Exhibit 1.2
DRAFT 1,615,000 - 2,185,000 Shares
1/26/99 (subject to increase up to 2,512,750 shares
in the event of an oversubscription)
FIRST BANCORP OF INDIANA, INC.
(an Indiana corporation)
COMMON STOCK
($0.01 Par Value Per Share)
Subscription Price: $10.00 Per Share
AGENCY AGREEMENT
____________ , 1999
Capital Resources, Inc.
0000 Xxxxxxxxxxx Xxxxxx, X.X.
Suite 200
Washington, D.C. 20036
Ladies and Gentlemen:
First Bancorp of Indiana, Inc. (the "Company") and First Federal Savings
Bank of Evansville, Indiana, a federally chartered mutual savings bank ("Savings
Bank"), with its deposit accounts insured by the Savings Association Insurance
Fund ("SAIF") administered by the Federal Deposit Insurance Corporation
("FDIC"), hereby confirm their agreement with Capital Resources, Inc. ("Capital
Resources") as follows:
SECTION 1. The Offering. The Savings Bank, in accordance with and
pursuant to its plan of conversion adopted by the Board of Directors of the
Savings Bank (the "Plan"), intends to be converted from a federally chartered
mutual savings bank to a federally chartered stock savings bank and will sell
all of its issued and outstanding stock to the Company. The Company will offer
and sell its common stock (the "Common Stock") in a subscription offering
("Subscription Offering") to (1) depositors of the Savings Bank as of June 30,
1997 ("Eligible Account Holders"), (2) tax qualified employee benefit plans of
the Savings Bank, (3) depositors of the Savings Bank as of December 31, 1998
("Supplemental Eligible Account Holders"), and (4) certain other members of the
Savings Bank ("Other Members") pursuant to rights to subscribe for shares of
Common Stock (the "Shares"). Subject to the prior subscription rights of the
above-listed parties, and, depending on market conditions, the Company may also
offer the Common Stock for sale to persons residing in communities near the
Savings Bank's offices in a direct community offering (the "Direct Community
Offering") conducted after the Subscription Offering and the Company may offer
its Common Stock for sale in a public offering to selected persons (the "Public
Offering,") conducted after the Direct Community Offering. The Public Offering,
the Direct Community Offering and Subscription Offering are refereed to
collectively as the "Offering," and all such Offerees being referred to in the
aggregate as "Eligible Offerees." Shares may also be sold in the Public
Offering by a selling group of broker-dealers organized and managed by Capital
Resources. It is acknowledged that the purchase of Shares in the Offering is
subject to maximum and minimum purchase limitations as described in the Plan and
that the Company may reject in whole or in part any subscriptions received from
subscribers in the Public Offering or Direct Community Offering.
The Company and the Savings Bank desire to retain Capital Resources to
assist the Company with its sale of the Shares in the Offering. By and through
this Agreement, the Company and the Savings Bank confirm the retention of
Capital Resources to assist the Company and the Savings Bank during the
Offering.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-1 (File No.333-68793)
containing an offering 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, if any, and such amended prospectuses as may
have been required to the date hereof (the "Registration Statement"). The
prospectus, as amended, included in the Registration Statement at the time it
initially becomes effective, is hereinafter called the "Offering Prospectus",
except that if any prospectus is filed by the Company pursuant to Rule 424(b)
or (c) of the rules and regulations of the Commission under the 1933 Act (the
"1933 Act Regulations") differing from the offering prospectus included in the
Registration Statement at the time it initially becomes effective, the term
"Offering Prospectus" shall refer to the offering prospectus filed pursuant to
Rule 424(b) or (c) from and after the time said offering prospectus is filed
with or mailed to the Commission for filing.
In accordance with Title 12, Part 563b of the Code of Federal Regulations
(the "Conversion Regulations"), the Savings Bank has filed with the Office of
Thrift Supervision (the "OTS") an Application for Approval of Conversion on Form
AC (the "Conversion Application") including the Offering Prospectus and has
filed such amendments thereto, if any, as may have been required by the OTS. The
Conversion Application has been approved by the OTS. The Company has filed with
the OTS its application on Form H-(e)1-S (the "Holding Company Application") to
acquire the Savings Bank under the Home Owners' Loan Act, as amended (12 U.S.C.
(S)1467a) ("HOLA").
SECTION 2. Retention of Capital Resources; Compensation; Sale and Delivery
of the Shares. Subject to the terms and conditions herein set forth, the Company
and the Savings Bank hereby appoint Capital Resources as their agent to advise
and assist the Company and the Savings Bank with the Company's sale of the
Shares in the Offering.
On the basis of the representations, warranties, and agreements herein
contained, but subject to the terms and conditions herein set forth, Capital
Resources accepts such appointment and agrees to consult with and advise the
Company and the Savings Bank as to matters relating to the Conversion and the
Offering. It is acknowledged by the Company and the Savings Bank that Capital
Resources shall not be required to purchase any Shares and shall not be
obligated to take any action which is inconsistent with any applicable laws,
regulations, decisions or orders. If requested by the Company or the Savings
Bank, Capital Resources also may assemble and manage a selling group of broker
dealers which are members of the National Association of Securities Dealers,
Inc. (the "NASD") to participate in the solicitation of purchase orders for
Shares under a selected dealers' agreement ("Selected Dealers' Agreement"). A
form of Selected Dealers' Agreement is annexed as Exhibit B. The obligations of
Capital Resources pursuant to this Agreement shall terminate upon the completion
or termination or abandonment of the Plan by the Company or the Savings Bank, or
if the terms of the Conversion are substantially amended so as to materially and
adversely change the role of Capital Resources, but in no event later than 45
days after the completion of the Offering (the "End Date"). All fees due to
Capital Resources but unpaid will be payable to Capital Resources in next day
funds at the earlier of the Closing Date (as hereinafter defined) or the End
Date. In the event the Offering is extended beyond the End Date, the Company,
the Savings Bank and Capital Resources may agree to renew this Agreement under
mutually acceptable terms.
In the event the Company is unable to sell a minimum of $16,150,000 of
Common Stock within the period herein provided, this Agreement shall terminate,
and the Company shall refund to any persons who have subscribed for any of the
Shares, the full amount which it may have received from them plus accrued
interest as
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set forth in the Offering Prospectus; and none of the parties to this Agreement
shall have any obligation to the other parties hereunder, except as set forth in
this Section 2 and in Sections 7, 9 and 10 hereof.
In the event the closing does not occur, the Conversion is terminated or
otherwise abandoned, or the terms of the Conversion are substantially amended so
as to materially and adversely change the role of Capital Resources, Capital
Resources shall be entitled to retain any compensation already received for
consulting services prior to the closing, and shall be reimbursed for all
reasonable legal fees and actual, accountable out-of-pocket expenses subject to
the limits set forth in paragraph (b) below for rendering financial advice to
the Savings Bank concerning the structure of the Conversion, preparing a market
and financial analysis, performing due diligence and assisting in the
preparation of the Application for Conversion and the Registration Statement,
which shall be paid upon such termination, abandonment or amendment or within
five days of such event.
If all conditions precedent to the consummation of the Conversion,
including, without limitation, the sale of all Shares required by the Plan to be
sold, are satisfied, the Company agrees to issue or have issued the Shares sold
in the Offering and to release for delivery certificates for such Shares on the
Closing Date (as hereinafter defined) against payment to the Company by any
means authorized by the Plan, provided, however, that no certificates shall be
released for such shares until the conditions specified in Section 7 hereof
shall have been complied with to the reasonable satisfaction of Capital
Resources and its counsel. The release of Shares against payment therefor shall
be made on a date and at a time and place acceptable to the Company, the Savings
Bank and Capital Resources. The date upon which the Company shall release or
deliver the Shares sold in the Offering, in accordance with the terms hereof, is
herein called the "Closing Date."
Capital Resources shall receive the following compensation for its services
hereunder:
(a) a marketing fee in the amount of 1.25% of the total dollar amount of
the Common Stock sold in the Offering, excluding Shares received by the ESOP,
and by officers, directors, and employees of the Savings Bank, and their
immediate household family members (of which $30,000 was paid on execution of
the engagement letter dated August 24, 1998 and $30,000 was paid on regulatory
approval of the Conversion Application for consulting work performed prior to
the Offering, and the balance will be paid upon closing of the Conversion).
(b) Capital Resources shall be reimbursed for all reasonable out-of-pocket
expenses, including, but not limited to, legal fees, travel, communications and
postage, incurred by it whether or not the Conversion is successfully completed
as set forth in Section 7 hereof. Reimbursement for Capital Resources' legal and
other expenses shall not exceed $40,000, unless otherwise approved by the
Savings Bank. Capital Resources shall be reimbursed promptly for all out-of-
pocket expenses upon receipt by the Company or the Savings Bank of a monthly
itemized bill summarizing such expenses since the date of the last bill, if any,
to the date of the current bill.
(c) In the event other broker-dealers are assembled and managed by Capital
Resources to participate in the sale of the shares pursuant to a Selected
Dealers' Agreement or other arrangement, the Company and the Savings Bank will
enter into a separate agreement for the payment of selected dealers'
commissions.
All subscription funds received by Capital Resources (and if by check shall
be made payable to the Company) or by other NASD registered broker-dealers
soliciting subscriptions (if any) shall be transmitted (either by U.S. Mail or
similar type of transmittal) to the Company by noon of the following business
day.
SECTION 3. Offering Prospectus; the Offering. The Shares are to be
offered in the Offering at the Purchase Price as set forth on the cover page of
the Offering Prospectus.
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SECTION 4. Representations and Warranties. The Company and the Savings
Bank jointly and severally represent and warrant to Capital Resources as
follows:
(a) The Registration Statement was declared effective by the Commission on
_____________. At the time the Registration Statement, including the Offering
Prospectus contained therein (including any amendment or supplement thereto),
became effective, the Registration Statement complied in all material respects
with the requirements of the 1933 Act and the 1933 Act Regulations and the
Registration Statement, including the Offering Prospectus contained therein
(including any amendment or supplement thereto), any Blue Sky Application or any
Sales Information (as such terms are defined previously herein or in Section 8
hereof) authorized by the Company or the Savings 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) Offering Prospectus was
filed with the Commission for filing and at the Closing Date referred to in
Section 2, the Registration Statement including the Offering Prospectus
contained therein (including any amendment or supplement thereto), any Blue Sky
Application or any Sales Information (as such terms are defined previously
herein or in Section 8 hereof) authorized by the Company or the Savings Bank for
use in connection with the Offering will not contain an untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided, however, that the representations and warranties
in this Section 4(a) shall not apply to statements in or omissions from such
Registration Statement or Offering Prospectus made in reliance upon and in
conformity with written information furnished to the Company or the Savings Bank
by Capital Resources expressly regarding Capital Resources for use under the
caption "The Conversion-Plan of Distribution for the Subscription, Direct
Community, and Syndicated Community Offerings", and "--Stock Pricing and Number
of Shares to be Issued."
