HEMLOCK FEDERAL FINANCIAL CORPORATION
(a Delaware Corporation)
1,805,500 Shares
(Subject to Increase up to 2,076,325 Shares)
COMMON STOCK ($.01 Par Value)
Subscription Price $10.00 Per Share
AGENCY AGREEMENT
----------------
__________ __, 1997
Xxxxxxx Xxxx & Company
000 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxx 00000
Ladies and Gentlemen:
Hemlock Federal Financial Corporation (the "Holding Company") and
Hemlock Federal Bank for Savings (the "Bank") hereby confirm their agreement
with Xxxxxxx Xxxx & Company ("Xxxx" or the "Agent"), a Division of Xxxxx,
Bryette & Xxxxx, Inc., as follows:
Section 1. The Offering. The Holding Company is offering up to
1,805,500 shares of common stock, par value $.01 per share (the "Common Stock")
(subject to an increase up to 2,076,325 shares), in a concurrent subscription
offering (the "Subscription Offering") and community offering (the "Community
Offering") (together the "Subscription and Community Offering") in connection
with the conversion of the Bank from a federally chartered mutual savings bank
to a federally chartered stock savings bank and the issuance of all of the
Bank's outstanding common stock to the Holding Company (the "Conversion")
pursuant to the Bank's plan of conversion (the "Plan"). Non-transferable rights
to subscribe for the Common Stock ("Subscription Rights") will be granted, in
the following priority in the Subscription Offering: (1) the Bank's depositors
with account balances of $50.00 or more as of June 30, 1995 ("Eligible Account
Holders"); (2) tax-qualified employee benefit plans of the Bank and the Holding
Company ("Tax-Qualified Employee Plans"); (3) the Bank's depositors with account
balances of $50.00 or more as of December 31, 1996 ("Supplemental Eligible
Account Holders"); (4) members and certain borrowers of the Bank at the close of
business on ____________; and (5) employees, officers and directors of the Bank.
The Holding Company will issue such number of shares of its Common Stock upon
the Conversion as is subscribed for, up to 1,805,500 shares (the "Shares")
(subject to increase up to 2,076,325 shares) at a purchase price of $10.00 per
share (the "Purchase Price"). The Holding Company is simultaneously offering all
shares of Common Stock not subscribed for in the Subscription Offering, if any,
in a direct Community
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Offering to members of the general public. Depending on market conditions,
shares may be offered in the Community Offering by approved broker-dealer firms
which are members of the National Association of Securities Dealers, Inc.
("NASD") ("Assisting Brokers"). If the number of Shares is increased or
decreased in accordance with the Plan, the term "Shares" shall mean such greater
or lesser number, where applicable.
The Holding Company has filed with the U.S. Securities and Exchange
Commission (the "Commission") a Registration Statement on Form S-1 (File No.
333-18895) containing a prospectus relating to the Subscription and Community
Offering for the registration of the Shares under the Securities Act of 1933, as
amended (the "1933 Act"), and has filed such amendments thereto as have been
required to the date hereof (the "Registration Statement"). The prospectus, as
amended, included in the Registration Statement at the time it initially became
effective is hereinafter called the "Prospectus," except that if any prospectus
is filed by the Holding Company pursuant to Rule 424(b) or (c) of the
regulations of the Commission under the 1933 Act differing from the prospectus
included in the Registration Statement at the time it initially becomes
effective, the term "Prospectus" shall refer to the prospectus filed pursuant to
Rule 424(b) or (c) from and after the time said prospectus is filed with the
Commission and shall include any supplements and amendments thereto from and
after their dates of effectiveness or use, respectively.
The Bank has filed with the Office of Thrift Supervision, Department of
the Treasury (the "OTS") pursuant to Title 12, Part 563b of the Code of Federal
Regulations (the "Conversion Regulations") an Application for Conversion on Form
AC, including the Prospectus, and has filed amendments thereto as required by
the OTS (as so amended, the "Application"). The Application has been approved by
the OTS. The Holding Company has filed with the OTS its application on Form
H-(e)1-S (the "Holding Company Application") to acquire the Bank under the Home
Owners Loan Act, as amended, and the regulations promulgated thereunder
("HOLA").
Section 2. Appointment of the Agent. Subject to the terms and
conditions of this Agreement, the Holding Company and the Bank hereby appoint
Xxxx as their financial advisor and marketing agent to utilize its best efforts
to solicit subscriptions for Shares of the Company's Common Stock and to advise
and assist the Company and the Bank with respect to the Company's sale of the
Shares in the Offering.
On the basis of the representations and warranties and subject to the
terms and conditions of this Agreement, the Agent accepts such appointment and
agrees to consult with and advise the Company and the Bank as to the matters set
forth in the letter agreement ("Letter Agreement"), dated September 2, 1996,
between the Bank and Xxxx (a copy of which is attached hereto as Exhibit A). It
is acknowledged by the Holding Company and the Bank that the Agent shall not be
obligated to purchase any Shares
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and shall not be obligated to take any action which is inconsistent with any
applicable law, regulation, decision or order. Subscriptions will be offered by
means of Order Forms as described in the Prospectus. Except as provided in the
paragraph below, the appointment of the Agent hereunder shall terminate upon
completion of the Subscription and Community Offering.
Xxxx agrees to act as financial advisor to the Bank and the Holding
Company for a period of one year following the consummation of the Conversion
for no additional fee to render general advice on financial matters, including
dividend policy, and share repurchase programs, assistance with shareholder
reporting and shareholder relations matters, general advice on mergers and
acquisitions, and other related financial matters which are brought to the
attention of the Bank or the Holding Company. Thereafter, if the parties wish to
continue the relationship, a fee will be negotiated and an agreement with
respect to specific advisory services will be entered into at that time. Should
discussions commence for a specific acquisition transaction by, or a sale of,
the Bank or the Holding Company during the period in which the Agent is acting
as financial advisor to the Bank and the Holding Company, the general financial
advisory relationship as set forth in this paragraph will terminate with respect
to the specific transaction. If the Bank or the Holding Company and the Agent
wish to have the Agent initiate, negotiate and/or process a specific
transaction, an appropriate fee will be negotiated at that time.
Section 3. Refund of Purchase Price. In the event that the Conversion
is not consummated for any reason, including but not limited to the inability to
sell the Common Stock during the Subscription and Community Offering (including
any permitted extension thereof), this Agreement shall terminate and any persons
who have subscribed for any of the shares of Common Stock shall have refunded to
them the full amount which has been received from such person, together with
interest at the Bank's current passbook rate, from the date payment is received
as provided in the Prospectus. Upon termination of this Agreement, neither the
Agent nor the Bank and the Holding Company shall have any obligation to the
other except that (i) the Holding Company and the Bank, as applicable, shall
remain liable for any amounts due pursuant to Sections 4(a), 8, 10 and 11
hereof, unless the transaction is not consummated due to the breach by the Agent
of a warranty, representation or covenant; and (ii) the Agent shall remain
liable for any amount due pursuant to Sections 10 and 11 hereof, unless the
transaction is not consummated due to the breach by the Holding Company or Bank
of a warranty, representation or covenant.
Section 4. Fees. In addition to the expenses specified in Section 8
hereof, as compensation for the Agent's services as agents under this Agreement,
the Agent will receive the following fees from the Holding Company and the Bank.
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(a) A management fee to Xxxx in the amount of $25,000 payable
in four consecutive monthly installments of $6,250, commencing with the
signing of the Letter Agreement. Such fees shall be deemed to be earned
when due. Should the Conversion be terminated for any reason not
attributable to the action or inaction of the Agent, the Agent shall
have earned and be entitled to be paid fees accruing through the stage
at which point the termination occurred.
(b) A fee of 1.5% of the aggregate Purchase Price of the
Shares sold in the Subscription Offering and the Community Offering,
excluding those shares purchased by the Bank's officers, directors or
employees (or members of their immediate families) or by any
Tax-Qualified Employee Plan (except IRA's) created by the Bank or
Holding Company for some or all of its directors or employees.
(c) Should an extension of the Subscription and Community
Offering period be required, the Agent shall be paid a ____% marketing
fee of the aggregate Purchase Price of the shares sold during any
extension of the Offering, other than those shares sold pursuant to
paragraph 4(d).
(d) A fee not to exceed 5.5% of the aggregate Purchase Price
of the Shares sold by Assisting Brokers in any extension of the
Offerings and the Agent will pay Assisting Brokers which assisted in
the subscription or purchase of Shares in the Syndicated Community
Offering, a fee competitive with gross underwriting discounts charged
at such time for comparable amounts of stock sold at a comparable price
per share in a similar market environment. The decision to utilize
Assisting Brokers will be made jointly by the Agent on the one hand,
and the Bank and the Holding Company, on the other hand. In the event,
with respect to any stock purchases, fees are paid pursuant to this
subsection (d), such fees shall be paid in lieu of, and not in addition
to, payments to the Agent pursuant to subsection (b).
The fees specified in subsections (b), (c) and (d) shall be payable in
same-day funds on the Closing Date.
Section 5. Closing. If the minimum number of the shares of Common Stock
permitted to be sold-in the Conversion on the basis of the most recent updated
Conversion appraisal are subscribed for at or before the termination of the
Subscription and Community Offering and the other conditions to the completion
of the Conversion are satisfied, the Holding Company agrees to issue on the
Closing Date the shares of Common Stock which have been sold against payment
therefor from the escrow or other accounts maintained for the subscribers as set
forth in the Plan and to deliver certificates evidencing ownership of such
shares of Common Stock in such authorized denominations and registered in such
names as may be indicated on the subscription Order Forms directly to the
purchasers thereof as promptly as practicable
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after the Closing Date. The Closing shall be held at the offices of counsel to
the Holding Company, or at such other place as shall be agreed upon among the
Holding Company, the Bank and the Agent at 10:00 a.m. on a business day selected
by the Holding Company which business day shall be no less than two business
days following the giving of prior notice by the Holding Company to the Agent or
at such other time as shall be agreed upon by the Holding Company, the Bank and
the Agent. At the Closing, the Bank and the Holding Company shall deliver to the
Agent in same- day funds the commissions, fees and expenses owing to the Agent
as set forth in Sections 4 and 8 hereof and the opinions required hereby and
other documents deemed reasonably necessary by the Agent shall be executed and
delivered to effect the sale of the shares as contemplated hereby and pursuant
to the terms of the Prospectus. The Holding Company shall notify the Agent by
telephone, confirmed in writing, when funds shall have been received for the
minimum number of shares of the Common Stock. The date upon which the Holding
Company shall release the Shares for delivery in accordance with the terms
hereof is referred to herein as the "Closing Date."
