Exhibit 1.2
Form of Agency Agreement
PS FINANCIAL, INC.
(a Delaware Corporation)
__________ Shares
COMMON STOCK ($.01 Par Value)
Purchase Price $10.00 Per Share
AGENCY AGREEMENT
_______________, 1996
Xxxxxxx Xxxx & Company
A Division of Xxxxx, Xxxxxxxx
& Xxxxx, Inc.
000 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxx 00000
Ladies and Gentlemen:
PS Financial, Inc. (the "Holding Company") and Preferred Savings Bank,
F.S.B. (the "Bank") hereby confirm their agreements with Xxxxxxx Xxxx & Company,
A Division of Xxxxx, Xxxxxxxx & Xxxxx, Inc. (the "Agent") as follows:
Section 1. The Offering. The Holding Company is offering up to
__________ shares of common stock, par value $.01 per share (the "Common
Stock"), in a concurrent subscription offering (the "Subscription Offering") and
public offering (the "Public Offering") (together the "Offering") in connection
with the conversion of the Bank from a federally chartered mutual savings bank
to a federally chartered stock savings bank and the issuance of all of the
Bank's outstanding common stock to the Holding Company (the "Conversion")
pursuant to the Bank's plan of conversion (the "Plan"). Non-transferable rights
to subscribe for the Common Stock ("Subscription Rights") will be granted, in
the following priority in the Subscription Offering: (1) the Bank's depositors
with account balances of $50.00 or more as of March 31, 1995 ("Eligible Account
Holders"); (2) tax-qualified employee benefit plans of the Bank and the Holding
Company ("Tax-Qualified Employee Plans"); provided, however, that the
Tax-Qualified Employee Plans shall have the first priority Subscription Rights
to the extent that the total number of shares of Common Stock sold in the
Conversion shall exceed __________; (3) the Bank's depositors with account
balances of $50.00 or more as of September 30, 1996 ("Supplemental Eligible
Account Holders"); (4) depositors and certain borrowers of the Bank as of the
voting record date for the Special Meeting, as defined in the Prospectus ("Other
Members"); and (5) employees, officers and directors of the Bank. The Holding
Company will issue such number of shares of its Common Stock upon the Conversion
as is subscribed for, up to __________ shares (the "Shares")
at a purchase price of $10.00 per share (the "Purchase Price"). The Holding
Company is simultaneously offering all shares of Common Stock not subscribed for
in the Subscription Offering, if any, in a Public Offering to selected persons.
Depending on market conditions, shares may be offered in the Public Offering by
selected broker-dealer firms which are members of the National Association of
Securities Dealers, Inc. ("NASD") ("Selected Dealers"). If the number of Shares
is increased or decreased in accordance with the Plan, the term "Shares" shall
mean such greater or lesser number, where applicable.
The Holding Company has filed with the U.S. Securities and Exchange
Commission (the "Commission") a Registration Statement on Form S-1 (File No.
_________) containing a prospectus relating to the Offering for the registration
of the Shares under the Securities Act of 1933, as amended (the "1933 Act"), and
has filed such amendments thereto as have been required to the date hereof (the
"Registration Statement"). The prospectus, as amended, included in the
Registration Statement at the time it initially became effective is hereinafter
called the "Prospectus," except that if any prospectus is filed by the Holding
Company pursuant to Rule 424(b) or (c) of the regulations of the Commission
under the 1933 Act differing from the prospectus included in the Registration
Statement at the time it initially becomes effective, the term "Prospectus"
shall refer to the prospectus filed pursuant to Rule 424(b) or (c) from and
after the time said prospectus is filed with the Commission and shall include
any supplements and amendments thereto from and after their dates of
effectiveness or use, respectively.
The Bank has filed with the Office of Thrift Supervision, Department of
the Treasury (the "OTS") pursuant to Title 12, Part 563b of the Code of Federal
Regulations (the "Conversion Regulations") an Application for Conversion on Form
AC, including the Prospectus, and has filed amendments thereto as required by
the OTS (as so amended, the "Application"). The Application has been approved by
the OTS. The Holding Company has filed with the OTS its application on Form
H-(e)1-S (the "Holding Company Application") to acquire the Bank under the Home
Owners Loan Act, as amended, and the regulations promulgated thereunder
("HOLA").
Section 2. Appointment of the Agent. Subject to the terms and
conditions of this Agreement, the Holding Company and the Bank hereby appoint
the Agent as their exclusive financial advisor and marketing agent to utilize
its best efforts to solicit subscriptions for Shares of the Holding Company's
Common Stock and to advise and assist the Holding Company and the Bank with
respect to the Holding Company's sale of the Shares in the Offering and to
participate in the Offering in the areas of market making, research coverage and
syndicate formation (if necessary).
On the basis of the representations and warranties and subject to the
terms and conditions of this Agreement, the Agent accepts such appointment and
agrees to consult with and advise the Holding Company and the Bank as to the
matters set forth in the letter agreement ("Letter Agreement"), dated July 1,
1996, between the Bank and the
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Agent (a copy of which is attached hereto as Exhibit A). It is acknowledged by
the Holding Company and the Bank that the Agent shall not be obligated to
purchase any Shares and shall not be obligated to take any action which is
inconsistent with any applicable law, regulation, decision or order.
Subscriptions will be offered by means of order forms as described in the
Prospectus. The appointment of the Agent hereunder shall terminate upon
completion of the Offering, provided that, thereafter, if the parties wish to
continue the relationship, a fee will be negotiated and an agreement with
respect to specific advisory services will be entered into at that time.
Section 3. Refund of Purchase Price. In the event that the Conversion
is not consummated for any reason, including but not limited to the inability to
sell the Common Stock during the Offering (including any permitted extension
thereof), this Agreement shall terminate and any persons who have subscribed for
any of the shares of Common Stock shall have refunded to them the full amount
which has been received from such person, together with interest at the Bank's
current passbook rate, from the date payment is received as provided in the
Prospectus. Upon termination of this Agreement, neither the Agent nor the Bank
and the Holding Company shall have any obligation to the other except that (i)
the Holding Company and the Bank, as applicable, shall remain liable for any
amounts due pursuant to Sections 4(a), 8, 10 and 11 hereof, unless the
transaction is not consummated due to the breach by the Agent of a warranty,
representation or covenant; and (ii) the Agent shall remain liable for any
amount due pursuant to Sections 10 and 11 hereof, unless the transaction is not
consummated due to the breach by the Holding Company or Bank of a warranty,
representation or covenant.
Section 4. Fees. In addition to the expenses specified in Section 8
hereof, as compensation for the Agent's services as agents under this Agreement,
the Agent will receive the following fees from the Holding Company and the Bank.
(a) A management fee in the amount of $25,000 payable in four
consecutive monthly installments of $6,250, commencing with the signing of the
Letter Agreement. Such fees shall be deemed to be earned when due. Should the
Conversion be terminated for any reason not attributable to the action or
inaction of the Agent, the Agent shall have earned and be entitled to be paid
fees accruing through the stage at which point the termination occurred.
(b) A fee of 1.5% of the aggregate Purchase Price of Common Stock sold
in the Offering excluding shares purchased by the Bank's officers, directors, or
employees (or members of their immediate families) plus any ESOP, tax-qualified
or stock based compensation plan (except IRA's) or similar plan created by the
Bank for some or all of its directors or employees. The Management fee described
in subparagraph (a) will be deducted from this fee should the Prospectus be
based upon financial statements other than as of the end of a calendar quarter.
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(c) A fee not to exceed 5.5% of the aggregate Purchase Price of the
Shares sold by Selected Dealers. The Agent will pass onto Selected Dealers, who
assist in the syndicated Public Offering, an amount competitive with gross
underwriting discounts charged at such time for comparable amounts of stock sold
at a comparable price per share in a similar market environment. Fees with
respect to purchases effected with the assistance of a broker/dealer other than
the Agent shall be transmitted by the Agent to such broker/dealer. The decision
to utilize Selected Dealers will be made by the Agent. In the event, with
respect to any stock purchases, fees are paid pursuant to this subsection (c),
such fees shall be in lieu of, and not in addition to, payment to the Agent
pursuant to subsections (a) and (b).
The fees specified in subsections (b) and (c) shall be payable in
same-day funds on the Closing Date.
Section 5. Closing. If the minimum number of the shares of Common Stock
permitted to be sold in the Conversion on the basis of the most recent updated
Conversion appraisal are subscribed for at or before the termination of the
Offering and the other conditions to the completion of the Conversion are
satisfied, the Holding Company agrees to issue on the Closing Date the shares of
Common Stock which have been sold against payment therefor from the escrow or
other accounts maintained for the subscribers as set forth in the Plan and to
deliver certificates evidencing ownership of such shares of Common Stock in such
authorized denominations and registered in such names as may be indicated on the
subscription order forms directly to the purchasers thereof as promptly as
practicable after the Closing Date. The Closing shall be held at the offices of
counsel to the Agent, or at such other place as shall be agreed upon among the
Holding Company, the Bank and the Agent at 10:00 a.m. on a business day selected
by the Holding Company which business day shall be no less than two business
days following the giving of prior notice by the Holding Company to the Agent or
at such other time as shall be agreed upon by the Holding Company, the Bank and
the Agent. At the Closing, the Bank and the Holding Company shall deliver to the
Agent in same-day funds the commissions, fees and expenses owing to the Agent as
set forth in Sections 4 and 8 hereof and the opinions required hereby and other
documents deemed reasonably necessary by the Agent shall be executed and
delivered to effect the sale of the shares as contemplated hereby and pursuant
to the terms of the Prospectus. The Holding Company shall notify the Agent by
telephone, confirmed in writing, when funds shall have been received for the
minimum number of shares of the Common Stock. The date upon which the Holding
Company shall release the Shares for delivery in accordance with the terms
hereof is referred to herein as the "Closing Date."
Section 6A. Representations and Warranties of the Holding Company and
the Bank. The Holding Company and the Bank jointly and severally represent and
warrant to the Agent that:
(a) The Holding Company and the Bank have all such power, authority,
authorizations, approvals and orders as may be required to enter into this
Agreement, to
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carry out the provisions and conditions hereof and to issue and sell the capital
stock of the Bank to the Holding Company and the Shares to be sold by the
Holding Company as provided herein and as described in the Prospectus. The
consummation of the Conversion, the execution, delivery and performance of this
Agreement and the consummation of the transactions herein contemplated have been
duly and validly authorized by all necessary corporate action on the part of the
Holding Company and the Bank and this Agreement has been validly executed and
delivered by the Holding Company and the Bank and is the valid, legal and
binding agreement of the Holding Company and the Bank enforceable in accordance
with its terms, except to the extent, if any, that the provisions of Sections 10
and 11 hereof may be unenforceable as against public policy, and except to the
extent that such enforceability may be limited by bankruptcy laws, insolvency
laws, or other laws affecting the enforcement of creditors' rights generally, or
the rights of creditors of savings institutions insured by the FDIC (including
the laws relating to the rights of the contracting parties to equitable
remedies).
