offer common stock in a subscription offering (the
"Subscription Offering"), as described below. 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 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 minority
stockholders of the Bank and then to depositors of Mid-Iowa FSB, the federally
chartered savings bank that will be acquired by the Company immediately
following the Conversion (as hereinafter defined), and then to certain natural
persons residing in the Community, as defined in the Plan, in a direct community
offering (the "Community Offering" and, together with the Subscription Offering,
as each may be extended or reopened from time to time, the "Subscription and
Community Offering") to be commenced concurrently with, during or immediately
following the Subscription Offering. It is currently anticipated by the Bank,
the MHC 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." The
conversion of the MHC from mutual to stock form, the merger of the MHC into the
Bank, the acquisition of the Bank's common stock 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.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-1 (No. 333-69245), including a
related prospectus, for the registration of the Securities 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
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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 promulgated by 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 Agents for such use.
Concurrently with the execution of this Agency Agreement (the
"Agreement"), the Company is delivering to the Agents copies of the Prospectus
of the Company to be used in the Subscription and Community Offering. Such
prospectus contains information with respect to the Bank, the MHC, the Company
and the Common Stock.
SECTION 1. REPRESENTATIONS AND WARRANTIES.
(a) The Company, the MHC and the Bank jointly and severally represent
and warrant to the Agents 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,
the MHC 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 with
respect to either of the Agents to statements in, or omissions from, the
Registration Statement or Prospectus made in reliance upon, and in conformity
with, information with respect to such agent furnished to the Company in writing
by such agent expressly for use in the Registration Statement or Prospectus (the
"Agent Information," which the Company and the Bank acknowledge appears only in
the section captioned "Market for the Common Stock" and the first two paragraphs
of the section captioned "The Conversion-Plan of Distribution and Selling
Commissions" of the Prospectus).
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(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)3 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,
the MHC 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 and mutual
holding companies to stock form (the "Conversion Regulations"), the MHC has
filed with the OTS an application for conversion, and has filed such amendments
thereto and supplementary materials as may have been required to the date hereof
(such application, as amended to date, if applicable, and as from time to time
amended or supplemented hereafter, is hereinafter referred to as the "Conversion
Application"), including copies of the MHC's Proxy Statement, dated
______________, 1999, 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,
the MHC 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 Commission 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.
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(vi) At the Closing Time referred to in Section 2, the Company
and the Bank will have completed 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 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) RP Financial, Inc., which prepared the valuation of the
Company and the Bank as part of the Conversion, has advised the Company, the MHC
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 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, the MHC and the Bank in writing
that they are independent public accountants within the meaning of the Code of
Ethics of the American Institute of Certified Public Accountants (the "AICPA"),
and such accountants are, with respect to the Company, the MHC, 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 only direct subsidiaries of the MHC are the Bank and
Equity Services, Inc. Equity Services, Inc. has no subsidiaries. The only direct
subsidiary of the Bank is First Financial Corporation of Sioux City ("FFC"). The
only direct subsidiaries of FFC are Sioux Financial Co. and United Escrow Inc.
United Escrow Inc. has no subsidiaries. The only subsidiaries of Sioux Financial
Co. are Sioux Abstract Company and Xxxxxx Abstract Company, both of which have
no subsidiaries. All of the direct and indirect subsidiaries of the MHC except
the Bank are referred to collectively as the "Subsidiaries."
(x) The consolidated financial statements of the Bank and the
related notes thereto included in the Registration Statement and the Prospectus
present fairly the financial position of the Bank and its subsidiaries at the
dates indicated and the results of operations, total stockholders' equity and
cash flows for the periods specified, and comply as to form in all material
respects with the applicable accounting requirements of the Securities Act
Regulations and the Conversion Regulations; except as otherwise stated in the
Registration Statement, said financial statements have been prepared in
conformity with 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 or business affairs of the Company,
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the MHC, the Bank or any of the Subsidiaries, considered as one enterprise,
whether or not arising in the ordinary course of business, and (B) except for
transactions specifically referred to or contemplated in the Prospectus, there
have been no transactions entered into by the Company, the MHC, the Bank or any
of the Subsidiaries, other than those in the ordinary course of business, which
are material with respect to the Company, the MHC, the Bank and the
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 full 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 Iowa and 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 or business affairs of the Company, the Bank and the Subsidiaries,
considered as one enterprise.
(xiii) The MHC has been duly chartered and is validly existing
as a mutual holding company under the laws of the United States 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; the MHC is qualified to do business in any
jurisdiction in which the failure to so qualify would have a material adverse
effect on the financial condition, results of operations or business of the
Company, the MHC, the Bank and the Subsidiaries, considered as one enterprise;
upon consummation of the Conversion, the MHC will merge with and into the Bank,
with the Bank being the surviving institution.
(xiv) Upon consummation of the Conversion, the authorized,
issued and outstanding capital stock of the Company will be as set forth in the
Prospectus in the section captioned "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 non-assessable; 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 is not subject to preemptive or other similar rights.
(xv) The Bank, as of the date hereof, is a federally chartered
savings bank in stock form 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 MHC, the Bank and the Subsidiaries,
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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
or business affairs of the Company, the MHC, the Bank or the Subsidiaries,
considered as one enterprise; all such licenses, permits and other governmental
authorizations are in full force and effect and the Company, the MHC, the Bank
and the Subsidiaries are in all material respects in compliance therewith;
neither the Company, the MHC, 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 or business affairs of the Company, the MHC, the Bank and the
Subsidiaries, considered as one enterprise; and the 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 or business
affairs of the Company, the MHC, the Bank and the Subsidiaries, considered as
one enterprise.