Section 6.A. Representations and Warranties of the Holding Company and
the Bank. The Holding Company and the Bank jointly and severally represent and
warrant to the Agent that:
(a) The Holding Company and the Bank have all such power,
authority, authorizations, approvals and orders as may be required to
enter into this Agreement, to carry out the provisions and conditions
hereof and to issue and sell the capital stock of the Bank to the
Holding Company and the Shares to be sold by the Holding Company as
provided herein and as described in the Prospectus. The consummation of
the Conversion, the execution, delivery and performance of this
Agreement and the consummation of the transactions herein contemplated
have been duly and validly authorized by all necessary corporate action
on the part of the Holding Company and the Bank and this Agreement has
been validly executed and delivered by the Holding Company and the Bank
and is the valid, legal and binding agreement of the Holding Company
and the Bank enforceable in accordance with its terms, except to the
extent, if any, that the provisions of Sections 10 and 11 hereof may be
unenforceable as against public policy, and except to the extent that
such enforceability may be limited by bankruptcy laws, insolvency laws,
or other laws affecting the enforcement of creditors' rights generally,
or the rights of creditors of savings institutions insured by the FDIC
(including the laws relating to the rights of the contracting parties
to equitable remedies).
(b) As of the Closing Date, the Bank shall have completed all
conditions precedent to the Conversion in accordance with the Plan and
shall have complied in all material respects with applicable laws,
regulations (except as modified or waived in writing by the OTS),
decisions and orders, including all terms, conditions, requirements and
provisions precedent to
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the Conversion imposed upon it by the OTS as set forth in
correspondence received from the OTS. The Plan has been approved by the
OTS, and to the best knowledge of the Bank, no person has challenged or
sought to obtain judicial review of the actions of the OTS in approving
the Conversion pursuant to Section 5(i)(2)(B) of the HOLA or any other
statute or regulation.
(c) The Registration Statement was declared effective by the
Commission on __________, 1997; and no stop order has been issued with
respect thereto and no proceedings therefor have been initiated or to
the best knowledge of the Bank threatened by the Commission. At the
time the Registration Statement, including the Prospectus contained
therein (including any amendment or supplement thereto), became
effective, the Registration Statement complied as to form in all
material respects with the requirements of the 1933 Act and the
regulations promulgated thereunder and the Registration Statement
including the Prospectus contained therein (including any amendment or
supplement thereto), any Blue Sky Application or any Sales Information
(as such terms are defined in Section 10 hereof) authorized by the
Holding Company or the Bank for use in connection with the Subscription
and Community Offering did not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, and at the
time any Rule 424(b) or (c) Prospectus was filed with or mailed to the
Commission for filing and at the Closing Date referred to in Section 5,
the Registration Statement including the Prospectus contained therein
(including any amendment or supplement thereto) and any Blue Sky
Application or any Sales Information authorized by the Holding Company
or the Bank for use in connection with the Subscription and Community
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 light of the circumstances under which they were made, not
misleading; provided, however, that the representations and warranties
in this Section 6A shall not apply to statements or omissions made in
reliance upon and in conformity with written information furnished to
the Holding Company or the Bank by the Agent expressly regarding the
Agent for use under the caption "The Conversion - Marketing
Arrangements" or written statements or omissions from any sales
information or information filed pursuant to state securities or blue
sky laws or regulations regarding the Agent.
(d) The Application, including the Prospectus, was approved by
the OTS on __________, 1997; and the Proxy Statement of the Bank and
the Prospectus have been approved for use by the OTS. At the time of
the approval of the Application, including the Prospectus, by the OTS
(including any amendment or supplement thereto) and at all times
subsequent thereto until the Closing Date, the Application, including
the Prospectus, will comply as to form in all material respects with
the Conversion Regulations
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and any other applicable rules and regulations of the OTS (except as
modified or waived in writing by the OTS). The Application, including
the Prospectus (including any amendment or supplement thereto), does
not include any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they
were made, not misleading; provided, however, that representations or
warranties in this subsection (d) shall not apply to statements or
omissions made in reliance upon and in conformity with written
information furnished to the Bank by the Agent expressly regarding the
Agent for use in the Prospectus contained in the Application under the
caption "The Conversion -- Marketing Arrangements" or written
statements or omissions from any sales information or information filed
pursuant to state securities or blue sky laws or regulations regarding
the Agent.
(e) No order has been issued by the OTS, the Commission or the
FDIC (and hereinafter reference to the FDIC shall include the SAIF), or
any state regulatory authority, preventing or suspending the use of the
Prospectus and no action by or before any such government entity to
revoke any approval, authorization or order of effectiveness related to
the Conversion is, to the best knowledge of the Bank or the Holding
Company, pending or threatened.
(f) At the Closing Date, the Plan will have been adopted by
the Board of Directors of both the Holding Company and the Bank, the
Holding Company and the Bank will have completed all conditions
precedent to the Conversion specified in the Plan and the offer and
sale of the Shares will have been conducted in all material respects in
accordance with the Plan, the Conversion Regulations (except as
modified or waived in writing by the OTS) and with all other applicable
laws, regulations, decisions and orders, including all terms,
conditions, requirements and provisions precedent to the Conversion
imposed upon the Holding Company or the Bank by the OTS, the Commission
or any other regulatory authority and in the manner described in the
Prospectus. At the Closing Date, to the best knowledge of the Holding
Company and the Bank, no person will have sought to obtain review of
the final action of the OTS in approving the Plan or in approving the
Conversion or the Holding Company Application pursuant to the HOLA or
any other statute or regulation.
(g) The Holding Company has filed with the OTS the Holding
Company Application and has received, as of the Closing Date, approval
of its acquisition of the Bank from the OTS.
(h) Xxxxxx & Company, Inc., which prepared the appraisal, has
advised the Holding Company and the Bank in writing that it is
independent with respect to each within the meaning of the Conversion
Regulations.
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(i) Xxxxx, Xxxxxx and Company which certified the financial
statements filed as part of the Registration Statement and the
Application, have advised the Holding Company and the Bank in writing
that they are, with respect to the Holding Company and the Bank,
independent certified public accountants within the meaning of 12
C.F.R. Sections 563c.3 and 571.2(c)(3) and under the 1933 Act and the
regulations promulgated thereunder.
(j) The financial statements and the schedules and notes
thereto which are included in the Registration Statement and which are
a part of the Prospectus present fairly the financial position and
retained earnings of the Bank as of the dates indicated and the results
of operations and cash flows for the periods specified. The financial
statements comply in all material respects with the applicable
accounting requirements of Title 12 of the Code of Federal Regulations
and generally accepted accounting principles ("GAAP") applied on a
consistent basis during the periods presented except as otherwise noted
therein and present fairly in all material respects the information
required to be stated therein and are consistent with the most recent
financial statements and other reports filed by the Bank with the OTS
and the FDIC except that accounting principles employed in such filings
conform to requirements of such authorities and not necessarily to
GAAP. The other financial, statistical and pro forma information and
related notes included in the Prospectus fairly present the information
shown therein on a basis consistent with the audited and unaudited
financial statements included in the Prospectus, and as to the pro
forma adjustments, the adjustments made therein have been properly
applied on the basis described therein.
(k) Since the respective dates as of which information is
given in the Registration Statement, including the Prospectus: (i)
there has not been any material adverse change in the financial
condition or in the earnings, capital, properties or business affairs
of the Holding Company or the Bank or of the Holding Company and the
Bank considered as one enterprise, whether or not arising in the
ordinary course of business; (ii) there has not been any material
increase in the aggregate amount of loans past due ninety (90) days or
more, real estate acquired by foreclosure or loans characterized as "in
substance foreclosure" or any change in total assets of the Bank in an
amount greater than $___ million; nor has the Bank issued any
securities or incurred any liability or obligation for borrowings other
than in the ordinary course of business; (iii) there have not been any
material transactions entered into by the Holding Company or the Bank,
other than those in the ordinary course of business; and (iv) the
capitalization, liabilities, assets, properties and business of the
Holding Company and the Bank conform in all material respects to the
descriptions thereof contained in the Prospectus and, neither the Bank
nor the Holding Company has any material liabilities of any kind,
contingent or
8
otherwise, except as set forth in or contemplated by the Registration
Statement and the Prospectus.
(l) The Holding Company is a corporation duly organized and in
good standing under the laws of the State of Delaware, with corporate
power and authority to own its properties and to conduct its business
as described in the Prospectus, and is duly qualified to transact
business and is in good standing in each jurisdiction in which the
conduct of its business requires such qualification unless the failure
to qualify in one or more of such jurisdictions would not have a
material adverse effect on the financial condition, earnings, capital,
properties or business affairs of the Holding Company and the Bank
considered as a whole.
(m) The Bank is a duly organized and validly existing
federally chartered savings bank in mutual form and upon the Conversion
will become a duly organized and validly existing federally chartered
savings bank in stock form, in both instances duly authorized to
conduct its business as described in the Prospectus; the activities of
the Bank are permitted by the rules, regulations and practices of the
OTS; the Bank has obtained all licenses, permits and other governmental
authorizations currently required for the conduct of its business
except those that individually or in the aggregate would not materially
adversely affect the financial condition of the Holding Company and the
Bank taken as a whole; all such licenses, permits and other
governmental authorizations are in full force and effect and the Bank
is in good standing under the laws of the United States and is duly
qualified as a foreign corporation to transact business in each
jurisdiction in which failure to so qualify would have a material
adverse effect upon the financial condition, earnings, capital,
properties or business affairs of the Bank; all of the issued and
outstanding capital stock of the Bank after the Conversion will be duly
and validly issued and fully paid and nonassessable; and the Holding
Company will directly own all of such capital stock free and clear of
any mortgage, pledge, lien, encumbrance, claim or restriction. The Bank
does not own equity securities or any equity interest in any other
business enterprise except as described in the Prospectus.
(n) The Bank is a member of the Federal Home Loan Bank of
Chicago ("FHLB of Chicago"); the deposit accounts of the Bank are
insured by the FDIC up to applicable limits; and upon the Conversion,
the liquidation account for the benefit of Eligible Account Holders and
Supplemental Eligible Account Holders will be duly established in
accordance with the Conversion Regulations.
(o) Upon Conversion, the authorized, issued and outstanding
equity capital of the Holding Company will be as described in the
Prospectus under the caption "Capitalization," and no shares of Common
Stock have been or will be issued and outstanding prior to the Closing
Date; the shares of Common Stock to be subscribed for in the
Subscription and Community Offering
9
have been duly and validly authorized for issuance, and when issued and
delivered by the Holding Company pursuant to the Plan against payment
of the consideration calculated as set forth in the Plan and the
Prospectus, will be duly and validly issued and fully paid and
nonassessable; the issuance of the shares of Common Stock is not
subject to preemptive rights; and the terms and provisions of the
shares of Common Stock will conform in all material respects to the
description thereof contained in the Prospectus. Upon issuance of the
Shares, good title to the Shares will be transferred from the Holding
Company to the purchaser thereof against payment therefor, subject to
such claims as may be asserted against the purchasers thereof by third
party claimants.