(b) The Conversion Application, including the Offering Prospectus, was
approved by the OTS on _________________________________, 1999. At the time of
the approval of the Conversion Application, including the Offering Prospectus,
by the OTS (including any amendment or supplement thereto) and at all times
subsequent thereto until the Closing Date, the Conversion Application, including
the Offering Prospectus, will comply in all material respects with the
Conversion Regulations and any other rules and regulations of the OTS. The
Conversion Application, including the Offering 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 Section 4(b) shall not apply to statements or omissions made
in reliance upon and in conformity with written information furnished to the
Savings Bank by Capital Resources expressly regarding Capital Resources for use
in the Offering Prospectus contained in the Conversion Application under the
caption "The Conversion-Plan of Distribution for the Subscription, Direct
Community, and Syndicated Community Offerings," and "--Stock Pricing and Number
of Shares to be Issued."
(c) The Company has filed with the OTS the Holding Company Application and
will have received from the OTS, as of the Closing Date, approval of its
acquisition of the Savings Bank.
(d) No order has been issued by the OTS, the Commission, the FDIC (and
hereinafter reference to the FDIC shall include the SAIF), or to the best
knowledge of the Company or the Savings Bank any State regulatory or Blue Sky
authority, preventing or suspending the use of the Offering 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 Savings Bank or the Company, pending or threatened.
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(e) At the Closing Date referred to in Section 2, the Plan will have been
adopted by the Board of Directors of both the Company and the Savings Bank, the
Company and the Savings Bank will have completed in all material respects the
conditions precedent to the Conversion and the offer and sale of the Shares will
have been conducted in all material respects in accordance with the Plan, the
Conversion Regulations and all other applicable laws, regulations, decisions and
orders, including all terms, conditions, requirements and provisions precedent
to the Conversion imposed upon the Company or the Savings Bank by the OTS, the
Commission or any other regulatory authority and in all materials respects in
the manner described in the Offering Prospectus. At the Closing Date, no person
will have sought to obtain review of the final action of the OTS, to the
knowledge of the Company or the Savings Bank, in approving the Plan or in
approving the Conversion or the Company's application to acquire all of the
capital stock and control of the Savings Bank pursuant to the HOLA or any other
statute or regulation.
(f) The Savings Bank is now a duly organized and validly existing federally
chartered savings bank in mutual form of organization and upon the Conversion
will become a duly organized and validly existing federally chartered savings
bank in capital stock form of organization, in both instances duly authorized to
conduct its business and own its property as described in the Registration
Statement and the Offering Prospectus; the Company and the Savings Bank have
obtained all material licenses, permits and other governmental authorizations
currently required for the conduct of their respective businesses; all such
licenses, permits and governmental authorizations are in full force and effect,
and the Company and the Savings Bank are in all material respects complying with
all laws, rules, regulations and orders applicable to the operation of their
businesses; and the Savings Bank is in good standing under the laws of the
United States and is duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in which its ownership of
property or leasing of properties or the conduct of its business requires such
qualification, unless the failure to be so qualified in one or more of such
jurisdictions would not have a material adverse effect on the condition,
financial or otherwise, or the business, operations or income of the Savings
Bank. The Savings Bank does not own equity securities or any equity interest in
any other business enterprise except as described in the Offering Prospectus.
Upon the completion of the Conversion of the Savings Bank to a federally
chartered stock savings bank pursuant to the Plan, (i) all of the authorized and
outstanding capital stock of the Savings Bank will be owned by the Company, and
(ii) the Company will have no direct subsidiaries other than the Savings Bank.
The Conversion will have been effected in all material respects in accordance
with all applicable statutes, regulations, decisions and orders; and except with
respect to the filing of certain post-sale, post-conversion reports and
documents in compliance with the 1933 Act Regulations or the OTS's resolutions
or letters of approval. All terms, conditions, requirements and provisions with
respect to the Conversion imposed by the Commission, the OTS and the FDIC, if
any, will have been complied with by the Company and the Savings Bank in all
material respects or appropriate waivers will have been obtained and all
material notice and waiting periods will have been satisfied, waived or elapsed.
(g) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Indiana with
corporate power and authority to own, lease and operate its properties and to
conduct its business as described in the Registration Statement and the Offering
Prospectus, and the Company is qualified to do business as a foreign corporation
in any jurisdiction in which the conduct of its business requires such
qualification, except where the failure to so qualify would not have a material
adverse effect on the business of the Company.
(h) The Savings Bank is a member of the Federal Home Loan Bank of
Indianapolis ("FHLBIN"); and the deposit accounts of the Savings Bank are
insured by the FDIC up to the applicable limits. Upon consummation of the
Conversion, the liquidation account for the benefit of Eligible Account Holders
and Supplemental Eligible Account Holders will be duly established in accordance
with the requirements of the Conversion Regulations.
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(i) The Company and the Savings Bank have good and marketable title to all
assets owned by them which are material to the business of the Company and the
Savings Bank and to those assets described in the Registration Statement and
Offering Prospectus as owned by them, free and clear of all liens, charges,
encumbrances or restrictions, except such as are described in the Registration
Statement and Offering Prospectus or are not materially significant or important
in relation to the business of the Company and the Savings Bank; and all of the
leases and subleases material to the business of the Company and the Savings
Bank under which the Company or the Savings Bank holds properties, including
those described in the Registration Statement and Offering Prospectus, are in
full force and effect.
(j) The Savings Bank has received an opinion of its counsel, Xxxxxxx,
Xxxxxx & Xxxxxxxx LLP, with respect to the federal income tax consequences of
the Conversion of the Savings Bank from mutual to stock form, the acquisition of
the capital stock of the Savings Bank by the Company, the sale of the Shares,
and the reorganization of the Savings Bank as described in the Registration
Statement and the Offering Prospectus and an opinion from Olive LLP with respect
to the State of Indiana income tax consequences of the proposed transaction; all
material aspects of the opinions of Xxxxxxx, Xxxxxx & Xxxxxxxx LLP and Olive LLP
are accurately summarized in the Offering Prospectus; and the facts and
representations upon which such opinions are based are truthful, accurate and
complete, and neither the Savings Bank nor the Company will take any action
inconsistent therewith.
(k) The Company and the Savings Bank have all such power, authority,
authorizations, approvals and orders as may be required to enter into this
Agreement, to carry out the provisions and conditions hereof and to issue and
sell the Capital Stock of the Savings Bank to the Company and Shares to be sold
by the Company as provided herein and as described in the Offering 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 Company and the Savings Bank and this Agreement has been validly executed
and delivered by the Company and the Savings Bank and is the valid, legal and
binding agreement of the Company and the Savings Bank enforceable in accordance
with its terms (except as the enforceability thereof may be limited by
bankruptcy, insolvency, moratorium, reorganization or similar laws relating to
or affecting the enforcement of creditors' rights generally or the rights of
creditors of savings and loan holding companies, the accounts of whose
subsidiaries are insured by the FDIC or by general equity principles regardless
of whether such enforceability is considered in a proceeding in equity or at
law, and except to the extent, if any, that the provisions of Sections 9 and 10
hereof may be unenforceable as against public policy or pursuant to Section 23A
of the Federal Reserve Act).
(l) The Company and the Savings Bank are not in violation of any directive
which has been delivered to the Company or the Savings Bank or of which
management of the Company or the Savings Bank has actual knowledge from the OTS,
the Commission, the FDIC or any other agency to make any material change in the
method of conducting their businesses so as to comply in all material respects
with all applicable statutes and regulations (including, without limitation,
regulations, decisions, directives and orders of the OTS, the Commission and the
FDIC) and except as set forth in the Registration Statement and the Offering
Prospectus, there is no suit or proceeding or, to the knowledge of the Company
or the Savings Bank, charge, investigation or action before or by any court,
regulatory authority or governmental agency or body, pending or, to the
knowledge of the Company or the Savings Bank, threatened, which might materially
and adversely affect the Conversion, the performance of this Agreement or the
consummation of the transactions contemplated in the Plan and as described in
the Registration Statement or which might result in any material adverse change
in the financial condition or results of operations of the Company or the
Savings Bank considered as one enterprise, or which would materially affect
their properties and assets.
(m) The financial statements which are included in the Registration
Statement and which are part
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of the Offering Prospectus fairly present the financial condition, results of
operations, retained earnings and cash flows of the Savings Bank at the
respective dates thereof and for the respective periods covered thereby, and
comply as to form in all material respects with the applicable accounting
requirements of Title 12 of the Code of Federal Regulations and generally
accepted accounting principles ("GAAP") (including those requiring the recording
of certain assets at their current market value). Such financial statements have
been prepared in accordance with generally accepted accounting principles
consistently applied through the periods involved, present fairly in all
material respects the information required to be stated therein and are
consistent with the most recent financial statements and other reports filed by
the Savings 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 generally accepted accounting principles. The other financial,
statistical and pro forma information and related notes included in the Offering
Prospectus present fairly the information shown therein on a basis consistent
with the audited and unaudited financial statements, if any, of the Savings Bank
included in the Offering Prospectus, and as to the pro forma adjustments, the
adjustments made therein have been properly applied on the basis described
therein.
(n) Since the respective dates as of which information is given in the
Registration Statement and the Offering Prospectus, except as may otherwise be
stated therein: (i) there has not been any material adverse change in the
financial condition of the Company or the Savings Bank, or of the Company and
the Savings Bank considered as one enterprise, or in the earnings, capital, or
properties, of the Company or the Savings Bank, whether or not arising in the
ordinary course of business, (ii) there has not been (A) an increase of greater
than $_________________ in the long term debt of the Savings Bank or (B) an
increase of $_________________________ in non performing assets (consisting of
accruing loans past due 90 days or more, non-accruing loans and foreclosed
assets) or (C) a decrease of $ ________________or more in the allowance for loan
losses or (D) any decrease in total equity or (E) a decrease in net income from
______________________ to date when compared to the like period in ___________
or (F) any change in total assets of the Savings Bank in an amount greater than
$____________________ (excluding the proceeds of stock subscriptions) or (H) any
other material change which would require an amendment to the Offering
Prospectus; (iii) the Savings Bank has not issued any securities or incurred any
liability or obligation for borrowing other than in the ordinary course of
business; (iv) there have not been any material transactions entered into by the
Company or the Savings Bank, except with respect to those transactions entered
into in the ordinary course of business; and (v) the capitalization,
liabilities, assets, properties and business of the Company and the Savings Bank
conform in all material respects to the descriptions thereof contained in the
Offering Prospectus, and neither the Company nor the Savings Bank have any
material liabilities of any kind, contingent or otherwise, except as set forth
in the Offering Prospectus.