(xvi) The deposit accounts of the Bank are insured by the FDIC
up to the applicable limits and upon consummation of the Conversion, the
liquidation account for the benefit of eligible account holders will be duly
established in accordance with the requirements of the Conversion Regulations.
The Bank is a "qualified thrift lender" within the meaning of 12 U.S.C. Section
1467a(m).
(xvii) Upon consummation of the Conversion, the authorized
capital stock of the Bank will be 20,000,000 shares of common stock, par value
$1.00 per share (the "Bank Common Stock") and 10,000,000 shares of preferred
stock (the "Bank Preferred Stock"), and the issued and outstanding capital stock
of the Bank will be 1,000 shares of Bank Common Stock; _____ shares of Bank
Common Stock and no shares of Bank Preferred Stock are issued and outstanding as
of the date hereof. No additional shares of Bank Common Stock and no shares of
Bank Preferred Stock will be issued prior to the Closing Time referred to in
Section 2 except for shares of Bank Common Stock which may be issued pursuant to
the exercise of outstanding stock options; the issued and outstanding shares of
Bank Common Stock have been duly authorized and validly issued, are fully paid
and nonassessable, and have been issued in compliance with all federal and state
securities laws and such shares owned of record by the MHC are owned
beneficially free and clear of any security interest, mortgage, pledge, lien,
encumbrance, claims or equity. 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
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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; and the
issuance of the Bank Common Stock is not subject to preemptive or similar
rights.
(xviii) Each of the Subsidiaries 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 or business affairs of the Company, the MHC, the Bank and the
Subsidiaries, considered as one enterprise; the activities of each of the
Subsidiaries are permitted to subsidiaries of a federally chartered savings bank
or mutual holding company by the rules, regulations, resolutions and practices
of the OTS; all of the issued and outstanding capital stock of each of the
Subsidiaries has been duly authorized and validly issued, is fully paid and
nonassessable and is owned by the Bank or the MHC, directly, free and clear of
any security interest, mortgage, pledge, lien, encumbrance or legal or equitable
claim.
(xix) The Company, the MHC 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, the MHC and the Bank,
enforceable in accordance with its terms, except as 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 MHC, the Bank or any of the Subsidiaries 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 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 MHC, the Bank and
the Subsidiaries, considered as one enterprise, 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.
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(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 that has not been obtained and
a copy of which has been delivered to the Agents, except as may be required
under the securities laws of various jurisdictions.
(xxii) None of the Company, the MHC, the Bank nor any of the
Subsidiaries is in violation of its certificate of incorporation, organization
certificate, articles of incorporation or charter, as the case may be, or bylaws
and none of the Company, the MHC, 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 MHC,
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 MHC, 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 or business of the Company, the MHC,
the Bank and the Subsidiaries, considered as one enterprise; and there are no
contracts or documents of the Company, the MHC, 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 execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated herein have been
duly authorized by all necessary corporate action 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 MHC, 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 MHC, 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 MHC, 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 or business affairs of the Company, the MHC, the Bank or the
Subsidiaries, considered as one enterprise; nor will such action result in any
violation of the provisions of the certificate of incorporation, organization
certificate, articles of incorporation or charter or bylaws of the Company, the
MHC, 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
MHC, the Bank or any of the Subsidiaries exists or, to the knowledge of the
Company, the MHC or the Bank, is imminent or threatened; and the Company, the
MHC 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 or business affairs of the Company, the MHC, the Bank and
the Subsidiaries, considered as one enterprise.
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(xxv) Each of the Company, the MHC, the Bank and the
Subsidiaries has good and marketable title to all properties and assets for
which ownership is material to the business of the Company, the MHC, the Bank or
the Subsidiaries and to those properties and assets described in the Prospectus
as owned by them, free and clear of all liens, charges, encumbrances or
restrictions, except such as are described in the Prospectus or are not material
in relation to the business of the Company, the MHC, the Bank or the
Subsidiaries, considered as one enterprise; and all of the leases and subleases
material to the business of the Company, the MHC, the Bank or the Subsidiaries
under which the Company, the MHC, the Bank or the Subsidiaries hold properties,
including those described in the Prospectus, are valid and binding agreements of
the Company, the MHC, the Bank and the Subsidiaries, enforceable in accordance
with their terms.
(xxvi) None of the Company, the MHC, the Bank nor any of the
Subsidiaries is in violation of any directive from the OTS or the FDIC to make
any material change in the method of conducting their respective businesses; the
Company, the MHC, the Bank and the Subsidiaries have conducted and are
conducting their businesses 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 OTS or 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, the MHC or the Bank, threatened, against or
affecting the Company, the MHC, 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 or business affairs of the Company, the MHC,
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; all pending
legal or governmental proceedings to which the Company, the MHC, the Bank or any
of the Subsidiaries 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, the MHC, 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 an opinion of its counsel,
Luse, Lehman, Xxxxxx, Xxxxxxxx & Xxxxxx, a Professional Corporation, with
respect to the legality of the Securities to be issued and the federal income
tax consequences of the Conversion, and an opinion from KPMG Peat Marwick LLP
with respect to the state and local 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,
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accurate and complete in all material respects; and none of the Bank, the MHC
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.