(p) As of the date hereof and as of the Closing Date, neither
the Holding Company nor the Bank is in violation of its certificate of
incorporation or charter, respectively, or its bylaws (and the Bank
will not be in violation of its charter or bylaws in capital stock form
as of the Closing Date) or in material default in the performance or
observance of any obligation, agreement, covenant, or condition
contained in any contract, lease, loan agreement, indenture or other
instrument to which it is a party or by which it, or any of its
property, may be bound which would result in a material adverse change
in the condition (financial or otherwise), earnings, capital,
properties or business affairs of the Holding Company or Bank
considered as one enterprise or which would materially affect their
properties or assets. The consummation of the transactions herein
contemplated will not (i) conflict with or constitute a breach of, or
default under, the certificate of incorporation and bylaws of the
Holding Company, the charter and bylaws of the Bank (in either mutual
or capital stock form), or materially conflict with or constitute a
material breach of, or default under any material contract, lease or
other instrument to which the Holding Company or the Bank has a
beneficial interest, or any applicable law, rule, regulation or order
that is material to the financial condition of the Holding Company and
the Bank on a consolidated basis; (ii) violate any authorization,
approval, judgment, decree, order, statute, rule or regulation
applicable to the Holding Company or the Bank except for such
violations which would not have a material adverse effect on the
financial condition and results of operations of the Holding Company
and the Bank on a consolidated basis; or (iii) with the exception of
the liquidation account established in the Conversion, result in the
creation of any material lien, charge or encumbrance upon any property
of the Holding Company or the Bank.
(q) No material default exists, and no event has occurred
which with notice or lapse of time, or both, would constitute a
material default on the part of the Holding Company or the Bank, in the
due performance and observance of any term, covenant or condition of
any indenture, mortgage, deed of trust, note, bank loan or credit
agreement or any other material instrument or agreement to which the
Holding Company or the Bank
10
is a party or by which any of them or any of their property is bound or
affected in any respect which, in any such case, is material to the
Holding Company or the Bank considered as one enterprise, and such
agreements are in full force and effect; and no other party to any such
agreements has instituted or, to the best knowledge of the Holding
Company or the Bank, threatened any action or proceeding wherein the
Holding Company or the Bank is alleged to be in default thereunder
under circumstances where such action or proceeding, if determined
adversely to the Holding Company or the Bank, as the case may be, would
have a material adverse effect upon the Holding Company and the Bank
considered as one enterprise.
(r) The Holding Company and the Bank have good and marketable
title to all assets which are material to the business of the Holding
Company and the Bank and to those assets described in the Prospectus as
owned by them free and clear of all material liens, charges,
encumbrances, restrictions or other claims, except such as are
described in the Prospectus or which do not have a material adverse
effect on the business of the Holding Company and the Bank taken as a
whole; and all of the leases and subleases which are material to the
business of the Holding Company and the Bank, as described in the
Registration Statement or Prospectus, are in full force and effect.
(s) Except as described in the Prospectus, the Holding Company
and the Bank are not in material violation of any directive from the
OTS, the FDIC, the Commission or any other agency to make any material
change in the method of conducting their respective businesses; the
Holding Company and the Bank have conducted and are conducting their
respective businesses so as to comply in all material respects with all
applicable statutes and regulations (including, without limitation,
regulations, decisions, directives and orders of the OTS, the
Commission and the FDIC) and, except as set forth in the Prospectus,
there is no charge, investigation, action, suit or proceeding before or
by any court, regulatory authority or governmental agency or body
pending or, to the best knowledge of either the Holding Company or the
Bank, threatened, which would reasonably be expected to materially and
adversely affect the Conversion, the performance of this Agreement, or
the consummation of the transactions contemplated in the Plan as
described in the Registration Statement, or which would reasonably be
expected to result in any material adverse change in the financial
condition or in the earnings, capital, properties or business affairs
of the Holding Company and the Bank considered as one enterprise.
(t) Bank has received an opinion of its special counsel,
Silver, Xxxxxxxx & Xxxx, L.L.P. with respect to the federal income tax
consequences of the Conversion of the Bank from mutual to stock form,
as described in the Registration Statement and the Prospectus, and an
opinion from Xxxxx, Xxxxxx and Company with respect to the Illinois tax
consequences of the
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proposed transaction; and the facts and representations upon which such
opinions are based are truthful, accurate and complete, and neither the
Bank nor the Holding Company will take any action inconsistent
therewith.
(u) The Holding Company and the Bank have timely filed all
required federal and state tax returns, have paid all taxes that have
become due and payable in respect of such returns, except where
permitted to be extended, have made adequate reserves for similar
future tax liabilities and no deficiency has been asserted with respect
thereto by any taxing authority.
(v) No approval, authorization, consent or other order of any
regulatory or supervisory or other public authority is required for the
execution and delivery by the Holding Company and the Bank of this
Agreement, or the issuance of the Shares, except for the approval of
the OTS and the Commission (which have been received) and any necessary
qualification, notification, or registration or exemption under the
securities or blue sky laws of the various states in which the shares
are to be offered and except as may be required under the rules and
regulations of the NASD and/or the Nasdaq.
(w) The Holding Company and the Bank have made appropriate
arrangements for placing the funds received from subscriptions for
Shares in special interest bearing accounts with the Bank until all
Shares are sold and paid for, with provision for refund to the
purchasers in the event that the Conversion is not completed for
whatever reason or for delivery to the Holding Company if all Shares
are sold.
(x) Prior to the Conversion, the Bank was not authorized to
issue shares of capital stock and neither the Holding Company nor the
Bank has: (i) issued any securities within the last 18 months (except
for notes to evidence other bank loans and reverse repurchase
agreements or other liabilities); (ii) had any material dealings with
respect to sales of securities within the 12 months prior to the date
hereof with any member of the NASD, or any person related to or
associated with such member, other than discussions and meetings
relating to the proposed Subscription and Community Offering and
routine purchases and sales of U.S. government and agency and other
securities; (iii) entered into a financial or management consulting
agreement except as contemplated hereunder; or (iv) engaged any
intermediary between the Agent and the Holding Company and the Bank in
connection with the offering of Shares, and no person is being
compensated in any manner for such service.
(y) To the best knowledge of the Holding Company and the Bank,
neither the Holding Company, the Bank nor the employees of the Holding
Company or the Bank have made any payment of funds of the Holding
Company or the Bank as a loan to any person for the purchase of the
Shares.
12
Any certificates signed by an officer of the Holding Company or the
Bank and delivered to the Agent or its counsel that refer to this Agreement
shall be deemed to be a representation and warranty by the Holding Company or
the Bank to the Agent as to the matters covered thereby with the same effect as
if such representation and warranty were set forth herein.
Section 6.B. Representations and Warranties of the Agent.
Xxxx represents and warrants to the Company and the Bank that:
(a) Xxxx is a corporation and is validly existing in good
standing under the laws of the State of Ohio with full power and
authority to provide the services to be furnished to the Bank and the
Holding Company hereunder.
(b) The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly and
validly authorized by all necessary action on the part of Xxxx, and
this Agreement has been duly and validly executed and delivered by Xxxx
and is the legal, valid and binding agreement of Xxxx, enforceable in
accordance with its terms.
(c) Each of Xxxx and its employees, agents and representatives
who shall perform any of the services hereunder shall be duly
authorized and empowered, and shall have all licenses, approvals and
permits necessary to perform such services.
(d) The execution and delivery of this Agreement by Xxxx, the
consummation of the transactions contemplated hereby and compliance
with the terms and provisions hereof will not conflict with, or result
in a breach of, any of the terms, provisions or conditions of, or
constitute a default (or event which with notice or lapse of time or
both would constitute a default) under, the certificate of
incorporation of Xxxx or any agreement, indenture or other instrument
to which Xxxx is a party or by which it or its property is bound.
(e) No action, suit, charge or proceeding is pending, or to
the knowledge of Xxxx threatened, against Xxxx which, if determined
adversely to Xxxx, would have a material adverse effect upon the
ability of Xxxx to perform obligations under this Agreement.
(f) No approval, authorization, consent or other order of any
regulatory or supervisory or other public authority is required for the
execution and delivery by Xxxx of this Agreement, except as may have
been received.
13
Section 7.A. Covenants of the Holding Company and the Bank. The Holding
Company and the Bank hereby jointly and severally covenant with the Agent as
follows:
(a) The Holding Company has filed the Registration Statement
with the Commission. The Holding Company will not, at any time after
the date the Registration Statement is declared effective, file any
amendment or supplement to the Registration Statement without providing
the Agent and its counsel an opportunity to review such amendment or
file any amendment or supplement to which amendment the Agent or its
counsel shall reasonably object.
(b) The Bank has filed the Application with the OTS. The Bank
will not, at any time after the date the Application is approved, file
any amendment or supplement to the Application without providing the
Agent and its counsel an opportunity to review such amendment or
supplement or file any amendment or supplement to which amendment or
supplement the Agent or its counsel shall reasonably object.
(c) The Holding Company and the Bank will use their best
efforts to cause any post-effective amendment to the Registration
Statement to be declared effective by the Commission and any
post-effective amendment to the Application to be approved by the OTS,
and will immediately upon receipt of any information concerning the
events listed below notify the Agent (i) when the Registration
Statement, as amended, has become effective; (ii) when the Application,
as amended, has been approved by the OTS; (iii) of the receipt of any
comments from the Commission, the OTS, the FDIC or any other
governmental entity with respect to the Conversion or the transactions
contemplated by this Agreement; (iv) of any request by the Commission,
the OTS, the FDIC or any other governmental entity for any amendment or
supplement to the Registration Statement or the Application or for
additional information; (v) of the issuance by the Commission, the OTS,
the FDIC or any other governmental agency of any order or other action
suspending the Subscription and Community Offering or the use of the
Registration Statement or the Prospectus or any other filing of the
Holding Company and the Bank under the Conversion Regulations or other
applicable law, or the threat of any such action; (vi) of the issuance
by the Commission, the OTS, the FDIC or any state authority of any stop
order suspending the effectiveness of the Registration Statement or of
the initiation or threat of initiation or threat of any proceedings for
that purpose; or (vii) of the occurrence of any event mentioned in
paragraph (g) below. The Holding Company and the Bank will make every
reasonable effort to prevent the issuance by the Commission, the OTS,
the FDIC or any state authority of any such order and, if any such
order shall at any time be issued, to obtain the lifting thereof at the
earliest possible time.
14
(d) The Holding Company and the Bank will provide the Agent
and its counsel notice of its intention to file, and reasonable time to
review prior to filing any amendment or supplement to the Holding
Company Application and will not file any such amendment or supplement
to which the Agent shall reasonably object or which shall be reasonably
disapproved by its counsel.
(e) The Holding Company and the Bank will deliver to the Agent
and to its counsel conformed copies of each of the following documents,
with all exhibits: the Application and the Holding Company Application,
as originally filed and of each amendment or supplement thereto, and
the Registration Statement, as originally filed and each amendment
thereto. Further, the Holding Company and the Bank will deliver such
additional copies of the foregoing documents to counsel to the Agent as
may be required for any NASD filings. In addition, the Holding Company
and the Bank will also deliver to the Agent such number of copies of
the Prospectus, as amended or supplemented, as the Agent may reasonably
request.
