Exhibit 10.1
BANK MUTUAL CORPORATION
(a Wisconsin Business Corporation)
Up to 31,050,000 Shares
(Subject to Increase Up to 35,707,500 Shares)
COMMON STOCK ($.01 Par Value)
Subscription Price $10.00 Per Share
AGENCY AGREEMENT
July 31, 2003
Xxxx Xxxx & Co.
000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000-0000
Ladies and Gentlemen:
Bank Mutual Corporation, a federal-chartered stock corporation (the
"Mid-Tier Holding Company"), Bank Mutual Corporation, a newly formed, Wisconsin
business corporation organized in stock form to be the successor to the Mid-Tier
Holding Company (the "Holding Company"), Bank Mutual Bancorp, MHC, a
federal-chartered mutual holding company that owns approximately 52.3% of the
common stock of the Mid-Tier Holding Company (the "MHC"), and Bank Mutual, a
federal-chartered savings association (together with its subsidiaries, the
"Bank") whose common stock is owned in its entirety by the Mid-Tier Holding
Company (collectively, the "Bank Mutual Parties") hereby confirm, jointly and
severally, their agreement with Xxxx Xxxx & Co., Inc. (the "Agent"), as follows:
Section 1. The Offering. The MHC, in accordance with the Plan of
Restructuring for the Conversion and Reorganization of Bank Mutual Bancorp, MHC
adopted on April 21, 2003 (the "Plan"), intends to convert from a
federal-chartered mutual holding company and, in connection therewith, has
formed the Holding Company, a newly formed, Wisconsin business corporation
organized in stock form that will offer stock on a priority basis to (i)
Eligible Account Holders, (ii) Employee Plans, (iii) Supplemental Eligible
Account Holders, and (iv) Other Members (all capitalized terms used in this
Agreement and not defined in this Agreement shall have the meanings set forth in
the Plan). Pursuant to the Plan, the Holding Company is offering a minimum of
22,950,000 and a maximum of 31,050,000 shares of common stock, par value $.01
per share (the "Common Stock") (subject to an increase up to 35,707,500 shares),
in the Subscription Offering, and, if necessary, (i) the Community Offering
and/or (ii) Syndicated Community Offering.
Pursuant to the Plan, the Holding Company will offer and sell shares of its
Common Stock (the "Shares") in the Subscription Offering, Community Offering,
and/or Syndicated
Community Offering (the "Offerings") and issue shares of the Holding Company to
existing public shareholders of the Mid-Tier Holding Company in exchange for
their existing shares of the Mid-Tier Holding Company based upon an exchange
ratio (the "Exchange") so that, upon completion of the Offerings, 100% of the
outstanding Common Stock of the Holding Company will be publicly held. The
Holding Company will sell the Shares in the Offerings at $10.00 per share (the
"Purchase Price"). 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.
Pursuant to the Plan, in the Subscription Offering, the Holding Company
will offer the Shares, subject to the allocation procedures and purchase
limitations set forth in the Plan, in descending order of priority to: (1)
Eligible Account Holders, (2) Employee Plans of the Holding Company or the Bank,
(3) Supplemental Eligible Account Holders, and (4) Other Members. The Holding
Company may offer Shares, if any, remaining after the Subscription Offering, in
the Community Offering on a priority basis to the Mid-Tier Holding Company's
public shareholders who are shareholders as of the Voting Record Date, and then
to the natural persons residing within the Wisconsin counties in which the Bank
maintains its home office or one or more branch offices and the Minnesota county
of Washington and then to the general public. In the event a Community Offering
is held, it may be held at any time during or immediately after the Subscription
Offering. Depending on market conditions, Shares available for sale but not
subscribed for in the Subscription Offering or purchased in the Community
Offering may be offered in the Syndicated Community Offering to the general
public on a best efforts basis, as described in subsection 4(b) below.
The Holding Company has filed with the U.S. Securities and Exchange
Commission (the "Commission") a Registration Statement on Form S-1 (File No.
333-105685) in order to register 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, including the prospectus supplement relating to the Mid-Tier Holding
Company's 401(k) Plan, 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.
In connection with the Conversion, the MHC and the Mid-Tier Holding Company
each filed with the Office of Thrift Supervision (the "OTS") an application for
conversion to a stock company (the "Conversion Application") and amendments
thereto as required by the OTS. The Holding Company also has filed with the OTS
its application on Form H-(e)1-S (the "Holding Company Application") to become a
unitary savings and loan holding company under the Home Owners' Loan Act of
1933, as amended, and the regulations promulgated thereunder (the "HOLA").
Collectively, the Conversion Application and the Holding Company Application may
also be termed the "Applications."
Section 2. Appointment of Agent. Subject to the terms and conditions of
this
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Agreement, the Bank Mutual Parties hereby appoint the Agent to consult with,
advise and assist the Bank Mutual Parties with the solicitation of subscriptions
and purchase orders for the Shares in connection with the sale of the Shares in
the Offerings.
On the basis of the representations and warranties of the Bank Mutual
Parties contained in, and subject to the terms and conditions of, this
Agreement, the Agent accepts such appointment and agrees to use its best efforts
to assist the Bank Mutual Parties with the solicitation of subscriptions and
purchase orders for the shares and agrees to consult with and advise the Bank
Mutual Parties as to the matters set forth in Section 3 of the letter agreement
(the "Letter Agreement"), dated April 22, 2003 (the "Letter Agreement") between
the MHC, the Mid-Tier Holding Company and Agent (a copy of which is attached
hereto as Exhibit A). The Letter Agreement is incorporated herein by reference,
and paragraph 3 regarding services and paragraph 12 regarding confidentiality of
the Letter Agreement, and only those sections, shall be binding on the Agent and
the Bank Mutual Parties and shall be considered an integral part hereof; the
provisions of the Letter Agreement that the parties intended to be non-binding,
as set forth in Section 14(a) of the Letter Agreement, are incorporated by
reference herein as well and shall retain their non-binding status.
It is acknowledged by the Bank Mutual Parties that the Agent shall not be
obligated to purchase any Shares and shall not be obligated to take any action
that is inconsistent with any applicable law, regulation, decision or order.
Except as set forth in Section 14 hereof, the appointment of the Agent to
provide services hereunder shall terminate upon consummation of the Offerings.
If requested by the MHC or the Mid-Tier Holding Company, Agent also may
assemble and manage a selling group of broker-dealers that are members of the
National Association of Securities Dealers, Inc. ("NASD") to participate in the
solicitation on a "best efforts" basis of purchase orders for the Shares (the
"Assisting Brokers") under a selected dealer agreement ("Selected Dealer
Agreement"), the form of which is set forth as Exhibit B to this Agreement. The
Agent shall distribute the Shares among dealers in the Syndicated Community
Offering in a fashion that best meets the distribution objectives of the Bank
and the Plan. The Agent shall not commence the Syndicated Community Offering
without the prior approval of the Bank Mutual Parties. Alternatively, if so
directed by the MHC and the Mid-Tier Holding Company, the Agent shall lead
manage a "stand-by" firm commitment underwriting including other underwriters
designated by the MHC and the Mid-Tier Holding Company.
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 a minimum of 22,950,000 Shares during the Offerings (including any
permitted extension thereof) or such other minimum number of Shares as shall be
established consistent with the Plan and the mutual-to-stock conversion
regulations of the OTS (the "Conversion Regulations"), this Agreement shall
terminate and any persons who have subscribed for any of the Shares shall have
refunds placed in the mail to them promptly of the full amount that has been
received from such person, together with interest as provided in the Prospectus.
Section 4. Fees. In addition to the expenses specified in Section 9
hereof, as compensation for the Agent's services under this Agreement, the Agent
has received or will
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receive the following fees from the Bank Mutual Parties:
(a) An advisory and management fee and Voting Member proxy
solicitation fee of $50,000, which has been paid or shall be paid, as the case
may be, as follows: (i) $20,000 upon execution of the Letter Agreement, (ii)
$15,000 upon the initial filing of the Registration Statement, and (iii) $15,000
upon the closing of the Offerings; the parties agree that the $35,000 described
in (i) and (ii) corresponds to the Agent's services described in the Letter
Agreement's Section 3.b., the seventh and eighth bullet points of Section 3.a.,
and that portion of the services described in the third bullet point of Section
3.a. which relates to the regulatory approval of the Office of Thrift
Supervision. Fees for services shall be one percent (1.0%) of the dollar amount
of the Common Stock sold in the Offerings, other than for shares sold pursuant
to 4(b), which will be paid at Closing. No fee shall be payable for Common Stock
sold in the Offerings to officers, directors, employees or immediate family of
such persons ("Insiders") and qualified and non-qualified employee benefit plans
of the Company or the Insiders. The term "immediate family" includes a spouse as
well as siblings, parents and children who reside within the same household as
an officer, director or employee.
(b) If any of the Shares remain unsubscribed for after the
Subscription Offering and Community Offering, at the request of the Holding
Company, the Agent shall form a group of approved broker-dealer firms in
accordance with Section 2 for purposes of the Syndicated Community Offering. The
fees payable by the Holding Company pursuant to this Section 4(b) shall not
exceed five and one-half percent (5.5%) of the aggregate dollar amount of the
Shares sold in the Syndicated Community Offering. Of such 5.5% fee, the Agent
shall receive one percent (1.0%) of the aggregate dollar amount of the shares
sold pursuant to this Section 4(b) as a management fee, and the Bank Mutual
Parties shall pay the remainder of the fee to the Assisting Brokers, which may
include the Agent, in amounts relating to the number of Shares sold by such
Assisting Brokers pursuant to this Section 4(b). All such fees payable under
this Section 4(b) shall be in addition to all fees payable under Section 4(a)
and shall be paid at Closing (as defined below).
In the event that the Holding Company is required to resolicit subscribers
for Shares in the Subscription Offering and Community Offering and the Agent is
required to provide significant additional services or expend significant
additional time in connection with such a resolicitation, the Bank Mutual
Parties and the Agent shall mutually agree to the dollar amount of additional
compensation due to the Agent, and the Bank Mutual Parties shall pay such
amount, if any. Until any agreement called for by this paragraph is reached, the
Agent shall not incur expenses relating to any resolicitation in an amount that
would cause the total expenses incurred by the Agent that are reimbursable by
the Bank pursuant to Section 9 hereof to be greater than those permitted without
the prior written consent of the Holding Company, which consent shall not be
unreasonably withheld.
To the extent the Company elects to employ broker-dealers to serve as
"stand-by" underwriters then any "stand-by" fees associated therewith are to be
paid separately by the Company. Sales concessions paid to such firms are covered
by Section 4(b) above.
Section 5. Closing. If the minimum number of Shares permitted to be sold
in the Offerings on the basis of the most recently updated Appraisal (as defined
in Section 6(g)) are
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subscribed for at or before the termination date of the Offerings (which may be
extended), and the other conditions (including those in Section 10) to the
completion of the Conversion are satisfied, the Holding Company agrees to issue
the Shares on the Closing Date (as hereinafter defined) against payment therefor
by the means authorized by the Plan and to deliver certificates evidencing
ownership of the Shares in such authorized denominations and registrations
directly to the purchasers thereof or as instructed as promptly as practicable
after the Closing Date. The closing (the "Closing") shall be held at the offices
of Xxxxxxx & Xxxxx, LLP, 000 Xxxx Xxxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxx or at
such other place as shall be agreed upon among the Bank Mutual Parties and the
Agent, at 9:00 a.m., Central Time, on the 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 Bank Mutual Parties and the Agent. At the
Closing, the Bank Mutual Parties shall deliver to the Agent by wire transfer in
same-day funds the commissions, fees and expenses owing to the Agent as set
forth in Section 4 and Section 9 hereof and the opinions required hereby and
other documents deemed reasonably necessary by the Agent, which opinions and
documents shall be executed and delivered to effect the sale of the Shares as
contemplated hereby and pursuant to the terms of the Prospectus; provided,
however, that all out-of-pocket expenses to which the Agent is entitled under
Section 9 hereof shall be due and payable upon receipt by the Holding Company or
the Bank of a written accounting therefor setting forth in reasonable detail the
expenses incurred by the Agent. The hour and 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. Representations and Warranties of the Bank Mutual Parties. The
Bank Mutual Parties jointly and severally represent and warrant to the Agent
that:
(a) The MHC, the Mid-Tier Holding Company and the Bank have all such
power, authority, authorizations, approvals and orders as may be required to
enter into this Agreement, and, as of the Closing Date, the MHC, the Holding
Company and the Bank will have all such power, authority, authorizations,
approvals and orders as may be required to carry out the provisions and
conditions hereof and to issue and sell the Shares as provided herein and as
described in the Prospectus. The consummation of the Conversion, the execution,
delivery and performance of this Agreement and the Letter Agreement and the
consummation of the transactions contemplated herein have been duly and validly
authorized by all necessary corporate action on the part of the MHC, the Holding
Company and the Bank. This Agreement has been validly executed and delivered by
the Bank Mutual Parties, and is a valid, legal and binding obligation of the
Bank Mutual Parties, in each case enforceable in accordance with its terms,
except as the legality, validity, binding nature and enforceability thereof may
be limited by (i) bankruptcy, insolvency, moratorium, reorganization,
conservatorship, receivership or other similar laws relating to or affecting the
enforcement of creditors' rights generally, (ii) general equity principles
regardless of whether such enforceability is considered in a proceeding in
equity or at law, and (iii) the extent, if any, that the provisions of Sections
11 or 12 hereof may be unenforceable as against public policy.