(b) As of the Closing Date, the Bank shall have completed all
conditions precedent to the Conversion in accordance with the Plan and shall
have complied in all material respects with applicable laws, regulations (except
as modified or waived in writing by the OTS), decisions and orders, including
all terms, conditions, requirements and provisions precedent to the Conversion
imposed upon it by the OTS as set forth in correspondence received from the OTS.
The Plan has been approved by the OTS, and to the best knowledge of the Bank, no
person has challenged or sought to obtain judicial review of the actions of the
OTS in approving the Conversion pursuant to Section 5(i)(2)(B) of the HOLA or
any other statute or regulation.
(c) The Registration Statement was declared effective by the Commission
on _______________, 1996; and no stop order has been issued with respect thereto
and no proceedings therefor have been initiated or to the best knowledge of the
Bank threatened by the Commission. At the time the Registration Statement,
including the Prospectus contained therein (including any amendment or
supplement thereto), became effective, the Registration Statement complied as to
form in all material respects with the requirements of the 1933 Act and the
regulations promulgated thereunder and the Registration Statement including the
Prospectus contained therein (including any amendment or supplement thereto),
any Blue Sky Application or any Sales Information (as such terms are defined in
Section 10 hereof) authorized by the Holding Company or the Bank for use in
connection with the Offering did not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading, and at the time any Rule 424(b) or (c) Prospectus was
filed with or mailed to the Commission for filing and at the Closing Date
referred to in Section 5, the Registration Statement including the Prospectus
contained therein (including any amendment or supplement thereto) and any Blue
Sky Application or any Sales Information authorized by the Holding Company or
the Bank for use in connection with the Offering will not contain an untrue
statement of a material fact or omit to state a
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material fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading; provided, however,
that the representations and warranties in this Section 6A shall not apply to
statements or omissions made in reliance upon and in conformity with written
information furnished to the Holding Company or the Bank by the Agent expressly
regarding the Agent for use under the caption "The Conversion - Marketing
Arrangements" or written statements or omissions from any sales information or
information filed pursuant to state securities or blue sky laws or regulations
regarding the Agent.
(d) The Application, including the Prospectus, was approved by the OTS
on _______________, 1996; and the Proxy Statement of the Bank and the Prospectus
have been approved for use by the OTS. At the time of the approval of the
Application, including the Prospectus, by the OTS (including any amendment or
supplement thereto) and at all times subsequent thereto until the Closing Date,
the Application, including the Prospectus, will comply as to form in all
material respects with the Conversion Regulations and any other applicable rules
and regulations of the OTS (except as modified or waived in writing by the OTS).
The Application, including the Prospectus (including any amendment or supplement
thereto), does not include any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading; provided, however, that representations or warranties in this
subsection (d) shall not apply to statements or omissions made in reliance upon
and in conformity with written information furnished to the Bank by the Agent
expressly regarding the Agent for use in the Prospectus contained in the
Application under the caption "The Conversion - Marketing Arrangements" or
written statements or omissions from any sales information or information filed
pursuant to state securities or blue sky laws or regulations regarding the
Agent.
(e) No order has been issued by the OTS, the Commission or the FDIC
(and hereinafter reference to the FDIC shall include the SAIF), or any state
regulatory authority, preventing or suspending the use of the Prospectus and no
action by or before any such government entity to revoke any approval,
authorization or order of effectiveness related to the Conversion is, to the
best knowledge of the Bank or the Holding Company, pending or threatened.
(f) At the Closing Date, the Plan will have been adopted by the Board
of Directors of both the Holding Company and the Bank, the Holding Company and
the Bank will have completed all conditions precedent to the Conversion
specified in the Plan and the offer and sale of the Shares will have been
conducted in all material respects in accordance with the Plan, the Conversion
Regulations (except as modified or waived in writing by the OTS) and with all
other applicable laws, regulations, decisions and orders, including all terms,
conditions, requirements and provisions precedent to the Conversion imposed upon
the Holding Company or the Bank by the OTS, the Commission or any other
regulatory authority and in the manner described in the Prospectus. At the
Closing Date, to the best knowledge of the Holding Company and
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the Bank, no person will have sought to obtain review of the final action of the
OTS in approving the Plan or in approving the Conversion or the Holding Company
Application pursuant to the HOLA or any other statute or regulation.
(g) The Holding Company has filed with the OTS the Holding Company
Application and has received, as of the Closing Date, approval of its
acquisition of the Bank from the OTS.
(h) Xxxxxx & Company, Inc. which prepared the appraisal, has advised
the Holding Company and the Bank in writing that it is independent with respect
to each within the meaning of the Conversion Regulations.
(i) Xxxxx, Xxxxxx and Company which certified the financial statements
filed as part of the Registration Statement and the Application, have advised
the Holding Company and the Bank in writing that they are, with respect to the
Holding Company and the Bank, independent certified public accountants within
the meaning of 12 C.F.R. Sections 563c.3 and 571.2(c)(3) and under the 1933 Act
and the regulations promulgated thereunder.
(j) The financial statements and the schedules and notes thereto which
are included in the Registration Statement and which are a part of the
Prospectus present fairly the financial position and retained earnings of the
Bank as of the dates indicated and the results of operations and cash flows for
the periods specified. The financial statements comply in all material respects
with the applicable accounting requirements of Title 12 of the Code of Federal
Regulations and generally accepted accounting principles ("GAAP") applied on a
consistent basis during the periods presented except as otherwise noted therein
and present fairly in all material respects the information required to be
stated therein and are consistent with the most recent financial statements and
other reports filed by the Bank with the OTS and the FDIC except that accounting
principles employed in such filings conform to requirements of such authorities
and not necessarily to GAAP. The other financial, statistical and pro forma
information and related notes included in the Prospectus fairly present the
information shown therein on a basis consistent with the audited and unaudited
financial statements included in the Prospectus, and as to the pro forma
adjustments, the adjustments made therein have been properly applied on the
basis described therein.
(k) Since the respective dates as of which information is given in the
Registration Statement, including the Prospectus: (i) there has not been any
material adverse change in the financial condition or in the earnings, capital,
properties or business affairs of the Holding Company or the Bank or of the
Holding Company and the Bank considered as one enterprise, whether or not
arising in the ordinary course of business, (ii) there has not been any material
increase in the aggregate amount of loans past due ninety (90) days or more,
real estate acquired by foreclosure or loans characterized as "in substance
foreclosure" or any change in total assets of the Bank in an amount greater than
$1.0 million; nor has the Bank issued any securities or incurred
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any liability or obligation for borrowings other than in the ordinary course of
business, (iii) there have not been any material transactions entered into by
the Holding Company or the Bank, other than those in the ordinary course of
business; and (iv) the capitalization, liabilities, assets, properties and
business of the Holding Company and the Bank conform in all material respects to
the descriptions thereof contained in the Prospectus and, neither the Bank nor
the Holding Company has any material liabilities of any kind, contingent or
otherwise, except as set forth in or contemplated by the Registration Statement
and the Prospectus.
(l) The Holding Company is a corporation duly organized and in good
standing under the laws of the State of Delaware, with corporate power and
authority to own its properties and to conduct its business as described in the
Prospectus, and is duly qualified to transact business and is in good standing
in each jurisdiction in which the conduct of its business requires such
qualification unless the failure to qualify in one or more of such jurisdictions
would not have a material adverse effect on the financial condition, earnings,
capital, properties or business affairs of the Holding Company and the Bank
considered as a whole.
(m) The Bank is a duly organized and validly existing federally
chartered savings bank in mutual form and upon the Conversion will become a duly
organized and validly existing federally chartered savings bank in stock form,
in both instances duly authorized to conduct its business as described in the
Prospectus; the activities of the Bank are permitted by the rules, regulations
and practices of the OTS; the Bank has obtained all licenses, permits and other
governmental authorizations currently required for the conduct of its business
except those that individually or in the aggregate would not materially
adversely affect the financial condition of the Holding Company and the Bank
taken as a whole; all such licenses, permits and other governmental
authorizations are in full force and effect and the Bank is in good standing
under the laws of the United States and is duly qualified as a foreign
corporation to transact business in each jurisdiction in which failure to so
qualify would have a material adverse effect upon the financial condition,
earnings, capital, properties or business affairs of the Bank; all of the issued
and outstanding capital stock of the Bank after the Conversion will be duly and
validly issued and fully paid and nonassessable; and the Holding Company will
directly own all of such capital stock free and clear of any mortgage, pledge,
lien, encumbrance, claim or restriction. The Bank does not own equity securities
or any equity interest in any other business enterprise except as described in
the Prospectus.
(n) The Bank is a member of the Federal Home Loan Bank of Chicago
("FHLB of Chicago"); the deposit accounts of the Bank are insured by the FDIC up
to applicable limits; and upon the Conversion, the liquidation account for the
benefit of Eligible Account Holders and Supplemental Eligible Account Holders
will be duly established in accordance with the Conversion Regulations.
(o) Upon Conversion, the authorized, issued and outstanding equity
capital of the Holding Company will be as described in the Prospectus under the
caption
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"Capitalization," and no shares of Common Stock have been or will be issued and
outstanding prior to the Closing Date; the shares of Common Stock to be
subscribed for in the Offering have been duly and validly authorized for
issuance, and when issued and delivered by the Holding Company pursuant to the
Plan against payment of the consideration calculated as set forth in the Plan
and the Prospectus, will be duly and validly issued and fully paid and
nonassessable; the issuance of the shares of Common Stock is not subject to
preemptive rights; and the terms and provisions of the shares of Common Stock
will conform in all material respects to the description thereof contained in
the Prospectus. Upon issuance of the Shares, good title to the Shares will be
transferred from the Holding Company to the purchaser thereof against payment
therefor, subject to such claims as may be asserted against the purchasers
thereof by third party claimants.