(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 or business of the Company, the MHC, the Bank and the Subsidiaries,
considered as one enterprise.
(xxxi) To the knowledge of the Company, the MHC and the Bank,
with the exception of the intended loan to the Bank's ESOP by the Company to
enable the ESOP to purchase shares of Common Stock in an amount up to 7% of the
Common Stock issued in the Conversion, none of the Company, the MHC, the Bank or
any employee of the Bank has made any payment of funds of the Company, the MHC
or the Bank 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 MHC, 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 promulgated
thereunder.
(xxxiii) None of the Company, the MHC, the Bank nor any of the
Subsidiaries nor any properties owned or operated by the Company, the MHC, the
Bank or any of 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 or business affairs of the
Company, the MHC, 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, the MHC or the Bank, threatened, relating to
the liability of any property owned or operated by the Company, the MHC, 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
- 12 -
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.
(xxxiv) The Company, the MHC, the Bank and the Subsidiaries
have filed all federal income and state and local 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.
(xxxv) The Company has received approval, subject to
regulatory approval to consummate the Offerings and issuance, to have the
Securities quoted on the Nasdaq National Market of the Nasdaq Stock Market
("Nasdaq National Market") 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(g) of the Securities Exchange Act of 1934, as
amended, (the "Exchange Act") and such registration statement was declared
effective concurrent with the effectiveness of the Registration Statement.
(b) Any certificate signed by any officer of the Company, the MHC or
the Bank and delivered to either one or both of the Agents or counsel for the
Agents shall be deemed a representation and warranty by the Company, the MHC or
the Bank to each Agent as to the matters covered thereby.
SECTION 2. APPOINTMENT OF SANDLER X'XXXXX AND IBS; 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 and IBS as its Agents to consult with and advise the
Company, and to assist the Company with the solicitation of subscriptions and
purchase orders for Securities, in connection with the Company's sale of Common
Stock in the Offerings. On the basis of the representations and warranties
herein contained, and subject to the terms and conditions herein set forth,
Sandler X'Xxxxx and IBS accept such appointment and agree to use their 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 Agents 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 and IBS pursuant to this appointment
include the following: (i) consulting as to the securities marketing
implications
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of any aspect of the Plan of Conversion or related corporate documents; (ii)
reviewing with the Board of Directors the independent appraiser's appraisal of
the Common Stock; (iii) reviewing all offering documents, including the
Prospectus, stock order form and related offering materials (it being understood
that preparation and filing of such documents is the sole responsibility of the
Company, the MHC, the Bank and their counsel); (iv) assisting in the design and
implementation of a marketing strategy for the Offerings; (v) assisting the
Company, the MHC and the Bank in obtaining all requisite regulatory approvals;
(vi) assisting Bank management in preparing for meetings with potential
investors and broker-dealers; and (vii) providing such other general advice and
assistance as may be requested to promote the successful completion of the
Offerings.
The appointment of the Agents hereunder shall terminate upon the
earlier to occur of (a) forty-five (45) days after the last day of the
Subscription and Community Offering, unless the Company and the Agents agree in
writing to extend such period and the OTS agrees to extend the period of time in
which the Shares 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 the
Subscription and Community Offering, at the request of the Company and the Bank,
Sandler X'Xxxxx and IBS will seek to form a syndicate of registered brokers or
dealer's ("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 dealer's agreement (the "Selected Dealer's Agreement"),
substantially in the form set forth in Exhibit A to this Agreement. Sandler
X'Xxxxx and IBS will endeavor to limit the aggregate fees to be paid by the
Company and the Bank under any such Selected Dealer's Agreement to an amount
competitive with gross underwriting discounts charged at such time for
underwritings of comparable amounts of stock sold at a comparable price per
share in a similar market environment; PROVIDED, HOWEVER, that the aggregate
fees payable to Sandler X'Xxxxx and IBS and Selected Dealers shall not exceed 7%
of the aggregate Purchase Price of the Securities sold by such Selected Dealers.
Sandler X'Xxxxx and IBS 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 or IBS 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 in 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, the MHC and the
Bank as set forth in Sections 4, 6(a) and 7 hereof and the obligations of the
Agents 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
- 14 -
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 in 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 Luse, Lehman, Xxxxxx, Xxxxxxxx & Xxxxxx, a Professional Corporation,
at a 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 Agents by
telephone, confirmed in writing, when funds shall have been received for all the
Securities. Certificates for Securities shall be delivered directly to the
purchasers thereof in accordance with their directions. Notwithstanding the
foregoing, certificates for Securities purchased through Selected Dealers shall
be made available to the Agents for inspection at least 48 hours prior to the
Closing Time at such office as the Agents 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 the reimbursement of the expenses specified in Section 4
hereof, the Agents will receive the following compensation for their services
hereunder:
(a) One and one-eighth percent (1.125%) of the aggregate actual
purchase price of the Securities sold in the Subscription and Community
Offering, excluding in each case, 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 a National Association of
Securities Dealers, Inc. (the "NASD") member firm (other than Sandler X'Xxxxx or
IBS) under the Selected Dealer's Agreement in the Syndicated Community Offering,
(i) the compensation payable to Selected Dealers under any Selected Dealer's
Agreement, (ii) any sponsoring dealer's fees; and (iii) a management fee to
Sandler X'Xxxxx of one and one-eighth percent (1.125%). Any fees payable to
Sandler X'Xxxxx and IBS for Securities sold by Sandler X'Xxxxx or IBS under any
such agreement shall be limited to an aggregate of one and one-eights percent
(1.125%) of the actual purchase price of such Securities.