(f) The Holding Company and the Bank will comply in all
material respects with any and all terms, conditions, requirements and
provisions with respect to the Conversion and the transactions
contemplated thereby imposed by the Commission, by applicable state law
and regulations, and by the 1933 Act, the Securities Exchange Act of
1934 (the "1934 Act") and the rules and regulations of the Commission
promulgated under such statutes, to be complied with prior to or
subsequent to the Closing Date; and when the Prospectus is required to
be delivered, the Holding Company and the Bank will comply in all
material respects, at their own expense, with all material requirements
imposed upon them by the OTS, the Conversion Regulations (except as
modified or waived in writing by the OTS), the FDIC, the Commission, by
applicable state law and regulations and by the 1933 Act, the 1934 Act
and the rules and regulations of the Commission promulgated under such
statutes, in each case as from time to time in force, so far as
necessary to permit the continuance of sales or dealing in shares of
Common Stock during such period in accordance with the provisions
hereof and the Prospectus.
(g) If any event relating to or affecting the Holding Company
or the Bank shall occur, as a result of which it is necessary, in the
reasonable opinion of counsel for the Holding Company or the Bank or
for the Agent, to amend or supplement the Registration Statement or the
Prospectus in order to make them not misleading in light of the
circumstances existing at the time of their use, the Holding Company
and the Bank will, at their expense, forthwith prepare, file with the
Commission and the OTS, and furnish to the Agent, a reasonable number
of copies of an amendment or amendments of, or a supplement or
supplements to, the Registration Statement and the Prospectus (in form
and substance satisfactory to counsel for the Agent after a
15
reasonable time for review) which will amend or supplement the
Registration Statement and/or the Prospectus so that as amended or
supplemented it will not contain an untrue statement of a material fact
or omit to state a material fact necessary in order to make the
statements therein, in light of the circumstances existing at the time,
not misleading. For the purpose of this subsection, the Holding Company
and the Bank each will furnish such information with respect to itself
as the Agent may from time to time reasonably request.
(h) Pursuant to the terms of the Plan, the Holding Company
will endeavor in good faith, in cooperation with the Agent, to register
or to qualify the Shares for offering and sale under the applicable
securities laws of the jurisdictions in which the Subscription Offering
and Community Offering will be conducted; provided, however, that the
Holding Company shall not be obligated to file any general consent to
service of process or to qualify to do business in any jurisdiction in
which it is not so qualified. In each jurisdiction where any of the
Shares shall have been registered or qualified as above provided, the
Holding Company will make and file such statements and reports in each
year as are or may be required by the laws of such jurisdictions.
(i) The liquidation account for the benefit of account holders
as of June 30, 1995 and December 31, 1996 will be duly established and
maintained in accordance with the requirements of the OTS, and such
Eligible Account Holders and Supplemental Eligible Account Holders who
continue to maintain their savings accounts in the Bank will have an
inchoate interest in their pro rata portion of the liquidation account
which shall have a priority superior to that of the holders of shares
of Common Stock in the event of a complete liquidation of the Bank.
(j) The Holding Company and the Bank will not sell or issue,
contract to sell or otherwise dispose of, for a period of 90 days after
the date hereof, without the Agent's prior written consent, which
consent shall not be unreasonably withheld, any shares of Common Stock
other than in connection with any plan or arrangement described in the
Prospectus.
(k) For the period of three years from the date of this
Agreement, the Holding Company will furnish to the Agent upon request
(i) a copy of each report of the Holding Company furnished to or filed
with the Commission under the 1934 Act or any national securities
exchange or system on which any class of securities of the Holding
Company is listed or quoted, (ii) a copy of each report of the Holding
Company mailed to holders of Common Stock or non-confidential report
filed with the Commission or the OTS or any other supervisory or
regulatory authority or any national securities exchange or system on
which any class of the securities of the Holding Company is listed or
quoted, and (iii) from time to time, such other publicly available
information concerning the Holding Company and the Bank as the Agent
may reasonably request.
16
(l) The Holding Company and the Bank will use the net proceeds
from the sale of the Common Stock in the manner set forth in the
Prospectus under the caption "Use of Proceeds."
(m) Prior to the Closing Date, the Holding Company and the
Bank will inform the Agent of any event or circumstances of which it is
aware as a result of which the Registration Statement and/or
Prospectus, as then supplemented or amended, would include an untrue
statement of a material fact or omit to state a material fact necessary
in order to make the statements therein not misleading.
(n) The Holding Company and the Bank will distribute the
Prospectus or other offering materials in connection with the offering
and sale of the Common Stock only in accordance with the Conversion
Regulations, the 1933 Act and the 1934 Act and the rules and
regulations promulgated under such statutes, and the laws of any state
in which the shares are qualified for sale.
(o) The Holding Company shall register its Common Stock under
Section 12(g) of the 1934 Act, concurrent with the effective date of
the Registration Statement. The Holding Company shall maintain the
effectiveness of such registration for not less than three years or
such shorter period as permitted by the OTS.
(p) For so long as the Holding Company's Common Stock is
registered under the 1934 Act, the Holding Company will furnish to its
stockholders as soon as practicable after the end of each fiscal year
such reports and other information as are required to be furnished to
its stockholders under the 1934 Act (including consolidated financial
statements of the Holding Company and its subsidiaries, certified by
independent public accountants).
(q) The Holding Company will comply with the provisions of
Rule 158 of the 1933 Act.
(r) The Holding Company will file with the Commission such
reports on Form SR as may be required pursuant to Rule 463 under the
1933 Act.
(s) Holding Company will use its best efforts to obtain
approval for and maintain quotation of the Common Stock on the Nasdaq
National Market effective on or prior to the Closing Date.
(t) The Bank will maintain appropriate arrangements for
depositing all funds received from persons mailing subscriptions for or
orders to purchase Shares in the Subscription and Community Offering on
an interest bearing basis at the rate described in the Prospectus until
the Closing Date and satisfaction of all conditions precedent to the
release of the Bank's obligation to refund payments received from
persons
17
subscribing for or ordering Shares in the Subscription and Community
Offering in accordance with the Plan as described in the Prospectus or
until refunds of such funds have been made to the persons entitled
thereto or withdrawal authorizations canceled in accordance with the
Plan and as described in the Prospectus. The Bank will maintain such
records of all funds received to permit the funds of each subscriber to
be separately insured by the FDIC (to the maximum extent allowable) and
to enable the Bank to make the appropriate refunds of such funds in the
event that such refunds are required to be made in accordance with the
Plan and as described in the Prospectus.
(u) The Holding Company will promptly register as a savings
and loan holding company under the HOLA.
(v) The Holding Company and the Bank will take such actions
and furnish such information as are reasonably requested by the Agent
in order for the Agent to ensure compliance with the "Interpretation of
the Board of Governors of the NASD on Free Riding and Withholding."
(w) The Holding Company and the Bank will conduct their
businesses in compliance in all material respects with all applicable
federal and state laws, rules, regulations, decisions, directives and
orders including, all decisions, directives and orders of the
Commission, the OTS and the FDIC.
(x) The Bank will not amend the Plan of Conversion without
notifying the Agent prior thereto.
(y) The Holding Company shall provide the Agent with any
information necessary to carry out the allocation of the Shares in the
event of an oversubscription and such information shall be accurate and
reliable.
(z) The Holding Company will not deliver the Shares until the
Holding Company and the Bank have satisfied or caused to be satisfied
each condition set forth in Section 9A hereof, unless such condition is
waived in writing by the Agent.
Section 7.B. Covenants of Agent. Xxxx hereby covenants
with the Company and the Bank as follows:
(a) During the period when the Prospectus is used, Xxxx will
comply, in all material respects and at its own expense, with all
requirements imposed upon it by the OTS and, to the extent applicable,
by the 1933 Act and the rules and regulations promulgated thereunder.
(b) Xxxx will distribute any Prospectus or offering materials
in connection with the offering and sale of the Common Stock only in
accordance with the Conversion Regulations and the requirements of the
1933 Act and 1934 Act and the rules and regulations promulgated
thereunder; and
18
(c) Xxxx shall perform the calculations process in connection
with the allocation of shares in the event of an over- subscription.
Section 8. Payment of Expenses. Whether or not the Conversion is
completed or the sale of the Shares by the Holding Company is consummated, the
Holding Company and the Bank will pay for all expenses incident to the
performance of this Agreement, including without limitation: (a) the preparation
and filing of the Application; (b) the preparation, printing, filing, delivery
and shipment of the Registration Statement, including the Prospectus, and all
amendments and supplements thereto; (c) all filing fees and expenses in
connection with the qualification or registration of the Shares for offer and
sale by the Holding Company under the securities or "blue sky" laws, including
without limitation filing fees, reasonable legal fees and disbursements of
counsel in connection therewith, and in connection with the preparation of a
blue sky law survey; (d) the filing fees of the NASD; and (e) the reasonable
expenses of the Agent, including without limitation, accounting, communications,
legal and travel expenses. Any such expense incurred by the Agent shall be
reimbursed by the Holding Company and the Bank. If this Agreement is terminated
in accordance with the provisions of Sections 3, 9, or 13, the Bank will pay the
Agent the fees earned pursuant to Section 4 and will reimburse the Agent for the
reasonable expenses of the Agent, including without limitation accounting,
communication, legal and travel expenses. Non-legal expenses shall not exceed
$5,000 without the prior approval of the Holding Company or the Bank. Legal fees
and expenses shall not exceed $35,000 without the prior approval of the Holding
Company or the Bank.
Section 9.A. Conditions to the Agent's Obligations. The obligations of
the Agent hereunder and the occurrence of the Closing and the Conversion are
subject to the condition that all representations and warranties and other
statements of the Holding Company and the Bank herein contained are at and as of
the commencement of the Subscription and Community Offering and at and as of the
Closing Date, true and correct in all material respects, the condition that the
Holding Company and the Bank shall have performed in all material respects all
of their obligations hereunder to be performed on or before such dates and to
the following further conditions:
(a) The Registration Statement shall have been declared
effective by the Commission and the Application approved by the OTS not
later than 5:30 p.m. on the date of this Agreement, and no stop order
or other action suspending the effectiveness of the Registration
Statement shall have been issued under the 1933 Act or proceedings
therefor initiated or, to the Company's or the Bank's best knowledge,
threatened by the Commission or any state authority and no order or
other action suspending the authorization for use of the Prospectus or
the consummation of the Conversion shall have been issued or
19
proceedings therefor initiated or, to the Company's or Bank's best
knowledge, threatened by the OTS, the Commission, or any other
governmental body.