(p) As of the date hereof and as of the Closing Date, neither the
Holding Company nor the Bank is in violation of its certificate of incorporation
or charter, respectively, or its bylaws (and the Bank will not be in violation
of its charter or bylaws in capital stock form as of the Closing Date) or in
material default in the performance or observance of any obligation, agreement,
covenant, or condition contained in any contract, lease, loan agreement,
indenture or other instrument to which it is a party or by which it, or any of
its property, may be bound which would result in a material adverse change in
the condition (financial or otherwise), earnings, capital, properties or
business affairs of the Holding Company or Bank considered as one enterprise or
which would materially affect their properties or assets. The consummation of
the transactions herein contemplated will not (i) conflict with or constitute a
breach of, or default under, the certificate of incorporation and bylaws of the
Holding Company, the charter and bylaws of the Bank (in either mutual or capital
stock form), or materially conflict with or constitute a material breach of, or
default under any material contract, lease or other instrument to which the
Holding Company or the Bank has a beneficial interest, or any applicable law,
rule, regulation or order that is material to the financial condition of the
Holding Company and the Bank on a consolidated basis; (ii) violate any
authorization, approval, judgment, decree, order, statute, rule or regulation
applicable to the Holding Company or the Bank except for such violations which
would not have a material adverse effect on the financial condition and results
of operations of the Holding Company and the Bank on a consolidated basis; or
(iii) with the exception of the liquidation account established in the
Conversion, result in the creation of any material lien, charge or encumbrance
upon any property of the Holding Company or the Bank.
(q) No material default exists, and no event has occurred which with
notice or lapse of time, or both, would constitute a material default on the
part of the Holding Company or the Bank, in the due performance and observance
of any term, covenant or condition of any indenture, mortgage, deed of trust,
note, bank loan or credit agreement or any other material instrument or
agreement to which the Holding Company or the Bank is a party or by which any of
them or any of their property is bound or affected in any respect which, in any
such case, is material to the Holding Company or the Bank considered as one
enterprise, and such agreements are in full force and effect; and no
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other party to any such agreements has instituted or, to the best knowledge of
the Holding Company or the Bank, threatened any action or proceeding wherein the
Holding Company or the Bank is alleged to be in default thereunder under
circumstances where such action or proceeding, if determined adversely to the
Holding Company or the Bank, as the case may be, would have a material adverse
effect upon the Holding Company and the Bank considered as one enterprise.
(r) The Holding Company and the Bank have good and marketable title to
all assets which are material to the business of the Holding Company and the
Bank and to those assets described in the Prospectus as owned by them free and
clear of all material liens, charges, encumbrances, restrictions or other
claims, except such as are described in the Prospectus or which do not have a
material adverse effect on the business of the Holding Company and the Bank
taken as a whole; and all of the leases and subleases which are material to the
business of the Holding Company and the Bank, as described in the Registration
Statement or Prospectus, are in full force and effect.
(s) Except as described in the Prospectus, the Holding Company and the
Bank are not in material violation of any directive from the OTS, the FDIC, the
Commission or any other agency to make any material change in the method of
conducting their respective businesses; the Holding Company and the Bank have
conducted and are conducting their respective businesses so as to comply in all
material respects with all applicable statutes and regulations (including,
without limitation, regulations, decisions, directives and orders of the OTS,
the Commission and the FDIC) and except as set forth in the Prospectus, there is
no charge, investigation, action, suit or proceeding before or by any court,
regulatory authority or governmental agency or body pending or, to the best
knowledge of either the Holding Company or the Bank, threatened, which would
reasonably be expected to materially and adversely affect the Conversion, the
performance of this Agreement, or the consummation of the transactions
contemplated in the Plan as described in the Registration Statement, or which
would reasonably be expected to result in any material adverse change in the
financial condition or in the earnings, capital, properties or business affairs
of the Holding Company and the Bank considered as one enterprise.
(t) The Bank has received an opinion of its special counsel, Silver,
Xxxxxxxx & Taff, L.L.P. with respect to the federal income tax consequences of
the Conversion, as described in the Registration Statement and the Prospectus,
and an opinion from Xxxxx, Xxxxxx and Company with respect to the Illinois
income tax consequences of the Conversion; and the facts and representations
upon which such opinions are based are truthful, accurate and complete, and
neither the Bank nor the Holding Company will take any action inconsistent
therewith.
(u) The Holding Company and the Bank have timely filed all required
federal and state tax returns, have paid all taxes that have become due and
payable in respect of such returns, except where permitted to be extended, have
made adequate reserves
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for similar future tax liabilities and no deficiency has been asserted with
respect thereto by any taxing authority.
(v) No approval, authorization, consent or other order of any
regulatory or supervisory or other public authority is required for the
execution and delivery by the Holding Company and the Bank of this Agreement, or
the issuance of the Shares, except for the approval of the OTS and the
Commission (which have been received) and any necessary qualification,
notification, or registration or exemption under the securities or blue sky laws
of the various states in which the shares are to be offered and except as may be
required under the rules and regulations of the NASD and/or the Nasdaq.
(w) The Holding Company and the Bank have made appropriate arrangements
for placing the funds received from subscriptions for Shares in special interest
bearing accounts with the Bank until all Shares are sold and paid for, with
provision for refund to the purchasers in the event that the Conversion is not
completed for whatever reason or for delivery to the Holding Company if all
Shares are sold.
(x) Prior to the Conversion, the Bank was not authorized to issue
shares of capital stock and neither the Holding Company nor the Bank has: (i)
issued any securities within the last 18 months (except for notes to evidence
other bank loans and reverse repurchase agreements or other liabilities); (ii)
had any material dealings with respect to sales of securities within the 12
months prior to the date hereof with any member of the NASD, or any person
related to or associated with such member, other than discussions and meetings
relating to the proposed Offering and routine purchases and sales of U.S.
government and agency and other securities; (iii) entered into a financial or
management consulting agreement except as contemplated hereunder; or (iv)
engaged any intermediary between the Agent and the Holding Company and the Bank
in connection with the offering of Shares, and no person is being compensated in
any manner for such service.
(y) To the best knowledge of the Holding Company and the Bank, neither
the Holding Company, the Bank nor the employees of the Holding Company or the
Bank have made any payment of funds of the Holding Company or the Bank as a loan
to any person for the purchase of the Shares.
Any certificates signed by an officer of the Holding Company or the
Bank and delivered to the Agent or its counsel that refer to this Agreement
shall be deemed to be a representation and warranty by the Holding Company or
the Bank to the Agent as to the matters covered thereby with the same effect as
if such representation and warranty were set forth herein.
Section 6B. Representations and Warranties of the Agent. The Agent
represents and warrants to the Holding Company and the Bank that:
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(a) The Agent is a corporation and is validly existing in good standing
under the laws of the State of Ohio with full power and authority to provide the
services to be furnished to the Bank and the Holding Company hereunder.
(b) The execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby have been duly and validly authorized by
all necessary action on the part of the Agent, and this Agreement has been duly
and validly executed and delivered by the Agent and is the legal, valid and
binding agreement of the Agent, enforceable in accordance with its terms.
(c) Each of the Agent and its employees, agents and representatives who
shall perform any of the services hereunder shall be duly authorized and
empowered, and shall have all licenses, approvals and permits necessary to
perform such services.
(d) The execution and delivery of this Agreement by the Agent, the
consummation of the transactions contemplated hereby and compliance with the
terms and provisions hereof will not conflict with, or result in a breach of,
any of the terms, provisions or conditions of, or constitute a default (or event
which with notice or lapse of time or both would constitute a default) under,
the certificate of incorporation of the Agent or any agreement, indenture or
other instrument to which the Agent is a party or by which it or its property is
bound.
(e) No action, suit, charge or proceeding is pending, or to the
knowledge of the Agent threatened, against the Agent which, if determined
adversely to the Agent, would have a material adverse effect upon the ability of
the Agent to perform obligations under this Agreement.
(f) No approval, authorization, consent or other order of any
regulatory or supervisory or other public authority is required for the
execution and delivery by the Agent of this Agreement, except as may have been
received.
Section 7A. Covenants of the Holding Company and the Bank. The Holding
Company and the Bank hereby jointly and severally covenant with the Agent as
follows:
(a) The Holding Company has filed the Registration Statement with the
Commission. The Holding Company will not, at any time after the date the
Registration Statement is declared effective, file any amendment or supplement
to the Registration Statement without providing the Agent and its counsel an
opportunity to review such amendment or file any amendment or supplement to
which amendment the Agent or its counsel shall reasonably object.
(b) The Bank has filed the Application with the OTS. The Bank will not,
at any time after the date the Application is approved, file any amendment or
supplement to the Application without providing the Agent and its counsel an
opportunity to review
-12-
such amendment or supplement or file any amendment or supplement to which
amendment or supplement the Agent or its counsel shall reasonably object.
(c) The Holding Company and the Bank will use their best efforts to
cause any post-effective amendment to the Registration Statement to be declared
effective by the Commission and any post-effective amendment to the Application
to be approved by the OTS, and will immediately upon receipt of any information
concerning the events listed below notify the Agent (i) when the Registration
Statement, as amended, has become effective; (ii) when the Application, as
amended, has been approved by the OTS; (iii) of the receipt of any comments from
the Commission, the OTS, the FDIC or any other governmental entity with respect
to the Conversion or the transactions contemplated by this Agreement; (iv) of
any request by the Commission, the OTS, the FDIC or any other governmental
entity for any amendment or supplement to the Registration Statement or the
Application or for additional information; (v) of the issuance by the
Commission, the OTS, the FDIC or any other governmental agency of any order or
other action suspending the Offering or the use of the Registration Statement or
the Prospectus or any other filing of the Holding Company and the Bank under the
Conversion Regulations or other applicable law, or the threat of any such
action; (vi) of the issuance by the Commission, the OTS, the FDIC or any state
authority of any stop order suspending the effectiveness of the Registration
Statement or of the initiation or threat of initiation or threat of any
proceedings for that purpose; or (vii) of the occurrence of any event mentioned
in paragraph (g) below. The Holding Company and the Bank will make every
reasonable effort to prevent the issuance by the Commission, the OTS, the FDIC
or any state authority of any such order and, if any such order shall at any
time be issued, to obtain the lifting thereof at the earliest possible time.
(d) The Holding Company and the Bank will provide the Agent and its
counsel notice of its intention to file, and reasonable time to review prior to
filing any amendment or supplement to the Holding Company Application and will
not file any such amendment or supplement to which the Agent shall reasonably
object or which shall be reasonably disapproved by its counsel.
(e) The Holding Company and the Bank will deliver to the Agent and to
its counsel conformed copies of each of the following documents, with all
exhibits: the Application and the Holding Company Application, as originally
filed and of each amendment or supplement thereto, and the Registration
Statement, as originally filed and each amendment thereto. Further, the Holding
Company and the Bank will deliver such additional copies of the foregoing
documents to counsel to the Agent as may be required for any NASD filings. In
addition, the Holding Company and the Bank will also deliver to the Agent such
number of copies of the Prospectus, as amended or supplemented, as the Agent may
reasonably request.