(o) As of the date hereof and as of the Closing Date, neither the Company
nor the Savings Bank is in violation of its articles of incorporation or
charter, respectively, or its bylaws (and the Savings Bank will not be in
violation of its charter or bylaws in capital stock form as of the Closing Date)
or in default in the performance or observance of any material 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,
business affairs or business prospects of the Company or Savings Bank 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 articles of incorporation and bylaws of the
Company, the charter and bylaws of the Savings Bank (in either mutual or capital
stock form), or any material contract, lease or other instrument to which the
Company or the Savings Bank has a beneficial interest, or any applicable law,
rule, regulation or order; (ii) violate any authorization, approval, judgment,
decree, order, statute, rule or regulation applicable to the Company or the
Savings Bank; or (iii) with the exception of the Liquidation Account established
in the Conversion, result in the creation of any material lien, charge or
encumbrance upon any property of the Company or the Savings Bank.
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(p) No default exists, and no event has occurred which with notice or lapse
of time, or both, would constitute a default on the part of the Company or the
Savings Bank, in the due performance and observance of any term, covenant or
condition of any indenture, mortgage, deed of trust, note, Savings Bank loan or
credit agreement or any other instrument or agreement to which the Company or
the Savings 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 cases, is material to the
Company or the Savings Bank; such agreements are in full force and effect; and
no other party to any such agreements has instituted or, to the best knowledge
of the Company or the Savings Bank, threatened any action or proceeding wherein
the Company or the Savings Bank would or might be alleged to be in default
thereunder.
(q) Upon consummation of the Conversion, the authorized, issued and
outstanding equity capital of the Company will be within the range set forth in
the Registration Statement under the caption "Capitalization," and no shares of
Common Stock have been or will be issued and outstanding prior to the Closing
Date referred to in Section 2; the Shares will have been duly and validly
authorized for issuance and, when issued and delivered by the Company pursuant
to the Plan against payment of the consideration calculated as set forth in the
Plan and in the Offering Prospectus, will be duly and validly issued and fully
paid and non-assessable; the issuance of the Shares will not violate any
preemptive rights; the Shares will be issued in conformity with the provisions
of the Plan, the Offering Prospectus, and the Conversion Regulations; and the
terms and provisions of the Shares will conform in all material respects to the
description thereof contained in the Registration Statement and the Offering
Prospectus. Upon the issuance of the Shares, good title to the Shares will be
transferred from the Company to the purchasers thereof against payment therefor,
subject to such claims as may be asserted against the purchasers thereof by
third party claimants.
(r) No approval of any regulatory or supervisory or other public authority
is required in connection with the execution and delivery of this Agreement or
the issuance of the Shares, except for the approval of the OTS, the Commission
and any necessary qualification or registration under the securities or blue sky
laws of the various states in which the Shares are to be offered and as may be
required under the regulations of the National Association of Securities
Dealers, Inc. ("NASD").
(s) Olive LLP ("Olive"), which has certified the financial statements of
the Savings Bank included in the Registration Statement, are with respect to the
Company and the Savings Bank independent public accountants within the meaning
of the Code of Professional Ethics of the American Institute of Certified Public
Accountants and Title 12 of the Code of Federal Regulations, Section 571.2(c)(3)
and the 1933 Act and the 1933 Act Regulations.
(t) The Company and the Savings Bank have (subject to all properly obtained
extensions) timely filed all required federal and state tax returns, have paid
all taxes that have become due and payable in respect of such returns, have made
adequate reserves for similar future tax liabilities and no deficiency has been
asserted with respect thereto by any taxing authority.
(u) Appropriate arrangements have been made for placing the funds received
from subscriptions for Shares in a special interest-bearing account with the
Savings 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 Company if all Shares are sold.
(v) To the knowledge of the Company and the Savings Bank, none of the
Company, the Savings Bank nor employees of the Company or the Savings Bank have
made any payment of funds of the Company or the Savings Bank as a loan to any
person for the purchase of the Shares other than the Employee Stock Ownership
Plan Trust.
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(w) Prior to the Conversion, the Savings Bank was not authorized to issue
shares of capital stock and neither the Company nor the Savings Bank has: (i)
issued any securities within the last 18 months (except for notes to evidence
other Savings Bank loans and reverse repurchase agreements or other
liabilities); (ii) had any material dealings within the twelve 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 the Offering and routine purchases and sales of U.S. government and
agency securities and other investment securities; (iii) entered into a
financial or management consulting agreement except as contemplated hereunder;
and (iv) engaged any intermediary between Capital Resources and the Company and
the Savings Bank in connection with the offering of Common Stock, and no person
is being compensated in any manner for such service.
(x) All pending legal proceedings to which the Company or the Bank is a
party or of which any of their property is the subject which are not described
in the Registration Statement and the Offering Prospectus, including ordinary
routine litigation incidental to the business are, considered in the aggregate,
not material.
(y) To the knowledge of the Company and the Savings Bank, the Company and
the Savings Bank comply in all material respects with all laws, rules and
regulations relating to environmental protection, and neither the Company nor
the Savings Bank has been notified or is otherwise aware that any of them is
potentially liable, or is considered potentially liable in any material respect,
under the Comprehensive Environmental Response, Compensation and Liability Act
of 1980, as amended, or any similar state or local laws. There are no actions,
suits, regulatory investigations or other proceedings pending or, to the
knowledge of the Company or the Savings Bank, threatened against the Company or
the Savings Bank relating to environmental protection, nor does the Company or
the Savings Bank have any reason to believe any such proceedings may be brought
against any of them.
(z) The Savings Bank has one subsidiary, FFSL Service Corporation, Inc.
Any certificates signed by an officer of the Company or the Savings
Bank and delivered to Capital Resources or its counsel that refer to this
Agreement shall be deemed to be a representation and warranty by the Company or
the Savings Bank to Capital Resources as to the matters covered thereby with the
same effect as if such representation and warranty were set forth herein.
SECTION 5. Capital Resources represents and warrants to the Company
and the Savings Bank that:
(a) Capital Resources is a corporation and is validly existing in good
standing under the laws of the District of Columbia with full power and
authority to provide the services to be furnished to the Company and the Savings
Bank 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 Capital Resources, and this Agreement has
been duly and validly executed and delivered by Capital Resources and is the
legal, valid and binding agreement of Capital Resources, enforceable in
accordance with its terms.
(c) Each of Capital Resources 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 and Capital Resources is a registered
selling agent in the jurisdictions listed in Exhibit A hereto and will remain
registered in such jurisdictions in which the Company is relying on such
registration for the sale of the Shares, until the Conversion is consummated or
terminated.
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(d) The execution and delivery of this Agreement by Capital Resources,
the consummation of the transactions contemplated hereby and compliance with the
terms and provisions hereof will not conflict with, or result in a breach of,
any of the terms, provisions or conditions of, or constitute a default (or event
which with notice or lapse of time or both would constitute a default) under,
the articles of incorporation of Capital Resources or any agreement, indenture
or other instrument to which Capital Resources is a party or by which its
property is bound, or law or regulation by which Capital Resources is bound.
(e) Funds received by Capital Resources to purchase Common Stock will
be handled in accordance with Rule 15c2-4 under the Securities Exchange Act of
1934, as amended.
SECTION 6. Covenants of the Company and Savings Bank. The Company
and the Savings Bank hereby jointly and severally covenant with Capital
Resources as follows:
(a) The Company will not, at any time after the date the Registration
Statement is declared effective, file any amendment or supplement to the
Registration Statement without providing Capital Resources and its counsel
reasonable time to review such amendment or file any amendment or supplement to
which amendment Capital Resources or its counsel shall reasonably object.
(b) The Savings Bank has filed the Conversion Application with the
OTS. The Savings Bank will not, at any time after the date the Conversion
Application is approved, file any amendment or supplement to the Conversion
Application without providing Capital Resources and its counsel an opportunity
to review such amendment or supplement or file any amendment or supplement to
which amendment or supplement Capital Resources or its counsel shall reasonably
object.
(c) The Company and the Savings Bank will use their best efforts to
cause any post-effective amendment to the Registration Statement to be declared
effective by the Commission and any post-effective amendment to the Conversion
Application to be approved by the OTS and will immediately upon receipt of any
information concerning the events listed below notify Capital Resources and
promptly confirm the notice in writing: (i) when the Registration Statement, as
amended, has become effective; (ii) when the Conversion Application, as amended,
has been approved by the OTS; (iii) of the receipt of any comments from the
Commission, the OTS or the FDIC or any other governmental entity with respect to
the Conversion or the transactions contemplated by this Agreement; (iv) of the
request by the Commission, the OTS or the FDIC or any other governmental entity
for any amendment or supplement to the Registration Statement or for additional
information; (v) of the issuance by the Commission, the OTS, the FDIC or any
other governmental entity of any order or other action suspending the Offering
or the use of the Registration Statement or the Offering Prospectus or any other
filing of the Company and the Savings Bank under the Conversion Regulations or
other applicable law, or the threat of any such action; (vi) the issuance by the
Commission, the OTS or 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 Company
and the Savings Bank will make every reasonable effort to prevent the issuance
by the Commission, the OTS or 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 Company and the Savings Bank will deliver to Capital Resources
and to its counsel two conformed copies of each of the following documents, with
all exhibits: the Conversion 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 Company and the Savings Bank will deliver such additional copies of the
foregoing documents to counsel for Capital Resources as may be
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required for any NASD and blue sky filings. In addition, the Company and the
Savings Bank will also deliver to Capital Resources such number of copies of the
Offering Prospectus, as amended or supplemented, as Capital Resources may
reasonably request.
(e) The Company will furnish to Capital Resources, from time to time
during the period when the Offering Prospectus (or any later prospectus related
to this Offering) is required to be delivered under the 1933 Act or the
Securities Exchange Act of 1934 (the "1934 Act"), such number of copies of such
Offering Prospectus (as amended or supplemented) as Capital Resources may
reasonably request for the purposes contemplated by the 1933 Act or the 1934 Act
or the respective applicable rules and regulations of the Commission thereunder.
The Company authorizes Capital Resources to use the Offering Prospectus (as
amended or supplemented, if amended or supplemented) for any lawful manner in
connection with the sale of the Shares by Capital Resources.