(b) At the Closing Date, the Agent shall have received:
(1) The favorable opinion, dated as of the Closing
Date, of Silver, Xxxxxxxx & Xxxx, LLP, special counsel for the
Holding Company and the Bank, in form and substance
satisfactory to counsel for the Agent to the effect that:
(i) The Holding Company is a
corporation duly organized and validly
existing and in good standing under the laws
of the State of Delaware, with corporate
power and authority to own its properties
and to conduct its business as described in
the Prospectus, and to such counsel's
knowledge is duly qualified to transact
business and is in good standing in each
jurisdiction in which the conduct of its
business requires such qualification and in
which the failure to qualify would have a
material adverse effect on the financial
condition, earnings, capital, properties or
business affairs of the Holding Company.
(ii) The Bank is a duly organized
and validly existing federally chartered
mutual savings bank and, at the Closing
Date, upon satisfaction of the conditions
set forth in the Plan, will become a duly
organized and validly existing federally
chartered stock savings bank with full power
and authority to own its properties and to
conduct its business as described in the
Prospectus and to enter into this Agreement
and perform its obligations hereunder; the
activities of the Bank as described in the
Prospectus are permitted by the rules,
regulations and practices of the OTS; the
issuance and sale of the capital stock of
the Bank to the Holding Company has been
duly and validly authorized by all necessary
corporate action on the part of the Holding
Company and the Bank and, upon payment
therefor in accordance with the terms of the
Plan, will be validly issued, fully paid and
nonassessable; and will be owned of record
and beneficially by the Holding Company,
free and clear of any mortgage, pledge,
lien, encumbrance, claim or restriction.
(iii) The Bank is a member of the
FHLB of Chicago and the savings accounts of
the Bank are insured by the FDIC up to the
maximum amount allowed by law and to such
counsel's knowledge no proceedings for the
termination or revocation of such insurance
are pending or threatened; and the
description of the liquidation account as
set forth in the Prospectus under the
caption "The Conversion - Effects of
Conversion to Stock Form on Depositors and
Borrowers of the Bank - Liquidation Rights"
has been reviewed by such counsel and, to
the extent that such information constitutes
matters of law or legal conclusions, is
accurate in all material respects.
20
(iv) Upon Conversion, the
authorized, issued and outstanding capital
stock of the Holding Company and the Bank
will be as set forth in the Prospectus under
the caption "Capitalization," and no shares
of Common Stock have been or will be issued
and outstanding prior to the Closing Date;
the shares of Common Stock of the Holding
Company to be subscribed for in the
Subscription and Community Offering have
been duly and validly authorized for
issuance, and when issued and delivered by
the Holding Company pursuant to the Plan
against payment of the consideration
calculated as set forth in the Plan, will be
fully paid and nonassessable; and the
issuance of the shares of Common Stock is
not subject to preemptive rights, except for
the subscription rights under the Plan.
(v) The execution and delivery of
this Agreement and the consummation of the
transactions contemplated hereby have been
duly authorized by all necessary action on
the part of the Holding Company and the
Bank; and this Agreement constitutes a
valid, legal and binding obligation of each
of the Holding Company and the Bank,
enforceable in accordance with its terms,
except to the extent that the provisions of
Sections 10 and 11 hereof may be
unenforceable as against public policy, and
except to the extent that such
enforceability may be limited by bankruptcy
laws, insolvency laws, or other laws
affecting the enforcement of creditors'
rights generally, or the rights of creditors
of savings institutions insured by the FDIC
(including the laws relating to the rights
of the contracting parties to equitable
remedies).
(vi) The Plan has been duly adopted
as required by the directors of the Holding
Company and the Bank and members of the
Bank.
(vii) Subject to the satisfaction
of the conditions to the OTS's approval of
the Conversion and the Holding Company
Application to acquire the Bank, no further
approval, registration, authorization,
consent or other order of any federal
regulatory agency, public board or body is
required in connection with the execution
and delivery of this Agreement, the offer,
sale and issuance of the Shares and the
consummation of the Conversion (other than
compliance with state securities or Blue Sky
laws as to which such counsel need express
no opinion and other than as may be required
under the rules and regulations of the NASD
or the Nasdaq System).
(viii) The Application, including
the Prospectus as filed with the OTS, has
been approved by the OTS. The OTS has issued
its order of approval under the savings and
loan holding company provisions of the HOLA,
and the purchase by the Holding Company of
all of the issued and outstanding capital
stock of the Bank has been authorized by the
OTS and no action has been taken, or, to
such counsel's knowledge, is pending or
threatened, to revoke any such authorization
or approval.
21
(ix) The Registration Statement has
become effective under the 1933 Act, no stop
order suspending the effectiveness of the
Registration Statement has been issued, and,
to the best of such counsel's knowledge, no
proceedings for that purpose have been
instituted or threatened.
(x) The material tax consequences
of the Conversion are set forth in the
Prospectus under the caption "The
Conversion-Income Tax Consequences." The
information in the Prospectus under the
caption "The Conversion-Income Tax
Consequences" has been reviewed by such
counsel and fairly describes such opinions
rendered by Silver Xxxxxxxx & Xxxx, L.L.P.
and Xxxxx, Xxxxxx and Company to the Holding
Company and the Bank with respect to such
matters.
(xi) The terms and provisions of
the shares of Common Stock conform to the
description thereof contained in the
Registration Statement and the Prospectus
and such description describes in all
material respects the rights of the holders
thereof, the information in the Prospectus
under the captions "Restrictions on
Acquisitions of Stock and Related Takeover
Defensive Provisions" and "Description of
Capital Stock," to the extent that they
constitute matters of law or legal
conclusions, has been prepared by such
counsel and is accurate in all material
respects; and the forms of certificates
proposed to be used to evidence the shares
of Common Stock are in due and proper form.
(xii) At the time the Application,
including the Prospectus contained therein,
was approved, the Application (as amended or
supplemented) complied as to form in all
material respects with the requirements of
the Conversion Regulation and all applicable
laws, rules and regulations and decisions
and orders of the OTS, except as modified or
waived in writing by the OTS, (other than
the financial statements, notes to financial
statements, financial tables and other
financial and statistical data included
therein and the appraisal valuation as to
which counsel need express no opinion). To
such counsel's knowledge, no person has
sought to obtain regulatory or judicial
review of the final action of the OTS
approving the Application or in approving
the Holding Company Application.
(xiii) At the time that the
Registration Statement became effective (i)
the Registration Statement (as amended or
supplemented) (other than the financial
statements, notes to financial statements,
financial tables or other financial and
statistical data included therein and the
appraisal valuation as to which counsel need
express no opinion), complied as to form in
all material respects with the requirements
of the 1933 Act and the rules and
regulations promulgated thereunder; and (ii)
the Prospectus (other than the financial
statements, notes to financial statements,
financial tables and other financial and
statistical data included therein and the
appraisal valuation, as to which counsel
need express no opinion) complied
22
as to form in all material respects with the
requirements of the 1933 Act and the rules
and regulations promulgated thereunder, the
Conversion Regulations, the rules,
regulations and decisions and orders of the
OTS, except as modified or waived in writing
by the OTS.
(xiv) To the best of such counsel's
knowledge, there are no legal or
governmental proceedings pending, or
threatened (i) asserting the invalidity of
this Agreement or (ii) seeking to prevent
the Conversion or the offer, sale or
issuance of the Shares.
(xv) The information in the
Prospectus under the captions "Regulation,"
"The Conversion" and "Legal Matters," to the
extent that it constitutes matters of law,
summaries of legal matters, documents or
proceedings, or legal conclusions, has been
prepared by such counsel and is accurate in
all material respects (except as to the
financial statements and other financial
data included therein as to which such
counsel need express no opinion).
(xvi) To the best of counsel's
knowledge, the Holding Company and the Bank
have obtained all material licenses, permits
and other governmental authorizations
required for the conduct of their respective
businesses as described in the Registration
Statement and the Prospectus, except where
the failure to obtain such licenses, permits
and other governmental authorizations would
not have a material adverse effect on the
financial condition of the Holding Company
or the Bank considered as one enterprise, or
on the earnings, capital, properties or
business affairs of the Holding Company or
the Bank considered as one enterprise, and
all such licenses, permits and other
governmental authorizations are in full
force and effect and the Holding Company and
the Bank are in all material respects
complying therewith.
(xvii) Neither the Holding Company
nor the Bank is in violation of its
certificate of incorporation or its charter,
respectively, or its bylaws (and the Bank
will not be in violation of its charter or
bylaws in stock form upon consummation of
the Conversion) or to the best of such
counsel's knowledge, in violation of any
material obligation, agreement, covenant or
condition contained in any material
contract, indenture, mortgage, loan
agreement, note, lease or other instrument
to which it is a party or by which it or its
property may be bound, which violation would
have a material adverse effect on the
financial condition of the Holding Company
or the Bank considered as one enterprise, or
on the earnings, capital, properties or
business affairs of the Holding Company and
the Bank considered as one enterprise; the
execution and delivery of this Agreement by
the Holding Company and the Bank, the
incurrence of the obligations herein set
forth and the consummation of the
transactions contemplated herein, will not
materially conflict with, constitute a
material breach of, or
23
default under, or result in the creation or
imposition of any material lien, charge or
encumbrance upon any property or assets of
the Holding Company or the Bank which are
material to their business considered as one
enterprise, pursuant to any contract,
indenture, mortgage, loan agreement, note,
lease or other instrument to which the
Holding Company or the Bank is a party or by
which any of them may be bound, or to which
any of the property or assets of the Holding
Company or the Bank is subject. In addition,
such action will not result in any material
violation of the provisions of the
certificate of incorporation or bylaws of
the Holding Company or the Bank or any
material violation of any applicable law,
act, regulation or to such counsel's
knowledge, order or court order, writ,
injunction or decree.
(xviii) To the best of counsel's
knowledge, the Holding Company and the Bank
are not in violation in any material respect
of any directive from the OTS or the FDIC to
make any material change in the method of
conducting their business.
(2) The letter of Silver, Xxxxxxxx & Xxxx, L.L.P.,
special counsel for the Holding Company and the Bank, in form
and substance to the effect that:
In addition, during the preparation of the
Registration Statement and the Prospectus, Silver,
Xxxxxxxx & Xxxx participated in conferences with
certain officers of and other representatives of the
Bank and the Holding Company, counsel to the Agent,
representatives of the independent public accountants
for the Bank and the Holding Company and
representatives of the Agent at which the contents of
the Registration Statement and the Prospectus and
related matters were discussed and, although Silver,
Xxxxxxxx & Xxxx is not passing upon and does not
assume the accuracy of the statements contained in
the Registration Statement and Prospectus, on the
basis of the foregoing without independent
verification (relying as to materiality as to factual
matters on certificates of officers and other factual
representations by the Bank and the Holding Company),
nothing has come to Silver, Xxxxxxxx & Xxxx'x
attention that caused Silver, Xxxxxxxx & Xxxx to
believe that the Registration Statement at the time
it was declared effective by the SEC or the
Prospectus as of its date, contained or contains any
untrue statement of a material fact or omitted to
state any material fact required to be stated therein
or necessary to make the statements therein, in light
of the circumstances under which they were made, not
misleading (it being understood that counsel need
express no comment or opinion with respect to the
financial statements, schedules and other financial
and statistical data included, or statistical or
appraisal methodology employed, in the Registration
Statement or Prospectus).