If this Agreement is terminated by the Agents 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 and IBS;
however, the Company shall reimburse the Agents for all of
- 15 -
their reasonable out-of-pocket expenses incurred prior to termination, including
the reasonable fees and disbursements of counsel for the Agents in accordance
with the provisions of Section 4 hereof.
All fees payable to the Agents hereunder shall be payable to Sandler
X'Xxxxx, as representative of the Agents, 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 Agents 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, the MHC and the Bank covenant with the Agents as follows:
(a) The Company, the MHC and the Bank will prepare and file such
amendments or supplements to the Registration Statement, the Prospectus, the
Conversion Application and the Proxy Statement as may hereafter be required by
the Securities Act Regulations or the Conversion Regulations or as may hereafter
be requested by the Agents. Following completion of the Subscription and
Community Offering, and 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, or mail
for filing to, the Commission a prospectus or prospectus supplement containing
information relating to the results of the Subscription and Community Offering
and pricing information pursuant to Rule 424 of the Securities Act Regulations,
in either case in a form acceptable to the Agents. The Company, the MHC and the
Bank will notify the Agents 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, the MHC 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.
- 16 -
(b) The Company, the MHC and the Bank will give the Agents notice of
their intention to file or prepare any amendment to the Conversion Application
or 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 Agents 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 Agents or counsel for the
Agents may object.
(c) The Company, the MHC and the Bank will deliver to the Agents as
many signed copies and as many conformed copies of the Conversion Application
and the Registration Statement as originally filed and of each amendment thereto
(including exhibits filed therewith or incorporated by reference therein) as the
Agents may reasonably request, and from time to time such number of copies of
the Prospectus as the Agents may reasonably request.
(d) During the period when the Prospectus is required to be delivered,
the Company, the MHC and the Bank will comply, at their own expense, with all
requirements imposed upon them by the OTS, by the applicable Conversion
Regulations, as from time to time in force, and by the Securities Act, the
Securities Act Regulations, the Exchange Act, and the rules and regulations of
the Commission promulgated thereunder, including, without limitation, Regulation
M under the Exchange Act, so far as necessary to permit the continuance of sales
or dealing in shares of Common Stock during such period in accordance with the
provisions hereof and the Prospectus.
(e) If any event or circumstance shall occur as a result of which it is
necessary, in the opinion of counsel for the Agents, 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,
the MHC and the Bank will forthwith amend or supplement the Prospectus (in form
and substance satisfactory to counsel for the Agents) 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 Agents a reasonable number of copies of such amendment or supplement. For
the purpose of this subsection, the Company, the MHC and the Bank will each
furnish such information with respect to itself as the Agents may from time to
time reasonably request.
(f) The Company, the MHC and the Bank will take all necessary action,
in cooperation with the Agents, 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 Agents
and the Company have agreed; PROVIDED, HOWEVER, that the Company, the MHC and
the Bank shall not be obligated to file any general consent to service of
process or to qualify as
- 17 -
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 IBS 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 or make publicly available 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 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 their 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 Agents (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 non-confidential information concerning the Company as the
Agents may reasonably request.
(k) The Company and the Bank will conduct the Conversion 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.
- 18 -
(l) The Company and the Bank will use the net proceeds received by it
from the sale of the Securities in the manner specified in the Prospectus under
"Use of Proceeds."
(m) The Company will file with the Commission such reports on Form SR
as may be required pursuant to Rule 463 of the Securities Act Regulations, if
such report or substantially similar report is required by the Commission.
(n) The Company will maintain the effectiveness of the Exchange Act
Registration Statement for not less than three years. The Company will file with
the Nasdaq Stock Market all documents and notices required by the Nasdaq Stock
Market of companies that have issued securities that are traded in the
over-the-counter market and quotations for which are reported by the Nasdaq
National Market.
(o) The Company and the Bank will take such actions and furnish such
information as are reasonably requested by the Agents in order for the Agents to
ensure compliance with the NASD's "Interpretation Relating to Free-Riding and
Withholding."
(p) Other than in connection with any employee benefit plan or
arrangement described in the Prospectus, the Company will not, without the prior
written consent of the Agents, 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.
(q) During the period beginning on the date hereof and ending on the
later of the third anniversary of the Closing Time or the date on which the
Agents receive full payment in satisfaction of any claim for indemnification or
contribution to which they may be entitled pursuant to Sections 6 or 7,
respectively, neither the Company nor the Bank shall, without the prior written
consent of the Agents, which consent shall not be unreasonably withheld, take or
permit to be taken any action that could result in the Bank Common Stock
becoming subject to any security interest, mortgage, pledge, lien or
encumbrance; PROVIDED, HOWEVER, that this covenant shall be null and void if the
Board of Governors of the Federal Reserve System, by regulation, policy
statement or interpretive release, or by written order or written advice
addressed to the Bank or one of the Agents specifically addressing the
provisions of Section 6(a) hereof, permits indemnification of the Agents by the
Bank as contemplated by such provisions.