(b) The Registration Statement was declared effective by the
Commission on July 31, 2003. No stop order has been issued with respect to the
Prospectus. No proceedings related to the Prospectus have been initiated or, to
the knowledge of the Bank Mutual Parties,
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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 1933 Act and the regulations promulgated
thereunder; and the Registration Statement and the Prospectus 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. At the time any Rule
424(b) or (c) Prospectus was filed with the Commission and at the Closing Date
referred to in Section 5, the Registration Statement, including the Prospectus
(including any amendment or supplement thereto) and, when taken together with
the Prospectus, any Blue Sky Application (as defined in Section 11(a)) or Sales
Information (as defined in Section 11(a)) authorized for use by any of the Bank
Mutual Parties in connection with the Offerings, shall 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; provided, however,
that the representations and warranties in this Section 6(b) shall not apply to
statements or omissions made in reliance upon and in conformity with written
information furnished to the Bank Mutual Parties by the Agent expressly
regarding the Agent for use under the caption " The Conversion - Plan of
Distribution; Selling Agent Compensation."
(c) The Conversion Application has been approved by the OTS. The
Conversion Application did, and shall, as of the Closing Date comply as to form
in all material respects with the Conversion Regulations and any other
applicable rules and regulations of the OTS.
(d) No order has been issued by the Commission preventing or
suspending the use of the Registration Statement or 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 pending or, to the best
knowledge of the Bank Mutual Parties, threatened.
(e) The Plan has been duly adopted by the Board of the MHC. To the
best knowledge of the Bank Mutual Parties, no person has, or at the Closing Date
shall have, sought to obtain review of the final action of the OTS in approving
the Plan or the Conversion Application or the Holding Company Application,
pursuant to the HOLA or any other statute or regulation.
(f) The Holding Company has filed the Holding Company Application
with the OTS. As of the Closing Date, the OTS shall have approved of the Holding
Company becoming a unitary savings and loan holding company with respect to the
Bank.
(g) RP Financial, LC, which prepared the appraisal of the aggregate
pro forma market value of the Common Stock on which the Offerings were based
(the "Appraisal"), has advised the Bank Mutual Parties in writing that it is
independent with respect to each of the Bank Mutual Parties, and the Bank Mutual
Parties believe RP Financial, LC to be expert in preparing appraisals of savings
institutions.
(h) Ernst & Young LLP, which certified the financial statements filed
as part of the Registration Statement and the Conversion Application, has
advised the Bank Mutual
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Parties that it is an independent certified public accountant within the meaning
of the Code of Ethics of the AICPA, and Ernst & Young is, with respect to the
Holding Company, the Bank and each subsidiary of the Bank, independent certified
public accountants as required by the 1933 Act, the 1933 Act Regulations and
Regulation S-X of the Commission.
(i) The consolidated financial statements and the notes thereto that
are included in the Registration Statement and that are a part of the Prospectus
present fairly in all material respects the financial condition and
shareholders' equity of the Mid-Tier Holding Company as of the dates indicated
and the results of operations, cash flows and changes in shareholders' equity
for the periods specified. The consolidated financial statements comply with the
applicable accounting requirements of Title 12 of the Code of Federal
Regulations, Regulation S-X of the Commission 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. The other financial, statistical
and pro forma information and related notes included in the Prospectus present
fairly the information shown therein on a basis consistent with the audited and
any unaudited consolidated financial statements included in the Prospectus, and
as to the pro forma adjustments, the adjustments made therein have been
consistently applied on the basis described therein.
(j) Since the respective dates as of which information is given in
the Registration Statement, including the Prospectus, except as has been
disclosed in the Registration Statement or the Prospectus: (i) there has not
been any material adverse change in the financial condition, results of
operations, capital, properties, business affairs or prospects of the Bank
Mutual Parties considered as one enterprise, whether or not arising in the
ordinary course of business; (ii) there have not been any material transactions
entered into by any of the Bank Mutual Parties, other than those in the ordinary
course of business; and (iii) the capitalization, liabilities, assets,
properties and business of the Bank Mutual Parties conform in all material
respects to the descriptions thereof contained in the Prospectus and, none of
the Bank Mutual Parties has any material liabilities of any kind, contingent or
otherwise.
(k) As of the Closing Date, the Holding Company shall be a stock
corporation duly organized and in active status under the laws of the State of
Wisconsin, with corporate power and authority to own its properties and to
conduct its business as described in the Prospectus, and shall be qualified to
transact business and shall be in active status or good standing in Wisconsin
and 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, results of operations, capital, properties, business affairs or
prospects of the Bank Mutual Parties taken as a whole (a "Material Adverse
Effect"). As of the Closing Date, the Holding Company shall have obtained all
licenses, permits and other governmental authorizations required for the conduct
of its business, except those that individually or in the aggregate would not
have a Material Adverse Effect; and as of the Closing Date, all such licenses,
permits and governmental authorizations shall be in full force and effect, and
the Holding Company shall be in compliance therewith in all material respects.
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(l) The Holding Company does not, and as of the Closing Date, shall
not own any equity securities or any equity interest in any business enterprise,
except as described in the Prospectus.
(m) Bank Mutual is a duly organized and validly existing federal
savings association, duly authorized to conduct its business as described in the
Prospectus; the activities of the Bank are permitted by the applicable 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
have a Material Adverse Effect; 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 United States of America, and the Bank is duly
qualified as a foreign corporation to transact business in each jurisdiction in
which the failure to so qualify would have a Material Adverse Effect; all of the
issued and outstanding capital stock of the Bank after the Conversion shall be
duly and validly issued and fully paid and nonassessable; and the Holding
Company shall directly own all of the capital stock of the Bank free and clear
of any mortgage, pledge, lien, encumbrance, claim or restriction of any kind.
The Bank does not own equity securities or any equity interest in any other
business enterprise, except as otherwise described in the Prospectus or as are
immaterial in amount and are not required to be described in the Prospectus.
(n) The MHC is duly organized and validly existing as a
federal-chartered mutual holding company operating under the laws and
regulations of the United States of America and under the supervision of the OTS
and is in good standing under such laws.
(o) The Mid-Tier Holding Company is duly organized and validly
existing as a federal-chartered stock corporation operating under the laws and
regulations of the United States of America and under the supervision of the OTS
and is in good standing under such laws; the Mid-Tier Holding Company is duly
authorized to conduct its business as described in the Prospectus; the
activities of the Mid-Tier Holding Company are permitted by the rules,
regulations and practices of the OTS; the Mid-Tier Holding Company 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 have a Material Adverse Effect; all such licenses, permits
and other governmental authorizations are in full force and effect; and the
Mid-Tier Holding Company is duly qualified as a foreign corporation to transact
business in each jurisdiction in which the failure to so qualify would have a
Material Adverse Effect.
(p) The deposit accounts of the Bank are insured by the FDIC up to
applicable limits. Upon consummation of the Conversion, the Bank shall establish
a liquidation account for the benefit of the Bank's depositors, in accordance
with the Plan and the requirements of applicable Conversion Regulations.
(q) Upon consummation of the Conversion, the Bank shall be a wholly
owned subsidiary of the Holding Company.
(r) Upon consummation of the Conversion, the authorized, issued and
outstanding capital stock of the Holding Company shall be within the range set
forth in the Prospectus under the caption "Capitalization" and no shares of
Common Stock have been or will
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be issued and outstanding prior to the Closing Date, except for shares of Common
Stock issued with respect to the initial capitalization of the Holding Company;
the shares of Common Stock to be subscribed for in the Offerings 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, shall be duly and
validly issued and fully paid and nonassessable (except with respect to
assessability as provided in Section 180.0622(2) of the Wisconsin Business
Corporation Law ("WBCL"), as it and its predecessor statutes have been
judicially interpreted ("Section 180.0622(2)"); the issuance of the Shares is
not subject to preemptive rights, except for the subscription rights granted
pursuant to the Plan; and the terms and provisions of the shares of Common Stock
shall conform in all material respects to the description thereof contained in
the Prospectus. Upon issuance of the Shares sold, good title to the Shares shall
be transferred from the Holding Company to the purchasers of Shares against
payment therefor in the Offerings as set forth in the Plan and the Prospectus.
(s) The Bank Mutual Parties are not in violation of their respective
certificates of incorporation or charters or their respective bylaws, or in
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 they are a party or by which they, or any of their
respective properties, may be bound that would result in a Material Adverse
Effect. The consummation of the transactions contemplated herein and in the Plan
shall not (i) conflict with or constitute a breach of, or default under, the
certificate of incorporation, charter or bylaws of any of the Bank Mutual
Parties, or conflict with or constitute a breach of, or default under, any
material contract, lease or other instrument to which any of the Bank Mutual
Parties has a beneficial interest, or any applicable law, rule, regulation or
order; except for such conflicts, breaches or defaults that would not have a
Material Adverse Effect, or (ii) violate any authorization, approval, judgment,
decree, order, statute, rule or regulation applicable to the Bank Mutual
Parties, except for such violations that would not have a Material Adverse
Effect; or (iii) result in the creation of any lien, charge or encumbrance upon
any property of the Bank Mutual Parties, except for such liens, changes or
encumbrances that would not individually or in the aggregate have a Material
Adverse Effect.
(t) No default exists, and no event has occurred that with notice or
lapse of time, or both, shall constitute a default on the part of any of the
Bank Mutual Parties, 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 instrument or agreement to which any of the Bank
Mutual Parties is a party or by which any of their property is bound or affected
in any respect that, in any such case, would have a Material Adverse Effect, 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 any of the Bank Mutual
Parties, threatened any action or proceeding wherein any of the Bank Mutual
Parties is alleged to be in default thereunder under circumstances where such
action or proceeding, if determined adversely to any of the Bank Mutual Parties,
would have a Material Adverse Effect.
(u) The Bank Mutual Parties have good and marketable title to all
assets that are material to the businesses of the Bank Mutual Parties, free and
clear of all liens, charges, encumbrances, restrictions or other claims, except
such as are described in the Prospectus or that
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do not have a Material Adverse Effect; and all of the leases and subleases that
are material to the businesses of the Bank Mutual Parties, including those
described in the Registration Statement or Prospectus, are in full force and
effect.
(v) The Bank Mutual Parties are not in violation of any written
directive from the OTS, the FDIC, or any other agency to make any change in the
method of conducting their respective businesses; the Bank Mutual Parties have
conducted and are conducting their respective businesses so as to comply in all
respects with all applicable statutes and regulations (including, without
limitation, regulations, decisions, directives and orders of the OTS, the
Commission and the FDIC), except where the failure to so comply would not
reasonably be expected to result in a Material Adverse Effect; and 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 any of the Bank Mutual Parties, threatened, that would reasonably
be expected to materially and adversely affect the Conversion, the performance
of this Agreement by the Bank Mutual Parties, or the consummation of the
transactions contemplated in the Plan as described in the Registration
Statement, or that would reasonably be expected to result in a Material Adverse
Effect.
(w) Prior to the Closing Date, the Bank Mutual Parties shall have
received an opinion of their counsel, Xxxxxxx & Xxxxx LLP, with respect to the
federal and Wisconsin income tax consequences of the Conversion, as described in
the Registration Statement and the Prospectus, and the facts and representations
upon which such opinions will be based, shall be truthful, accurate and
complete, and none of the Bank Mutual Parties shall take any action inconsistent
therewith.
(x) The Mid-Tier Holding Company and the Bank have filed all required
federal and state tax returns, paid all taxes that have become due and payable,
except where permitted to be extended or where the failure to pay such taxes
would not have a Material Adverse Effect, and no deficiency has been asserted
with respect thereto by any taxing authority.
(y) No approval, authorization, consent or other order of any
regulatory or supervisory or other public authority is required for the
execution, delivery and performance by the Bank Mutual Parties of this
Agreement, or the issuance of the Shares, except for the approval of the OTS and
the Commission 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.
(z) None of the Bank Mutual Parties has: (i) issued any securities
within the last 18 months (except for (a) notes to evidence bank loans,
deposits, certificates of deposit or other liabilities in the ordinary course of
business or as described in the Prospectus, (b) shares of Common Stock issued
with respect to the initial capitalization of the Holding Company, and (c)
shares of Common Stock issued pursuant to employee benefit plans of the Mid-Tier
Holding Company or the Bank, which plans have been approved by shareholders of
the Mid-Tier Holding Company); (ii) had any 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 Offerings and purchases and sales of
U.S. government and agency and other securities in the ordinary course of
business; or (iii)
10
engaged any intermediary between the Agent and the Bank Mutual Parties in
connection with the Offerings or the offering of shares of the common stock of
the Mid-Tier Holding Company, and no person is being compensated in any manner
for such services.