(f) The Holding Company and the Bank will comply in all material
respects with any and all terms, conditions, requirements and provisions with
respect to the Conversion and the transactions contemplated thereby imposed by
the Commission, by
-13-
applicable state law and regulations, and by the 1933 Act, the Securities
Exchange Act of 1934 (the "1934 Act") and the rules and regulations of the
Commission promulgated under such statutes, to be complied with prior to or
subsequent to the Closing Date; and when the Prospectus is required to be
delivered, the Holding Company and the Bank will comply in all material
respects, at their own expense, with all material requirements imposed upon them
by the OTS, the Conversion Regulations (except as modified or waived in writing
by the OTS), the FDIC, the Commission, by applicable state law and regulations
and by the 1933 Act, the 1934 Act and the rules and regulations of the
Commission promulgated under such statutes, in each case as from time to time in
force, so far as necessary to permit the continuance of sales or dealing in
shares of Common Stock during such period in accordance with the provisions
hereof and the Prospectus.
(g) If any event relating to or affecting the Holding Company or the
Bank shall occur, as a result of which it is necessary, in the reasonable
opinion of counsel for the Holding Company or the Bank or for the Agent, to
amend or supplement the Registration Statement or the Prospectus in order to
make them not misleading in light of the circumstances existing at the time of
its use, the Holding Company and the Bank will, at their expense, forthwith
prepare, file with the Commission and the OTS, and furnish to the Agent, a
reasonable number of copies of an amendment or amendments of, or a supplement or
supplements to, the Registration Statement and the Prospectus (in form and
substance satisfactory to counsel for the Agent after a reasonable time for
review) which will amend or supplement the Registration Statement and/or the
Prospectus so that as amended or supplemented it will not contain an untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in light of the circumstances existing at the
time, not misleading. For the purpose of this subsection, the Holding Company
and the Bank each will furnish such information with respect to itself as the
Agent may from time to time reasonably request.
(h) Pursuant to the terms of the Plan, the Holding Company will
endeavor in good faith, in cooperation with the Agent, to register or to qualify
the Shares for offering and sale under the applicable securities laws of the
jurisdictions in which the Offering will be conducted; provided, however, that
the Holding Company shall not be obligated to file any general consent to
service of process or to qualify to do business in any jurisdiction in which it
is not so qualified. In each jurisdiction where any of the Shares shall have
been registered or qualified as above provided, the Holding Company will make
and file such statements and reports in each year as are or may be required by
the laws of such jurisdictions.
(i) The liquidation account for the benefit of account holders as of
March 31, 1995 and September 30, 1996 will be duly established and maintained in
accordance with the requirements of the OTS, and such Eligible Account Holders
and Supplemental Eligible Account Holders who continue to maintain their savings
account in the Bank will have an inchoate interest in their pro rata portion of
the liquidation account which
-14-
shall have a priority superior to that of the holders of shares of Common Stock
in the event of a complete liquidation of the Bank.
(j) The Holding Company and the Bank will not sell or issue, contract
to sell or otherwise dispose of, for a period of 90 days after the date hereof,
without the Agent's prior written consent, which consent shall not be
unreasonably withheld, any shares of Common Stock other than in connection with
any plan or arrangement described in the Prospectus.
(k) For the period of three years from the date of this Agreement, the
Holding Company will furnish to the Agent upon request (i) a copy of each report
of the Holding Company furnished to or filed with the Commission under the 1934
Act or any national securities exchange or system on which any class of
securities of the Holding Company is listed or quoted, (ii) a copy of each
report of the Holding Company mailed to holders of Common Stock or
non-confidential report filed with the Commission or the OTS or any other
supervisory or regulatory authority or any national securities exchange or
system on which any class of the securities of the Holding Company is listed or
quoted, and (iii) from time to time, such other publicly available information
concerning the Holding Company and the Bank as the Agent may reasonably request.
(l) The Holding Company and the Bank will use the net proceeds from the
sale of the Common Stock in the manner set forth in the Prospectus under the
caption "Use of Proceeds."
(m) Prior to the Closing Date, the Holding Company and the Bank will
inform the Agent of any event or circumstances of which it is aware as a result
of which the Registration Statement and/or Prospectus, as then supplemented or
amended, would include an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein not misleading.
(n) The Holding Company and the Bank will distribute the Prospectus or
other offering materials in connection with the offering and sale of the Common
Stock only in accordance with the Conversion Regulations, the 1933 Act and the
1934 Act and the rules and regulations promulgated under such statutes, and the
laws of any state in which the shares are qualified for sale.
(o) The Holding Company shall register its Common Stock under Section
12(g) of the 1934 Act, concurrent with the effective date of the Registration
Statement. The Holding Company shall maintain the effectiveness of such
registration for not less than three years or such shorter period as permitted
by the OTS.
(p) For so long as the Holding Company's Common Stock is registered
under the 1934 Act, the Holding Company will furnish to its stockholders as soon
as practicable after the end of each fiscal year such reports and other
information as are required to be furnished to its stockholders under the 1934
Act (including consolidated
-15-
financial statements of the Holding Company and its subsidiaries, certified by
independent public accountants).
(q) The Holding Company will comply with the provisions of Section
11(a) of the 33 Act and Rule 158 thereunder.
(r) The Holding Company will file with the Commission such reports on
Form SR as may be required pursuant to Rule 463 under the 1933 Act.
(s) The Holding Company will use its best efforts to obtain approval
for and maintain quotation of the Common Stock on the Nasdaq National Market
effective on or prior to the Closing Date.
(t) The Bank will maintain appropriate arrangements for depositing all
funds received from persons mailing subscriptions for or orders to purchase
Shares in the Offering on an interest bearing basis at the rate described in the
Prospectus until the Closing Date and satisfaction of all conditions precedent
to the release of the Bank's obligation to refund payments received from persons
subscribing for or ordering Shares in the Offering in accordance with the Plan
as described in the Prospectus or until refunds of such funds have been made to
the persons entitled thereto or withdrawal authorizations canceled in accordance
with the Plan and as described in the Prospectus. The Bank will maintain such
records of all funds received to permit the funds of each subscriber to be
separately insured by the FDIC (to the maximum extent allowable) and to enable
the Bank to make the appropriate refunds of such funds in the event that such
refunds are required to be made in accordance with the Plan and as described in
the Prospectus.
(u) The Holding Company will promptly register as a savings and loan
holding company under the HOLA.
(v) The Holding Company and the Bank will take such actions and furnish
such information as are reasonably requested by the Agent in order for the Agent
to ensure compliance with the "Interpretation of the Board of Governors of the
NASD on Free Riding and Withholding."
(w) The Holding Company and the Bank will conduct their businesses in
compliance in all material respects with all applicable federal and state laws,
rules, regulations, decisions, directives and orders including, all decisions,
directives and orders of the Commission, the OTS and the FDIC.
(x) The Bank will not amend the Plan without notifying the Agent prior
thereto.
(y) The Holding Company shall provide the Agent with any information
necessary to carry out the allocation of the Shares in the event of an
oversubscription and such information shall be accurate and reliable.
-16-
(z) The Holding Company will not deliver the Shares until the Holding
Company and the Bank have satisfied or caused to be satisfied each condition set
forth in Section 9A hereof, unless such condition is waived in writing by the
Agent.
Section 7B. Covenant of the Agent. The Agent hereby covenants with the
Company and the Bank as follows:
(a) During the period when the Prospectus is used, the Agent will
comply, in all material respects and at its own expense, with all requirements
imposed upon it by the OTS and, to the extent applicable, by the 1933 Act and
the rules and regulations promulgated thereunder.
(b) The Agent will distribute any Prospectus or offering materials in
connection with the offering and sale of the Common Stock only in accordance
with the Conversion Regulations and the requirements of the 1933 Act and 1934
Act and the rules and regulations promulgated thereunder; and
(c) The Agent shall perform the calculations process in connection with
the allocation of shares in the event of an over-subscription.
Section 8. Payment of Expenses. Whether or not the Conversion is
completed or the sale of the Shares by the Holding Company is consummated, the
Holding Company and the Bank will pay for all expenses incident to the
performance of this Agreement, including without limitation: (a) the preparation
and filing of the Application; (b) the preparation, printing, filing, delivery
and shipment of the Registration Statement, including the Prospectus, and all
amendments and supplements thereto; (c) all filing fees and expenses in
connection with the qualification or registration of the Shares for offer and
sale by the Holding Company under the securities or "blue sky" laws, including
without limitation filing fees, reasonable legal fees and disbursements of
counsel in connection therewith, and in connection with the preparation of a
blue sky law survey; (d) the filing fees of the NASD; and (e) the reasonable
expenses of the Agent, including without limitation, accounting, communications,
legal and travel expenses. Any such expense incurred by the Agent shall be
reimbursed by the Holding Company and the Bank. If this Agreement is terminated
in accordance with the provisions of Sections 3, 9, or 13, the Bank will pay the
Agent the fees earned pursuant to Section 4 and will reimburse the Agent for the
reasonable expenses of the Agent, including without limitation accounting,
communication, legal and travel expenses. Non-legal expenses shall not exceed
$5,000 without the prior approval of the Holding Company or the Bank. Legal fees
(including expenses and disbursements) shall not exceed $35,000.
Section 9A. Conditions to the Agent's Obligations. The obligations of
the Agent hereunder and the occurrence of the Closing and the Conversion are
subject to the condition that all representations and warranties and other
statements of the Holding Company and the Bank herein contained are at and as of
the commencement of the Offering and at and as of the Closing Date, true and
correct in all material respects, the
-17-
condition that the Holding Company and the Bank shall have performed in all
material respects all of their obligations hereunder to be performed on or
before such dates and to the following further conditions:
(a) The Registration Statement shall have been declared effective by
the Commission and the Application approved by the OTS not later than 5:30 p.m.
on the date of this Agreement, and no stop order or other action suspending the
effectiveness of the Registration Statement shall have been issued under the
1933 Act or proceedings therefor initiated or, to the Holding Company's or
Bank's best knowledge, threatened by the Commission or any state authority and
no order or other action suspending the authorization for use of the Prospectus
or the consummation of the Conversion shall have been issued or proceedings
therefor initiated or, to the Holding Company's or Bank's best knowledge,
threatened by the OTS, the Commission, or any other governmental body.
(b) At the Closing Date, the Agent shall have received:
(1) The favorable opinion, dated as of the Closing Date, of
Silver, Xxxxxxxx & Taff, LLP, special counsel for the Holding Company and the
Bank, in form and substance satisfactory to counsel for the Agent to the effect
that:
(i) The Holding Company is a corporation duly organized
and validly existing and in good standing under the laws of the State of
Delaware, with corporate power and authority to own its properties and to
conduct its business as described in the Prospectus, and to our knowledge is
duly qualified to transact business and is in good standing in each jurisdiction
in which the conduct of its business requires such qualification and in which
the failure to qualify would have a material adverse effect on the financial
condition, earnings, capital, properties or business affairs of the Holding
Company.