(r) The Company and the Bank will comply with the conditions imposed
by, or agreed to, with the OTS in connection with its approval of the Holding
Company Application and in connection with its approval of the Conversion
Application.
(s) During the period ending on the first anniversary of the Closing
Time, the Bank will comply with all applicable laws and regulations necessary
for the Bank to continue to be a "qualified thrift lender" within the meaning of
12 U.S.C. Section 1467a(m).
- 19 -
(t) The Company shall not deliver the Securities until the Company and
the Bank have satisfied each condition set forth in Section 5 hereof, unless
such condition is waived by the Agents.
(u) The Company or the Bank will furnish to Sandler X'Xxxxx and IBS as
early as practicable prior to the Closing Date, but no later than two (2) full
business days prior thereto, a copy of the latest available unaudited interim
consolidated financial statements of the Bank and the Subsidiaries which have
been read by KPMG Peat Marwick LLP, as stated in their letters to be furnished
pursuant to subsections (e) and (f) of Section 5 hereof.
SECTION 4. PAYMENT OF EXPENSES.
The Company, the MHC 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 counsel in connection therewith and in connection with the
preparation of the Blue Sky Survey, (vi) the printing and delivery to the Agents
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
Agents, (vii) the printing and delivery to the Agents of copies of a Blue Sky
Survey, and (viii) the fees and expenses incurred in connection with the listing
of the Securities on the Nasdaq National Market. In the event the Agents incur
any such fees and expenses on behalf of the Bank, MHC or the Company, the Bank
will reimburse the Agents for such fees and expenses whether or not the
Conversion is consummated; PROVIDED, HOWEVER, that the Agents shall not incur
any substantial expenses on behalf of the Bank, the MHC or the Company pursuant
to this Section without the prior approval of the Bank.
The Company, the MHC and the Bank jointly and severally agree to pay
certain expenses incident to the performance of the Agents' obligations under
this Agreement, regardless of whether the Conversion is consummated, including
(i) the filing fees paid or incurred by the Agents in connection with all
filings with the NASD and (ii) all reasonable out-of-pocket expenses incurred by
the Agents relating to the Offerings, including, without limitation,
advertising, promotional, syndication and travel expenses and fees and expenses
of the Agents' counsel up to the aggregate maximum amount of $75,000. All fees
and expenses to which the Agents are 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 Agents.
SECTION 5. CONDITIONS OF AGENT'S OBLIGATIONS.
- 20 -
The Company, the Bank and the Agents agree that the issuance and the
sale of Securities and all obligations of the Agents hereunder are subject to
the accuracy of the representations and warranties of the Company and the Bank
herein contained as of the date hereof and the Closing Time, to the accuracy of
the statements of officers and directors of the Company and the Bank made
pursuant to the provisions hereof, to the performance by the Company and the
Bank of their obligations hereunder, and to the following further conditions:
(a) No stop order suspending the effectiveness of the Registration
Statement shall have been issued under the Securities Act or proceedings
therefor initiated or threatened by the Commission, no order suspending the
Offerings or authorization for final use of the Prospectus shall have been
issued or proceedings therefor initiated or threatened by the OTS and no order
suspending the sale of the Securities in any jurisdiction shall have been
issued.
(b) At Closing Time, the Agents shall have received:
(1) The favorable opinion, dated as of the Closing Time, of
Luse, Lehman, Xxxxxx, Xxxxxxxx & Xxxxxx, a Professional Corporation, counsel for
the Company, the MHC and the Bank, in form and substance satisfactory to counsel
for the Agents, 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
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 Iowa 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 or business
affairs of the Company, the Bank and the
Subsidiaries, considered as one enterprise.
(iv) Upon consummation of the Conversion, the
authorized, issued and outstanding capital
stock of the Company will be within the
range as set forth in the Prospectus under
the section captioned "Capitalization" and,
no shares of Common Stock have been or will
be issued and outstanding prior to the
Closing Time.
- 21 -
(v) The Securities 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, will be duly and validly issued and
fully paid and non-assessable.
(vi) The issuance of the Securities is not
subject to preemptive or other similar
rights arising by operation of law or, to
the best of their knowledge and information,
otherwise.
(vii) The MHC is validly existing and is in good
standing under the laws of the United States
as a mutual holding company, with full
corporate power to own, lease and operate
its properties and to conduct its business
as described in the Registration Statement
and Prospectus and is duly qualified as a
foreign corporation in each jurisdiction in
which such qualification is required, except
where the failure to so qualify would not
have a material adverse effect upon the
financial condition, results of operations
or business affairs of the MHC.
(viii) 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 stock form, 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
such qualification is required except where
the failure to so qualify would not have a
material adverse effect upon the financial
condition, results of operations or business
affairs of the Bank.
(ix) The Bank is a member in good standing of the
Federal Home Loan Bank of Des Moines and the
deposit accounts of the Bank are insured by
the FDIC up to the applicable limits.