(aa) The Bank Mutual Parties have not made any payment of funds of the
Bank Mutual Parties as a loan to any person for the purchase of Shares or has
made any other payment or loan of funds prohibited by law, and no funds have
been set aside to be used for any payment prohibited by law.
(bb) The Bank complies in all material respects with the applicable
financial record keeping and reporting requirements of the Currency and Foreign
Transactions Reporting Act of 1970, as amended, and the regulations and rules
thereunder.
(cc) The Bank Mutual Parties have not relied upon Agent or its counsel
for any legal, tax or accounting advice in connection with the Conversion.
(dd) The records of Eligible Account Holders and Supplemental Eligible
Account Holders and Other Members are accurate and complete in all material
respects.
(ee) The Bank Mutual Parties comply with all laws, rules and
regulations relating to environmental protection, and none of them has been
notified or is otherwise aware that any of them is potentially liable, or is
considered potentially liable, under the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, or any other federal, state
or local environmental laws and regulations, except to the extent that any
non-compliance would not have a Material Adverse Effect; no action, suit,
regulatory investigation or other proceeding is pending, or to the knowledge of
the Bank Mutual Parties, threatened against the Bank Mutual Parties relating to
environmental protection, nor do the Bank Mutual Parties have any reason to
believe any such proceedings may be brought against any of them; and, to the
knowledge of the Bank Mutual Parties, no disposal, release or discharge of
hazardous or toxic substances, pollutants or contaminants, including petroleum
and gas products, as any of such terms may be defined under federal, state or
local law, has occurred on, in, at or about any facilities or properties owned
or leased by any of the Bank Mutual Parties or in which the Bank has a security
interest, except to the extent such disposal, release or discharge would not
have a Material Adverse Effect.
(ff) All of the loans represented as assets in the recent developments
or financial information of the Bank Mutual Parties included in the Prospectus
meet or are exempt from all requirements of federal, state and local law
pertaining to lending, including, without limitation, truth in lending
(including the requirements of Regulations Z and 12 C.F.R. Part 226), real
estate settlement procedures, consumer credit protection, equal credit
opportunity and all disclosure laws applicable to such loans, except for
violations which, if asserted, would not result in a Material Adverse Effect.
(gg) None of the Bank Mutual Parties are required to be registered as
an investment company under the Investment Company Act of 1940.
(hh) Any certificates signed by an officer of any of the Bank Mutual
Parties and delivered to the Agent or its counsel that refer to this Agreement
shall be deemed to be a
11
representation and warranty by the Bank Mutual Parties to the Agent as to the
matters covered thereby with the same effect as if such representation and
warranty were set forth herein.
(ii) The Bank Mutual Parties have taken all actions necessary to
obtain at Closing a Blue Sky Memorandum from Xxxxxxx & Xxxxx LLP.
(jj) All reports filed by the Mid-Tier Holding Company with the
Commission under the 1934 Act through the date hereof and those reports that
shall be filed by the Mid-Tier Holding Company through the Closing Date, as of
their respective dates of filing, have complied or shall comply, as the case be,
in all material respects with the requirements of the 1934 Act, as amended and
the rules and regulations of the Commission thereunder, and did not or shall not
contain, as the case may be, any 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. The Mid-Tier Holding Company has filed all reports it has been
required to file under the 1934 Act on a timely basis.
Section 7. Representations and Warranties of the Agent. Agent represents
and warrants to the Bank Mutual Parties that:
(a) Agent is a corporation and is validly existing and in good
standing under the laws of the State of New Jersey with full power and authority
to provide the services to be furnished to the Bank Mutual Parties hereunder and
to perform its obligations hereunder.
(b) The execution, delivery and performance of this Agreement and the
Letter Agreement and the consummation of the transactions contemplated herein
and therein have been duly and validly authorized by all necessary corporate
action on the part of Agent, and each of this Agreement is the legal, valid and
binding agreement of Agent, enforceable in accordance with its terms, except as
the legality, validity, binding nature and enforceability thereof may be limited
by (i) bankruptcy, insolvency, moratorium, reorganization, conservatorship,
receivership or other similar laws relating to or affecting the enforcement of
creditors' rights generally, and (ii) general equity principles regardless of
whether such enforceability is considered in a proceeding in equity or at law.
(c) Each of Agent and its employees, agents and representatives who
shall perform any of the services hereunder shall have, and until the Offerings
are consummated or terminated shall maintain, all licenses, approvals and
permits necessary to perform such services and shall comply in all material
respects with all applicable laws and regulations in connection with the
performance of such services. The Agent is a registered selling agent in all
U.S. jurisdictions, and will remain registered in such jurisdictions in which
the Bank Mutual Parties are relying on such registration for the sale of the
Shares, until the Conversion and the Offerings are consummated or terminated.
(d) No action, suit, charge or proceeding before the Commission, the
NASD, any state securities commission or any court is pending, or to the
knowledge of Agent, threatened against Agent that, if determined adversely to
Agent, would have a material adverse effect upon the ability of Agent to perform
its obligations under this Agreement.
12
(e) Agent is registered as a broker/dealer pursuant to Section 15(b)
of the Securities Exchange Act of 1934, as amended (the "1934 Act") and is a
member of the National Association of Securities Dealers, Inc. ("NASD"). The
Agent is in good standing with the SEC and the NASD.
(f) Any funds received in the Offerings by the Agent shall be handled
by the Agent in accordance with Rule 15c2-4 under the 1934 Act to the extent
applicable.
(g) The execution and delivery of this Agreement by the Agent, the
fulfillment of the terms set forth herein and the consummation of the
transactions herein contemplated shall not violate or conflict with the
corporate charter or bylaws of the Agent or violate, conflict with or constitute
a breach of, or default (or an event which, with notice or lapse of time, or
both, would constitute a default) under, any material agreement, indenture or
other instrument by which the Agent is bound or under any governmental license
or permit or any law, administrative regulation, authorization, approval or
order or court decree, injunction or order applicable to it.
(h) There is not now pending or, to the Agent's knowledge, threatened
against the Agent any material action or proceeding before the Commission, the
NASD, any state securities commission or any state or federal court concerning
the Agent's activities as a broker-dealer.
(i) The NASD, upon review of the terms of this Agreement, shall not
have objected to the Agent's performance of its obligations hereunder or the
terms herein set forth.
Section 8. Covenants of the Bank Mutual Parties. The Bank Mutual Parties
hereby jointly and severally covenant with the Agent as follows:
(a) The Holding Company shall 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 and comment on such amendment or supplement. The Holding
Company shall furnish promptly to the Agent and its counsel copies of all
correspondence from the Commission with respect to the Registration Statement
and the Holding Company's responses thereto.
(b) The Bank Mutual Parties shall not, at any time after the date any
Application is approved, file any amendment or supplement to such Application
without providing the Agent and its counsel an opportunity to review and comment
on such amendment or supplement. The Bank Mutual Parties shall furnish promptly
to the Agent and its counsel copies of all correspondence from the OTS with
respect to the Application and the Bank Mutual Parties' responses thereto.
(c) The Bank Mutual Parties shall use their best efforts to cause the
OTS to approve the Plan, the Conversion and the Holding Company's acquisition of
the Bank, shall use their best efforts to cause the Registration Statement to be
declared effective and any post-effective amendment to the Registration
Statement to be declared effective by the Commission, and shall use their best
efforts to cause the Conversion Application to be approved by the OTS and any
post-effective amendment to the Conversion Application to be approved by the
OTS,
13
and shall promptly 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 Conversion Application as amended, has received
the approval of the OTS, (iii) when the Holding Company Application, as amended,
has been approved by the OTS, (iv) of the receipt of any comments from the OTS
or the Commission or any other governmental entity with respect to the
Registration Statement, the Conversion Application, the Conversion or the
transactions contemplated by this Agreement, (v) of any request by the
Commission, the OTS, or any other governmental entity for any amendment or
supplement to the Registration Statement or the Applications or for additional
information, (vi) of the issuance by the Commission or the OTS, or any other
governmental agency of any order or other action suspending the Offerings or the
use of the Registration Statement or the Prospectus or any other filing of the
Bank Mutual Parties under the Conversion Regulations or other applicable law, or
the threat of any such action, (vii) of the issuance by the Commission or the
OTS, or any other state authority of any stop order suspending the effectiveness
of the Registration Statement, or, in the case of the OTS, suspending the
Conversion or of the initiation or threat of initiation or threat of any
proceedings for that purpose, or (viii) of the occurrence of any event mentioned
in subsection (f) below. The Bank Mutual Parties shall make every reasonable
effort to prevent the issuance by the Commission, the OTS, or any other state
authority of any order referred to in (vi) and (vii) above and, if any such
order shall at any time be issued, to obtain the lifting thereof at the earliest
possible time.
(d) The Bank Mutual Parties have delivered to the Agent and to its
counsel conformed copies of each of the following documents, with all exhibits:
the Applications as originally filed and of each amendment or supplement
thereto, and the Registration Statement, as originally filed and each amendment
thereto. Further, the Bank Mutual Parties shall deliver such additional copies
of the foregoing documents to counsel to the Agent as may be required for any
NASD filings. In addition, the Bank Mutual Parties also shall deliver to the
Agent such number of copies of the Prospectus, as amended or supplemented, as
the Agent may reasonably request.
(e) The Bank Mutual Parties shall 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 OTS, 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
Acts, and the Conversion Regulations, to be complied with prior to the Closing
Date; and when the Prospectus is required to be delivered, the Bank Mutual
Parties shall comply in all material respects, at their own expense, with all
requirements imposed upon them by the OTS, the Conversion Regulations, 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 is 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.
(f) During any period when the Prospectus is required to be
delivered, each of the Bank Mutual Parties shall inform the Agent of any event
or circumstance of which it is or becomes 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. If it is
necessary,
14
in the reasonable opinion of counsel for the Bank Mutual Parties, to amend or
supplement the Registration Statement or the Prospectus in order to correct such
untrue statement of a material fact or to make the statements therein not
misleading in light of the circumstances existing at the time of their use, the
Bank Mutual Parties shall, at their expense, 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 (after a reasonable time for review by counsel for
the Agent) that shall amend or supplement the Registration Statement and/or the
Prospectus so that as amended or supplemented it shall 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, each of the Bank
Mutual Parties shall furnish such information with respect to itself as the
Agent may from time to time reasonably request.
(g) Pursuant to the terms of the Plan, the Holding Company shall
endeavor in good faith, in cooperation with the Agent, to the extent required by
law, to register or to qualify the Shares for offering and sale or to exempt
such Shares from registration and to exempt the Holding Company and its
officers, directors and employees from registration as broker-dealers, under the
applicable securities laws of the jurisdictions in which the Offerings 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 as a foreign
corporation 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 shall make and file such
statements and reports as are required by the applicable regulatory authority in
connection with such registration or qualification for a period of not less than
one year from the effective date of the Registration Statement.
(h) The Holding Company shall not sell or issue, contract to sell or
otherwise dispose of, for a period of 90 days after the date hereof, any shares
of Common Stock or securities into or exercisable for shares of Common Stock,
without the Agent's prior written consent other than in connection with any plan
(including an employee benefit plan) or arrangement described in the Prospectus
and in existence as of the date of the Prospectus.
(i) For a period of three years from the date of this Agreement, the
Holding Company shall furnish to the Agent, as soon as practical after such
information is available (i) a copy of each report of the Holding Company mailed
to holders of Common Stock, (ii) each press release and material news item and
article released by the Holding Company, and (iii) from time-to-time, such other
publicly available information concerning the Bank Mutual Parties as the Agent
may reasonably request.
(j) The Bank Mutual Parties shall use the net proceeds from the sale
of the Common Stock in the manner set forth in the Prospectus under the caption
"How We Intend to Use the Proceeds from the Offering."
(k) The Holding Company and the Bank shall 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
15
regulations promulgated under such statutes, and the laws of any state in which
the shares are qualified for sale.
(l) Prior to the Closing Date, the Holding Company shall register its
Common Stock under Section 12(b) or 12(g) of the 1934 Act, and shall request
that such registration statement shall be effective no later than the completion
of the Conversion.
(m) For so long as the Shares are registered under the 1934 Act, the
Holding Company shall furnish to its shareholders as soon as practicable after
the end of each fiscal year such reports and other information as are required
to be furnished to its shareholders under the 1934 Act.
(n) The Holding Company shall report, to the extent required, the use
of proceeds of the Offering in accordance with Rule 463 under the 0000 Xxx.
(o) The Bank Mutual Parties shall maintain appropriate arrangements
for depositing all funds received from persons mailing subscriptions for or
orders to purchase Shares on an interest bearing basis as described in the
Prospectus until the Closing Date and satisfaction of all conditions precedent
to the release of the Holding Company's obligation to refund payments received
from persons subscribing for or ordering Shares in the Offerings, 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 Mutual Parties shall 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 Mutual Parties 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.
(p) The Holding Company shall register as a unitary savings and loan
holding company under HOLA.
(q) The Bank Mutual Parties shall 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."
(r) The Bank Mutual Parties shall conduct their businesses in
compliance with all applicable federal and state laws, rules, regulations,
decisions, directives and orders, including all decisions, directives and orders
of the Commission, the FDIC and the OTS.