The opinion shall be limited to matters
governed by the laws of the United States or the
State of Delaware. In rendering such
24
opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction
other than the United States or Delaware, to the
extent such counsel deems proper and specified in
such opinion, upon the opinion of other counsel of
good standing, as long as such other opinion
indicates that the Agent may rely on the opinion, and
(B) as to matters of fact, to the extent such counsel
deems proper, on certificates of responsible officers
of the Company and the Bank and public officials;
provided copies of any such opinion(s) or
certificates of public officials are delivered to you
together with the opinion to be rendered hereunder by
special counsel to the Company and the Bank. The
opinion of such counsel for the Company shall state
that it has no reason to believe that the Agent is
not justified in relying thereon.
(3) The favorable opinion, dated as of the Closing
Date, of Xxxxxxx & Xxx, P.C., counsel for the Agent, with
respect to such matters as the Agent may reasonably require,
such opinion may rely as to matters of fact, upon certificates
of officers and directors of the Holding Company and the Bank
delivered pursuant hereto or as such counsel may reasonably
request.
(c) Concurrently with the execution of this Agreement, the
Agent shall receive a letter from Xxxxx, Xxxxxx and Company, dated the
date hereof and addressed to the Agent, (i) such letter confirming that
Xxxxx, Xxxxxx and Company is a firm of independent public accountants
within the meaning of the Code of Professional Ethics of the American
Institute of Certified Public Accountants, the 1933 Act and the
regulations promulgated thereunder and 12 C.F.R. Section 571.2(c)(3),
and no information concerning its relationship with or interests in the
Holding Company or the Bank is required by the Application or Item 10
of the Registration Statement, and stating in effect that in Xxxxx,
Xxxxxx and Company's opinion the financial statements of the Bank
included in the Prospectus comply as to form in all material respects
with the applicable accounting requirements of the 1933 Act, the 1934
act and the related published rules and regulations of the Commission
thereunder and the Conversion Regulations and generally accepted
accounting principles; (ii) stating in effect that, on the basis of
certain agreed upon procedures (but not an audit examination in
accordance with generally accepted auditing standards) consisting of a
reading of the latest available unaudited interim financial statements
of the Bank prepared by the Bank, a reading of the minutes of the
meetings of the Board of Directors and members of the Bank, a review of
interim financial information in accordance with Statement on Auditing
Standards No. 71, and consultations with officers of the Bank
responsible for financial and accounting matters, nothing came to their
attention which caused them to believe that: (A) such unaudited
financial statements, including Recent Developments, if any, are not in
conformity with generally accepted accounting principles applied on a
basis substantially consistent with that of the audited financial
statements included in the Prospectus;
25
or (B) during the period from the date of the latest unaudited
consolidated financial statements included in the Prospectus to a
specified date not more than five business days prior to the date
hereof, there was any material increase in borrowings (defined as
advances from the Federal Home Loan Bank of Chicago, securities sold
under agreements to repurchase and any other form of debt other than
deposits) of the Holding Company or the Bank (other than as disclosed
in the Prospectus or in the ordinary course of business); or (C) there
was any decrease in retained earnings of the Bank at the date of such
letter as compared with amounts shown in the latest unaudited statement
of condition included in the Prospectus or there was any decrease in
net income or net interest income of the Bank for the number of full
months commencing immediately after the period covered by the latest
unaudited income statement included in the Prospectus and ended on the
latest month end prior to the date of the Prospectus or in such letter
as compared to the corresponding period in the preceding year; and
(iii) stating that, in addition to the audit examination referred to in
its opinion included in the Prospectus and the performance of the
procedures referred to in clause (ii) of this subsection (f), they have
compared with the general accounting records of the Holding Company
and/or the Bank, as applicable, which are subject to the internal
controls of the Holding Company and/or the Bank, as applicable,
accounting system and other data prepared by the Holding Company and/or
the Bank, as applicable, directly from such accounting records, to the
extent specified in such letter, such amounts and/or percentages set
forth in the Prospectus as the Agent may reasonably request, and they
have found such amounts and percentages to be in agreement therewith
(subject to rounding).
(d) At the Closing Date, the Agent shall receive letters from
Xxxxx, Xxxxxx and Company dated the Closing Date, addressed to the
Agent, confirming the statements made by its letter delivered by it
pursuant to subsection (f) of this Section 9A, the "specified date"
referred to in clause (ii)(B) thereof to be a date specified in such
letter, which shall not be more than five business days prior to the
Closing Date.
(e) At the Closing Date, counsel to the Agent shall have been
furnished with such documents and opinions as counsel for the Agent may
require for the purpose of enabling them to advise the Agent with
respect to the issuance and sale of the Common Stock as herein
contemplated and related proceedings, or in order to evidence the
accuracy of any of the representations and warranties, or the
fulfillment of any of the conditions herein contained.
(f) At the Closing Date, the Agent shall receive a certificate
of the Chief Executive Officer and Chief Financial Officer of each of
the Holding Company and the Bank, dated the Closing Date, to the effect
that (i) they have carefully examined the Prospectus and at the time
the Prospectus became authorized for final use, the Prospectus did not
contain an untrue statement
26
of a material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under
which they were made, not misleading; (ii) there has not been, since
the respective dates as of which information is given in the
Prospectus, any material adverse change in the financial condition or
in the earnings, capital, properties, business prospects or business
affairs of the Holding Company or the Bank, considered as one
enterprise, whether or not arising in the ordinary course of business;
(iii) the representations and warranties contained in Section 6A of
this Agreement are true and correct with the same force and effect as
though made at and as of the Closing Date; (iv) the Holding Company and
the Bank have complied in all material respects with all material
agreements and satisfied all conditions on its part to be performed or
satisfied at or prior to the Closing Date including the conditions
contained in this Section 9A; (v) no stop order has been issued or, to
the best of their knowledge, is threatened, by the Commission or any
other governmental body; (vi) no order suspending the Subscription and
Community Offering, the Conversion, the acquisition of all of the
shares of the Bank by the Holding Company or the effectiveness of the
Prospectus has been issued and to the best of their knowledge, no
proceedings for any such purpose have been initiated or threatened by
the OTS, the Commission, the FDIC, or any other federal or state
authority; (vii) to the best of their knowledge, no person has sought
to obtain regulatory or judicial review of the action of the OTS in
approving the Plan or to enjoin the Conversion.
(g) At the Closing Date, the Agent shall receive a letter from
Xxxxxx & Company, Inc. dated as of the Closing Date, confirming its
appraisal.
(h) The Holding Company or the Bank shall not have sustained
since the date of the latest audited financial statements included in
the Registration Statement and Prospectus, any material loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise
than as set forth in the Registration Statement and the Prospectus, and
since the respective dates as of which information is given in the
Registration Statement and the Prospectus, there shall not have been
any material change in the long-term debt of the Holding Company or the
Bank other than debt incurred in relation to the purchase of Shares by
the Holding Company's or Bank's tax-qualified employee plans, or any
material change, or any development involving a prospective material
change in, or affecting the general affairs of, management, financial
position, stockholders' equity or results of operations of the Holding
Company or the Bank, otherwise than as set forth or contemplated in the
Registration Statement and the Prospectus, the effect of which, in any
such case described above, is in the Agent's reasonable judgment
sufficiently material and adverse as to make it impracticable or
inadvisable to proceed with the Subscription
27
and Community Offering or the delivery of the Shares on the terms and
in the manner contemplated in the Prospectus.
(i) Prior to and at the Closing Date: (i) in the reasonable
opinion of the Agent, there shall have been no material adverse change
in the financial condition or in the earnings, capital, properties or
business affairs of the Holding Company or the Bank independently, or
of the Holding Company and the Bank, considered as one enterprise, from
that as of the latest dates as of which such condition is set forth in
the Prospectus, except as referred to therein; (ii) there shall have
been no material transaction entered into by the Holding Company and
the Bank, considered as one enterprise, from the latest date as of
which the financial condition of the Holding Company or the Bank is set
forth in the Prospectus other than transactions referred to or
contemplated therein; (iii) the Holding Company or the Bank shall not
have received from the OTS or the FDIC any direction (oral or written)
to make any material change in the method of conducting their business
with which it has not complied in all material respects (which
direction, if any, shall have been disclosed to the Agent) and which
would reasonably be expected to have a material and adverse effect on
the condition (financial or otherwise) or on the earnings, capital,
properties or business affairs of the Holding Company or the Bank
considered as one enterprise; (iv) neither the Holding Company nor the
Bank shall have been in default (nor shall an event have occurred
which, with notice or lapse of time or both, would constitute a
default) under any provision of any agreement or instrument relating to
any material outstanding indebtedness; (v) no action, suit or
proceeding, at law or in equity or before or by any federal or state
commission, board or other administrative agency, shall be pending or,
to the knowledge of the Holding Company or the Bank, threatened against
the Holding Company or the Bank or affecting any of their properties
wherein an unfavorable decision, ruling or finding would reasonably be
expected to have a material and adverse effect on the financial
condition or on the earnings, capital, properties or business affairs
of the Holding Company or the Bank, considered as one enterprise; and
(vi) the Shares have been qualified or registered for offering and sale
under the securities or blue sky laws of the jurisdictions as to which
the Holding Company and the Agent shall have agreed.
(j) At or prior to the Closing Date, the Agent shall receive
(i) a copy of the letter from the OTS authorizing the use of the
Prospectus and approving the Application, (ii) a copy of the order from
the Commission declaring the Registration Statement effective, (iii) a
copy of certificate of existence for the Bank from the OTS, (iv) a
certificate of good standing from the State of Delaware evidencing the
good standing of the Holding Company and (v) a copy of the letter from
the OTS approving the Holding Company Application.
28
(k) As soon as available after the Closing Date, the Agent
shall receive a certified copy of the Bank's stock charter.
(l) Subsequent to the date hereof, there shall not have
occurred any of the following: (i) a suspension or limitation in
trading in securities generally on the New York Stock Exchange or
American Stock Exchange or in the over-the-counter market, or
quotations halted generally on the Nasdaq Stock Market, or minimum or
maximum prices for trading have been fixed, or maximum ranges for
prices for securities have been required by either of such exchanges or
the NASD or by order of the Commission or any other governmental
authority; (ii) a general moratorium on the operations of commercial
banks or other federally-insured financial institutions or general
moratorium on the withdrawal of deposits from commercial banks or other
federally-insured financial institutions declared by either federal or
state authorities; (iii) the engagement by the United States in
hostilities which have resulted in the declaration, on or after the
date hereof, of a national emergency or war; or (iv) a material decline
in the price of equity or debt securities if the effect of any of (i)
through (iv) herein, in the Agent's reasonable judgment, makes it
impracticable or inadvisable to proceed with the Subscription and
Community Offering or the delivery of the Shares on the terms and in
the manner contemplated in the Registration Statement and the
Prospectus.