(x) Each of the Subsidiaries 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 as a foreign corporation to
transact business and is in good standing in
each jurisdiction in which the failure to so
- 22 -
qualify would have a material adverse effect
upon the financial condition, results of
operations or business of the Company, the
MHC, the Bank and the Subsidiaries,
considered as one enterprise; the activities
of each of the Subsidiaries 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 of the Subsidiaries has been duly
authorized and validly issued, is fully paid
and non-assessable and is owned by the Bank
or the MHC, directly or through
subsidiaries, free and clear of any security
interest, mortgage, pledge, lien,
encumbrance, claim or equity.
(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
such counsel's knowledge, threatened
respecting the Holding Company Application
or the Conversion Application or the
acquisition by the Company of all of the
Bank's issued and outstanding capital stock;
the Holding Company Application and the
Conversion Application comply as to form in
all material respects with the applicable
requirements of the OTS, and to the
knowledge of such counsel, include all
documents required to be filed as exhibits
thereto, and are to such counsel's
knowledge, truthful, accurate and complete
as to form in all material respects,
excluding the Prospectus filed as part of
the Holding Company Application or the
Conversion Application, and any related
marketing materials as to which no opinion
need be given; 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, (A) have been duly and
validly authorized by all necessary action
on the part of each of the
- 23 -
Company, the MHC and the Bank, and this
Agreement constitutes the legal, valid and
binding agreement of each of the Company,
the MHC 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); (B) will not result in
any violation of the provisions of the
certificate of incorporation, organization
certificate, articles of incorporation or
charter, as the case may be, or by-laws of
the Company, the MHC, the Bank or any of the
Subsidiaries; and, (C) to such counsel's
knowledge 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 or business affairs of the
Company, the MHC, the Bank and the
Subsidiaries, considered as one enterprise,
upon any property or assets of the Company,
the MHC, 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
MHC, 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 MHC, the Bank or any of 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 such counsel's knowledge, 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 such counsel's
knowledge, 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
- 24 -
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 appraisal, financial
statements, and schedules and other
financial and statistical data included
therein, as to which no opinion need be
rendered) complied as to form in all
material respects with the requirements of
the Securities Act and the Securities Act
Regulations and the Conversion Regulations.
(xviii) The Common Stock conforms to the description
thereof contained in the Prospectus, and the
form of certificate used to evidence the
Common Stock is in due and proper form and
complies with all applicable statutory
requirements.
(xix) There are no legal or governmental
proceedings pending or to such counsel's
knowledge, threatened against or affecting
the Company, the MHC, the Bank or any of 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 MHC, 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 the
sections captioned "Risk Factors -
Anti-Takeover Provisions in our Governing
Instruments and Voting Control of Management
May Discourage Takeover Attempts," "Dividend
Policy," "Business of First Federal - Legal
Proceedings", "Taxation," "Regulation," "The
Conversion - Effects of Conversion on
Depositors, Borrowers and Members,"
"-Liquidation Rights" and "- Tax Aspects,"
"Restrictions on Acquisitions of First
Federal Bankshares and First Federal,"
"Description of Capital Stock of First
Federal Bankshares" and "Description of
Capital Stock of First Federal," to the
extent that it constitutes matters of law,
summaries of legal matters, documents or
proceedings, or legal conclusions, has been
reviewed by such counsel and is complete and
accurate in all material respects and to the
extent it constitutes summaries of written
legal opinions rendered by a person or
entity other than such counsel
- 25 -
has been reviewed by such counsel and is a
complete and accurate summary of such
opinions in all material respects.
(xxi) To such counsel's knowledge, there are no
contracts, indentures, mortgages, loan
agreements, notes, leases or other
instruments required to be described or
referred to in the Registration Statement or
Prospectus 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 in all
material respects, 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 MHC and the Board
of Directors of the Company and the Board of
Directors of the Bank and the OTS's approval
of the Plan remains in full force and
effect; to such counsel's knowledge, 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, no order has been issued by the OTS
to suspend the Conversion or the Offerings
and no action for such purpose has been
instituted or threatened by the OTS; and, to
the best of such counsel's knowledge, no
person has sought to obtain review of the
final action of the OTS in approving the
Conversion Application or the Holding
Company Application.
(xxiii) To such counsel's knowledge, the Company,
the MHC, 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 Prospectus except for such
licenses, permits or authorizations the
failure of which to have would not result in
a material adverse change in the financial
condition, results of operations or the
business of the Company, the Bank and the
MHC, considered as one enterprise, and all
such licenses, permits and other
governmental authorizations are
- 26 -
in full force and effect, and the Company,
the MHC, the Bank and the Subsidiaries are
in all material respects complying
therewith.
(xxiv) None of the Company, the MHC, the Bank nor
any of the Subsidiaries is in violation of
its certificate of incorporation,
organization certificate, articles of
incorporation or charter, as the case may
be, or bylaws or, to such counsel's
knowledge, 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 MHC, the Bank or
any of the Subsidiaries is a party or by
which the Company, the MHC, the Bank or any
of the Subsidiaries or any of their property
may be bound in any respect that would have
a material adverse effect upon the financial
condition, results of operations, or
business of the Company, the Bank and the
MHC considered as one enterprise.
(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
Xxxxxxx, Xxxxxx & Xxxxxxxx LLP, counsel for the Agents, 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), (xvii) and (xviii) and such
other matters as the Agents may reasonably require.