(s) The Bank Mutual Parties shall comply with any and all terms,
conditions, requirements and provisions with respect to the Conversion and the
transactions contemplated thereby imposed by the OTS, the HOLA, the Commission,
the 1933 Act, the Conversion Regulations, the 1934 Act and the regulations
promulgated by the Commission pursuant to the 1934 Act to be complied with
subsequent to the Closing Date. The Holding Company shall comply with all
provisions of all undertakings contained in the Registration Statement.
16
(t) The Bank Mutual Parties shall not amend the Plan without
notifying the Agent prior thereto.
(u) The Holding Company shall provide the Agent with any information
necessary to allow the Agent to manage the allocation process in order to permit
the Holding Company to carry out the allocation of the Shares in the event of an
oversubscription, and such information shall be accurate and reliable in all
material respects.
(v) The Holding Company shall not deliver the Shares until the Bank
Mutual Parties have satisfied or caused to be satisfied each condition set forth
in Section 10 hereof, unless such condition is waived in writing by the Agent.
(w) Immediately upon completion of the sale by the Holding Company of
the Shares contemplated by the Plan and the Prospectus and the completion of
certain transactions necessary to implement the Plan, (i) all of the issued and
outstanding shares of capital stock of the Bank shall be owned by the Holding
Company, (ii) the Holding Company shall have no direct subsidiaries other than
the Bank, and (iii) the Conversion shall have been effected in accordance with
the Plan and all applicable laws, including statutes, regulations, decisions and
orders; and all terms, conditions, requirements and provisions with respect to
the Conversion (except those that are conditions subsequent) imposed by the
Commission, the OTS or any other governmental agency, if any, shall have been
complied with by the Bank Mutual Parties in all material respects or appropriate
waivers shall have been obtained and all notice and waiting periods shall have
been satisfied, waived or elapsed.
(x) Prior to the Closing Date, the Plan shall have been approved by
the voting members of the MHC and the shareholders of the Mid-Tier Holding
Company in accordance with the Plan and the Conversion Regulations and the
applicable provisions, if any, of the MHC's charter and bylaws.
(y) On or before the Closing Date, the Bank Mutual Parties shall have
used their best efforts to obtain approval for quotation of shares of the Common
Stock on the NASDAQ National Market System by the Closing Date and shall use its
best efforts to maintain such quotation and shall have completed all conditions
precedent to the Conversion specified in the Plan, including completion of the
Exchange Offer, and the offer and sale of the Shares shall have been conducted
in all material respects in accordance with the Plan, the Conversion Regulations
and with all other applicable laws, including statutes, regulations, decisions
and orders, as well as all terms, conditions, requirements and provisions
precedent to the Conversion imposed upon any of the Bank Mutual Parties by the
OTS, the Commission or any other regulatory authority and in the manner
described in the Prospectus.
(z) The Holding Company shall notify the Agent when funds shall have
been received for the minimum number of Shares set forth in the Prospectus.
(aa) The officers and directors of the Bank Mutual Parties shall not
(i) exercise any stock options providing for the issuance of shares of common
stock in the Mid-Tier Holding Company from the date hereof until after the
Closing Date or (ii) sell or transfer for value any shares of Common Stock
commencing on the date hereof and continuing for a period of 90 days
17
following the Closing Date (the "Restricted Period"); provided, however, that
any permissible transfer of shares made during the Restricted Period to a family
member of an officer or director shall convey subject to the transferee agreeing
to honor the transfer restriction in clause (ii). Except as required by law, the
Bank Mutual Parties shall not honor the exercise of any stock options providing
for the issuance of shares of common stock in the Mid-Tier Holding Company by
any such officer or director during the period described in (i) above, nor shall
the Company otherwise assist such officers or directors in connection with the
sale or transfer of shares of Common Stock during the Restricted Period.
Section 9. Payment of Expenses. Whether or not the Conversion is completed
or the sale and exchange of the Shares by the Holding Company is consummated,
the Bank Mutual Parties shall pay for all their expenses incident to the
performance of this Agreement, including without limitation: (a) the preparation
and filing of the Application and Registration Statement; (b) the preparation,
printing, filing, delivery and mailing of the Registration Statement, including
the Prospectus, and all documents related to the Offerings and proxy
solicitation; (c) all filing fees and expenses in connection with the
qualification or registration of the Shares for offer and sale by the Holding
Company or the Bank 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 related to the Agent's fairness filing
under NASD Rule 2710 and the application of the Holding Company to list its
shares; (e) fees and expenses related to the preparation of the independent
appraisal; (f) fees and expenses related to auditing and accounting services;
(g) expenses relating to advertising, temporary personnel, investor meetings and
stock information center; (h) transfer agent fees and costs of preparation and
distribution of stock certificates; (i) Nasdaq listing fees, and (j) other fees
and expenses that are customary for an issuer of securities in a transaction of
the type contemplated hereby to pay. The Bank Mutual Parties also agree to
reimburse Agent for reasonable out-of-pocket expenses, including legal fees and
expenses, incurred by Agent in connection with the services hereunder. Agent
shall not seek reimbursement from the Bank Mutual Parties for legal fees
(including counsel's out-of-pocket expenses) in excess of $65,000 without the
approval of the Mid-Tier Holding Company. The Agent shall not seek reimbursement
from the Bank Mutual Parties for other out-of-pocket expenses in excess of
$40,000 without prior approval of the Mid-Tier Holding Company. In the event
that the Agent incurs any expenses on behalf of the Bank Mutual Parties, the
Bank Mutual Parties shall pay or reimburse the Agent for such expenses
regardless of whether the Conversion is successfully completed, and such
reimbursements shall not be included in the expense limitations set forth in the
following paragraph. The Agent shall not seek reimbursement from the Bank Mutual
Parties for any single expense of more than $2,000 pursuant to this paragraph
without the prior approval of the Mid-Tier Holding Company, MHC or the Bank. The
Bank Mutual Parties acknowledge, however, that such limitations may be increased
by the mutual consent of the Mid-Tier Holding Company and Agent in the event of
a delay in the Offerings that would require (i) an update of the financial
information in tabular form contained in the Prospectus for a period later than
March 31, 2003, or (ii) the Agent to utilize a Syndicated Community Offering.
The Bank Mutual Parties acknowledge that in the event the Mid-Tier Holding
Company elects to employ broker-dealers to serve as "stand-by" underwriters,
there may be additional expenses with respect to preparation of the documents
necessary for a firm commitment underwriting. Not later than two days prior to
the Closing Date, the Agent shall provide the Bank with a detailed accounting of
all reimbursable expenses to be paid at the
18
Closing.
Section 10. 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 of the Bank Mutual
Parties herein contained are, at and as of the commencement of the Offerings and
at and as of the Closing Date, true and correct, the condition that the Bank
Mutual Parties 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, the Conversion Application and Holding Company Application shall
have been approved by the OTS 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 knowledge of the Bank
Mutual Parties, threatened by the Commission or any state authority and no order
or other action suspending the authorization for use of the Prospectus or the
consummation of the Conversion shall have been issued, or proceedings therefor
initiated or, to the knowledge of the Bank Mutual Parties, threatened by the
OTS, the Commission, or any other governmental body.
(b) At the Closing Date, the Agent shall have received:
(1) The opinion, dated as of the Closing Date, of Xxxxxxx &
Xxxxx LLP in form and substance satisfactory to the Agent and counsel
for the Agent to the effect that:
(i) The Holding Company is a corporation duly
organized, validly existing and in active status under the laws
of the State of Wisconsin, 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, as described in the Prospectus, requires such
qualification.
(ii) The Bank is a validly existing capital stock federal
savings association in good standing under the laws of the United
States of America, and upon consummation of the Conversion, the
Bank shall continue to be a validly existing capital stock
federal savings association, with corporate 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 federal law and the rules,
regulations and practices of the OTS; the issuance and sale of
the capital stock of the Bank to the Holding Company in the
Conversion 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
19
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. Similarly, any
subsidiaries of the Bank are validly existing corporations in
good standing in the jurisdiction of incorporation and authorized
under state and applicable federal law to conduct their
respective businesses as described in the Prospectus.
(iii) The activities of the Mid-Tier Holding Company, the
MHC and the Bank, as described in the Prospectus, are permitted
under applicable federal law. Each of the MHC, the Mid-Tier
Holding Company and the Bank has obtained all licenses, permits,
and other governmental authorizations that are required to
conduct a banking business as described in the Prospectus, except
where the failure to obtain them would not have a Material
Adverse Effect, and all such licenses, permits and other
governmental authorizations are in full force and effect, and to
such counsel's knowledge the Mid-Tier Holding Company and the
Bank comply therewith in all material respects.
(iv) The Bank is an insured depository institution under
the provisions of the Federal Deposit Insurance Act, as amended,
and to such counsel's knowledge, no proceedings for the
termination or revocation of the federal deposit insurance of the
Bank are pending or threatened.
(v) Upon consummation of the Conversion, (a) the
authorized, issued and outstanding capital stock of the Holding
Company will be within the range 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 (except for the shares issued upon incorporation of the
Holding Company to facilitate the Conversion); (b) the shares to
be subscribed for in the Offerings will 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 (except with respect to assessability as
provided in Section 180.0622(2)); and (c) the issuance of the
Shares is not subject to preemptive rights under the charter,
certificate of incorporation or bylaws of the Holding Company, or
arising or outstanding by operation of law or under any contract,
indenture, agreement, instrument or other document known to such
counsel, except for the subscription rights under the Plan.
(vi) The execution and delivery of this Agreement and
the consummation of the transactions contemplated hereby have
been duly authorized by all necessary corporate action on the
part of the Bank Mutual Parties; and this Agreement constitutes a
valid, legal and binding obligation of each of the Bank Mutual
Parties, enforceable in accordance with its terms, except as
rights to indemnity and contribution thereunder may be limited
under applicable law, subject to the qualification that (i)
20
enforcement thereof may be limited by bankruptcy, insolvency,
moratorium, reorganization or other laws (including the laws of
fraudulent conveyance) or judicial decisions affecting the
enforceability of creditors' rights generally, the rights of
creditors of savings banks or financial institutions, the
accounts of which are insured by the FDIC, and (ii) enforcement
thereof is subject to general equity principles (regardless of
whether such enforceability is considered in a proceeding in
equity or at law) and to the effect of certain laws and judicial
decisions upon the availability of injunctive relief and
enforceability of equitable remedies, including the remedies of
specific performance and self-help.
(vii) The Plan has been duly adopted by the Board of
Directors of the MHC in the manner required by the Conversion
Regulations and the MHC's charter and bylaws.
(viii) The Conversion Application and the Holding Company
Application have been approved by the OTS, and subject to the
satisfaction of any conditions set forth in such approvals, no
further approval, registration, authorization, consent or other
order of any federal or state 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, except as may be required
under the securities or "blue sky" laws of various jurisdictions
as to which no opinion need be rendered.
(ix) The Registration Statement has become effective
under the 1933 Act and to such counsel's knowledge no stop order
suspending the effectiveness of the Registration Statement has
been issued, or proceedings for that purpose have been instituted
or threatened by the Commission.
(x) The terms and provisions of the shares of Common
Stock conform to the description thereof contained in the
Registration Statement and the Prospectus, and the forms of
certificates proposed to be used to evidence the shares of Common
Stock are in due and proper form.
(xi) At the time the Conversion Application was
approved, the Conversion Application (as amended or
supplemented), complied as to form in all material respects with
the requirements of the Conversion Regulations 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 and the business
plan 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 in approving the
Applications.
21
(xii) At the time that the Registration Statement became
effective and as of the Closing Date, the Registration Statement,
including the Prospectus (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 and the business plan 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.
(xiii) To 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.
(xiv) The information in the Prospectus under the captions
"The Conversion," "Certain Restrictions on Purchase or Transfer
of Our Shares after Conversion," "Restrictions on Acquisition of
Bank Mutual Corporation," and "Description of Our Capital Stock,"
to the extent that such information constitutes matters of law,
summaries of legal matters, documents or proceedings, or legal
conclusions, has been reviewed by such counsel and is accurate in
all material respects.
(xv) None of the Bank Mutual Parties are required to be
registered as an investment company under the Investment Company
Act of 1940.
(xvi) The execution and delivery of and performance under
this Agreement by the Bank Mutual Parties, the incurrence of the
obligations set forth herein and the consummation of the
transactions contemplated herein and (subject to receipt of all
necessary governmental approvals and approval of the Plan by the
voting members of the MHC and the shareholders of the Mid-Tier
Holding Company) contemplated in the Plan will not result in (i)
any violation of the provisions of the articles of incorporation
or charter, as the case may be, or the bylaws of any of the Bank
Mutual Parties, (ii) any violation of any applicable law, act,
regulation, or to such counsel's knowledge, order or court order,
writ, injunction or decree, and (iii) any violation of any
obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, loan agreement, note, lease or
other instrument filed as an exhibit to, or incorporated by
reference in, the Registration Statement or otherwise known by
such counsel that should have otherwise been filed as an exhibit
to the Registration Statement, which violation would have a
Material Adverse Effect.