(f) The Company and the Savings 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 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, to be complied with prior to or subsequent to the Closing Date
and when the Offering Prospectus is required to be delivered, the Company and
the Savings Bank will comply in all material respects, at their own expense,
with all requirements imposed upon them by the OTS, the Conversion Regulations,
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, including, without limitation, Regulation M
under the 1934 Act, in each case as from time to time in force, so far as
necessary to permit the continuance of sales or dealing in shares of Common
Stock during such period in accordance with the provisions hereof and the
Offering Prospectus.
(g) If, at any time during the period when the Offering Prospectus
relating to the Shares is required to be delivered, any event relating to or
affecting the Company or the Savings Bank shall occur, as a result of which it
is necessary or appropriate, in the reasonable opinion of counsel for the
Company and the Savings Bank or in the reasonable opinion of Capital Resources'
counsel, to amend or supplement the Registration Statement or Offering
Prospectus in order to make the Registration Statement or Offering Prospectus
not misleading in light of the circumstances existing at the time it is
delivered to a purchaser, the Company and the Savings Bank will, at their
expense, forthwith prepare, file with the Commission and the OTS and furnish to
Capital Resources a reasonable number of copies of any amendment or amendments
of, or a supplement or supplements to, the Registration Statement or Offering
Prospectus (in form and substance reasonably satisfactory to Capital Resources
and its counsel after a reasonable time for review) which will amend or
supplement the Registration Statement or Offering Prospectus so that as amended
or supplemented it will not contain an untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements therein,
in light of the circumstances existing at the time the Offering Prospectus
reasonably is delivered to a purchaser, not misleading. For the purpose of this
Agreement, the Company and the Savings Bank each will timely furnish to Capital
Resources such information with respect to itself as Capital Resources may from
time to time request.
(h) The Company and the Savings Bank will take all necessary actions,
in cooperation with Capital Resources, and furnish to the appropriate agency,
entity, or person, such information as may be required to qualify or register
the Shares for offering and sale by the Company under the applicable securities
or blue sky laws of such jurisdictions in which the shares are required under
the Conversion Regulations to be sold or as Capital Resources and the Savings
Bank may jointly agree; provided, however, that the Company shall not be
obligated to file any general consent to service of process or to qualify to do
business in any jurisdiction in which it is not so qualified. In each
jurisdiction where any of the Shares shall have been qualified or registered as
above provided, the Company will make and file such statements and reports in
each fiscal period as are or may be required by the laws of such jurisdiction.
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(i) The liquidation account for the benefit of account holders with
account balances of $50 or more as of the applicable record dates will be duly
established and maintained in accordance with the requirements of the OTS.
(j) The Company and the Savings Bank will not sell or issue, contract
to sell or otherwise dispose of, for a period of 180 days after the date hereof,
without Capital Resources' prior written consent, any shares of Common Stock
other than in connection with any plan or arrangement described in the Offering
Prospectus.
(k) The Company shall register its Common Stock under Section 12(g) of
the 1934 Act concurrent with the stock offering pursuant to the Plan and shall
request that such registration be effective upon completion of the Conversion.
The Company shall maintain the effectiveness of such registration for not less
than three years or such shorter period as permitted by the OTS.
(l) During the period during which the Company's common stock is
registered under the 1934 Act or for three years from the date hereof, whichever
period is greater, the Company will furnish to its stockholders as soon as
practicable after the end of each fiscal year an annual report (including a
balance sheet and statements of income, stockholders' equity and changes in
financial position or cash flow statement of the Company as at the end of and
for such year, certified by independent public accountants and prepared in
accordance with Regulation S-X under the 1934 Act).
(m) During the period of three years from the date hereof, the Company
will furnish to Capital Resources: (i) a copy of each public report of the
Company furnished to or filed with the Commission under the 1934 Act or any
national securities exchange or system on which any class of securities of the
Company is listed or quoted (including but not limited to, reports on Form 10-
KSB, 10-QSB, and 8-K and all proxy statements and annual reports to
stockholders), a copy of each public report of the Company mailed to its
stockholders or 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 securities of the Company is listed or quoted, each press release and
material news items and additional public documents and information with respect
to the Company or the Savings Bank as Capital Resources may reasonably request,
and (ii) from time to time, such other publicly available information concerning
the Company and the Savings Bank as Capital Resources may reasonably request.
(n) The Company and the Savings Bank will use the net proceeds from
the sale of the Shares in the manner set forth in the Offering Prospectus under
the caption "Use of Proceeds."
(o) Other than as permitted by the Conversion Regulations, the 1933
Act, the 1933 Act Regulations and the laws of any state in which the Shares are
qualified for sale, neither the Company nor the Savings Bank will distribute any
prospectus, offering circular or other offering material in connection with the
offer and sale of the Shares.
(p) The Company will make generally available to its security holders
as soon as practicable, but not later than 90 days after the close of the period
an earnings statement (in form complying with the provisions of Rule 158 under
the 1933 Act) covering a twelve-month period beginning not later than the first
day of the Company's fiscal quarter next following the effective date (as
defined in said Rule 158) of the Registration Statement.
-12-
(q) The Company will maintain quotation of the shares on the NASDAQ
Stock Market effective on the Closing Date.
(r) The Savings 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 Offering Prospectus until the Closing Date and satisfaction of
all conditions precedent to the release of the Savings 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 Offering 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 Offering Prospectus. The Savings 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 Savings 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 Offering
Prospectus.
(s) The Company will register as a savings and loan holding company
under the HOLA within the period required by applicable law.
(t) The Company and the Savings Bank will take such actions and
furnish such information as are reasonably requested by Capital Resources in
order for Capital Resources to ensure compliance with the "Interpretation of the
Board of Governors of the NASD on Free Riding and Withholding."
(u) The Savings Bank will not amend the Plan of Conversion without
Capital Resources' prior written consent in any manner that, in the reasonable
opinion of Capital Resources, would materially and adversely affect the sale of
the Shares or the terms of this Agreement except as to comply with any
regulatory requirement.
(v) The Company shall advise Capital Resources, if necessary, as to
the allocation of the Shares in the event of an oversubscription and shall
provide Capital Resources with any information necessary to assist Capital
Resources in allocating the Shares in such event and such information shall be
accurate and reliable.
(w) The Company and the Savings Bank shall promptly advise Capital
Resources in writing of all relationships or facts which would render persons
subscribing or purchasing Shares in the Conversion Associates or Acting in
Concert within the meaning of the Conversion Regulations, and shall further
advise Capital Resources of all appropriate limitations on the purchase of
shares by such persons imposed by the Conversion Regulations and such
information furnished shall be accurate and reliable in all material respects.
SECTION 7. Payment of Expenses. Whether or not this Agreement
becomes effective, the Conversion is completed or the sale of the Shares by the
Company is consummated, the Company and Savings Bank jointly and severally agree
to pay directly for or to reimburse Capital Resources for (to the extent that
such expenses have been reasonably incurred by Capital Resources) (a) all filing
fees and expenses incurred in connection with the qualification or registration
of the Shares for offer and sale by the Company under the securities or blue sky
laws of any jurisdictions Capital Resources and the Company may agree upon
pursuant to subsection (i) of Section 6 above, including counsel fees paid or
incurred by the Company, the Savings Bank or Capital Resources in connection
with such qualification or registration or exemption from qualification or
registration; (b) all filing fees in connection with all filings with the NASD;
(c) any stock issue or transfer taxes which may be payable with respect to the
sale of the Shares to purchasers in the Conversion; (d) reasonable and necessary
expenses of the Conversion, including but not limited to, attorneys' fees,
transfer agent, registrar and
-13-
other agent charges, fees relating to auditing and accounting or other advisors
and costs of printing all documents necessary in connection with the Conversion;
and (e) out-of-pocket expenses incurred by Capital Resources in connection with
the Conversion or any of the transactions contemplated hereby, including,
without limitation, the fees of its attorneys, and reasonable communication and
travel expenses, as limited by Section 2 hereof.
SECTION 8. Conditions to Capital Resources' Obligations. Capital
Resources' obligations hereunder, as to the Shares to be delivered at the
Closing Date, are subject to the condition that all representations and
warranties and other statements of the Company and the Savings Bank herein 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 condition that the Company and
the Savings 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) At the Closing Date, the Company and the Savings Bank will have
completed the conditions precedent to, and shall have conducted the Conversion
in all material respects in accordance with, the Plan, the Conversion
Regulations and all other applicable laws, regulations, decisions and orders,
including all terms, conditions, requirements and provisions precedent to the
Conversion imposed upon them by the OTS.
(b) The Registration Statement shall have been declared effective by
the Commission and the Conversion Application approved by the OTS not later than
5:30 p.m. (eastern time) on the date of this Agreement, or with Capital
Resources' consent at a later time and date; and at the Closing Date no stop
order suspending the effectiveness of the Registration Statement shall have been
issued under the 1933 Act or proceedings therefore initiated or threatened by
the Commission or any state authority, and no order or other action suspending
the authorization of the Offering Prospectus or the consummation of the
Conversion shall have been issued or proceedings therefore initiated or, to the
Company's or Savings Bank's knowledge, threatened by the Commission, the OTS,
the FDIC or any state authority.
(c) At the Closing Date, Capital Resources shall have received:
(1) The favorable opinion, dated as of the Closing Date addressed
to Capital Resources and for its benefit, of Xxxxxxx, Xxxxxx & Xxxxxxxx LLP,
counsel for the Company and the Savings Bank dated the Closing Date, addressed
to Capital Resources and in form and substance to the effect that:
(i) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of Indiana.
(ii) The Company has corporate power and authority to own, lease
and operate its properties and to conduct its business as described in the
Registration Statement and the Offering Prospectus.
(iii) The Savings Bank is a validly existing federally chartered
savings association in mutual form of organization and upon the consummation of
the Conversion will become a duly organized and validly existing federally
chartered savings association in capital stock form of organization, in both
instances duly authorized to conduct its business and own its property as
described in the Registration Statement. The activities of the Savings Bank as
described in the Offering Prospectus, insofar as they are material to the
operations and financial condition of the Savings Bank, are permitted by the
rules and regulations of the OTS or the FDIC and any other federal or state
authorities.
(iv) The Savings Bank is a member of the FLHBIN, and the deposit
accounts of the Savings Bank are insured by the FDIC up to the maximum amount
allowed under law and to the best of such counsel's knowledge no proceedings for
the termination or revocation of such insurance are pending or threatened; and
the
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description of the liquidation account as set forth in the Registration
Statement and the Offering Prospectus under the caption "The Conversion -Effects
of Conversion to Stock Form on Depositors and Borrowers of the Bank -Liquidation
Account" has been reviewed by such counsel and is accurate in all material
respects.