(3) In giving their opinions required by subsections (b)(l)
and (b)(2), respectively, of this Section, Luse, Lehman, Xxxxxx, Xxxxxxxx &
Xxxxxx and Xxxxxxx, Xxxxxx & Xxxxxxxx LLP shall each additionally state that
nothing has come to their attention that would lead them to believe that the
Registration Statement (except for the appraisal, 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 it became effective or at Closing Time, included an
untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. In giving their
opinions, Luse, Lehman, Xxxxxx, Xxxxxxxx & Xxxxxx and Xxxxxxx, Xxxxxx & Xxxxxxxx
LLP may rely as to matters of fact on certificates of officers and directors of
the MHC, the Company and the Bank and certificates of public officials, and as
to certain matters of Iowa law and Delaware law upon the opinion of local
counsel reasonably satisfactory to the Agents (the Agents shall be notified of
the identity of such counsel at the time of
- 27 -
the execution of this Agreement and receive drafts of such counsel's opinion at
least 3 days prior to the Closing Time), which opinions shall be in form and
substance satisfactory to counsel for the Agents, and Xxxxxxx, Xxxxxx & Xxxxxxxx
LLP may also rely on the opinion of Luse, Lehman, Xxxxxx, Xxxxxxxx & Xxxxxx and
such local counsel.
(c) At Closing Time referred to in Section 2, the Company, the MHC and
the Bank shall have completed in all material respects the conditions precedent
to the Conversion in accordance with the Plan, the applicable Conversion
Regulations and all other applicable laws, regulations, decisions and orders,
including all terms, conditions, requirements and provisions precedent to the
Conversion imposed upon the Company or the Bank by the OTS, or any other
regulatory authority, other than those which the OTS permits to be completed
after the Conversion.
(d) At Closing Time referred to in Section 2, 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 or
business affairs of the Company, the MHC, the Bank and the Subsidiaries,
considered as one enterprise, whether or not arising in the ordinary course of
business, and the Agents shall have received a certificate of the Chief
Executive Officer of the Company, of the MHC and of the Bank, the President of
the Company, of the MHC and of the Bank and the Chief Financial or Chief
Accounting Officer of the Company, of the MHC 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, the MHC or the Bank from the latest date as of which the financial
condition of the Company, the MHC or the Bank as 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, (iii) none of the
Company, the MHC nor the Bank shall have received from the OTS any direction
(oral or written) to make any material change in the method of conducting its
business with which it has not complied (which direction, if any, shall have
been disclosed to the Agents) or which materially and adversely would affect the
business, financial condition or results of operations of the Company, the MHC,
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, the MHC 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.
- 28 -
(e) At the time of the execution of this Agreement, the Agents shall
have received from KPMG Peat Marwick LLP a letter dated such date, in form and
substance satisfactory to the Agents, to the effect that: (i) they are
independent public accountants with respect to the Company, the MHC, the Bank,
the Subsidiaries, Mid-Iowa Financial Corp. and its subsidiaries (together
"Mid-Iowa") within the meaning of the Code of Ethics of the American Institute
of Certified Public Accountants, the Securities Act, 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 Agents 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 its subsidiaries and Mid-Iowa 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 the section captioned "Selected Consolidated Financial
and Other Data of First Federal and Subsidiaries" in the Registration Statement
and 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 Mid-Iowa or any decrease in consolidated total assets, the
allowance for loan losses, total deposits or net worth of the Bank and its
subsidiaries or Mid-Iowa, in each case as compared with the amounts shown in the
September 30, 1998 balance sheet included in the Registration Statement or, (D)
during the period from September 30, 1998 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 its 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
Prospectus and which are specified by the Agents, 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 MHC, the Bank, the
Subsidiaries, and Mid-Iowa identified in such letter.
- 29 -
(f) At Closing Time, the Agents 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 (e) 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 the Nasdaq National Market upon notice of issuance.
(h) At Closing Time, the Agents shall have received a letter from RP
Financial, Inc., dated as of the Closing Time, confirming its appraisal.
(i) At Closing Time, counsel for the Agents 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 Agents and counsel for the Agents.
(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 Agents, 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 the American Stock Exchange,
the New York Stock Exchange or the Nasdaq Stock Market 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 Iowa authorities.
SECTION 6. INDEMNIFICATION.
(a) The Company and the Bank, jointly and severally, agree to indemnify
and hold harmless the Agents, each person, if any, who controls the Agents,
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 or any action taken by the Agents where acting as Agents of the
Company or the Bank or otherwise as described in Section 2 hereof;
- 30 -
(ii) from and against any and all loss, liability, claim,
damage and expense whatsoever, as incurred, based upon or arising out of any
untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), or the omission or alleged
omission therefrom of a material fact required to be stated therein or necessary
to make the statements therein not misleading or arising out of any untrue
statement or alleged untrue statement of a material fact contained in the Proxy
Statement or Prospectus (or any amendment or supplement thereto) or the omission
or alleged omission therefrom of a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading;
(iii) from and against any and all loss, liability, claim,
damage and expense whatsoever, as incurred, to the extent of the aggregate
amount paid in settlement of any litigation, or any investigation or proceeding
by any governmental agency or body, commenced or threatened, or of any claim
whatsoever described in clauses (i) or (ii) above, if such settlement is
effected with the written consent of the Company or the Bank, which consent
shall not be unreasonably withheld; and
(iv) from and against any and all expense whatsoever, as
incurred (including, subject to Section 6(c) hereof, the fees and disbursements
of counsel chosen by the Agents), 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 pending or threatened 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 the indemnification provided for in this paragraph (a)
shall not apply with respect to an Agent 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 such agent
furnished to the Company or the Bank by such agent expressly for use in the
Prospectus (or any amendments or supplements thereto), which information the
Company and the Bank acknowledge is included only in the sections captioned
"Market for the Common Stock" and the first two paragraphs of the section
captioned "The Conversion - Plan of Distribution and Selling Commission" of the
Prospectus (the "Agent Information").