The opinion may be limited to matters governed by the laws of the United
States of America and the laws of the State of Wisconsin. In rendering such
opinion, such counsel may rely (A) as to matters involving the application of
laws of any jurisdiction other than the United
22
States of America or the State of Wisconsin, to the extent such counsel deems
proper and specified in such opinion, upon the opinion of counsel reasonably
acceptable to the Agent, 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 Bank Mutual
Parties, agents thereof and public officials; provided copies of any such
opinion(s) or certificates of public officials are delivered to Agent together
with the opinion to be rendered hereunder by counsel to the Bank Mutual Parties.
In rendering such opinion, all statements contained therein "to our knowledge"
or "to our attention" or "known to us" means the actual knowledge, following
reasonable investigation, of the attorneys who have worked on the transactions
contemplated herein and, in the case of the opinion rendered in Section
10(b)(1)(xiii), including a docket search in Milwaukee County, Wisconsin. The
opinion of such counsel for the Bank Mutual Parties shall state that it has no
reason to believe that the Agent is not reasonably justified in relying thereon.
Counsel may expressly exclude any opinions as to choice of law, securities
disclosures and anti-trust matters, and may add other qualifications and
explanations on the basis of its opinions as are consistent with the Legal
Opinion Accord prepared by the Section of Business Law of the American Bar
Association The Agent's counsel may rely for purposes of its own opinion to the
Agent being provided hereunder on the opinion(s) of Xxxxxxx & Xxxxx LLP, whose
opinion(s) shall expressly authorize such reliance.
(2) Xxxxxxx & Xxxxx LLP shall also deliver a letter to the Agent
that shall state that during the preparation of the Registration
Statement and the Prospectus, Xxxxxxx & Xxxxx LLP participated in
conferences with certain officers of and other representatives of the
Bank Mutual Parties, counsel to the Agent, representatives of the
independent public accountants for the Bank Mutual Parties and
representatives of the Agent at which the contents of the Registration
Statement and the Prospectus and related matters were discussed and
has considered the matters required to be stated therein and the
statements contained therein and, although (without limiting the
opinions provided pursuant to Section 10(b)(1)), Xxxxxxx & Xxxxx LLP
has not independently verified the accuracy, completeness or fairness
of the statements contained in the Registration Statement and
Prospectus, on the basis of the foregoing, nothing has come to the
attention of Xxxxxxx & Xxxxx LLP that caused Xxxxxxx & Xxxxx LLP to
believe that the Registration Statement at the time it was declared
effective by the Commission and as of the date of such letter,
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 financial
statements, notes to financial statements, schedules and other
financial and statistical data included, or statistical or appraisal
methodology employed, in the Registration Statement or Prospectus, the
appraisal valuation or the business plan).
(3) The favorable opinion, dated as of the Closing Date, of
Xxxxxx Xxxxxx & Xxxxx, counsel for the Agent, with respect to such
matters as the Agent may reasonably require; such opinion may rely, as
to matters of fact, upon certificates of officers and directors of the
Bank Mutual Parties delivered pursuant hereto or as such counsel may
reasonably request.
23
(4) A Blue Sky Memorandum from Xxxxxxx & Xxxxx LLP relating to
the Offerings, including Agent's participation therein, shall be
furnished to Agent with a copy thereof addressed to Agent or upon
which Xxxxxxx & Xxxxx LLP shall state Agent may rely. The Blue Sky
Memorandum shall relate to the necessity of obtaining or confirming
exemptions, qualifications or the registration of the common stock
under applicable state securities law.
(c) Concurrently with the execution of this Agreement, the Agent
shall receive a letter from Ernst & Young LLP, dated the date hereof and
addressed to the Agent, such letter (i) confirming that Ernst & Young LLP is a
firm of independent public accountants within the meaning of the 1933 Act, the
regulations promulgated thereunder and Regulation S-X, and stating in effect
that in Ernst & Young LLP's opinion the consolidated financial statements of the
Mid-Tier Holding Company included in the Prospectus comply as to form in all
material respects with the applicable accounting requirements of the 1933 Act
and the 1934 Act and the related rules and regulations of the Commission
thereunder; (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 review (in accordance with Statement of
Auditing Standards No. 71) of the latest available unaudited consolidated
interim financial statements of the Mid-Tier Holding Company prepared by the
Bank Mutual Parties, a reading of the minutes of the meetings of the Board of
Directors, Executive Committee and shareholders and Audit Committee of the
Mid-Tier Holding Company and the Bank (including those of First Northern Savings
Bank) and consultations with officers of the Mid-Tier Holding Company and the
Bank responsible for financial and accounting matters, nothing came to their
attention that caused them to believe that: (A) such unaudited consolidated
financial statements including any "Recent Developments" section in the
Prospectus are not in conformity with generally accepted accounting principles
applied on a basis substantially consistent with that of the audited financial
statements included in the Prospectus; or (B) during the period from the date of
the latest unaudited consolidated financial statements included in the
Prospectus to a specified date not more than five business days prior to the
date of the Prospectus, there was any material increase in borrowings (defined
as securities sold under agreements to repurchase and any other form of debt
other than deposits), or non-performing loans, special mention loans or decrease
in the deposits or loan allowance, total assets, stockholders' equity or there
was any change in common stock outstanding (other than for stock option plans)
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, non-interest income, provision for loan losses or net
income after provision or increase in non-interest expense of the Bank for the
period commencing immediately after the period covered by the latest unaudited
income statement included in the Prospectus and ended not more than five
business days prior to the date of the Prospectus 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 (c), they have compared with the general accounting records of the
Mid-Tier Holding Company, which are subject to the internal controls of the
accounting system of the Bank and other data prepared by the Bank Mutual Parties
from 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).
24
(d) At the Closing Date, the Agent shall receive a letter from
Ernst & Young LLP dated the Closing Date, addressed to the Agent, confirming the
statements made by its letter delivered by it pursuant to subsection (c) of this
Section 10, the "specified date" referred to in clause (ii)(B) thereof to be a
date specified in such letter, which shall not be more than three business days
prior to the Closing Date.
(e) At the Closing Date, counsel to the Agent shall have been
furnished with such documents and opinions as counsel for the Agent may
reasonably 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 Bank
Mutual Parties, dated the Closing Date, to the effect that: (i) they have
examined the Registration Statement and at the time the Registration Statement
became authorized for final use, the Prospectus did not contain an untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein not misleading; (ii) there has not been, since
the respective dates as of which information is given in the Registration
Statement, any Material Adverse Effect otherwise than as set forth or
contemplated in the Registration Statement; (iii) the representations and
warranties contained in Section 6 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
Bank Mutual Parties 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 10; (v) no stop order has been issued or, to the best of their
knowledge, is threatened, by the Commission or any other governmental body; (vi)
no order suspending the Offering, the Conversion, the acquisition of all of the
shares of the Bank by the Holding Company, the transactions required under the
Plan to consummate the conversion 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, 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, and (viii) that the
officers and directors of the Bank Mutual Parties have agreed to abide by the
restrictions on the exercise of options and sale of Common Stock set forth in
Section 8(aa).
(g) At the Closing Date, the Agent shall receive a letter from RP
Financial, LC, dated as of the Closing Date, (i) confirming that said firm is
independent of the Bank Mutual Parties and is experienced and expert in the area
of corporate appraisals, (ii) stating in effect that the Appraisal complies in
all material respects with the applicable requirements of the Conversion
Regulations, and (iii) further stating that its opinion of the aggregate pro
forma market value of the Bank Mutual Parties, as converted, expressed in the
appraisal as most recently updated, remains in effect.
(h) None of the Bank Mutual Parties shall have sustained, since
the date of the latest consolidated 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,
25
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 Adverse Effect, is in the Agent's reasonable judgment sufficiently
material and adverse as to make it impracticable or inadvisable to proceed with
the Offering or the delivery of the Shares on the terms and in the manner
contemplated in the Prospectus.
(i) Prior to and at the Closing Date, in the reasonable opinion of
the Agent there shall have been no material adverse change in the financial
condition or in the earnings, business affairs or prospects of any of the Bank
Mutual Parties independently, or the Bank Mutual Parties taken as a whole, from
and as of the latest dates as of which such condition is set forth in the
Prospectus, except as referred to therein.
(j) At or prior to the Closing Date, the Agent shall receive (i)
a copy of the Conversion Application and a copy of the letter from the OTS
approving the Conversion Application, (ii) a copy of the order from the
Commission declaring the Registration Statement effective, (iii) a certified
copy of the articles of incorporation of the Holding Company, (iv) a copy of the
letter from the OTS approving the Holding Company Application, (v) a certificate
from the FDIC evidencing the Bank's insurance of accounts, and (vi) any other
documents that Agent shall reasonably request.
(k) 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
other than temporary trading halts or limitations (A) imposed as a result of
intraday changes in the Dow Xxxxx Industrial Average, (B) lasting no longer than
until the regularly scheduled commencement of trading on the next succeeding
business-day and (C) which when combined with all other such halts occurring
during the previous five (5) business days, total less than two (2); (ii) a
general moratorium on the operations of federally-insured financial institutions
or a general moratorium on the withdrawal of deposits from commercial banks or
other federally-insured financial institutions declared by either federal or
state authorities; or (iii) there shall not have occurred any material adverse
change in the financial markets in the United States or elsewhere or any
outbreak of hostilities or escalation thereof (or other calamity or crisis,
including, without limitation, terrorist activities after the date hereof), the
effect of which, in the judgment of the Agent, is so material and adverse as to
make it impracticable to market the Shares or to enforce contracts, including
subscriptions or purchase orders, for the sale of the Shares.
(l) All such opinions, certificates, letters and documents shall
be in compliance with the provisions hereof only if they are reasonably
satisfactory in form and substance to the Agent and to counsel for the Agent.
Section 11. Indemnification.
26
(a) The Bank Mutual Parties jointly and severally agree to indemnify
and hold harmless the Agent, its officers, directors, agents, attorneys,
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, judgment, damage or expense
whatsoever (including but not limited to settlement expenses, subject to the
limitation set forth in the last sentence of subsection (c) below), joint or
several, that the Agent or any of such officers, directors, agents, attorneys,
servants, employees and controlling Persons (collectively, the "Related
Persons") may suffer or to which the Agent or the Related Persons may become
subject under all applicable federal and state laws or otherwise, and to
promptly reimburse the Agent and any Related Persons upon written demand for any
reasonable expenses (including reasonable fees and disbursements of counsel and
Agent's time spent according to normal hourly rates) incurred by the Agent or
any Related Persons in connection with investigating, preparing or defending any
actions, proceedings or claims (whether commenced or threatened) to the extent
such losses, claims, damages, liabilities or actions: (i) arise out of or are
based upon any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement (or any amendment or supplement
thereto), the Prospectus (or any amendment or supplement thereto), the
Applications, or other instrument or document of the Bank Mutual Parties or
based upon written information (if any) supplied by any of the Bank Mutual
Parties 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
Applications"), or any application or other document, advertisement, or
communication ("Sales Information") prepared, made or executed by or on behalf
of any of the Bank Mutual Parties with its consent or based upon information
furnished by or on behalf of any of the Bank Mutual Parties, in order to qualify
or register the Shares under the securities laws thereof, (ii) arise out of or
are based upon the omission or alleged omission to state in any of the foregoing
documents or information, a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading; (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), the Prospectus (or any amendment or
supplement thereto), the Applications, any Blue Sky Applications or Sales
Information or other documentation distributed in connection with the Offerings
or the engagement described herein; or (iv) result from any claims made with
respect to the accuracy, reliability and completeness of the records of Eligible
Account Holders, Supplemental Eligible Account Holders, Other Members or
stockholders of the Mid-Tier Holding Company or for any denial or reduction of a
subscription or order to purchase Common Stock, whether as a result of a
properly calculated allocation pursuant to the Plan or otherwise, based upon
such records; provided, however, that no indemnification is required under this
subsection (a) to the extent such losses, claims, judgments, 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 Prospectus (or any amendment or supplement thereto),
the Applications, the Blue Sky Applications 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 Bank Mutual
Parties by the Agent or its representatives (including counsel) with respect to
the Agent expressly for use in the Registration Statement (or any amendment or
supplement thereto) or Prospectus (or
27
any amendment or supplement thereto) under the caption "The Conversion -- Plan
of Distribution; Selling Agent Compensation" except for information derived from
the Prospectus.
(b) The Agent agrees to indemnify and hold harmless the Bank Mutual
Parties, their directors and officers, agents, servants and employees and each
person, if any, who controls any of the Bank Mutual Parties 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, judgment, damage or expense whatsoever (including
but not limited to settlement expenses, subject to the limitation set forth in
the last sentence of subsection (c) below), joint or several, which they, or any
of them, may suffer or to which they, or any of them, may become subject under
all applicable federal and state laws or otherwise, and to promptly reimburse
the Bank Mutual Parties and any such persons upon written demand for any
reasonable expenses (including out-of-pocket expenses, fees and disbursements of
counsel) incurred by them in connection with investigating, preparing or
defending any actions, proceedings or claims (whether commenced or threatened)
to the extent such losses, claims, judgments, 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 or
supplement thereto), the Applications or any Blue Sky Applications 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 11(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 Applications,
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 Bank Mutual Parties by the
Agent or its representatives (including counsel) expressly for use under the
caption "The Conversion - Plan of Distribution; Selling Agent Compensation."