(v) Upon consummation of the Conversion, the authorized, issued
and outstanding capital stock of the Company will be within the range set forth
in the Registration Statement and the Offering Prospectus under the caption
"Capitalization," and, to the best of such counsel's knowledge, no shares of
Common Stock have been issued prior to the Closing Date; at the time of the
Conversion, the Shares subscribed for pursuant to the Offerings will have been
duly and validly authorized for issuance, and when issued and delivered by the
Company pursuant to the Plan against payment of the consideration calculated as
set forth in the Plan, will be duly and validly issued and fully paid and non-
assessable; and the issuance of the Shares is not subject to statutory
preemptive rights.
(vi) The issuance and sale of the common stock of the Savings Bank
to the Company have been duly and validly authorized by all necessary corporate
action on the part of the Company and the Savings Bank and, upon payment
therefor in accordance with the terms of the Plan, the common stock of the
Savings Bank will be duly and validly issued, fully paid and non-assessable and
will be owned of record by the Company, free and clear of any mortgage, pledge,
lien, encumbrance or claim (legal or equitable).
(vii) The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly and validly
authorized by all necessary action on the part of the Company and the Savings
Bank; and this Agreement is a valid and binding obligation of the Company and
the Savings Bank, enforceable in accordance with its terms (except as the
enforceability thereof may be limited by bankruptcy, insolvency, moratorium,
reorganization or similar laws relating to or affecting the enforcement of
creditors' rights generally or the rights of creditors of savings associations
or savings and loan holding companies, the accounts of whose subsidiaries are
insured by the FDIC or by general equity principles, regardless of whether such
enforceability is considered in a proceeding in equity or at law, and except to
the extent, if any, that the provisions of Sections 9 and 10 hereof may be
unenforceable as against public policy).
(viii) The Plan has been duly adopted by the required vote of the
Directors of the Company and the Savings Bank and, to the best of such counsel's
knowledge based on a certificate of the inspector of elections, by the members
of the Savings Bank.
(ix) Subject to the satisfaction of the conditions to the OTS's
approval of the Conversion and the Company's application to acquire the Savings
Bank, no further approval, registration, authorization, consent or other order
of any regulatory agency, public board or body is required in connection with
the execution and delivery of this Agreement, the issuance of the Shares and the
consummation of the Conversion, except as may be required under the regulations
of the NASD. The Conversion has been consummated in all material respects in
accordance with the Plan, all applicable provisions of the HOLA, the Conversion
Regulations, Federal and State law and all applicable rules and regulations
promulgated thereunder, and during the course of such counsel's representation
of the Company and the Savings Bank, nothing has come to such counsel's
attention that caused it to believe that the Company and the Savings Bank have
not conducted the Conversion, in all material respects with Plan, all
applicable provisions of the HOLA, the Conversion Regulations, Federal and State
law and all applicable rules and regulations promulgated thereunder.
-15-
(x) The Conversion Application 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 Company of all of the issued and
outstanding capital stock of the Savings Bank has been authorized by the OTS and
no action has been taken, or to counsel's knowledge is pending or threatened, to
revoke any such authorization or approval, by way of judicial review of the
final action of the OTS approving the Conversion Application or in approving the
Holding Company Application or otherwise.
(xi) The Registration Statement is effective under the 1933 Act
and, to the best of such counsel's knowledge, no stop order suspending the
effectiveness has been issued under the 1933 Act or proceedings therefor
initiated or threatened by the Commission.
(xii) At the time the Conversion Application, including the Offering
Prospectus contained therein, was approved, the Conversion Application including
the Offering Prospectus contained therein (as amended or supplemented, if so
amended or supplemented) complied as to form in all material respects with the
requirements of all applicable federal laws and the rules, regulations,
decisions and orders of the OTS (except as to the financial statements, other
financial data and stock valuation and pro forma information included therein as
to which such counsel need express no opinion); to the best of such counsel's
knowledge, based on conferences with management of and the independent
accountants for the Company and the Savings Bank, and on such investigation of
the corporate records of the Company and the Savings Bank as such counsel
conducted in connection with the preparation of the Registration Statement and
the Conversion Application, all material documents and exhibits required to be
filed with the Conversion Application (as amended or supplemented, if so amended
or supplemented) have been so filed. The description in the Conversion
Application and the Offering Prospectus contained therein of such documents and
exhibits is accurate in all material respects and fairly presents the
information required to be shown.
(xiii) At the time that the Registration Statement became effective,
(i) the Registration Statement (as amended or supplemented if so amended or
supplemented) (other than the financial statements and other financial and
statistical data and stock valuation information included therein, as to which
no opinion need be rendered), complied as to form in all material respects with
the requirements of the 1933 Act and the 1933 Act Regulations and (ii) the
Offering Prospectus (other than the financial statements and other financial and
statistical data and the stock valuation and pro forma information included
therein, as to which no opinion need be rendered) complied as to form in all
material respects with the requirements of the 1933 Act, and the 1933 Act
Regulations. To the best of such counsel's knowledge based on the conferences
and document review specified in item (xii) above, all material documents and
exhibits required to be filed with the Registration Statement (as amended or
supplemented, if so amended or supplemented) have been so filed. The description
in the Registration Statement and the Offering Prospectus of such documents and
exhibits is accurate in all material respects and fairly presents the
information required to be shown and during the course of such counsel's
representation of the Company and the Savings Bank, nothing has come to such
counsel's attention that caused it to believe that the Registration Statement
and the Offering Prospectus (other than the financial statements and other
financial and statistical data and the stock valuation information included
therein as to which no opinion need be rendered) do not comply in all material
respects with applicable law.
(xiv) The terms and provisions of the Common Stock of the Company
conform to the description thereof contained in the Registration Statement and
the Offering Prospectus, and the form of certificates used to evidence the
Shares complies with applicable requirements of Indiana law.
(xv) To the best of such counsel's knowledge, there are no legal or
governmental proceedings pending or threatened which are required to be
disclosed in the Registration Statement and the Offering Prospectus, other than
those disclosed therein; provided that for this purpose, any litigation or
governmental
-16-
proceeding is not considered to be "threatened" unless the potential litigant or
governmental authority has manifested to the management of the Company or the
Savings Bank, or to such counsel, a present intention to initiate such
litigation or proceeding.
(xvi) To such counsel's knowledge, the Company and the Savings Bank
are not in violation of any directive from the OTS or the FDIC to make any
material change in the method of conducting their business.
(xvii) The information in the Registration Statement and Offering
Prospectus under the captions "Regulation," "Restrictions on Acquisition of The
Holding Company," "Taxation," "The Conversion," "Description of Capital Stock
of the Holding Company", to the extent that it constitutes matters of law,
summaries of legal matters, documents or proceedings, or legal conclusions, has
been reviewed by such counsel and is correct 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).
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, to the extent such counsel deems proper and specified in such opinion
satisfactory to Capital Resources, upon the opinion of other counsel of good
standing (providing that such counsel states that Capital Resources is justified
in relying upon such specified opinion or opinions), and (B) as to matters of
fact, to the extent such counsel deems proper, on certificates of responsible
officers of the Company and the Savings Bank and public officials (but not on
conclusions of law which may be set forth in said certificates); provided copies
of any such opinion(s) or certificates are delivered pursuant hereto to Capital
Resources together with the opinion to be rendered hereunder by special counsel
to the Company and the Savings Bank. Such counsel may assume that any agreement
is the valid and binding obligation of any parties to such agreement other than
the Company or the Savings Bank.
(2) The favorable opinion, dated as of the Closing Date addressed to
Capital Resources and for its benefit, of Xxxxxxx, Xxxxxxx & Griffith, Indiana
counsel for the Company and the Savings Bank dated the Closing Date, addressed
to Capital Resources and in form and substance to the effect that:
(i) The Savings Bank is duly organized as a federally-chartered
savings association in mutual form of organization.
(ii) To such counsel's knowledge, the Company and the Savings Bank
have obtained all licenses, permits and other governmental authorizations
required for the conduct of their respective businesses, except where the
failure to have such licenses, permits or authorizations would not have a
material adverse effect on the business, financial condition operations or
income or business prospects of the Company and the Savings Bank, and all such
licenses, permits and other governmental authorizations are in full force and
effect, and the Company and the Savings Bank are in all material respects
complying therewith.
(iii) To such counsel's knowledge, neither the Company nor the
Savings Bank is in contravention of its articles of incorporation or its
charter, respectively, or its bylaws (and the Savings Bank will not be in
contravention of its charter or bylaws in stock form upon consummation of the
Conversion) or, to such counsel's knowledge, in default or violation of any
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 default or
violation would be material to the business of the Company and the Savings Bank
considered as one enterprise; to such counsel's knowledge, any such default or
violation will not constitute a material breach of, or default under, or result
in the creation or imposition of any material lien, charge or encumbrance upon
any property or assets of the Company or the Savings Bank which are
-17-
material to their business considered as one enterprise, pursuant to any
contract, indenture, mortgage, loan agreement, note, lease or other instrument
to which the Company or the Savings Bank is a party or by which any of them may
be bound, or to which any of the property or assets of the Company or the
Savings Bank is subject. In addition, such action will not result in any default
or violation of the provisions of the articles of incorporation or bylaws of the
Company or the Savings Bank or to such counsel's knowledge, any applicable law,
act, regulation or order or court order, writ, injunction or decree.
(iv) To such counsel's knowledge, the Company and the Savings Bank
have good and marketable title to all properties and assets described in the
Registration Statement as owned by them, free and clear of all liens, charges,
encumbrances or restrictions, except such as are described in the Registration
Statement or are not material in relation to the business of the Company and the
Savings Bank considered as one enterprise; and to the best of such counsel's
knowledge, all of the leases and subleases material to the business of the
Company and the Savings Bank under which the Company and the Savings Bank hold
properties, as described in the Registration Statement, are in full force and
effect.
(v) To such counsel's knowledge, all pending legal and governmental
proceedings to which the Company or the Savings Bank is a party or of which any
of their property is the subject which are not described in the Registration
Statement and the Offering Prospectus, including ordinary routine litigation
incidental to the business, are, considered in the aggregate, not material.
(vi) To such counsel's knowledge, the Company and the Savings Bank
have conducted and are conducting their business so as to comply in all material
respects with all applicable statutes and regulations (including, without
limitation, regulations, decisions, directives and orders of the OTS and the
FDIC).