(ii) The Bank is a duly organized and validly existing
federally chartered mutual savings bank and, at the Closing Date, upon
satisfaction of the conditions set forth in the Plan, will become a duly
organized and validly existing federally chartered stock savings bank with full
power and authority to own its properties and to conduct its business as
described in the Prospectus and to enter into this Agreement and perform its
obligations hereunder; the activities of the Bank as described in the Prospectus
are permitted by the rules, regulations and practices of the OTS; the issuance
and sale of the capital stock of the Bank to the Holding Company has been duly
and validly authorized by all necessary corporate action on the part of the
Holding Company and the Bank and, upon payment therefor in accordance with the
terms of the Plan, will be validly issued, fully paid and nonassessable; and
will be owned of record and beneficially by the Holding Company, free and clear
of any mortgage, pledge, lien, encumbrance, claim or restriction.
-18-
(iii) The Bank is a member of the FHLB of Chicago and
the savings accounts of the Bank are insured by the FDIC up to the maximum
amount allowed by law and to such counsel's knowledge no proceedings for the
termination or revocation of such insurance are pending or threatened; and the
description of the liquidation account as set forth in the Prospectus under the
caption "The Conversion Effects of Conversion to Stock Form on Depositors and
Borrowers of the Bank Liquidation Rights" has been reviewed by such counsel and,
to the extent that such information constitutes matters of law or legal
conclusions, is accurate in all material respects.
(iv) Upon Conversion, the authorized, issued and
outstanding capital stock of the Holding Company and the Bank will be as set
forth in the Prospectus under the caption "Capitalization," and no shares of
Common Stock have been or will be issued and outstanding prior to the Closing
Date; the shares of Common Stock of the Holding Company to be subscribed for in
the Offering have been duly and validly authorized for issuance, and when issued
and delivered by the Holding Company pursuant to the Plan against payment of the
consideration calculated as set forth in the Plan, will be fully paid and
nonassessable; and the issuance of the shares of Common Stock is not subject to
preemptive rights, except for the subscription rights under the Plan.
(v) The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
by all necessary action on the part of the Holding Company and the Bank; and
this Agreement constitutes a valid, legal and binding obligation of each of the
Holding Company and the Bank, enforceable in accordance with its terms, except
to the extent that the provisions of Sections 10 and 11 hereof may be
unenforceable as against public policy, and except to the extent that such
enforceability may be limited by bankruptcy laws, insolvency laws, or other laws
affecting the enforcement of creditors' rights generally, or the rights of
creditors of savings institutions insured by the FDIC (including the laws
relating to the rights of the contracting parties to equitable remedies).
(vi) The Plan has been duly adopted as required by the
directors of the Holding Company and the Bank and members of the Bank.
(vii) Subject to the satisfaction of the conditions to
the OTS's approval of the Conversion and the Holding Company Application to
acquire the Bank, no further approval, registration, authorization, consent or
other order of any federal regulatory agency, public board or body is required
in connection with the execution and delivery of this Agreement, the offer, sale
and issuance of the Shares and the consummation of the Conversion (other than
compliance with state securities or Blue Sky laws as to which such counsel need
express no opinion and other than as may be required under the rules and
regulations of the NASD or the Nasdaq System).
-19-
(viii) The Application, including the Prospectus as
filed with the OTS, has been approved by the OTS. The OTS has issued its order
of approval under the savings and loan holding company provisions of the HOLA,
and the purchase by the Holding Company of all of the issued and outstanding
capital stock of the Bank has been authorized by the OTS and no action has been
taken, or to such counsel's knowledge is pending or threatened, to revoke any
such authorization or approval.
(ix) The Registration Statement has become effective
under the 1933 Act, no stop order suspending the effectiveness of the
Registration Statement has been issued, and to the best of such counsel's
knowledge no proceedings for that purpose have been instituted or threatened.
(x) The material tax consequences of the Conversion are
set forth in the Prospectus under the caption "the Conversion - Income Tax
Consequences". The information in the Prospectus under the caption "The
Conversion - Income Tax Consequences" has been reviewed by such counsel and
fairly describes such opinions rendered by Silver Xxxxxxxx & Xxxx, L.L.P. and
Xxxxx, Xxxxxx and Company to the Holding Company and the Bank with respect to
such matters.
(xi) The terms and provisions of the shares of Common
Stock conform to the description thereof contained in the Registration Statement
and the Prospectus and such description describes in all material respects the
rights of the holders thereof; the information in the Prospectus under the
captions "Restrictions on Acquisitions of Stock and Related Takeover Defensive
Provisions" and "Description of Capital Stock" to the extent that they
constitute matters of law or legal conclusions has been prepared by such counsel
and is accurate in all material respects; and the forms of certificates proposed
to be used to evidence the shares of Common Stock are in due and proper form.
(xii) At the time the Application, including the
Prospectus contained therein, was approved, the Application (as amended or
supplemented) complied as to form in all material respects with the requirements
of the Conversion Regulation and all applicable laws, rules and regulations and
decisions and orders of the OTS, except as modified or waived in writing by the
OTS, (other than the financial statements, notes to financial statements,
financial tables and other financial and statistical data included therein and
the appraisal valuation as to which counsel need express no opinion and other
than compliance with state securities or Blue Sky laws as to which such counsel
need express no opinion). To such counsel's knowledge, no person has sought to
obtain regulatory or judicial review of the final action of the OTS approving
the Application or in approving the Holding Company Application.
(xiii) At the time that the Registration Statement
became effective (i) the Registration Statement (as amended or supplemented)
(other than the financial statements, notes to financial statements, financial
tables or other financial and statistical data included therein and the
appraisal valuation as to which counsel need
-20-
express no opinion), complied as to form in all material respects with the
requirements of the 1933 Act and the rules and regulations promulgated
thereunder; and (ii) the Prospectus (other than the financial statements, notes
to financial statements, financial tables and other financial and statistical
data included therein and the appraisal valuation, as to which counsel need
express no opinion) complied as to form in all material respects with the
requirements of the 1933 Act and the rules and regulations promulgated
thereunder, the Conversion Regulations, the rules, regulations and decisions and
orders of the OTS, except as modified or waived in writing by the OTS.
(xiv) To the best of such counsel's knowledge, there are
no legal or governmental proceedings pending, or threatened (i) asserting the
invalidity of this Agreement or, (ii) seeking to prevent the Conversion or the
offer, sale or issuance of the Shares.
(xv) The information in the Prospectus under the
captions "Regulation," "The Conversion" and "Legal Matters," to the extent that
it constitutes matters of law, summaries of legal matters, documents or
proceedings, or legal conclusions, has been prepared by such counsel and is
accurate in all material respects (except as to the financial statements and
other financial data included therein as to which such counsel need express no
opinion).
(xvi) To the best of counsel's knowledge, the Holding
Company and the Bank have obtained all material licenses, permits and other
governmental authorizations required for the conduct of their respective
businesses as described in the Registration Statement and the Prospectus, except
where the failure to obtain such licenses, permits and other governmental
authorizations would not have a material adverse effect on the financial
condition of the Holding Company or the Bank considered as one enterprise, or on
the earnings, capital, properties or business affairs of the Holding Company or
the Bank considered as one enterprise, and all such licenses, permits and other
governmental authorizations are in full force and effect and the Holding Company
and the Bank are in all material respects complying therewith.
(xvii) Neither the Holding Company nor the Bank is in
violation of its certificate of incorporation or its charter, respectively, or
its bylaws (and the Bank will not be in violation of its charter or bylaws in
stock form upon consummation of the Conversion) or to the best of such counsel's
knowledge, in violation of any material obligation, agreement, covenant or
condition contained in any material contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which it is a party or by which it
or its property may be bound, which violation would have a material adverse
effect on the financial condition of the Holding Company or the Bank considered
as one enterprise, or on the earnings, capital, properties or business affairs
of the Holding Company and the Bank considered as one enterprise; the execution
and delivery of this Agreement by the Holding Company and the Bank, the
incurrence of the obligations herein set forth and the consummation of the
transactions contemplated herein, will not materially conflict with, constitute
a material breach of, or default under,
-21-
or result in the creation or imposition of any material lien, charge or
encumbrance upon any property or assets of the Holding Company or the Bank which
are material to their business considered as one enterprise, pursuant to any
contract, indenture, mortgage, loan agreement, note, lease or other instrument
to which the Holding Company or the Bank is a party or by which any of them may
be bound, or to which any of the property or assets of the Holding Company or
the Bank is subject. In addition, such action will not result in any material
violation of the provisions of the certificate of incorporation or bylaws of the
Holding Company or the Bank or any material violation of any applicable law,
act, regulation or to such counsel's knowledge, order or court order, writ,
injunction or decree.
(xviii) To the best of counsel's knowledge, the Holding
Company and the Bank are not in violation in any material respect of any
directive from the OTS or the FDIC to make any material change in the method of
conducting their business.
(2) The letter of Silver, Xxxxxxxx & Xxxx, L.L.P., special
counsel for the Holding Company and the Bank, in form and substance to the
effect that:
In addition, during the preparation of the Registration Statement and
the Prospectus, Silver, Xxxxxxxx & Taff participated in conferences with certain
officers of and other representatives of the Bank and the Holding Company,
counsel to the Agent, representatives of the independent public accountants for
the Bank and the Holding Company and representatives of the Agent at which the
contents of the Registration Statement and the Prospectus and related matters
were discussed and, although Silver, Xxxxxxxx & Xxxx is not passing upon and
does not assume the accuracy of the statements contained in the Registration
Statement and Prospectus, on the basis of the foregoing without independent
verification (relying as to materiality as to factual matters on certificates of
officers and other factual representations by the Bank and the Holding Company),
nothing has come to Silver, Xxxxxxxx & Taff's attention that caused Silver,
Xxxxxxxx & Xxxx to believe that the Registration Statement at the time it was
declared effective by the Commission or the Prospectus as of its date, contained
or contains any untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading (it being understood that counsel need express no comment or opinion
with respect to the financial statements, schedules and other financial and
statistical data included, or statistical or appraisal methodology employed, in
the Registration Statement or Prospectus).
The opinion shall be limited to matters governed by the laws of the
United States or the State of Delaware. In rendering such opinion, such counsel
may rely (A) as to matters involving the application of laws of any jurisdiction
other than the United States or Delaware, to the extent such counsel deems
proper and specified in such opinion, upon the opinion of other counsel of good
standing, as long as such other opinion indicates that the Agent may rely on the
opinion, and (B) as to matters of fact, to the extent such counsel deems proper,
on certificates of responsible officers of the Company
-22-
and the Bank and public officials; provided copies of any such opinion(s) or
certificates of public officials are delivered to you together with the opinion
to be rendered hereunder by special counsel to the Company and the Bank. The
opinion of such counsel for the Company shall state that it has no reason to
believe that you are not justified in relying thereon.