(b) The Agents agree to indemnify and hold harmless the Company, the
Bank, their directors and trustees, 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
- 31 -
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 liability
which it may have otherwise than on account of this indemnity 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.
(d) The Company, the MHC and the Bank also agree that the Agents shall
not have any liability (whether direct or indirect, in contract or tort or
otherwise) to the Bank, the MHC, the Company, its security holders or the Bank's
or the Company's creditors relating to or arising out of the engagement of the
Agents pursuant to, or the performance by, the Agents 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 any 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 MHC, the Bank, an Agent or any of their
respective agents or affiliates or any participant in the transactions
contemplated hereby in which the Agents or such person or agent is not named as
a defendant, the Company and the Bank jointly and severally agree to reimburse
the Agent for all reasonable and necessary out-of-pocket expenses incurred by it
in connection with preparing or appearing as a witness or otherwise giving
testimony and to compensate the Agents 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
- 32 -
the Agents 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 Agents, as incurred, in such
proportions (i) that the Agents are 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 Agents 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 Agents 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 either of the Agents 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 Agents, and each director of the Company, each trustee 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 Agents be required to contribute an aggregate amount in excess
of the aggregate marketing fees to which the Agents are entitled and actually
paid pursuant to this Agreement.
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 any Agents or
controlling person, or by or on behalf of the Company, and shall survive
delivery of the Securities.
SECTION 9. TERMINATION OF AGREEMENT.
(a) The Agents 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 or business affairs of the Company, the MHC, or
the Bank, or the Company, MHC, Bank and the Subsidiaries, considered as one
enterprise, whether or not arising in the ordinary course of business; (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 Agents,
are so material and adverse as to make it impracticable to market the Securities
or to enforce
- 33 -
contracts, including subscriptions or orders, for the sale of the Securities;
(iii) if trading generally on the Nasdaq Stock Market, the American Stock
Exchange or the New York Stock Exchange has been suspended, or minimum or
maximum prices for trading have been fixed, or maximum ranges for prices for
securities have been required, by 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 Iowa 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 Agents' good faith opinion would make it
inadvisable to proceed with the offering, sale or delivery of the Securities;
(vi) if, in the Agents' good faith opinion, the price for the Securities
established by RP Financial, 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 Sandler X'Xxxxx shall be directed to
Sandler X'Xxxxx at Two World Xxxxx Xxxxxx, 000xx Xxxxx, Xxx Xxxx, Xxx Xxxx
00000, attention of Xxxxxxxxx X. Xxxxxx, Principal; notices to IBS shall be
directed to IBS at The 1000 Building, 0000 Xxxxxxxx'x Xxxx, Xxxxx 000,
Xxxxxxxxxx, Xxxxxxxx 00000, attention of Xxxx Xxxxx; copies of all such notices
and other communications to the Agents shall be directed to Xxxxxxx, Xxxxxx &
Xxxxxxxx LLP, 0000 Xxxxxxxxx Xxxxxx, X.X., Xxxxxxxxxx, X.X. 00000, attention of
Xxxx X. Xxxx, Esquire; notices to the Company and the Bank shall be directed to
either of them at First Federal Savings Bank of Siouxland, 000 Xxxxxx Xxxxxx,
X.X. Xxx 000, Xxxxx Xxxx, Xxxx 00000, attention of Xxxxx X. Xxxxxxxx, President
and Chief Executive Officer with a copy to Xxxx Xxxxxx Xxxxxx Xxxxxxxx & Xxxxxx,
0000 Xxxxxxxxx Xxxxxx, X.X., Xxxxx 000, Xxxxxxxxxx, X.X. 00000, attention of
Xxxxxx X. Xxxxxxx, Esq..
SECTION 11. PARTIES.
This Agreement shall inure to the benefit of and be binding upon the
Agents, the Company, the MHC and the Bank and their respective successors.
Nothing expressed or mentioned in this Agreement is intended or shall be
construed to give any person, firm or corporation, other than the Agents, the
Company, the MHC 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
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hereof and thereof are intended to be for the sole and exclusive benefit of the
Agents, the MHC, 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 November 20, 1998, by and among Sandler X'Xxxxx, the
Company, the MHC and the Bank, relating to the Agents' providing conversion
agent services to the Company, the MHC 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.
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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 Agents, the Company and the Bank in accordance with its terms.
Very truly yours,
FIRST FEDERAL BANKSHARES, INC.
By:
----------------------------------
Title:
FIRST FEDERAL BANKSHARES, M.H.C.
By:
----------------------------------
Title:
FIRST FEDERAL SAVINGS BANK OF
SIOUXLAND
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:
-----------------------------
Xxxxxxxxx X. Xxxxxx
Vice President
INVESTMENT BANK SERVICES, INC.
By:
-----------------------------
[Name]
[Title]