(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 11,
Section 12 or otherwise, unless the failure to give such notice promptly results
in material prejudice to the indemnifying party. 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 the defense of such action with counsel chosen by it reasonably
acceptable to the indemnified parties that are defendants in such action, unless
such indemnified parties reasonably object to such assumption on the ground that
there may be legal defenses available to them that are different from or in
addition to those available to such indemnifying party. If an indemnifying party
assumes the defense of such action, the indemnifying parties shall not be liable
for any fees and expenses of counsel for the indemnified parties incurred
thereafter in connection with such action, proceeding or claim, other than
reasonable costs of investigation. In no event shall the indemnifying parties be
liable for the fees and expenses of more than one separate firm of attorneys
(unless an indemnified party or parties shall have reasonably concluded that
there may be defenses available to it or them which are
28
different from or in addition to those of other indemnified parties) 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. No
indemnifying party, shall be liable for any settlement of any action, proceeding
or suit, which settlement is effected without its prior written consent.
(d) The agreements contained in this Section 11 and in Section 12
hereof and the representations and warranties of the Bank Mutual Parties 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, controlling persons, agents, attorneys, servants or
employees or by or on behalf of any of the Bank Mutual Parties or any officers,
directors, controlling persons, agents, attorneys , servants or employees of any
of the Bank Mutual Parties; (ii) delivery of and payment hereunder for the
Shares; or (iii) any termination of this Agreement.
(e) Notwithstanding any other provisions hereof: (i) Sections 11 and
12 hereof are subject to and limited by Section 23A of the Federal Reserve Act,
as applicable, and (ii) no party shall be liable under the foregoing
indemnification provisions to another party to the extent that any loss, claim,
damage, liability or action is found in a final judgment by a court to have
resulted from the bad faith, willful misconduct or negligence of the party
seeking indemnification.
Section 12. Contribution.
(a) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in Section 11 is due in
accordance with its terms but is for any reason found in a final judgment by a
court to be unavailable from the Bank Mutual Parties or the Agent, the Bank
Mutual Parties and the Agent shall contribute to the aggregate losses, claims,
damages and liabilities of the nature contemplated by such indemnification
(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
Bank Mutual Parties or the Agent from persons other than the other party
thereto, who may also be liable for contribution) in such proportion so that (i)
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) ("Agent's Fees"), less any portion of Agent's Fees paid by Agent to
Assisting Brokers, bear to the total proceeds received by the Bank Mutual
Parties from the sale of the Shares in the Offering, net of all expenses of the
Offering, except Agent's fees and (ii) the Bank Mutual Parties 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 11 above, then each indemnifying party shall
contribute to such amount paid or payable to such indemnified party in such
proportion as is appropriate to reflect not only such relative fault of the Bank
Mutual Parties on the one hand and the Agent on the other in connection with the
statements or omissions which resulted in such losses, claims, damages or
liabilities (or actions, proceedings or claims in respect thereof), but also the
relative benefits received by the Bank Mutual Parties 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 Bank Mutual Parties on the
one hand and the Agent on the other hand shall be deemed to be in the same
29
proportion as the total proceeds from the Offering, except Agent's fees, net of
all expenses of the Offering, received by the Bank Mutual Parties bear, with
respect to the Agent, to the total fees (not including expenses) received by the
Agent less the portion of such fees paid by the Agent to Assisting Brokers. 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
Bank Mutual Parties 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 Bank Mutual Parties and the
Agent agree that it would not be just and equitable if contribution pursuant to
this Section 12 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 12. 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 12
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 that in the aggregate exceeds the amount paid (excluding
reimbursable expenses) to the Agent under this Agreement less the portion of
such fees paid by the Agent to Assisting Brokers. It is understood and agreed
that the above-stated limitation on the Agent's liability is essential to the
Agent and that the Agent would not have entered into this Agreement if such
limitation had not been agreed to by the parties to this Agreement. No person
found guilty of any fraudulent misrepresentation (within the meaning of Section
11(f) of the 0000 Xxx) shall be entitled to contribution with respect to any
loss or liability arising from such misrepresentation from any person who was
not found guilty of such fraudulent misrepresentation. The duties, obligations
and liabilities of the Bank Mutual Parties and the Agent under this Section 12
and under Section 11 shall be in addition to any duties, obligations and
liabilities that the Bank Mutual Parties and the Agent may otherwise have. For
purposes of this Section 12, each of the Agent's and the Bank Mutual Parties'
officers, directors and, controlling persons within the meaning of the 1933 Act
and the 1934 Act shall have the same rights to contribution as the Bank Mutual
Parties 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 12, will notify such party from whom
contribution may be sought, but the omission to so notify such party shall not
relieve the party from whom contribution may be sought from any other obligation
it may have hereunder or otherwise than under this Section 12.
Section 13. Survival.
(a) All representations, warranties and indemnities and other
statements contained in this Agreement or contained in certificates of officers
of the Bank Mutual Parties 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 its controlling persons, or by or on behalf of the Bank Mutual Parties
and shall survive the issuance of the Shares, and any legal representative,
successor or assign of the Agent, any of the Bank Mutual Parties, and any
indemnified person shall be entitled to the benefit of the respective
agreements, indemnities, warranties and representations.
30
(b) The provisions of Paragraph 10 of the Letter Agreement,
"Availability of 'Stars' Program," shall survive the issuance of the Shares (but
not any termination or cancellation of this Agreement) for a period of one (1)
year following the issuance, and any legal representative, successor or assign
of the Agent, and any of the Bank Mutual Parties shall be entitled during such
period to the benefit of the agreements contained therein.
Section 14. Termination. Agent may terminate this Agreement by giving the
notice indicated below in this Section at any time after this Agreement becomes
effective as follows:
(a) In the event (i) the Plan is abandoned or terminated by the
Holding Company; (ii) the Holding Company fails to consummate the sale of the
minimum number of Shares prior to March 31, 2004 in accordance with the
provisions of the Plan or as required by the Conversion Regulations and
applicable law; or (iii) immediately prior to commencement of the Offerings, the
Agent terminates this relationship because in its opinion, which shall have been
formed in good faith after reasonable determination and consideration of all
relevant factors, there has been a failure to satisfactorily disclose all
relevant information in the Prospectus or the existence of market conditions
that might render the sale of the Shares inadvisable, this Agreement shall
terminate and the Bank Mutual Parties shall refund to each person who has
subscribed for or ordered any of the Shares the full amount that it may have
received from such person, together with interest in accordance with Section 3
hereof and any such termination shall be without liability of any party to any
other party except as otherwise provided in Sections 3, 4, 9, 11 and 12 hereof.
(b) If any of the conditions specified in Section 10 hereof shall
not have been fulfilled when and as required by this Agreement, or by March 31,
2004, 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 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, 9, 11 and 12 hereof.
(c) If Agent elects to terminate this Agreement as provided in this
Section, the Bank Mutual Parties shall be notified by the Agent as provided in
Section 15 hereof.
(d) If this Agreement is terminated in accordance with the
provisions of this Agreement, the Agent shall retain the fee paid to it pursuant
to parts (i) and (ii) of Section 4(a) and the Bank Mutual Parties shall
reimburse the Agent for any of its other actual, accountable, reasonable
out-of-pocket expenses pursuant to Section 9, including without limitation,
communication, legal and travel expenses.
Section 15. 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, receipt electronically
confirmed. Notices to Agent shall be directed to Xxxx Xxxx & Co., 000 Xxxxx
Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxx Xxxxxx, Attention: Xx. Xxxxx X. Xxxxxxx, Managing
Director (with a copy to Xxxxxx Xxxxxx & Xxxxx, 0000 Xxxxx Xxxxx, Xxxxxxx,
Xxxxxxxx 00000, Attention: Xxxxxxxxxxx X. Xxxxxx, Esq.); notices to the Bank
Mutual Parties shall be directed to Bank Mutual Corporation, 0000 Xxxx Xxxxx
Xxxx Xxxx, Xxxxxxxxx, Xxxxxxxxx 00000-0000, Attention: Xx. Xxxxxxx X. Xxxxxxx,
Xx., Chairman and Chief Executive
31
Officer (with a copy to Xxxxxxx & Xxxxx LLP, 000 Xxxx Xxxxxxxxx Xxxxxx,
Xxxxxxxxx, Xxxxxxxxx 00000, Attention: Xxxxx X. Xxxxxxxx, Esq.)
Section 16. Parties. This Agreement shall inure to the benefit of and be
binding upon the Agent and the Bank Mutual Parties, 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 11 and 12 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 17. Partial Invalidity. In the event that any term, provision or
covenant herein or the application thereof to any circumstances or situation
shall be invalid or unenforceable, in whole or in part, the remainder hereof and
the application of said term, provision or covenant to any other circumstance or
situation shall not be affected thereby, and each term, provision or covenant
herein shall be valid and enforceable to the full extent permitted by law.
Section 18. Construction and Waiver of Jury Trial. This Agreement shall be
construed in accordance with the laws of the State of Wisconsin. Each of the
Bank Mutual Parties and the Agent waives all right to trial by jury in any
action, proceeding, claim or counterclaim (whether based on contract, tort or
otherwise) related to or arising out of this Agreement.
[THE REMAINDER OF THIS PAGE IS LEFT BLANK INTENTIONALLY]
32
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us a counterpart hereof, whereupon this instrument
along with all counterparts will become a binding agreement between you and us
in accordance with its terms.
Very truly yours,
BANK MUTUAL BANCORP, MHC
By: /s/ Xxxxxxx X. Xxxxxxx, Xx.
-------------------------------------
Xxxxxxx X. Xxxxxxx, Xx.
President and Chief Executive
Officer
BANK MUTUAL CORPORATION (a federal
Corporation)
By: /s/ Xxxxxxx X. Xxxxxxx, Xx.
-------------------------------------
Xxxxxxx X. Xxxxxxx, Xx.
Chairman and Chief Executive
Officer
BANK MUTUAL CORPORATION (a Wisconsin
Corporation)
By: /s/ Xxxxxxx X. Xxxxxxx, Xx.
-------------------------------------
Xxxxxxx X. Xxxxxxx, Xx.
Chairman and Chief Executive
Officer
BANK MUTUAL
By: /s/ Xxxxxxx X. Xxxxxxx, Xx.
-------------------------------------
Xxxxxxx X. Xxxxxxx, Xx.
President and Chief Executive
Officer
The foregoing Agency Agreement is
hereby confirmed and accepted as of
the date first set forth above.
XXXX XXXX & CO.
By: /s/ Xxxxx X. Xxxxxxx
-----------------------------------
Xxxxx X. Xxxxxxx
Managing Director
33
EXHIBIT A
LETTER AGREEMENT
[Xxxx Xxxx & Co. letterhead]
CONFIDENTIAL
------------
April 9, 2003
Section 19. Xx. Xxxxxxx X. Xxxxxxx, Xx.
Chairman & Chief Executive Officer
Bank Mutual Corporation
0000 Xxxx Xxxxx Xxxx Xxxx
Xxxxxxxxx, XX 00000-0000
Section 20. Xx. Xxxxxxx X. Xxxxxxx, Xx.
President & Chief Executive Officer
Bank Mutual Bancorp, MHC
0000 Xxxx Xxxxx Xxxx Xxxx
Xxxxxxxxx, XX 00000-0000
Re: "Second Step" Conversion - Selling Agent Services, Proxy
-------------------------------------------------------
Solicitation & Administrative Services
--------------------------------------
Dear Xxxx:
Xxxx Xxxx & Co., Inc. ("Xxxx Xxxx") is pleased to submit this engagement letter
setting forth the terms of the proposed engagement between Xxxx Xxxx and Bank
Mutual Corporation (the "Company") and Bank Mutual Bancorp, MHC (the "MHC") in
connection with the proposed conversion and sale of the Common Stock of the
Company held by Bank Mutual Bancorp, MHC.
1. BACKGROUND ON XXXX XXXX
Xxxx Xxxx & Co, Inc., was organized in 1946 and is one of the nation's leading
investment bankers for financial institutions. The firm is a registered
broker-dealer with the Securities and Exchange Commission, a member of the
National Association of Securities Dealers, Inc. ("NASD"), Securities Industry
Association and a member of the Securities Investor Protection Corporation. Xxxx
Xxxx'x Financial Institutions Group, including corporate finance and research,
represents one of the largest such groups devoted solely to financial
institutions matters in the country. Moreover, Xxxx Xxxx is one of the largest
market makers in bank and thrift stocks.