(3) The favorable opinion, dated as of the Closing Date, of
XxXxxxxxx, Will & Xxxxx, counsel for the Agent, with respect to such matters as
the Agent may reasonably require, such opinion may rely as to matters of fact,
upon certificates of officers and directors of the Holding Company and the Bank
delivered pursuant hereto or as such counsel may reasonably request.
(c) Concurrently with the execution of this Agreement, the Agent shall
receive a letter from Xxxxx, Xxxxxx and Company, dated the date hereof and
addressed to the Agent, (i) such letter confirming that Xxxxx, Xxxxxx and
Company is a firm of independent public accountants within the meaning of the
Code of Professional Ethics of the American Institute of Certified Public
Accountants, the 1933 Act and the regulations promulgated thereunder and 12
C.F.R. Sections 571.2(c)(3), and no information concerning its relationship with
or interests in the Holding Company or the Bank is required by the Application
or Item 10 of the Registration Statement, and stating in effect that in Xxxxx,
Xxxxxx and Company's opinion the financial statements of the Bank included in
the Prospectus comply as to form in all material respects with the applicable
accounting requirements of the 1933 Act, the 1934 Act and the related published
rules and regulations of the Commission thereunder and the Conversion
Regulations and generally accepted accounting principles; (ii) stating in effect
that, on the basis of certain agreed upon procedures (but not an audit
examination in accordance with generally accepted auditing standards) consisting
of a reading of the latest available unaudited interim financial statements of
the Bank prepared by the Bank, a reading of the minutes of the meetings of the
Board of Directors and members of the Bank, a review of interim financial
information in accordance with Statement on Auditing Standards No. 71, and
consultations with officers of the Bank responsible for financial and accounting
matters, nothing came to their attention which caused them to believe that: (A)
such unaudited financial statements, including Recent Developments, if any, are
not in conformity with generally accepted accounting principles applied on a
basis substantially consistent with that of the audited financial statements
included in the Prospectus; or (B) during the period from the date of the latest
unaudited consolidated financial statements included in the Prospectus to a
specified date not more than five business days prior to the date hereof, there
was any material increase in borrowings (defined as advances from the FHLB of
Chicago, securities sold under agreements to repurchase and any other form of
debt other than deposits) of the Holding Company or the Bank (other than as
disclosed in the Prospectus or in the ordinary course of business); or (C) there
was any decrease in retained earnings of the Bank at the date of such letter as
compared with amounts shown in the latest unaudited statement of condition
included in the Prospectus or there was any decrease in net income or net
interest income of the Bank for the number of full months commencing immediately
-23-
after the period covered by the latest unaudited income statement included in
the Prospectus and ended on the latest month end prior to the date of the
Prospectus or in such letter as compared to the corresponding period in the
preceding year; and (iii) stating that, in addition to the audit examination
referred to in its opinion included in the Prospectus and the performance of the
procedures referred to in clause (ii) of this subsection (f), they have compared
with the general accounting records of the Holding Company and/or the Bank, as
applicable, which are subject to the internal controls of the Holding Company
and/or the Bank, as applicable, accounting system and other data prepared by the
Holding Company and/or the Bank, as applicable, directly from such accounting
records, to the extent specified in such letter, such amounts and/or percentages
set forth in the Prospectus as the Agent may reasonably request, and they have
found such amounts and percentages to be in agreement therewith (subject to
rounding).
(d) At the Closing Date, the Agent shall receive letters from Xxxxx,
Xxxxxx and Company dated the Closing Date, addressed to the Agent, confirming
the statements made by its letter delivered by it pursuant to subsection (f) of
this Section 9A, the "specified date" referred to in clause (ii)(B) thereof to
be a date specified in such letter, which shall not be more than five business
days prior to the Closing Date.
(e) At the Closing Date, counsel to the Agent shall have been furnished
with such documents and opinions as counsel for the Agent may require for the
purpose of enabling it to advise the Agent with respect to the issuance and sale
of the Common Stock as herein contemplated and related proceedings, or in order
to evidence the accuracy of any of the representations and warranties, or the
fulfillment of any of the conditions herein contained.
(f) At the Closing Date, the Agent shall receive a certificate of the
Chief Executive Officer and Chief Financial Officer of each of the Holding
Company and the Bank, dated the Closing Date, to the effect that (i) they have
carefully examined the Prospectus and at the time the Prospectus became
authorized for final use, the Prospectus did 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; (ii) there has not been, since the respective dates as of
which information is given in the Prospectus, any material adverse change in the
financial condition or in the earnings, capital, properties, business prospects
or business affairs of the Holding Company or the Bank, considered as one
enterprise, whether or not arising in the ordinary course of business; (iii) the
representations and warranties contained in Section 6A of this Agreement are
true and correct with the same force and effect as though made at and as of the
Closing Date; (iv) the Holding Company and the Bank have complied in all
material respects with all material agreements and satisfied all conditions on
its part to be performed or satisfied at or prior to the Closing Date including
the conditions contained in this Section 9A; (v) no stop order has been issued
or, to the best of their knowledge, is threatened, by the Commission or any
other governmental body; (vi) no order suspending the Offering, the
-24-
Conversion, the acquisition of all of the shares of the Bank by the Holding
Company or the effectiveness of the Prospectus has been issued and to the best
of their knowledge, no proceedings for any such purpose have been initiated or
threatened by the OTS, the Commission, the FDIC, or any other federal or state
authority; (vii) to the best of their knowledge, no person has sought to obtain
regulatory or judicial review of the action of the OTS in approving the Plan or
to enjoin the Conversion.
(g) At the Closing Date, the Agent shall receive a letter from Xxxxxx &
Company, Inc. dated as of the Closing Date, confirming its appraisal.
(h) The Holding Company or the Bank shall not have sustained since the
date of the latest audited financial statements included in the Registration
Statement and Prospectus, any material loss or interference with its business
from fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action, order or
decree, otherwise than as set forth in the Registration Statement and the
Prospectus, and since the respective dates as of which information is given in
the Registration Statement and the Prospectus, there shall not have been any
material change in the long-term debt of the Holding Company or the Bank other
than debt incurred in relation to the purchase of Shares by the Holding
Company's or the Bank's tax-qualified employee plans, or any material change, or
any development involving a prospective material change in or affecting the
general affairs of, management, financial position, stockholders' equity or
results of operations of the Holding Company or the Bank, otherwise than as set
forth or contemplated in the Registration Statement and the Prospectus, the
effect of which, in any such case described above, is in the Agent's reasonable
judgment sufficiently material and adverse as to make it impracticable or
inadvisable to proceed with the Offering or the delivery of the Shares on the
terms and in the manner contemplated in the Prospectus.
(i) Prior to and at the Closing Date: (i) in the reasonable opinion of
the Agent, there shall have been no material adverse change in the financial
condition or in the earnings, capital, properties or business affairs of the
Holding Company or the Bank independently, or of the Holding Company and the
Bank, considered as one enterprise, from that as of the latest dates as of which
such condition is set forth in the Prospectus, except as referred to therein;
(ii) there shall have been no material transaction entered into by the Holding
Company and the Bank, considered as one enterprise, from the latest date as of
which the financial condition of the Holding Company or the Bank is set forth in
the Prospectus other than transactions referred to or contemplated therein;
(iii) the Holding Company or the Bank shall not have received from the OTS or
the FDIC any direction (oral or written) to make any material change in the
method of conducting their business with which it has not complied in all
material respects (which direction, if any, shall have been disclosed to the
Agent) and which would reasonably be expected to have a material and adverse
effect on the condition (financial or otherwise) or on the earnings, capital,
properties or business affairs of the Holding Company or the Bank considered as
one enterprise; (iv) neither the Holding Company nor the Bank shall have been in
default (nor shall an event have occurred which, with notice or lapse
-25-
of time or both, would constitute a default) under any provision of any
agreement or instrument relating to any material outstanding indebtedness; (v)
no action, suit or proceedings, at law or in equity or before or by any federal
or state commission, board or other administrative agency, shall be pending or,
to the knowledge of the Holding Company or the Bank, threatened against the
Holding Company or the Bank or affecting any of their properties wherein an
unfavorable decision, ruling or finding would reasonably be expected to have a
material and adverse effect on the financial condition or on the earnings,
capital, properties or business affairs of the Holding Company or the Bank,
considered as one enterprise; and (vi) the Shares have been qualified or
registered for offering and sale under the securities or blue sky laws of the
jurisdictions as to which the Holding Company and the Agent shall have agreed.
(j) At or prior to the Closing Date, the Agent shall receive (i) a copy
of the letter from the OTS authorizing the use of the Prospectus and approving
the Application, (ii) a copy of the order from the Commission declaring the
Registration Statement effective, (iii) a copy of certificate of existence for
the Bank from the OTS, (iv) a certificate of good standing from the State of
Delaware evidencing the good standing of the Holding Company and (v) a copy of
the letter from the OTS approving the Holding Company Application.
(k) As soon as available after the Closing Date, the Agent shall
receive a certified copy of the Bank's stock charter.
(l) Subsequent to the date hereof, there shall not have occurred any of
the following: (i) a suspension or limitation in trading in securities generally
on the New York Stock Exchange or American Stock Exchange or in the
over-the-counter market, or quotations halted generally on the Nasdaq Stock
Market, or minimum or maximum prices for trading have been fixed, or maximum
ranges for prices for securities have been required by either of such exchanges
or the NASD or by order of the Commission or any other governmental authority;
(ii) a general moratorium on the operations of commercial banks or other
federally-insured financial institutions or general moratorium on the withdrawal
of deposits from commercial banks or other federally-insured financial
institutions declared by either federal or state authorities; (iii) the
engagement by the United States in hostilities which have resulted in the
declaration, on or after the date hereof, of a national emergency of war; or
(iv) a material decline in the price of equity or debt securities if the effect
of any of (i) through (iv) herein, in the Agent's reasonable judgment, makes it
impracticable or inadvisable to proceed with the Offering or the delivery of the
Shares on the terms and in the manner contemplated in the Registration Statement
and the Prospectus.
Section 9B. Conditions to the Holding Company and the Bank's
Obligations.
The obligations of the Holding Company and the Bank hereunder are
subject to the accuracy of the representations, warranties and covenants of the
Agent, to the
-26-
performance by the Agent of its obligations hereunder and to the satisfaction of
the conditions contained in Paragraph (a) of Section 9A hereunder.
Section 10. Indemnification.