(3) The letter of Xxxxxxx, Xxxxxx & Xxxxxxxx LLP, counsel for the
Company and the Savings Bank addressed to Capital Resources, dated the Closing
Date, in form and substance to the effect that:
During the preparation of the Conversion Application, the Registration
Statement and the Offering Prospectus, such counsel participated in conferences
with management of, and the independent public accountants for the Company and
the Savings Bank. Based upon such conferences and a review of corporate records
of the Company and the Savings Bank as such counsel conducted in connection with
the preparation of the Registration Statement and Conversion Application,
nothing has come to their attention that would lead them to believe that the
Conversion Application, the Registration Statement, the Offering Prospectus, or
any amendment or supplement thereto (other than the financial statements and
other financial and statistical data and stock valuation information included
therein, as to which such counsel need express no view), contained an untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(4) The favorable opinion, dated as of the Closing Date, of Xxxxxx,
Xxxxxx, & Xxxxxxxx, P.C., counsel to Capital Resources, with respect to such
matters as Capital Resources may reasonably require. Such opinion may rely upon
the opinions of counsel to the Company and the Savings Bank, and as to matters
of fact, upon certificates of officers and directors of the Company and the
Savings Bank delivered pursuant hereto or as such counsel shall reasonably
request.
(d) At the Closing Date, counsel to Capital Resources shall have been
furnished with such documents and opinions as they may reasonably require for
the purpose of enabling them to render the opinion as herein contemplated, or in
order to evidence the occurrence or completeness of any of the representations
or warranties, or the fulfillment of any of the conditions, herein contained.
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(e) At the Closing Date, Capital Resources shall receive a certificate
of the Chief Executive Officer and the Chief Financial Officer of the Company
and of the Chief Executive Officer and Chief Financial Officer of the Savings
Bank, dated as of such Closing Date, to the effect that: (i) they have
carefully examined the Offering Prospectus and, in their opinion, at the time
the Offering Prospectus became authorized for final use, the Offering 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 light of the
circumstances under which they were made, not misleading; (ii) since the date
the Offering Prospectus became authorized for final use, in their opinion no
event has occurred which should have been set forth in an amendment or
supplement to the Offering Prospectus which has not been so set forth, including
specifically, but without limitation, any material adverse change in the
condition, financial or otherwise, or in the earnings, capital, or properties,
of the Company or the Savings Bank, and the conditions set forth in this Section
8 have been satisfied; (iii) since the respective dates as of which information
is given in the Registration Statement and the Offering Prospectus, there has
been no material adverse change in the condition, financial or otherwise, or in
the earnings, capital, or properties, of the Company or the Savings Bank,
independently, or of the Company and the Savings Bank considered as one
enterprise, whether or not arising in the ordinary course of business; (iv) to
the best knowledge of such officers the representations and warranties in
Section 4 are true and correct with the same force and effect as though
expressly made at and as of the Closing Date; (v) to the best knowledge of such
officers, the Company and the Savings Bank have complied with all material
agreements and satisfied, in all material respects at or prior to the Closing
Date, all obligations required to be met by such date and will in all material
respects comply with all obligations to be satisfied by them after Conversion;
(vi) no stop order suspending the effectiveness of the Registration Statement
has been initiated or, to the best knowledge of the Company or Savings Bank,
threatened by the Commission or any state authority; (vii) no order suspending
the Offering, the Conversion, the acquisition of all of the shares of the
Savings Bank by the Company or the effectiveness of the Offering Prospectus has
been issued and to the best knowledge of the Company or Savings Bank, no
proceedings for that purpose have been initiated or threatened by the OTS, the
Commission, the FDIC, or any state authority; and (viii) to the best of their
knowledge, no person has sought to obtain review of the final action of the OTS
approving the Plan.
(f) Prior to and at the Closing Date: (i) in the reasonable opinion of
Capital Resources, there shall have been no material adverse change in the
condition, financial or otherwise, or in the earnings, or the business affairs
or business prospects of the Company or the Savings Bank independently, or of
the Company or the Savings Bank, considered as one enterprise, since the latest
dates as of which such condition is set forth in the Offering Prospectus, except
as referred to therein; (ii) there shall have been no material transaction
entered into by the Company or the Savings Bank from the latest date as of which
the financial condition of the Company or the Savings Bank is set forth in the
Offering Prospectus other than transactions referred to or contemplated therein;
(iii) the Company or the Savings Bank shall not have received from the OTS or
the FDIC any direction (oral or written) to make any material change in the
method of conducting their business with which it has not complied (which
direction, if any, shall have been disclosed to Capital Resources) and which
would reasonably be expected to have a material and adverse effect on the
business, operations or financial condition or income of the Company or the
Savings Bank taken as a whole; (iv) neither the Company nor the Savings Bank
shall have been in default (nor shall an event have occurred which, with notice
or lapse of time or both, would constitute a default) under any provision of and
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 Company or the Savings Bank, threatened against the
Company or the Savings 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 business, operations, financial condition or
income of the Company or the Savings Bank, taken as a whole; and (vi) the Shares
have been qualified or registered for offering and sale under the securities or
blue sky laws of the jurisdictions as Capital Resources shall have requested and
as agreed to by the Company.
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(g) Concurrently with the execution of this Agreement, Capital
Resources shall receive a letter from Olive, dated the date hereof and addressed
to Capital Resources: (i) confirming that Olive is a firm of independent public
accountants within the meaning of the 1933 Act and the 1933 Act Regulations and
12 C.F.R. (S) 571.2(c)(3) and no information concerning its relationship with or
interests in the Company and the Savings Bank is required to be disclosed in the
Offering Prospectus by the Conversion Regulations or Item 10 of the Registration
Statement, and stating in effect that in Xxxxx's opinion the financial
statements of the Savings Bank as are included in the Offering 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 Savings Bank prepared by
the Savings Bank, a reading of the minutes of the meetings of the Board of
Directors and members of the Savings Bank and consultations with officers of the
Savings Bank responsible for financial and accounting matters, nothing came to
their attention which caused them to believe that: (A) during the period from
the date of the latest unaudited summary financial and other data as of and for
the three month period ended December 31, 1998, as set forth under the heading
"Recent Developments" in the Prospectus, there has been (1) any increase in the
long term debt of the Savings Bank or (2) any increase in non-performing assets
(consisting of accruing loans past due 90 days or more, non-accruing loans and
foreclosed assets) or (3) any decrease in the allowance for loan losses or (4)
any decrease in total equity or (5) a decrease in net income when compared to
the like period in the preceding year or (6) any change in total assets of the
Savings Bank in an amount from _____________________________ to
_________________________ greater than $___________________________ (excluding
the proceeds of stock subscriptions); and (iii) stating that, in addition to the
audit examination referred to in its opinion included in the Offering Prospectus
and the performance of the procedures referred to in clause (ii) of this
subsection (g), they have compared with the general accounting records of the
Company and/or the Savings Bank, as applicable, which are subject to the
internal controls of the Company and/or the Savings Bank, as applicable,
accounting system and other data prepared by the Company and/or the Savings
Bank, as applicable, directly from such accounting records, to the extent
specified in such letter, such amounts and/or percentages set forth in the
Offering Prospectus as Capital Resources may reasonably request; and they have
found such amounts and percentages to be in agreement therewith (subject to
rounding).
(h) At the Closing Date, Capital Resources shall receive a letter from
Olive, dated the Closing Date, addressed to Capital Resources, confirming the
statements made by its letter delivered by it pursuant to subsection (g) of this
Section 8, except that the "specified date" referred to in clause (ii)(B)
thereof to be a date specified in such letter, which shall not be more than
three business days prior to the Closing Date.
(i) The Company and the Savings Bank shall not have sustained since
the date of the latest audited financial statements included in the Registration
Statement and Offering Prospectus any 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 or contemplated in the Registration
Statement and Offering Prospectus, and since the respective dates as of which
information is given in the Registration Statement and Offering Prospectus,
there shall not have been any material change in the long term debt of the
Company or the Savings Bank other than debt incurred in relation to the purchase
of Shares by the Company's Tax-Qualified Employee Plans, or any change, or any
development involving a prospective change, in or affecting the general affairs,
management, financial position, stockholders' equity or results of operations of
the Company or the Savings Bank, otherwise than as set forth or contemplated in
the Registration Statement and Offering Prospectus, the effect of which, in any
such case described above, is in Capital Resources' reasonable judgment
sufficiently material and adverse as to make it impracticable or inadvisable to
proceed with the Subscription or Public Offerings or the delivery of the Shares
on the terms and in the manner contemplated in the Offering Prospectus.
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(j) At or prior to the Closing Date, Capital Resources shall receive
(i) a copy of the letter from the OTS authorizing the use of the Offering
Prospectus, (ii) a copy of the order from the Commission declaring the
Registration Statement effective, (iii) a copy of a certificate from the OTS
evidencing the valid existence of the Savings Bank, (iv) certificates of good
standing from the State of Indiana evidencing the good standing of the Company
and evidencing that the Company is duly qualified to do business in Indiana and
(v) a copy of the letter from the OTS approving the Company's Holding Company
Application.
(k) As soon as available after the Closing Date, Capital Resources
shall receive a certified copy of the Savings Bank's stock charter.
(1) 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 National
Market, or minimum or maximum prices for trading being fixed, or maximum ranges
for prices for securities being required by either of such exchanges or the NASD
or by order of the Commission or any other governmental authority; (ii) a
general moratorium on the operations of commercial banks or federal savings
banks or general moratorium on the withdrawal of deposits from commercial
associations or federal savings associations 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 or war; or (iv) a material decline in the price of equity or debt
securities if, as to clauses (iii) or (iv), the effect of such hostilities or
decline, in Capital Resources' 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
Offering Prospectus.
All such opinions, certifications, letters and documents shall be in
compliance with the provisions hereof only if they are, in the reasonable
opinion of Capital Resources and its counsel, satisfactory to Capital Resources
and its counsel. Any certificates signed by an officer or director of the
Company or the Savings Bank and delivered to Capital Resources or its counsel
shall be deemed a representation and warranty by the Company or the Savings Bank
to Capital Resources as to the statements made therein.
If any of the conditions specified in this Section shall not have been
fulfilled when and as required by this Agreement, this Agreement and all of
Capital Resources' obligations hereunder may be canceled by Capital Resources by
notifying the Savings Bank of such cancellation in writing or by telegram at any
time at or prior to the Closing Date, and any such cancellation shall be without
liability of any party to any other party except as otherwise provided in
Sections 2, 7, 9 and 10 hereof. Notwithstanding the above, if this Agreement is
canceled pursuant to this paragraph, Capital Resources will be entitled to
retain any compensation already received for consulting services prior to the
closing (including reimbursed expenses as provided herein), and the Company and
the Savings Bank jointly and severally agree to reimburse Capital Resources for
all out-of-pocket expenses, (including without limitation the fees and expenses
of Capital Resources' counsel) reasonably incurred by Capital Resources and
Capital Resources' counsel at its normal rates, in connection with the
preparation of the Registration Statement and the Offering Prospectus, and in
contemplation of the proposed Subscription or Public Offerings to the extent
provided for, and subject to the limitations contained in Sections 2 and 7
hereof.