2. SECOND STEP STOCK OFFERING
It is our understanding that the Company, or a successor corporation, proposes
to issue shares of common stock of the Company held by the MHC in a subscription
offering with any remaining shares sold in a community offering (collectively
the "Offering"). Shares sold in the Offering shall represent
2
those shares representing the final independent appraisal times the adjusted
majority ownership of the MHC. In connection therewith, the Company's and the
MHC's Boards of Directors will adopt a Plan of Restructuring (the "Plan")
whereby shares of Common Stock will be offered for sale in the Offering. Xxxx
Xxxx proposes to act as financial advisor to the Company with respect to the
Plan and selling agent with respect to the Offering. Specific terms of services
shall be set forth in a definitive agency agreement (the "Definitive Agreement")
among Xxxx Xxxx, the Company and the MHC to be executed on the date the offering
document is declared effective by the appropriate regulatory authorities. The
Definitive Agreement will include customary representations and warranties,
covenants, conditions, termination provisions and indemnification, contribution
and limitation of liability provisions, all to be mutually agreed upon by Xxxx
Xxxx, the Company (and its successors), and the MHC. Xxxx Xxxx'x willingness to
execute a Definitive Agreement and conduct the Offering will be subject to its
satisfaction, in its sole discretion and judgment, with a number of other
factors, including but not limited to the following:
i. there being no material adverse change in the condition or operation
of the Company;
ii. satisfactory disclosure of all relevant financial information in the
disclosure documents and determination that the sale of the securities
is reasonable given such disclosures;
iii. the current financial position, earnings performance and future
prospects of the Company;
iv. receipt of a "comfort letter" from the Company's accountants
containing no material exceptions; and
v. the condition of the credit and equity markets and particularly as
they relate to securities of financial institutions.
3. SERVICES TO BE PROVIDED BY XXXX XXXX
a. Advisory Services - Thorough planning is essential to a successful
offering. Xxxx Xxxx serves as lead coordinator of the marketing and
logistic efforts necessary to prepare for an offering. Our actions are
intended to clearly define responsibilities and timetables, while avoiding
costly surprises. We assume responsibility for the initial preparation of
marketing materials--saving you time and legal expense. Moreover, as your
investment banker, Xxxx Xxxx will evaluate the financial, marketing and
regulatory issues involved in the Offering. Our specific responsibilities
include:
. Review and advice with respect to the Plan;
. Review and provide input with respect to the Business Plan to be
prepared in connection with the Offering;
. Participate in drafting the Prospectus and assist in obtaining all
requisite regulatory approvals on terms most favorable to the Company;
. Review and opine to the Board of Directors on the adequacy of the
appraisal process;
. Develop a marketing plan for the Offering including direct mail,
advertising, community meetings and telephone solicitation;
. Provide specifications and assistance in selecting data processing
assistance, printer and other professionals;
. Develop an operating plan for the Stock Sale Center (the "Center");
. Provide a list of equipment and supplies needed for the Center;
3
. Draft marketing materials including letters, brochures, road show
presentation and advertisements; and
. Assist in arranging market-makers for post-Offering trading.
b. Administrative Services and Stock Sale Center Management - Xxxx Xxxx will
manage all aspects of the Offering. A successful Offering requires an
enormous amount of attention to detail. Working knowledge and familiarity
with the law and "lore" of bank regulators, Securities and Exchange
Commission and National Association of Securities Dealers is essential.
Xxxx Xxxx'x experience in managing many thrift reorganizations and second
step conversion offerings will minimize the burden on your management and
disruption to normal banking business. At the same time, our legal,
accounting and regulatory background ensures that details are attended to
in a professional fashion. An Offering requires accurate and timely record
keeping and reporting. Furthermore, customer inquiries must be handled
professionally and accurately. The Center centralizes all data and work
effort relating to the Offering.
Xxxx Xxxx will supervise and administer the Center. We will train Center
staff to help record stock orders, answer customer inquiries and handle
special situations as they arise. Center activities include the following:
. Provide experienced on-site registered representatives to minimize
disruption of day-to-day business;
. Identify and organize space for the Center, the focal point of sales and
proxy solicitation activity;
. Administer the Center. All substantive stock and proxy related matters
will be handled by employees of Xxxx Xxxx;
. Organize and implement all depositor related proxy solicitation efforts;
. Prepare procedures for processing proxies, stock orders and cash, and
for handling requests for information;
. Xxxx Xxxx will outsource all reorganization agent/data
processing/transfer agent function to a provider approved by the
Company;
. Provide scripts, training and guidance for the telephone team in
soliciting proxies and in the stock sales telemarketing effort;
. Educate the Company's directors, officers and employees about the
Offering , their roles and relevant securities laws;
. Train branch managers and customer-contact employees on the proper
response to stock purchase inquiries;
. Train and supervise Center staff assisting with proxy and order
processing;
. Prepare daily sales reports for management and ensure funds received
balance to such reports;
. Coordinate functions with the data processing agent, printer, transfer
agent, stock certificate printer and other professionals;
. Design and implement procedures for handling XXX and other retirement
plan orders; and
. Provide post-offering subscriber assistance and management of the
pro-ration process.
c. Securities Marketing Services - Xxxx Xxxx uses various sales techniques
including direct mail, advertising, community investor meetings, telephone
solicitation, and if necessary, selling group formation. The sales approach
is tailored to fit your specific situation. Our techniques are
4
designed to attract a stockholder base comprised largely of
community-oriented individuals loyal to the Company.
Our specific actions include:
. Assign licensed registered representatives from our staff to work at the
Center to solicit orders on behalf of the Company from eligible
prospects who have been targeted as likely and desirable stockholders;
. Assist management in developing a list of potential investors who are
viewed as priority prospects;
. Respond to inquiries concerning the Offering and investment
opportunities;
. Organize, coordinate and participate in community informational
meetings. These meetings are intended to both relieve customer anxiety
and attract potential investors. The meetings generate widespread
publicity for the Offering while providing local exposure of the Company
and promoting favorable stockholder relations;
. Supervise and conduct a telemarketing campaign to identify prospects
from among the Company's customer base;
. Continually advise management on market conditions and the community's
responsiveness to the Offering;
. If appropriate and at the request of the Company, arrange a syndicated
community Offering involving a selling group of selected broker-dealers
acting on a "best efforts" basis to assist in selling stock during the
Offering. In so doing, prepare broker "fact sheets" and arrange "road
shows" for the purpose of stimulating interest in the stock and
informing the brokerage community of the particulars of the Offering.
Alternatively, if so directed by the Company and the MHC, Xxxx Xxxx will
lead manage a "stand-by" firm commitment underwriting including other
underwriters designated by the Company and the MHC;
. Coordinate efforts to maximize after-market support and Company
sponsorship.
4. COMPENSATION
a. For its services hereunder, the Company will pay to Xxxx Xxxx the following
compensation in connection with the Reorganization and Offering.
(1) An advisory and management fee of $50,000 in connection with the
advisory, administrative and proxy solicitation services set forth in
section 3.a. and 3.b. hereof (the "Management Fee"); the Management
Fee shall be payable as follows: $20,000 upon signing this Agreement;
$15,000 upon the initial filing of the Registration Statement and
$15,000 upon closing of the Offering.
(2) A fee of one percent (1.00%) of the dollar amount of the Common Stock
sold in the Offering. No fee shall be payable pursuant to this
subsection in connection with the sale of stock to officers,
directors, employees or immediate family of such persons ("Insiders")
and qualified and non-qualified employee benefit plans of the Company
or the Insiders.
(3) For stock sold by a group of NASD member firms (which will include
Xxxx Xxxx & Co.) pursuant to a syndicated community offering solely
managed by Xxxx Xxxx (the "Selling Group"), a fee equal to one percent
(1.00%), which fee along with the fee payable directly by the Company
to selected dealers shall not exceed five and one-half percent (5.50%)
in the
5
aggregate. In consultation with Xxxx Xxxx, the Company shall be
authorized to determine which NASD member firms participate in the
syndicated community offering and the extent of their participation.
Xxxx Xxxx will not commence sales of the stock through members of the
Selling Group without the specific prior approval of the Company. The
Company, the MHC and Xxxx Xxxx agree to negotiate the fee prior to the
filing of necessary documents with the NASD.
Such fees (less the amount of any advance payments, including the
management fee) are to be paid to Xxxx Xxxx at the closing of the
Offering. If, pursuant to a resolicitation undertaken by the Company,
Xxxx Xxxx is required to provide significant additional services, or
expend significant additional time, the parties shall mutually agree to
the dollar amount of the additional compensation due.
To the extent the Holding Company elects to employ broker-dealers to
serve as "stand-by" underwriters then any "stand-by" fees associated
therewith are to be paid separately by the Holding Company. Sales
concessions paid to such firms are covered by paragraph 4a (3) above.
b. If (i) the Plan is abandoned or terminated by the Company; (ii) the
Offering is not consummated by March 31, 2004; (iii) Xxxx Xxxx terminates
this relationship because there has been a material adverse change in the
financial condition or operations of the Company since December 31, 2002;
or (iv) immediately prior to commencement of the Offering, Xxxx Xxxx
terminates this relationship because in its opinion, which shall have been
formed in good faith after reasonable determination and consideration of
all relevant factors, there has been a failure to satisfactorily disclose
all relevant information in the disclosure documents or the existence of
market conditions which might render the sale of the shares by the Company
hereby contemplated inadvisable; Xxxx Xxxx shall not be entitled to the
fees set forth above under subparagraph (a) of paragraph 4, above, but in
addition to reimbursement of its reasonable out-of-pocket expenses as set
forth in paragraph 6 below, shall be entitled to retain the Management Fee
already paid.
5. DOCUMENTS
The Company and its counsel will complete, file with the appropriate
regulatory authorities and, as appropriate, amend from time to time, the
information to be contained in the Company's applications to banking and
securities regulators and any related exhibits thereto. In this regard, the
Company and its counsel will prepare a prospectus and any other necessary
disclosure documents relating to the offering of the Common Stock in conformance
with applicable rules and regulations. As the Company's financial advisor, Xxxx
Xxxx will in conjunction with counsel, conduct an examination of the relevant
documents and records of the Company and will make such other reasonable
investigation as deemed necessary and appropriate under the circumstances. The
Company agrees to make all such documents, records and other information deemed
necessary by Xxxx Xxxx, or its counsel, available to them upon reasonable
request. Xxxx Xxxx'x counsel will prepare, subject to the approval of the
Company's counsel, the Definitive Agreement. Xxxx Xxxx'x counsel shall be
selected by Xxxx Xxxx, subject to the approval of the Company.
6. EXPENSES AND REIMBURSEMENT
6
The Company will bear all of its expenses in connection with the Reorganization
and the Offering of its Common Stock including, but not limited to, the
Company's attorney fees, NASD filing fees, "blue sky" legal fees, expenses for
appraisal, auditing and accounting services, advertising expenses, printing
expenses, "road show" expenses, syndicate related expenses, temporary personnel
expenses and the preparation of stock certificates. In the event Xxxx Xxxx
incurs such expenses on behalf of the Company, the Company shall pay or
reimburse Xxxx Xxxx for such reasonable fees and expenses regardless of whether
the Offering is successfully completed. Xxxx Xxxx will not incur any single
expense of more than $2,000, pursuant to this paragraph without the prior
approval of the Company.
The Company also agrees to reimburse Xxxx Xxxx for reasonable out-of-pocket
expenses, including legal fees and expenses, incurred by Xxxx Xxxx in connection
with the services contemplated hereunder. Xxxx Xxxx will not incur legal fees
(including legal out-of-pocket expenses) in excess of $65,000 without the prior
approval of the Company. Other out-of-pocket expenses directly incurred by Xxxx
Xxxx will not exceed $40,000, without the approval of the Company. The parties
acknowledge, however, that such caps may be increased by the mutual consent of
the Company and Xxxx Xxxx in the event of any material delay in the Offering
which would require an update of the financial information in tabular form
contained in the Prospectus for a period later than March 31, 2003. Not later
than two days before closing, we will provide you with a detailed accounting of
all reimbursable expenses to be paid at closing. The parties also acknowledge
that in the event the Company elects to employ broker-dealers to serve as
"stand-by" underwriters, there may be additional expenses with respect to
preparation of the documents necessary for a firm commitment underwriting.
7. MARKET MAKING
Xxxx Xxxx agrees to use its best efforts to maintain a market and if necessary
solicit other broker dealers to make a market in the Common Stock after the
"Second Step Conversion". Xxxx Xxxx further agrees to continue its independent
research coverage of the Company, but makes no commitment as to nature of its
opinion or the duration of such coverage. Such determinations shall be made
solely by Xxxx Xxxx'x Research Department in the ordinary course of its business
and the existence of this agreement shall not be a factor in such
determinations.
8. INFORMATION AND DOCUMENTS TO BE SUPPLIED
a. The Company acknowledges that all advice (written or oral) given by Xxxx
Xxxx to the Company is intended solely for the benefit and use of the
Company. Other than to the extent required to be reflected in Board and
committee meeting minutes, no advice (written or oral) of Xxxx Xxxx
hereunder shall be used, reproduced, disseminated, quoted or referred to at
any time, in any manner, or for any purpose, nor shall any public
references to Xxxx Xxxx be made by the Company (or such persons), without
the prior written consent of Xxxx Xxxx.