Section 9.B. Conditions to the Holding Company and the Bank's
Obligations. The obligations of the Holding Company and the Bank hereunder are
subject to the accuracy of the representations, warranties and covenants of the
Agent, to the performance by the Agent of its obligations hereunder and to the
satisfaction of the conditions contained in Paragraph (a) of Section 9A
hereunder.
Section 10. Indemnification.
(a) The Holding Company and the Bank agree to indemnify and
hold harmless the Agent, its officers, directors, agents, servants and
employees and each person, if any, who controls the Agent within the
meaning of Section 15 of the 1933 Act 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, that the Agent or any of them may suffer or to which the Agent
and any such persons may become subject under all applicable federal
and state laws or otherwise, and to promptly reimburse the Agent and
any such persons upon written demand for any reasonable expenses
(including fees and disbursements of counsel) incurred by the Agent or
any of them in connection with investigating, preparing or defending
any actions, proceedings or claims (whether commenced or threatened) to
the extent such losses, claims, damages, liabilities or actions (i)
arise out of or are based upon any untrue statement or alleged untrue
statement of a
29
material fact contained in the Registration Statement (or any amendment
or supplement thereto), preliminary or final Prospectus (or any
amendment or supplement thereto), the Application, or any blue sky
application or other instrument or document of the Holding Company or
the Bank or based upon written information supplied by the Holding
Company or the Bank filed in any state or jurisdiction to register or
qualify any or all of the Shares under the securities laws thereof
(collectively, the "Blue Sky Application"), or any application or other
document, advertisement, or communication ("Sales Information")
prepared, made or executed by or on behalf of the Holding Company or
the Bank with its consent or based upon written information furnished
by or on behalf of the Holding Company or the Bank, whether or not
filed in any jurisdiction in order to qualify or register the Shares
under the securities laws thereof, (ii) arise out of or based upon the
omission or alleged omission to state in any of the foregoing documents
or information, a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading; (iii) arise from any theory
of liability whatsoever relating to or arising from or based upon the
Registration Statement (or any amendment or supplement thereto),
preliminary or final Prospectus (or any amendment or supplement
thereto), the Application, any Blue Sky Application or Sales
Information or other documentation distributed in connection with the
Conversion; provided, however, that no indemnification is required
under this paragraph (a) to the extent such losses, claims, damages,
liabilities or actions arise out of or are based upon any untrue
material statements or alleged untrue material statements in, or
material omission or alleged material omission from, the Registration
Statement (or any amendment or supplement thereto) or the preliminary
or final Prospectus (or any amendment or supplement thereto) the
Application, the Blue Sky Application or Sales Information or other
documentation distributed in connection with the Conversion made in
reliance upon and in conformity with written information furnished to
the Holding Company or the Bank by the Agent with respect to the Agent
expressly for use in the Registration Statement (or any amendment or
supplement thereto) or Prospectus (or any amendment or supplement
thereto) under the caption "The Conversion - Marketing Arrangements"
therein or statistical information regarding the Holding Company
prepared by the Agent for use in the Sales Information except for
information derived from the Prospectus. Provided further, that the
Holding Company and the Bank will not be responsible for any loss,
liability, claim, damage or expense to the extent they result primarily
from actions taken or omitted to be taken by the Agent in bad faith or
from the Agent's gross negligence, and the Agent agrees to repay to the
Holding Company any amounts advanced by it to the Agent in connection
with matters as to which the Agent is found not to be entitled to
indemnification hereunder. Notwithstanding the foregoing, the
indemnification provided for in this paragraph (a) shall not apply to
the Bank to the extent that such indemnification by the
30
Bank would constitute a covered transaction under Section 23A of the
Federal Reserve Act.
(b) The Agent agrees to indemnify and hold harmless the
Holding Company, its directors and officers, agents, servants and
employees and each person, if any, who controls the Holding Company
within the meaning of Section 15 of the 1933 Act or Section 20(a) of
the 1934 Act against any and all loss, liability, claim, damage or
expense whatsoever (including but not limited to settlement expenses),
joint or several which they, or any of them, in connection with
investigating, preparing or defending any actions, proceedings or
claims (whether commenced or threatened) to the extent such losses,
claims, damages, liabilities or actions arise out of or are based upon
any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement (or any amendment of supplement
thereto), the Application, the Holding Company Application or any Blue
Sky Application or Sales Information or are based upon the omission or
alleged omission to state in any of the foregoing documents a material
fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading; provided, however, that the Agent's obligations under
this Section 10(b) shall exist only if and only to the extent that such
untrue statement or alleged untrue statement was made in, or such
material fact or alleged material fact was omitted from, the
Registration Statement (or any amendment or supplement thereto) or the
Prospectus (or any amendment or supplement thereto) in reliance upon
and in conformity with written information furnished to the Holding
Company by the Agent expressly for use under the caption "The
Conversion -- Marketing Arrangements" therein or statistical
information regarding the Holding Company prepared by the Agent for use
in the Sales information except for information derived from the
Prospectus.
(c) Each indemnified party shall give prompt written notice to
each indemnifying party of any action, proceeding, claim (whether
commenced or threatened), or suit instituted against it in respect of
which indemnity may be sought hereunder, but failure to so notify an
indemnifying party shall not relieve it from any liability which it may
have on account of this Section 10 or otherwise. An indemnifying party
may participate 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
31
incurred thereafter in connection with such action, proceeding or
claim, other than reasonable costs of investigation. In no event shall
the indemnifying parties be liable for the fees and expenses of more
than one separate firm of attorneys (and any special counsel that said
firm may retain) for all indemnified parties in connection with any one
action, proceeding or claim or separate but similar or related actions,
proceedings or claims in the same jurisdiction arising out of the same
general allegations or circumstances.
(d) The agreements contained in this Section 10 and in Section
11 hereof and the representations and warranties of the Holding Company
and the Bank set forth in this Agreement shall remain operative and in
full force and effect regardless of (i) any investigation made by or on
behalf of the Agent or its officers, directors or controlling persons,
agents or employees or by or on behalf of the Holding Company or the
Bank or any officers, directors or controlling persons, agents or
employees of the Holding Company or the Bank or any controlling person,
director or officer of the Holding Company or the Bank; (ii) delivery
of and payment hereunder for the Shares; or (iii) any termination of
this Agreement.
Section 11. Contribution.
(a) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in Section 10
is due in accordance with its terms but is for any reason held by a
court to be unavailable from the Holding Company and the Bank, or the
Agent, as the case may be, the Holding Company and the Bank, or the
Agent, as the case may be, shall contribute to the aggregate losses,
claims, damages and liabilities (including any investigation, legal and
other expenses incurred in connection therewith and any amount paid in
settlement of any action, suit or proceeding of any claims asserted,
but after deducting any contribution received by the Holding Company
and the Bank or the Agent, as the case may be from persons other than
the other party thereto, who may also be liable for contribution) in
such proportion so that the Agent is responsible for that portion
represented by the percentage that the fees paid to the Agent pursuant
to Section 4 of this Agreement (not including expenses) bears to the
gross proceeds received by the Holding Company from the sale of the
Shares in the Subscription and Community Offering and the Holding
Company and the Bank shall be responsible for the balance. If, however,
the allocation provided above is not permitted by applicable law or if
the indemnified party failed to give the notice required under Section
10 above, then each indemnifying party shall contribute to such amount
paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative fault of the Holding
Company and the Bank on the one hand and the Agent on the other in
connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities (or actions, proceedings or
claims in
32
respect thereof), but also the relative benefits received by the
Holding Company and Bank on the one hand and the Agent on the other
from the offering, as well as any other relevant equitable
considerations. The relative benefits received by the Holding Company
and the Bank on the one hand and the Agent on the other shall be deemed
to be in the same proportion as the total gross proceeds from the
Subscription and Community Offering (before deducting expenses)
received by the Holding Company bear to the total fees (not including
expenses) received by the Agent. The relative fault shall be determined
by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Holding
Company and/or the Bank on the one hand or the Agent on the other and
the parties relative intent, good faith, knowledge, access to
information and opportunity to correct or prevent such statement or
omission. The Holding Company and the Agent agree that it would not be
just and equitable if contribution pursuant to this Section 11 were
determined by pro-rata allocation or by any other method of allocation
which does not take account of the equitable considerations referred to
above in this Section 11. The amount paid or payable by an indemnified
party as a result of the losses, claims, damages or liabilities (or
action, proceedings or claims in respect thereof) referred to above in
this Section 11 shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with
investigating or defending any such action, proceeding or claim. It is
expressly agreed that the Agent shall not be liable for any loss,
liability, claim, damage or expense or be required to contribute any
amount which in the aggregate exceeds the amount paid (excluding
reimbursable expenses) to the Agent under this Agreement. It is
understood that the above-stated limitation on the Agent's liability is
essential to the Agent and that the Agent would not have entered into
this Agreement if such limitation had not been agreed to by the parties
to this Agreement. No person found guilty of any fraudulent
misrepresentation (within the meaning of Section 11(f) of the 1933 Act)
shall be entitled to contribution from any person who was not found
guilty of such fraudulent misrepresentation. The obligations of the
Holding Company, the Bank, and the Agent under this Section 11 and
under Section 10 shall be in addition to any liability which the
Holding Company, the Bank, and the Agent may otherwise have. For
purposes of this Section 11, each of the Agent's, the Holding Company's
and the Bank's officers and directors and each person, if any, who
controls the Agent or the Holding Company and the Bank within the
meaning of the 1933 Act and the 1934 Act shall have the same rights to
contribution as the Holding Company, the Bank and the Agent. Any party
entitled to contribution, promptly after receipt of notice of
commencement of any action, suit, claim or proceeding against such
party in respect of which a claim for contribution may be made against
another party under this Section 11, will notify such party from whom
contribution may be sought, but the omission to so notify such party
shall not relive the party from whom contribution may
33
be sought from any other obligation it may have hereunder or otherwise
than under this Section 11.
Section 12. Representations, Warranties and Indemnities to Survive
Delivery. All representations, warranties and indemnities and other statements
contained in this Agreement, or contained in certificates of officers of the
Holding Company and the Bank or the Agent submitted pursuant hereto, shall
remain operative and in full force and effect, regardless of any termination or
cancellation of this Agreement or any investigation made by or on behalf of the
Agent or controlling person, or by or on behalf of the Holding Company and the
Bank and shall survive the issuance of the Shares, and any legal representative,
successor or assign of the Agent, the Bank and the Holding Company, and any
indemnified person shall be entitled to the benefit of the respective
agreements, indemnities, warranties and representations.