SECTION 9. Indemnification.
(a) The Company and the Savings Bank jointly and severally agree to
indemnify and hold harmless Capital Resources, its officers, directors, agents
and employees and each person, if any, who controls or is under common control
with Capital Resources 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
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limited to settlement expenses), joint or several, that Capital Resources or any
of them may suffer or to which Capital Resources and any such persons upon
written demand for any expenses (including fees and disbursements of counsel)
incurred by Capital Resources 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, expense, 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), Offering Prospectus (or any amendment or
supplement thereto), the Conversion Application (including any document required
to be furnished therewith), or any Blue Sky application or other instrument or
document of the Company or the Savings Bank or based upon written information
supplied by the Company or the Savings Bank filed in any state or jurisdiction
to register or qualify any or all of the Shares or the subscription rights
applicable thereto under the securities laws thereof (collectively, the "Blue
Sky Application"), or any application or other document, advertisement, oral
statement, or communication ("Sales Information") prepared, made or executed by
or on behalf of the Company with its consent or based upon written or oral
information furnished by or on behalf of the Company or the Savings 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 are based upon
the omission or alleged omission to state in any of the foregoing documents or
information, a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading; or, (iii) arise from any theory of liability whatsoever
relating to or arising from or based upon the Registration Statement (or any
amendment or supplement thereto), Offering Prospectus (or any amendment or
supplement thereto), the Conversion Application (including any document required
to be furnished therewith), 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), the Conversion Application
(including any document required to be furnished therewith), any Blue Sky
Application, the Offering Prospectus (or any amendment or supplement thereto),
or Sales Information made in reliance upon and in conformity with written
information furnished to the Company or the Savings Bank by Capital Resources
regarding Capital Resources expressly for use under the captions "The
Conversion--Plan of Distribution for the Subscription, Direct Community, and
Syndicated Community Offerings", and "--Stock Pricing and Number of Shares
Issued" in the Offering Prospectus nor is indemnification required for material
oral misstatements made by Capital Resources, which are not based upon
information provided by the Savings Bank or the Company orally or in writing or
based on information contained in the Registration Statement (or any amendment
or supplement thereto), Offering Prospectus (or any amendment or supplement
thereto), the Conversion Application (including any document required to be
furnished therewith), any Blue Sky Application or Sales Information distributed
in connection with the Conversion. In addition, the Savings Bank and the Company
will not be liable under the foregoing provisions to the extent that the loss,
claim, damage, liability, expense, or actions is expressly found in a final
judgment by a court of competent jurisdiction to have resulted from Capital
Resources' bad faith, willful misconduct, or gross negligence.
(b) Capital Resources agrees to indemnify and hold harmless the
Company and the Savings Bank, their directors and officers, agents, servants and
employees and each person, if any, who controls the Company or the Savings Bank
within the meaning of Section 15 of the 1933 Act or Section 20(a) of the 1934
Act against any and all loss, liability, claim, damage or expense whatsoever
(including but not limited to settlement expenses), joint or several which they,
or any of them, may suffer or to which they, or any of them, may become subject
under all applicable federal and state laws or otherwise, and to promptly
reimburse the Company, the Savings Bank and any such persons upon written demand
for any expenses (including fees and disbursements of counsel) incurred by them,
or any of them, in connection with investigating, preparing or defending any
actions, proceedings or claims (whether commenced or threatened) to the extent
such losses, claims, damages, liabilities, expense, or actions arise out of or
are based upon any untrue statement or alleged untrue statement of a material
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fact contained in the Registration Statement (or any amendment of supplement
thereto), or the Offering Prospectus (or any amendment or supplement thereto),
or the Conversion 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 Capital Resources
obligations under this Section 9(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), the Offering Prospectus (or
any amendment or supplement thereto), or the Conversion Application, any Blue
Sky Application or Sales Information in reliance upon and in conformity with
written information furnished to the Company or the Savings Bank by Capital
Resources regarding Capital Resources expressly for use under the captions "The
Conversion - Plan of Distribution for the Subscription, Direct Community, and
Syndicated Community Offerings " and "--Stock Pricing and Number of Shares
Issued" in the Offering Prospectus or in the event of oral misstatements made by
Capital Resources, which are not based upon information provided by the Savings
Bank or the Company orally or in writing or based on information contained in
the Registration Statement (or any amendment or supplement thereto), Offering
Prospectus (or any amendment or supplement thereto), the Conversion Application,
any Blue Sky Application or Sales Information distributed in connection with the
Conversion. In addition, Capital Resources will not be liable under the
foregoing provisions to the extent that the loss, claim, damage, liability,
expense, or actions is expressly found in a final judgment by a court of
competent jurisdiction to have resulted from the Savings Bank's or the Company's
bad faith or gross negligence.
(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 9 or
otherwise. An indemnifying party may participate at its own expense in the
defense of such action. In addition, if it so elects within a reasonable time
after receipt of such notice, an indemnifying party, jointly with any other
indemnifying parties receiving such notice, may assume defense of such action
with counsel chosen by it and approved by the indemnified parties that are
defendants in such action, unless such indemnified parties reasonably object to
such assumption on the ground that there may be legal defenses available to them
that are different from or in addition to those available to such indemnifying
party. If an indemnifying party assumes the defense of such action, the
indemnifying parties shall not be liable for any fees and expenses of counsel
for the indemnified parties incurred thereafter in connection with such action,
proceeding or claim, other than reasonable costs of investigation. In no event
shall the indemnifying parties be liable for the fees and expenses of more than
one separate firm of attorneys (and any special counsel that said firm may
retain) for 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 9 and in Section 10
hereof and the representations and warranties of the Company and the Savings
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 Capital
Resources or its officers, directors or controlling persons, agents or employees
or by or on behalf of the Company or the Savings Bank or any officers, directors
or controlling persons, agents or employees of the Company or the Savings Bank
or any controlling person, director or officer of the Company or the Savings
Bank; (ii) delivery of and payment hereunder for the Shares; or (iii) any
termination of this Agreement.
(e) No indemnification by the Savings Bank under Section 9(a) hereof
nor contribution under Section 10 hereof shall be effective if the same shall be
deemed to be in violation of any law, rule or regulation applicable to the
Savings Bank including, without limitation, Section 23A of the Federal Reserve
Act.
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If the indemnification or contribution by the Savings Bank is not effective
pursuant to the preceding sentence, then the indemnification by Capital
Resources pursuant to Section 9(b) shall be given only to the Company, its
directors and officers, agents, servants and employees and not to the Savings
Bank, its directors and officers, agents, servants and employees and the Savings
Bank shall not be entitled to any contribution from Capital Resources pursuant
to Section 10.
SECTION 10. Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnification provided for in
Section 9 is due in accordance with its terms but is for any reason unavailable
as a result of Section 9(e) or held by a court to be unavailable from the
Company, the Savings Bank or Capital Resources, the Company, the Savings Bank
and Capital Resources shall contribute to the aggregate losses, claims, damages
and liabilities (including any investigation, legal and other expenses incurred
in connection with, and any amount paid in settlement of any action, suit or
proceeding of any claims asserted, but after deducting any contribution received
by the Company or the Savings Bank or Capital Resources from persons other than
the other party thereto, who may also be liable for contribution) in such
proportion so that Capital Resources is responsible for that portion represented
by the fees paid to Capital Resources pursuant to Section 2 of this Agreement
(not including expenses) bears to the gross proceeds received by the Company
from the sale of the Shares in the Offering and the Company and the Savings 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 9 above, then each indemnifying party shall
contribute to such amount paid or payable by such indemnified party in such
proportion as is appropriate to reflect not only such relative fault of the
Company and the Savings Bank on the one hand and Capital Resources 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 Company and Savings
Bank on the one hand and Capital Resources on the other from the offering as
well as any other relevant equitable considerations. The relative benefits
received by the Company and the Savings Bank on the one hand and Capital
Resources 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
Company bear to the total fees (not including expenses) received by Capital
Resources. The relative fault shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company and/or the Savings Bank on the one hand or Capital
Resources on the other and the parties' relative intent, good faith, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The Company, the Savings Bank and Capital Resources agree that it
would not be just and equitable if contribution pursuant to this Section 10 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 10. 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 10 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 Capital Resources 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 Capital Resources under this Agreement. It is understood that the above-
stated limitation on Capital Resources' liability is essential to Capital
Resources and that Capital Resources relied upon such limitation and 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 1933 Act) shall be
entitled to contribution from any person who was not found guilty of such
fraudulent misrepresentation. The obligations of the Company and the Savings
Bank under this Section 10 and under Section 9 shall be in addition to any
liability which the Company and the Savings Bank may otherwise have. For
purposes of this Section 10, each of Capital Resources', the Company's or the
Savings Bank's officers and directors and each person, if any, who controls
Capital Resources or the Company or the Savings Bank within the meaning of
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the 1933 Act and the 1934 Act shall have the same rights to contribution as the
Company and the Savings Bank. Any party entitled to contribution, promptly after
receipt of notice of commencement of any action, suit, claim or proceeding
against such party in respect of which a claim for contribution may be made
against another party under this Section 10, 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 10. This Section 10
is subject to and limited by the provisions of Section 23A of the Federal
Reserve Act, as applicable.
SECTION 11. Survival of Agreements, Representations and Indemnities.
The respective indemnities of the Company, the Savings Bank and Capital
Resources and the representations and warranties and other statements of the
Company and the Savings Bank set forth in or made pursuant to this Agreement
shall remain in full force and effect, regardless of any termination or
cancellation of this Agreement or any investigation made by or on behalf of
Capital Resources, the Company, the Savings Bank or any indemnified person
referred to in Section 9 hereof, and shall survive the issuance of the Shares,
and any legal representative, successor or assign of Capital Resources, the
Savings Bank, and any such indemnified person shall be entitled to the benefit
of the respective agreements, indemnities, warranties and representations.
SECTION 12. Termination. Capital Resources 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 Company fails to sell all of the Shares within
the period specified, and in accordance with the provisions of the Plan or as
required by the Conversion Regulations and applicable law, this Agreement shall
terminate upon refund by the Savings Bank to each person who has subscribed for
or ordered any of the Shares the full amount which it may have received from
such person, together with interest as provided in the Offering Prospectus, and
no party to this Agreement shall have any obligation to the other hereunder,
except for payment by the Savings Bank and/or the Company as set forth in
Sections 2, 7, 9 and 10 hereof.