(a) The Holding Company and the Bank agree to indemnify and hold
harmless the Agent, its officers, directors, agents, servants and employees and
each person, if any, who controls the Agent within the meaning of Section 15 of
the 1933 Act of Section 20(a) of the 1934 Act, against any and all loss,
liability, claim, damage or expense whatsoever (including but not limited to
settlement expenses and expenses and costs related to pursuing and enforcing the
indemnification provisions of Sections 10 and 11 of the Agreement), joint or
several, that the Agent or any of them may suffer or to which the Agent and any
such persons may become subject under all applicable federal and state laws or
otherwise, and to promptly reimburse the Agent and any such persons upon written
demand for any reasonable expenses (including fees and disbursements of counsel)
incurred by the Agent or any of them in connection with investigating, preparing
or defending any actions, proceedings or claims (whether commenced or
threatened) to the extent such losses, claims, damages, liabilities or actions
(i) arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement (or any
amendment or supplement thereto), preliminary or final Prospectus (or any
amendment or supplement thereto), the Application, or any blue sky application
or other instrument or document of the Holding Company or the Bank or based upon
written information supplied by the Holding Company or the Bank filed in any
state or jurisdiction to register or qualify any or all of the Shares under the
securities laws thereof (collectively, the "Blue Sky Application"), or any
application or other document, advertisement, or communication ("Sales
Information") prepared, made or executed by or on behalf of the Holding Company
or the Bank with its consent or based upon written information furnished by or
on behalf of the Holding Company or the Bank, whether or not filed in any
jurisdiction in order to qualify or register the Shares under the securities
laws thereof; (ii) arise out of or based upon the omission or alleged omission
to state in any of the foregoing documents or information, a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading; (iii)
arise from any theory of liability whatsoever relating to or arising from or
based upon the Registration Statement (or any amendment or supplement thereto),
preliminary or final Prospectus (or any amendment or supplement thereto), the
Application, any Blue Sky Application or Sales Information or other
documentation distributed in connection with the Conversion; provided, however,
that no indemnification is required under this paragraph (a) to the extent such
losses, claims, damages, liabilities or actions arise out of or are based upon
any untrue material statements or alleged untrue material statements in, or
material omission or alleged material omission from, the Registration Statement
(or any amendment or supplement thereto) or the preliminary or final Prospectus
(or amendment or supplement thereto), the Application, the Blue Sky Application
or Sales Information or other documentation distributed in connection with the
Conversion made in reliance upon and in conformity
-27-
with written information furnished to the Holding Company or the Bank by the
Agent with respect to the Agent expressly for use in the Registration Statement
(or any amendment or supplement thereto) or Prospectus (or any amendment or
supplement thereto) under the caption "The Conversion - Marketing Arrangements"
therein or statistical information regarding the Holding Company prepared by the
Agent for use in the Sales information except for information derived from the
Prospectus. Provided further, that the Holding Company and the Bank will not be
responsible for any loss, liability, claim, damage or expense to the extent they
result primarily from actions taken or omitted to be taken by the Agent in bad
faith or from the Agent's negligence, and the Agent agrees to repay to the
Holding Company any amounts advanced by it to the Agent in connection with
matters as to which the Agent is found not to be entitled to indemnification
hereunder. Notwithstanding the foregoing, the indemnification provided for in
this paragraph (a) shall not apply to the Bank to the extent that such
indemnification by the Bank would constitute a covered transaction under Section
23A of the Federal Reserve Act.
(b) The Agent agrees to indemnify and hold harmless the Holding
Company, its directors and officers, agents, servants and employees and each
person, if any, who controls the Holding Company within the meaning of Section
15 of the 1933 Act or Section 20(a) of the 1934 Act against any and all loss,
liability, claim, damage or expense whatsoever (including but not limited to
settlement expenses), joint or several which they, or any of them, in connection
with investigating, preparing or defending any actions, proceedings or claims
(whether commenced or threatened) to the extent such losses, claims, damages,
liabilities or actions arise out of or are based upon any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement (or any amendment of supplement thereto), the Application, the Holding
Company Application or any Blue Sky Application or Sales Information or are
based upon the omission or alleged omission to state in any of the foregoing
documents a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided, however, that the Agent's obligations under this
Section 10(b) shall exist only if and only to the extent that such untrue
statement or alleged untrue statement was made in, or such material fact or
alleged material fact was omitted from, the Registration Statement (or any
amendment or supplement thereto) or the Prospectus (or any amendment or
supplement thereto) in reliance upon and in conformity with written information
furnished to the Holding Company by the Agent expressly for use under the
caption "The Conversion - Marketing Arrangements" therein or statistical
information regarding the Holding Company prepared by the Agent for use in the
Sales Information except for information derived from the Prospectus.
(c) Each indemnified party shall give prompt written notice to each
indemnifying party of any action, proceeding, claim (whether commenced or
threatened), or suit instituted against it in respect of which indemnity may be
sought hereunder, but failure to so notify an indemnifying party shall not
relieve it from any liability which it may have on account of this Section 10 or
otherwise. An indemnifying party may participate
-28-
at its own expense in the defense of such action. In addition, if it so elects
within a reasonable time after receipt of such notice, an indemnifying party,
jointly with any other indemnifying parties receiving such notice, may assume
defense of such action with counsel chosen by it and approved by the indemnified
parties that are defendants in such action, unless such indemnified parties
reasonably object to such assumption on the ground that there may be legal
defenses available to them that are different from or in addition to those
available to such indemnifying party. If an indemnifying party assumes the
defense of such action, the indemnifying parties shall not be liable for any
fees and expenses of counsel for the indemnified parties incurred thereafter in
connection with such action, proceeding or claim, other than reasonable costs of
investigation. In no event shall the indemnifying parties be liable for the fees
and expenses of more than one separate firm of attorneys (and any special
counsel that said firm may retain) for all indemnified parties in connection
with any one action, proceeding or claim or separate but similar or related
actions, proceedings or claims in the same jurisdiction arising out of the same
general allegations or circumstances.
(d) The agreements contained in this Section 10 and in Section 11
hereof and the representations and warranties of the Holding Company and the
Bank set forth in this Agreement shall remain operative and in full force and
effect regardless of: (i) any investigation made by or on behalf of the Agent or
their officers, directors or controlling persons, agents or employees or by or
on behalf of the Holding Company or the Bank or any officers, directors or
controlling persons, agents or employees of the Holding Company or the Bank or
any controlling person, director or officer of the Holding Company or the Bank;
(ii) delivery of and payment hereunder for the Shares; or (iii) any termination
of this Agreement.
Section 11. Contribution.
(a) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in Section 10 is due in
accordance with its terms but is for any reason held by a court to be
unavailable from the Holding Company and the Bank, or the Agent, as the case may
be, the Holding Company and the Bank, or the Agent, as the case may be, shall
contribute to the aggregate losses, claims, damages and liabilities (including
any investigation, legal and other expenses incurred in connection therewith and
any amount paid in settlement of any action, suit or proceeding of any claims
asserted, but after deducting any contribution received by the Holding Company
and the Bank or the Agent, as the case may be, from persons other than the other
party thereto, who may also be liable for contribution) in such proportion so
that the Agent is responsible for that portion represented by the percentage
that the fees paid to the Agent pursuant to Section 4 of this Agreement (not
including expenses) bears to the gross proceeds received by the Holding Company
from the sale of the Shares in the Offering and the Holding Company and the Bank
shall be responsible for the balance. If, however, the allocation provided above
is not permitted by applicable law or if the indemnified party failed to give
the notice required under Section 10 above, then each indemnifying party shall
contribute to such amount paid or payable by such indemnified
-29-
party in such proportion as is appropriate to reflect not only such relative
fault of the Holding Company and the Bank on the one hand and the Agent on the
other in connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities (or actions, proceedings or claims in
respect thereof), but also the relative benefits received by the Holding Company
and Bank on the one hand and the Agent on the other from the offering, as well
as any other relevant equitable considerations. The relative benefits received
by the Holding Company and the Bank on the one hand and the Agent on the other
shall be deemed to be in the same proportion as the total gross proceeds from
the Offering (before deducting expenses) received by the Holding Company bear to
the total fees (not including expenses) received by the Agent. The relative
fault shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Holding
Company and/or the Bank on the one hand or the Agent on the other and the
parties relative intent, good faith, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Holding
Company and the Agent agrees that it would not be just and equitable if
contribution pursuant to this Section 11 were determined by pro-rata allocation
or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 11. The amount paid
or payable by an indemnified party as a result of the losses, claims, damages or
liabilities (or action, proceedings or claims in respect thereof) referred to
above in this Section 11 shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action, proceeding or claim. It is expressly agreed that
the Agent shall not be liable for any loss, liability, claim, damage or expense
or be required to contribute any amount which in the aggregate exceeds the
amount paid (excluding reimbursable expenses) to the Agent under this Agreement.
It is understood that the above-stated limitation on the Agent's liability is
essential to the Agent and that the Agent would not have entered into this
Agreement if such limitation had not been agreed to by the parties to this
Agreement. No person found guilty of any fraudulent misrepresentation (within
the meaning of Section 11(f) of the 0000 Xxx) shall be entitled to contribution
from any person who was not found guilty of such fraudulent misrepresentation.
The obligations of the Holding Company, the Bank, and the Agent under this
Section 11 and under Section 10 shall be in addition to any liability which the
Holding Company, the Bank, and the Agent may otherwise have. For purposes of
this Section 11, each of the Agent's, the Holding Company's and the Bank's
officers and directors and each person, if any, who controls the Agent or the
Holding Company and the Bank within the meaning of the 1933 Act and the 1934 Act
shall have the same rights to contribution as the Holding Company, the Bank and
the Agent. Any party entitled to contribution, promptly after receipt of notice
of commencement of any action, suit, claim or proceeding against such party in
respect of which a claim for contribution may be made against another party
under this Section 11, will notify such party from whom contribution may be
sought, but the omission to so notify such party shall not relieve the party
from whom contribution may be sought from any other obligation it may have
hereunder or otherwise than under this Section 11.
-30-
Section 12. Representations, Warranties and Indemnities to Survive
Delivery. All representations, warranties and indemnities and other statements
contained in this Agreement, or contained in certificates of officers of the
Holding Company and the Bank or the Agent submitted pursuant hereto, shall
remain operative and in full force and effect, regardless of any termination or
cancellation of this Agreement or any investigation made by or on behalf of the
Agent or controlling person, or by or on behalf of the Holding Company and the
Bank and shall survive the issuance of the Shares, and any legal representative,
successor or assign of the Agent, the Bank and the Holding Company, and any
indemnified person shall be entitled to the benefit of the respective
agreements, indemnities, warranties and representations.
Section 13. Termination. The Agent may terminate this Agreement by
giving the notice indicated below in this Section at any time after this
Agreement becomes effective as follows:
(a) In the event the Holding Company fails to sell the minimum number
of the Shares within the period specified in accordance with the provisions of
the Plan or as required by the Conversion Regulations and applicable law, this
Agreement shall terminate upon refund by the Bank to each person who has
subscribed for or ordered any of the Shares the full amount which it may have
received from such person, together with interest in accordance with Section 3,
and no party to this Agreement shall have any obligation to the other hereunder,
except as set forth in Sections 3, 4, 8, 10 and 11 hereof.