Section 13. Termination. Xxxx may terminate this Agreement by giving
the notice indicated below in this Section at any time after this Agreement
becomes effective as follows:
(a) In the event the Holding Company fails to sell the minimum
number of the Shares within the period specified in accordance with the
provisions of the Plan or as required by the Conversion Regulations and
applicable law, this Agreement shall terminate upon refund by the Bank
to each person who has subscribed for or ordered any of the Shares the
full amount which it may have received from such person, together with
interest in accordance with Section 3, and no party to this Agreement
shall have any obligation to the other hereunder, except as set forth
in Sections 3, 4, 8, 10 and 11 hereof.
(b) If any of the conditions specified in Section 9A shall not
have been fulfilled when and as required by this Agreement, or by the
Closing Date, or waived in writing by the Agent, this Agreement and all
of the Agent's obligations hereunder may be canceled by the Agent by
notifying the Bank of such cancellation in writing or by telegram at
any time at or prior to the Closing Date, and, any such cancellation
shall be without liability of any party to any other party except as
otherwise provided in Sections 3, 4, 8, 10 and 11 hereof.
(c) If Xxxx elects to terminate this Agreement as provided in
this Section, the Holding Company and the Bank shall be notified by the
Agent as provided in Section 14 hereof.
Section 14. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to Xxxx shall be
directed to Xxxxxxx Xxxx & Company at 000 Xxxxxxxxx Xxxxxx, Xxxxxx, Xxxx 00000,
Attention: Xx. Xxxxxxx X. Xxxx (with a copy to Xxxxx X. Xxxxxx, Xxxxxxx, Xxxxxxx
& Xxx, One Glenhardie Corporate Center,
34
0000 Xxxxxxxx Xxxx, X.X. Box 236, Wayne, Pennsylvania 19087- 0236), and notices
to the Holding Company and the Bank shall be directed to 0000 Xxxx 000xx Xxxxxx,
Xxx Xxxxxx, Xxxxxxxx 00000- 0000, Attention: Xxxxxxx X. Xxxxxxxxx, Chairman of
the Board and Chief Executive Officer (with a copy to Xxx X. Xxxxxxxx, P.C.,
Xxxxxx, Xxxxxxxx & Xxxx, L.L.P. 0000 Xxx Xxxx Xxxxxx, X.X., Xxxxxxxxxx, X.X.
00000).
Section 15. Parties. This Agreement shall inure to the benefit of and
be binding upon the Agent and the Holding Company and the Bank, and their
respective successors. Nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any person, firm or corporation, other
than the parties hereto and their respective successors and the controlling
persons and officers and directors referred to in Sections 10 and 11 and their
heirs and legal representatives, any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provisions herein contained. It is
understood and agreed that this Agreement is the exclusive agreement among the
parties, supersedes any prior Agreement among the parties and may not be varied
except by a writing signed by all parties.
Section 16. Partial Invalid. In the event that any term, provision or
covenant herein or the application thereof to any circumstances or situation
shall be invalid or unenforceable, in whole or in part, the remainder hereof and
the application of said term, provision or covenant to any other circumstance or
situation shall not be affected thereby, and each term, provision or covenant
herein shall be valid and enforceable to the full extent permitted by law.
Section 17. Construction. This Agreement shall be construed in
accordance with the laws of the State of [Illinois].
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us a counterpart hereof, whereupon this
35
instrument along with all counterparts will become a binding agreement between
you and us in accordance with its terms.
Very truly yours,
HEMLOCK FEDERAL BANK FOR HEMLOCK FEDERAL FINANCIAL
SAVINGS CORPORATION
By:________________________ By:_____________________________
Xxxxxxx X. Xxxxxxxxx, Xxxxxxx X. Xxxxxxxxx,
Chairman of the Board Chairman of the Board
and Chief Executive Officer and Chief Executive Officer
The foregoing Agency Agreement is hereby confirmed and accepted as of the date
first set and above written.
XXXXXXX XXXX & COMPANY
By:______________________________
Xxxxxxxx X. XxXxxxx,
Executive Vice President and
Chief Operating Officer
36
HEMLOCK FEDERAL FINANCIAL CORPORATION
(A Delaware Corporation)
Up to __________ Shares
(Par Value $.0l Per Share)
SELECTED DEALERS' AGREEMENT
---------------------------
_______________, 1997
Ladies and Gentlemen:
We have agreed to assist Hemlock Federal Financial Corporation (the
"Company"), a Delaware corporation, in connection with the offer and sale of up
to ______________ shares of the Company's common stock, $0.01 par value (the
"Common Stock"), to be issued in connection with the conversion of Hemlock
Federal Bank for Savings ("Hemlock Federal" or the "Bank"), a federally
chartered mutual savings bank in accordance with the Plan of Conversion of the
Bank (the "Plan") and the sale of all the Bank's issued and outstanding common
stock to the Company (the "Conversion"). The price per share of the Common Stock
has been fixed at $10.00. The Common Stock and certain of the terms on which it
is being offered, are more fully described in the enclosed prospectus dated
______________, 1997 (the "Prospectus").
In connection with the Conversion, the Company is offering the Common
Stock in a Subscription Offering (to the Eligible Account Holders, Tax-qualified
Employee Plans, Supplemental Eligible Account Holders, Other Members of the
Bank, and to directors, officers and employees of the Bank) and in a Community
Offering to members of the general public (Other Subscribers). The Common Stock
is also being offered in accordance with the Plan 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 Common Stock
and we will pay you a fee in the amount of _______ percent (______%) of the
dollar amount of the Common Stock sold on behalf of the Company by you, as
evidenced by the authorized designation of your firm on the order form or forms
for such Common Stock accompanying the funds transmitted for payment therefor to
the special account established by the Bank for the purpose of holding such
funds. Any purchase of Common Stock made pursuant to this Agreement is subject
to a maximum purchase limitation of $200,000 of the Common Stock offered in the
Conversion exclusive of an increase in the total number of shares issued
pursuant to an increase in the Estimated Valuation Range (as defined in the
Plan). It is understood, of course,
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that payment of your fee will be made to you directly by the Company for the
Common Stock sold on behalf of the Company by you, as evidenced in accordance
with the preceding sentence. As soon as practicable after the closing date of
the offering, the Company will remit to you the fees to which you are entitled
hereunder.
Each order form for the purchase of Common Stock must set forth the
identity and address of each person to whom the certificates for such Common
Stock should be issued and delivered. Such order form should clearly identify
your firm. You shall instruct any subscriber who elects to send his order form
to you to make any accompanying check payable to the Bank.
This offer is made subject to the terms and conditions herein set forth
and contained in the Plan and is made only to selected dealers who are (i)
members in good standing of the National Association of Securities Dealers, Inc.
(the "NASD") who are to comply with all applicable rules of the NASD, including,
without limitation, the NASD's Interpretation With Respect to Free-Riding and
Withholding and Section 24 of Article III of the NASD's Rules of Fair Practice,
or (ii) foreign dealers not eligible for membership in the NASD who agree (A)
not to sell any Common Stock within the United States, its territories or
possessions or to persons who are citizens thereof or resident therein and (B)
in making other sales to comply with the above-mentioned NASD Interpretation,
Sections 8, 24 and 36 of the above-mentioned Article III as if they were NASD
members and Section 25 of such Article III as it applies to non-member brokers
or dealers in a foreign country.
Orders for Common Stock will be strictly subject to confirmation and
we, acting on behalf of the Company, reserve the right in our uncontrolled
discretion to reject any order in whole or in part, to accept or reject orders
in the order of their receipt or otherwise, and to allot. Neither you nor any
other person is authorized by the Company or by us to give any information or
make any representations other than those contained in the Prospectus in
connection with the sale of any of the Common Stock. No selected dealer is
authorized to act as agent for us when soliciting offers to buy the Common Stock
from the public or otherwise. No selected dealer shall engage in any stabilizing
(as defined in Rule 10b-7 promulgated under the Securities Exchange Act of 1934)
with respect to the Company's Common Stock during the offering.
We and each selected dealer assisting in selling Common Stock pursuant
hereto agree to comply with the applicable requirements of the Securities
Exchange Act of 1934 and applicable state rules and regulations. In addition, we
and each selected dealer confirm that the Securities and Exchange Commission
interprets Rule 15c2-8 promulgated under the Securities Exchange Act of 1934 as
requiring that a Prospectus be
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supplied to each person who is expected to receive a confirmation of sale 48
hours prior to delivery of such person's order form.
We and each selected dealer within the meaning of Rule 15c3-1(a)(1)
further agree to the extent that our customers desire to pay for shares with
funds held by or to be deposited with us, in accordance with the interpretation
of the Securities and Exchange Commission of Rule 15c2-4 promulgated under the
Securities Exchange Act of 1934, either (a) upon receipt of an executed order
form or direction to execute an order form on behalf of a customer to forward
the offering price for the Common Stock ordered on or before twelve noon of the
business day following receipt or execution of an order form by us to the Bank
for deposit in a segregated account or (b) to solicit indications of interest in
which event (i) we will subsequently contact any customer indicating interest to
confirm the interest and give instructions to execute and return an order form
or to receive authorization to execute the order form on the customer's behalf,
(ii) we will mail acknowledgements of receipt of orders to each customer
confirming interest on the business day following such confirmation, (iii) we
will debit accounts of such customers on the fifth business day (the "debit
date") following receipt of the confirmation referred to in (i), and (iv) we
will forward completed order forms together with such funds to the Bank on or
before twelve noon on the next business day following the debit date for deposit
in a segregated account. We and each selected dealer acknowledge that if the
procedure in (b) is adopted, our customers' funds are not required to be in
their accounts until the debit date.
Unless earlier terminated by us, this Agreement shall terminate upon
the closing date of this offering. We may terminate this Agreement or any
provisions hereof at any time by written or telegraphic notice to you. Of
course, our obligations hereunder are subject to the successful completion of
the offering.
You agree that at any time or times prior to the termination of this
Agreement you will, upon our request, report to us the number of shares of
Common Stock sold on behalf of the Company by you under this Agreement.
We shall have full authority to take such actions as we may deem
advisable in respect of all matters pertaining to the offering. We shall be
under no liability to you except for lack of good faith and for obligations
expressly assumed by us in this Agreement.
Upon application to us, we will inform you as to the states in which we
believe the Common Stock has been qualified for sale under, or are exempt from
the requirements of, the respective blue sky laws of such states, but we assume
no responsibility or obligation as to your rights to sell Common Stock in any
state.
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Additional copies of the Prospectus and any supplements thereto will be
supplied in reasonable quantities upon request.
Any notice from us to you shall be deemed to have been duly given if
mailed, telephoned, or telegraphed to you at the address to which this Agreement
is mailed.
This Agreement shall be construed in accordance with the laws of the
State of Ohio.
Please confirm your agreement hereto by signing and returning the
confirmation accompanying this letter at once to us at Xxxxxxx Xxxx & Company,
000 Xxxxxxxxx, Xxxxxx, Xxxx 00000-3514. The enclosed duplicate copy will
evidence the agreement between us.
XXXXXXX XXXX & COMPANY
By:______________________________
Xxxxxxxx X. XxXxxxx
Executive Vice President
Agreed and accepted as of ________________, 1997
---------------------------------
By:________________________
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