(b) If any of the conditions specified in Section 8 shall not have
been fulfilled when and as required by this Agreement, or by the Closing Date,
or waived in writing by Capital Resources, this Agreement and all of Capital
Resources obligations hereunder may be canceled by Capital Resources by
notifying the Savings Bank of such cancellation in writing or by telegram at any
time at or prior to the Closing Date, and, any such cancellation shall be
without liability of any party to any other party except as otherwise provided
in Sections 2, 7, 9 and 10 hereof.
(c) If Capital Resources elects to terminate this Agreement as
provided in this section, the Company and the Savings Bank shall be notified as
provided in Section 13 hereof, promptly by Capital Resources by telephone or
telegram, confirmed by letter.
SECTION 13. Notices. All communications hereunder, except as herein
otherwise specifically provided, shall be mailed in writing and if sent to
Capital Resources shall be mailed, delivered or telegraphed and confirmed to
Capital Resources, Inc., 0000 Xxxxxxxxxxx Xxxxxx, X.X., Xxxxx 000, Xxxxxxxxxx,
X.X. 00000 Attention: Xxxxxxxxx X. Xxxxxxxxx (with a copy to Xxxxxx Xxxxxx &
Xxxxxxxx, P.C., 0000 Xxxxxxxxxxx Xxx., XX, Xxxxx Xxxxx, Xxxxxxxxxx, X.X. 00000,
Attention: Xxxxx X. Xxxxxx, Esq.) and, if sent to the Company and the Savings
Bank, shall be mailed, delivered or telegraphed and confirmed to the Company and
the Savings Bank at 0000 Xxxx Xxxxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxx, Attention:
Xx. Xxxxxx Xxxxxx (with a copy to Xxxxxxx, Xxxxxx & Xxxxxxxx LLP, 0000
Xxxxxxxxx Xxxxxx, XX, Xxxxx Xxxxx, Xxxxxxxxxx, X.X. 00000, Attention: Xxxx X.
Xxxxxxx, Esq.).
-25-
SECTION 14. Parties. The Company and the Savings Bank shall be
entitled to act and rely on any request, notice, consent, waiver or agreement
purportedly given on behalf of Capital Resources when the same shall have been
given by the undersigned. Capital Resources shall be entitled to act and rely
on any request, notice, consent, waiver or agreement purportedly given on behalf
or the Company or the Savings Bank, when the same shall have been given by the
undersigned or any other officer of the Company or the Savings Bank. This
Agreement shall inure solely to the benefit of, and shall be binding upon,
Capital Resources and the Company, the Savings Bank and the controlling persons
referred to in Section 9 hereof, and their respective successors, legal
representatives and assigns, and no other person shall have or be construed to
have any legal or equitable right, remedy or claim under or in respect of or by
virtue of this Agreement or any provision herein contained.
SECTION 15. Closing. The closing for the sale of the Shares shall take
place on the Closing Date at the offices of Xxxxxxx, Xxxxxx & Xxxxxxxx LLP, 0000
Xxxxxxxxx Xxxxxx, XX, Xxxxx Xxxxx, Xxxxxxxxxx, X.X. 20016, or such other
location as mutually agreed upon by Capital Resources, the Company and the
Savings Bank. At the closing, the Savings Bank shall deliver to Capital
Resources in next day funds the commissions, fees and expenses due and owing to
Capital Resources as set forth in Sections 2 and 7 hereof and the opinions and
certificates required hereby and other documents deemed reasonably necessary by
Capital Resources shall be executed and delivered to effect the sale of the
Shares as contemplated hereby and pursuant to the terms of the Offering
Prospectus.
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 District of Columbia.
SECTION 18. Counterparts. This Agreement may be executed in separate
counterparts, each of which so executed and delivered shall be an original, but
all of which together shall constitute but one and the same instrument.
Time shall be of the essence of this Agreement.
If the foregoing correctly sets forth the arrangement among the
Company, the Savings Bank and Capital Resources, please indicate acceptance
thereof in the space provided below for that purpose, whereupon this letter and
Capital Resources' acceptance shall constitute a binding agreement.
Very truly yours,
FIRST BANCORP OF INDIANA, INC.
By: ________________________________
Xxxxxx Xxxxxx, President and
Chief Executive Officer
-26-
FIRST FEDERAL SAVINGS BANK
By: ________________________________
Xxxxxx Xxxxxx, President and
Chief Executive Officer
Accepted as of the date first above written.
CAPITAL RESOURCES, INC.
By: _____________________________________
Xxxxxxxxx X. Xxxxxxxxx
President
-27-
EXHIBIT A
---------
Capital Resources
Broker/Dealer Jurisdictions
California
Colorado
Connecticut
District of Columbia
Florida
Georgia
Iowa
Idaho
Illinois
Indiana
Kansas
Kentucky
Louisiana
Maryland
Massachusetts
Michigan
Minnesota
Missouri
New Jersey
New Mexico
New York
Nevada
North Carolina
Ohio
Oregon
Pennsylvania
South Carolina
Tennessee
Texas
Virginia
West Virginia
Wisconsin
-28-
EXHIBIT B
(Form of Selected Dealers' Agreement)
1,615,000 - 2,185,000 Shares
(subject to increase up to 2,512,750 shares
in the event of an oversubscription)
FIRST BANCORP OF INDIANA, INC.
(an Indiana corporation)
COMMON STOCK
($0.01 Par Value Per Share)
, 1999
[ ]
[ ]
[ ][ ]. [ ]
Gentlemen:
We have agreed to assist First Bancorp of Indiana, Inc. (the "Company") and
First Federal Savings Bank, a federally chartered mutual savings and loan
association (the "Bank"), in connection with the offer and sale of up to
2,512,750 shares of the Company's common stock, $0.01 par value (the "Shares"),
to be issued in connection with the conversion of the Bank to a federally
chartered stock savings association (the "Conversion"). The total number of
Shares may be decreased to a minimum of 1,615,000 Shares. The Shares, the
number of shares to be issued, and certain of the terms on which they are being
offered, are more fully described in the enclosed Prospectus
dated____________________________, 1999 (the "Prospectus").
In connection with its Conversion, the Company has offered the Shares in a
Subscription Offering to certain account holders and other members of the Bank
as well as in a Direct Community Offering. The Shares are also be offered in
accordance with the Plan of Conversion by a selling 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 Shares and we will pay
you a fee in the amount of _________ percent (______%) of the dollar amount of
the Shares sold on behalf of the Company by you, as evidenced by the authorized
designation of your firm on the order form or forms of such Shares accompanying
the funds transmitted for payment therefor to the special account established by
the Company for the purpose of holding such funds. It is understood, of course,
that payment of your fee will be made only out of compensation received by us
for the Shares sold on behalf of the Company by you, as evidenced in according
with the preceding sentence. As soon as practicable after the closing date of
the offering, we will remit to you, out of our compensation as provided above,
the fees to which you are entitled hereunder.
Each order form for the purchase of the Shares must set forth the identity
---- --------
and address of each person to whom the certificates for such Shares 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 "First Bancorp of Indiana, Inc.."
This offer is made subject to the terms and conditions herein set forth and
is made only to selected dealers who are (i) members in good standing of the
National Association of Securities Dealers, Inc.
("NASD") who are to comply with all applicable rules of the NASD, including
without limitation, the "Free-Riding and Withholding" interpretation (IM-2110-1)
of the Board of Governors of the NASD and Conduct Rule 2740 of the NASD's
Conduct Rules, 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 residents
therein and (B) in making other sales to comply with the above-mentioned NASD
Interpretation and Conduct Rules 2878, 2740, and 2750 as if they were NASD
members, and Conduct Rule 2420 as it applies to non-member brokers or dealers in
a foreign country.
Orders for Shares will be strictly subject to confirmation and we, acting
on behalf of the Company and the Bank, 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
person is authorized by the Company, the Bank or by us to give any information
or make any representations other than those contained in the Prospectus in
connection with the sale of the Shares. No selected dealer is authorized to act
as agent for us when soliciting offers to buy the Shares from the public or
otherwise. No selected dealer shall engage in any stabilizing (as defined in
Regulation M promulgated under the Securities Exchange Act of 1934, as amended)
with respect to the Shares during the offering.
We and each selected dealer assisting in selling Shares pursuant hereto
agree to comply with the applicable requirements of the Securities Exchange Act
of 1934, as amended 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
amended, as requiring that a Prospectus be supplied to each person who is
expected to receive a confirmation of sale 48 hours prior to delivery of such
person's order form.
We and each selected dealer further agree to the extent that our customers
desire to pay for shares with funds held by or to be deposited with us, in
accordance with the interpretation of the Securities Exchange Commission of Rule
15c2-4 promulgated under the Securities Exchange Act of 1934, as amended, either
(a) upon receipt of an executed order form or direction to execute an order on
behalf of a customer, to forward the offering price for the Shares ordered on or
before twelve noon of the business day following receipt or execution of an
order form by us to the Company for deposit in a segregated account or (b) to
solicit indications of interest in which event (i) we will subsequently contact
any customer indicating interest to confirm the interest and give an order form
or to receive authorization to execute the order form on the customer's behalf,
(ii) we will mail acknowledgments of receipt of orders to each customer
confirming interest on the business day following such confirmation, (iii) we
will debit accounts of such customers on the fifth business day (the "debit
date") following receipt of the confirmation referred to in (i) and (ii) we will
forward completed order forms together with such funds to the Company 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. We and each selected dealer agree that no
method of payment, other than as set forth in this paragraph, will be employed
for shares of Shares sold pursuant to this Agreement.
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
obligation 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
Shares sold on behalf of the Company by you under this Agreement.
We shall have full authority to take such actions as we may deem advisable
in respect of all matters pertaining to the offering. We shall be under no
liability to you except for the lack of good faith and for obligations expressly
assumed by us in this Agreement.
Upon application to us, we will inform you as to the states in which we
believe the Shares have been qualified for sale under, or are exempt from the
requirements of, the respective blue sky law of such states, but we assume no
responsibility or obligation as to your rights to sell Shares in any state.
Additional copies of the Prospectus and any supplements thereto will be
supplied in reasonable quantities upon request.
Any notice from us to you shall be deemed to have been duly given if
mailed, telephoned, or telegraphed to you at the address to which this Agreement
is mailed.
This Agreement shall be construed in accordance with the laws of the
District of Columbia
Please confirm your agreement hereto by signing and returning the
confirmation accompanying this letter at once to us at Capital Resources, Inc.,
0000 Xxxxxxxxxxx Xxx., XX Xxxxx 000, Xxxxxxxxxx, X.X. 00000. The enclosed
duplicate copy will evidence the agreement between us.
Sincerely,
CAPITAL RESOURCES, INC.
By:
________________________________