(b) If any of the conditions specified in Section 9A shall not have
been fulfilled when and as required by this Agreement, or by the Closing Date,
or waived in writing by the Agent, this Agreement and all of the Agent's
obligations hereunder may be canceled by the Agent by notifying the Bank of such
cancellation in writing or by telegram at any time at or prior to the Closing
Date, and, any such cancellation shall be without liability of any party to any
other party except as otherwise provided in Sections 3, 4, 8, 10 and 11 hereof.
(c) If the Agent elects to terminate this Agreement as provided in this
section, the Holding Company and the Bank shall be notified by the Agent as
provided in Section 14 hereof.
Section 14. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the Agent
shall be directed to Xxxxxxx Xxxx & Company, A Division of Xxxxx, Xxxxxxxx &
Xxxxx, Inc. at 000 Xxxxxxxxx Xxxxxx, Xxxxxx, Xxxx 00000, Attention: Xx. Xxxxxxx
X. Xxxx (with a copy to Xxxxxxx X. Xxxxxx, P.C., XxXxxxxxx, Will & Xxxxx, 000
Xxxx Xxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 60606-5096), and notices to the Holding
Company and the Bank shall be directed to 0000 Xxxxx Xxxxxxx Xxxx, Xxxxxxx,
Xxxxxxxx 00000-0000, Attention: Xxxxxxxx X. Xxxxxx,
-31-
President and Chief Executive Officer (with a copy to Xxx X. Xxxxxxxx, P.C.,
Silver, Xxxxxxxx & Xxxx, L.L.P., 0000 Xxx Xxxx Xxxxxx, X.X., Xxxxxxxxxx, X.X.
00000).
Section 15. Parties. This Agreement shall inure to the benefit of and
be binding upon the Agent and the Holding Company and the Bank and their
respective successors. Nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any person, firm or corporation, other
than the parties hereto and their respective successors and the controlling
persons and officers and directors referred to in Sections 10 and 11 and their
heirs and legal representatives, any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provisions herein contained. It is
understood and agreed that this Agreement is the exclusive agreement among the
parties, supersedes any prior Agreement among the parties and may not be varied
except by a writing signed by all parties.
Section 16. Partial Invalidity. In the event that any term, provision
or covenant herein or the application thereof to any circumstances or situation
shall be invalid or unenforceable, in whole or in part, the remainder hereof and
the application of said term, provision or covenant to any other circumstance or
situation shall not be affected thereby, and each term, provision or covenant
herein shall be valid and enforceable to the full extent permitted by law.
Section 17. Construction. This Agreement shall be construed in
accordance with the laws of the State of Illinois.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us a counterpart hereof, whereupon this
instrument along with
-32-
all counterparts will become a binding agreement between you and us in
accordance with its terms.
Very truly yours,
PREFERRED SAVINGS BANK PS FINANCIAL, INC.
By:_________________________ By:______________________________
Xxxxxxxx X. Xxxxxx, President Xxxxxxxx X. Xxxxxx, President
and Chief Executive Officer and Chief Executive Officer
The foregoing Agency Agreement is
hereby confirmed and accepted as of
the date first set and above
written.
XXXXXXX XXXX & COMPANY,
A DIVISION OF XXXXX, XXXXXXXX & XXXXX, INC.
By: ___________________________
Its: ___________________________
-33-
PS FINANCIAL, INC.
(A Delaware Corporation)
Up to __________ Shares
(Par Value $.01 Per Share)
SELECTED DEALERS' AGREEMENT
____________, 1996
Ladies and Gentlemen:
We have agreed to assist PSB Financial Company (the "Company"), a
Delaware corporation, in connection with the offer and sale of up to _________
shares of the Company's common stock, $0.01 par value (the "Common Stock"), to
be issued in connection with the conversion of Preferred Savings Bank
("Preferred" or the "Bank"), a federally chartered mutual savings bank in
accordance with the Plan of Conversion of the Bank (the "Plan") and the sale of
all the Bank's issued and outstanding common stock to the Company (the
"Conversion"). The price per share of the Common Stock has been fixed at $10.00.
The Common Stock and certain of the terms on which it is being offered, are more
fully described in the enclosed prospectus dated ____________, 1996 (the
"Prospectus").
In connection with the Conversion, the Company is offering the Common
Stock in a Subscription Offering (to the Eligible Account Holders, Tax-Qualified
Employee Plans, Supplemental Eligible Account Holders, Other Members of the
Bank, and to directors, officers and employees of the Bank) and in a Public
Offering to selected persons. The Common Stock is also being offered in
accordance with the Plan by a selected group of broker-dealers.
We are offering the selected dealers (of which you are one) the
opportunity to participate in the solicitation of offers to buy the Common Stock
and we will pay you a fee in the amount of ______ percent (_____%) of the dollar
amount of the Common Stock sold on behalf of the Company by you, as evidenced by
the authorized designation of your firm on the order form or forms for such
Common Stock accompanying the funds transmitted for payment therefor to the
special account established by the Bank for the purpose of holding such funds.
Any purchase of Common Stock made pursuant to this Agreement is subject to a
maximum purchase limitation of $150,000 of the Common Stock offered in the
Conversion. It is understood, of course, that payment of your fee will be made
to you directly by the Company for the Common Stock sold on behalf of the
Company by you, as evidenced in accordance with the preceding sentence.
As soon as practicable after the closing date of the offering, the Company will
remit to you the fees to which you are entitled hereunder.
Each order form for the purchase of Common Stock must set forth the
identity and address of each person to whom the certificates for such Common
Stock should be issued and delivered. Such order form should clearly identify
your firm. You shall instruct any subscriber who elects to send his order form
to you to make any accompanying check payable to the Bank.
This offer is made subject to the terms and conditions herein set forth
and contained in the Plan and is made only to selected dealers who are (i)
members in good standing of the National Association of Securities Dealers, Inc.
(the "NASD") who are to comply with all applicable rules of the NASD, including,
without limitation, the NASD's Interpretation With Respect to Free-Riding and
Withholding and Section 24 of Article III of the NASD's Rules of Fair Practice,
or (ii) foreign dealers not eligible for membership in the NASD who agree (A)
not to sell any Common Stock within the United States, its territories or
possessions or to persons who are citizens thereof or resident therein and (B)
in making other sales to comply with the above-mentioned NASD Interpretation,
Sections 8, 24 and 36 of the above-mentioned Article III as if they were NASD
members and Section 25 of such Article III as it applies to non-member brokers
or dealers in a foreign country.
Orders for Common Stock will be strictly subject to confirmation and
we, acting on behalf of the Company, reserve the right in our uncontrolled
discretion to reject any order in whole or in part, to accept or reject orders
in the order of their receipt or otherwise, and to allot. Neither you nor any
other person is authorized by the Company or by us to give any information or
make any representations other than those contained in the Prospectus in
connection with the sale of any of the Common Stock. No selected dealer is
authorized to act as agent for us when soliciting offers to buy the Common Stock
from the public or otherwise. No selected dealer shall engage in any stabilizing
(as defined in Rule 10b-7 promulgated under the Securities Exchange Act of 1934)
with respect to the Company's Common Stock during the offering.
We and each selected dealer assisting in selling Common Stock pursuant
hereto agree to comply with the applicable requirements of the Securities
Exchange Act of 1934 and applicable state rules and regulations. In addition, we
and each selected dealer confirm that the Securities and Exchange Commission
interprets Rule 15c2-8 promulgated under the Securities Exchange Act of 1934 as
requiring that a Prospectus be supplied to each person who is expected to
receive a confirmation of sale 48 hours prior to delivery of such person's order
form.
We and each selected dealer within the meaning of Rule 15c3-1(a)(1)
further agree to the extent that our customers desire to pay for shares with
funds held by or to be deposited with us, in accordance with the interpretation
of the Securities and Exchange Commission of Rule 15c2-4 promulgated under the
Securities Exchange Act
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of 1934, either (a) upon receipt of an executed order form or direction to
execute an order form on behalf of a customer to forward the offering price for
the Common Stock ordered on or before twelve noon of the business day following
receipt or execution of an order form by us to the Bank for deposit in a
segregated account or (b) to solicit indications of interest in which event (i)
we will subsequently contact any customer indicating interest to confirm the
interest and give instructions to execute and return an order form or to receive
authorization to execute the order form on the customer's behalf, (ii) we will
mail acknowledgements of receipt of orders to each customer confirming interest
on the business day following such confirmation, (iii) we will debit accounts of
such customers on the fifth business day (the "debit date") following receipt of
the confirmation referred to in (i) and (iv) we will forward completed order
forms together with such funds to the Bank on or before twelve noon on the next
business day following the debit date for deposit in a segregated account. We
and each selected dealer acknowledge that if the procedure in (b) is adopted,
our customers' funds are not required to be in their accounts until the debit
date.
Unless earlier terminated by us, this Agreement shall terminate upon
the closing date of this offering. We may terminate this Agreement or any
provisions hereof at any time by written or telegraphic notice to you. Of
course, our obligations hereunder are subject to the successful completion of
the offering.
You agree that at any time or times prior to the termination of this
Agreement you will, upon our request, report to us the number of shares of
Common Stock sold on behalf of the Company by you under this Agreement.
We shall have full authority to take such actions as we may deem
advisable in respect of all matters pertaining to the offering. We shall be
under no liability to you except for lack of good faith and for obligations
expressly assumed by us in this Agreement.
Upon application to us, we will inform you as to the states in which we
believe the Common Stock has been qualified for sale under, or are exempt from
the requirements of, the respective blue sky laws of such states, but we assume
no responsibility or obligation as to your rights to sell Common Stock in any
state.
Additional copies of the Prospectus and any supplements thereto will be
supplied in reasonable quantities upon request.
Any notice from us to you shall be deemed to have been duly given if
mailed, telephoned, or telegraphed to you at the address to which this Agreement
is mailed.
This Agreement shall be construed in accordance with the laws of the
State of Ohio.
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Please confirm your agreement hereto by signing and returning the
confirmation accompanying this letter at once to us at Xxxxxxx Xxxx & Company, A
Division of Xxxxx, Xxxxxxxx & Xxxxx, Inc., 000 Xxxxxxxxx, Xxxxxx, Xxxx
00000-0000. The enclosed duplicate copy will evidence the agreement between us.
XXXXXXX XXXX & COMPANY,
A DIVISION OF XXXXX, XXXXXXXX & XXXXX, INC.
By: ___________________________
Xxxxxxxx X. XxXxxxx
Executive Vice President
and Chief Operating Officer
Agreed and accepted as of ____________, 1996
___________________________________
By: ___________________________
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