7
b. In connection with Xxxx Xxxx'x activities on behalf of the Company, the
Company will furnish Xxxx Xxxx with all financial and other information
regarding the Company that Xxxx Xxxx reasonably believes appropriate to its
assignment (all such information so furnished by the Company, whether
furnished before or after the date of this Agreement, being referred to
herein as the "Information"). The Company will provide Xxxx Xxxx with
access to the officers, directors, employees, independent accountants,
legal counsel and other advisors and consultants for the Company. The
Company recognizes and agrees that Xxxx Xxxx:
i. will use and rely primarily on the Information and information
available from generally recognized public sources in performing
the services contemplated by this Agreement without independently
verifying the Information or such other information;
ii. does not assume responsibility for the accuracy of the
Information or such other information; and
iii. will not make an appraisal of any assets or liabilities owned or
controlled by the Company or its market competitors.
c. Nothing in this Agreement shall be construed to limit the ability of Xxxx
Xxxx or its affiliates to pursue, investigate, analyze, invest in, or
engage in investment banking, financial advisory or any other business
relationships with, entities other than the Company, notwithstanding that
such entities may be engaged in a business which is similar to or
competitive with the business of the Company, and notwithstanding that such
entities may have actual or potential operations, products, services,
plans, ideas, customers or supplies similar or identical to the Company, or
may have been identified by the Company as potential merger or acquisition
targets or potential candidates for some other business combination,
cooperation or relationship. The Company expressly acknowledges and agrees
that it does not claim any proprietary interest in the identity of any
other entity in its industry or otherwise, and that the identity of any
such entity is not confidential information.
9. BLUE SKY
To the extent required by applicable state law, Xxxx Xxxx and the Company will
need to obtain or confirm exemptions, qualifications or registration of the
Common Stock under applicable state securities laws and NASD policies. Such work
will be performed by the Company's counsel and the cost of such legal work and
related filing fees will be paid by the Company. The Company will cause the
counsel performing such services to prepare a Blue Sky memorandum related to the
Offering including Xxxx Xxxx'x participation therein and shall furnish Xxxx Xxxx
a copy thereof addressed to Xxxx Xxxx or upon which such counsel shall state
Xxxx Xxxx may rely.
10. AVAILABILITY OF "STARS" PROGRAM
As an additional service to the Company, Xxxx Xxxx will make available for a
period of 1 year following the completion of the Offering, advisory services
through the Xxxx Xxxx Strategic Advisory Services ("STARS") program. The
undersigned will serve as the senior relationship manager for this program. If
the Company elects to avail itself of the STARS program, Xxxx Xxxx will meet
with the Company at its request. Xxxx Xxxx also will provide opinions and
recommendations, upon request, for the areas covered below:
8
Valuation Analysis
Merger and Acquisition Planning and Analysis
Merger and Acquisition Trends
Planning, Forecasting & Competitive Strategy
Capital, Asset & Liability Structure & Management
Stock Repurchase Programs
Dividend Policy
Dividend Reinvestment Programs
Market Development and Sponsorship of Bank Securities
Financial Disclosure
Financial Relations
Financial Reports
Branch Sales and Purchases
Stock Benefit Plan Analysis and Advisory
Stockholder & Investor Relations Presentations & Programs
Fairness Opinions
Scanning of Potential Acquisition Candidates
Based on Published Statement Information
(This screening does not extend to any in-depth merger and acquisition
analyses or studies which are available under Xxxx Xxxx'x normal fee
schedule, and does not include retention of Xxxx Xxxx by the Company for
any specific merger/acquisition situation.)
If the Company elects to utilize the STARS program Xxxx Xxxx will waive the
regular retainer fee and hourly charges for this program for the first year. The
Company also will reimburse Xxxx Xxxx'x reasonable out-of-pocket expenses
incurred in conjunction with the performance of these services. Such
out-of-pocket expenses shall include travel, legal and other miscellaneous
expenses. Xxxx Xxxx will not incur any single expense in excess of $2,000
pursuant to this paragraph without the prior approval of the Company.
11. INDEMNIFICATION
The Definitive Agreement will provide for indemnification of the type usually
found in underwriting agreements as to certain liabilities, including
liabilities under the Securities Act of 1933. The Company also agrees to defend,
indemnify and hold harmless Xxxx Xxxx and its officers, directors, employees and
agents against all claims, losses, actions, judgments, damages or expenses,
including but not limited to reasonable attorneys' fees, arising solely out of
the engagement described herein, except that such indemnification shall not
apply to Xxxx Xxxx'x own bad faith, willful misconduct or negligence.
12. CONFIDENTIALITY
To the extent consistent with legal requirements and except as otherwise set
forth in the Prospectus, all information given to Xxxx Xxxx by the Company,
unless publicly available or otherwise available to Xxxx Xxxx without
restriction to breach of any confidentiality agreement ("Confidential
Information"), will be held by Xxxx Xxxx in confidence and will not be disclosed
to anyone other than Xxxx Xxxx'x agents without the Company's prior approval or
used for any purpose other than those referred to in this engagement letter.
Upon any termination of its engagement, Xxxx Xxxx shall promptly deliver to the
Company all materials specifically produced for it and will return to the
Company all Confidential
9
Information provided to Xxxx Xxxx during the course of its engagement hereunder.
To the extent Xxxx Xxxx is legally required to make disclosures of any of the
Confidential Information, Xxxx Xxxx will give notice to the Company prior to
such disclosure.
13. NASD MATTERS
Xxxx Xxxx has an obligation to file certain documents and to make certain
representations to the NASD in connection with the Offering. The Company agrees
to cooperate with Xxxx Xxxx and provide such information as may be necessary for
Xxxx Xxxx to comply with all NASD requirements applicable to it in connection
with its participation as contemplated herein in the Offering. Xxxx Xxxx is and
will remain through completion of the Offering a member in a good standing of
the NASD and will comply with all applicable NASD requirements.
14. OBLIGATIONS
(a) Except as set forth below, this engagement letter is merely a statement of
intent. While Xxxx Xxxx and the Company agree in principle to the contents
hereof and propose to proceed promptly and in good faith to work out the
arrangements with respect to the Offering, any legal obligations between
Xxxx Xxxx and the Company shall be only: (i) those set forth herein in
paragraphs 2, 3 and 4 regarding services and payments; (ii) those set forth
in paragraph 6 regarding reimbursement for certain expenses; (iii) those
set forth in paragraph 11 regarding indemnification; (iv) those set forth
in paragraph 12 regarding confidentiality; and (v) as set forth in an
executed Definitive Agreement.
(b) The obligation of Xxxx Xxxx to enter into the Definitive Agreement shall be
subject to there being, in Xxxx Xxxx'x opinion, which shall have been
formed in good faith after reasonable determination and consideration of
all relevant factors: (i) no material adverse change in the condition or
operation of the Company since the date of this engagement letter; (ii)
satisfactory disclosure of all relevant information in the disclosure
documents and a determination that the sale of stock is reasonable given
such disclosures; (iii) no market conditions which might render the sale of
the shares by the Company hereby contemplated inadvisable; and (iv)
agreement that the price established by the independent appraiser is
reasonable in the then prevailing market conditions.
15. INDEPENDENT CONTRACTOR; NO FIDUCIARY DUTY
The Company acknowledges and agrees that it is a sophisticated business
enterprise and that Xxxx Xxxx has been retained pursuant to this Agreement to
act as financial advisor to the Company solely with respect to the matters set
forth herein. In such capacity, Xxxx Xxxx shall act as an independent
contractor, and any duties of Xxxx Xxxx arising out of its engagement pursuant
to this Agreement shall be contractual in nature and shall be owed solely to the
Company. Each party disclaims any intention to impose any fiduciary duty on the
other.
16. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with the laws of
the State of Wisconsin applicable to contracts executed and to be wholly
performed therein without giving effects to its conflict of laws principles or
rules.
10
17. WAIVER OF TRIAL BY JURY
EACH OF XXXX XXXX AND THE COMPANY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY
ACTION, PROCEEDING, CLAIM OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR
OTHERWISE) RELATED TO OR ARISING OUT OF THIS AGREEMENT.
11
Please acknowledge your agreement to the foregoing by signing in the place
provided below and returning one copy of this letter to our office together with
the retainer payment in the amount of $20,000. We look forward to working with
you.
XXXX XXXX & CO., INC.
BY: /s/ Xxx X. Xxxxxxx
-----------------------------------
Xxx X. Xxxxxxx
Chairman & Chief Executive Officer
Accepted and Agreed to This 22nd Day of April, 2003.
BANK MUTUAL CORPORATION
BY: /s/ Xxxxxxx X. Xxxxxxx, Xx.
-----------------------------------
Xxxxxxx X. Xxxxxxx, Xx.
Chairman & Chief Executive Officer
Accepted and Agreed to This 22nd Day of April, 2003.
BANK MUTUAL BANCORP, MHC
BY: /s/ Xxxxxxx X. Xxxxxxx, Xx.
-----------------------------------
Xxxxxxx X. Xxxxxxx, Xx.
President & Chief Executive Officer
Accepted and Agreed to This 22nd Day of April, 2003.
12
EXHIBIT B
SELECTED DEALERS' AGREEMENT
Master Selected Dealer Agreement
_______, 2003
Xxxx Xxxx & Co., Inc.
000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Gentlemen:
(1) General. We understand that Xxxx Xxxx & Co., Inc. ("Xxxx Xxxx") is
entering into this Agreement with us and other firms who may be offered the
right to purchase as principal a portion of securities being distributed to the
public. The terms and conditions of this Agreement shall be applicable to any
public offering of securities ("Securities") pursuant to a registration
statement filed under the Securities Act of 1933 (the "Securities Act") wherein
Xxxx Xxxx (acting for its own account or for the account of any underwriting or
similar group or syndicate) is responsible for managing or otherwise
implementing the sale of the Securities to selected dealers ("Selected Dealers")
and has informed us that such terms and conditions shall be applicable. Any such
offering of Securities to us as a Selected Dealer is hereinafter called an
"Offering." In the case of any Offering in which you are acting for the account
of any underwriting or similar group or syndicate ("Underwriters"), the terms
and conditions of this Agreement shall be for the benefit of, and binding upon,
such Underwriters, including, in the case of any Offering in which you are
acting with others as representatives of Underwriters, such other
representatives. The term "preliminary prospectus" means any preliminary
prospectus relating to an Offering of Securities or any preliminary prospectus
supplement together with a prospectus relating to an Offering of Securities; the
term "Prospectus" means the prospectus, together with the final prospectus
supplement, if any, relating to an Offering of Securities, filed pursuant to
Rule 424(b) or Rule 424(c) under the Securities Act or any successor or similar
rules.
(2) Conditions of Offering, Acceptance and Purchase. Any Offering will be
subject to delivery of the Securities and their acceptance by you and any other
Underwriters, may be subject to the approval of all legal matters by counsel and
the satisfaction of other conditions, and may be made on the basis of
reservation of Securities or an allotment against subscription. You will advise
us by telegram, telex, facsimile, e-mail, or other form of written communication
("Written Communication") of the particular method and supplementary terms and
conditions (including, without limitation, the information as to prices and
offering date referred to in Section 3(b)) of any Offering in which we are
invited to participate. To the extent such supplementary terms and conditions
are inconsistent with any provision herein, such terms and conditions shall
supersede any such provision. Unless otherwise indicated in any such Written
Communication, acceptances and other communications by us with respect to any
Offering should be sent to Xxxx Xxxx. You reserve the right to reject any
acceptance in whole or in part. Payment for Securities purchased by us is to be
made at such office as you may designate, at the public offering price, or, if
you shall so advise us, at such price less the concession to dealers or
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at the price set forth or indicated in a Written Communication, on such date as
you shall determine, on one day's prior notice to us, by wire transfer to a Xxxx
Xxxx account, against delivery of certificates or other forms evidencing such
Securities. If payment is made for Securities purchased by us at the public
offering price, the concession to which we shall be entitled will be paid to us
upon termination of the provisions of Section 3(b) with respect to such
Securities.
Unless we promptly give you written instructions otherwise, if transactions
in the Securities may be settled through the facilities of The Depository Trust
Company, delivery of Securities purchased by us will be made through such
facilities if we are a member, or if we are not a member, settlement may be made
through our ordinary correspondent who is a member.
(3) Representations, Warranties, and Agreements.
(a) Prospectuses. You shall provide us with such number of copies of each
preliminary prospectus, the Prospectus and any supplement thereto relating to
each Offering as we may reasonably request for the purposes contemplated by the
Securities Act and the Securities Exchange Act of 1934 (Exchange Act) and the
applicable Rules and regulations of the Securities and Exchange Commission
thereunder. We represent that we are familiar with Rule 15c2-8 under the
Exchange Act relating to the distribution of preliminary and final prospectuses
and agree that we will comply therewith. We agree to keep an accurate record of
our distribution (including dates, number of copies, and persons to whom sent)
of copies of the Prospectus or any preliminary prospectus (or any amendment or
supplement to any thereof), and promptly upon request by you, to bring all
subsequent changes to the attention of anyone to whom such material shall have
been furnished. We agree to furnish to persons who receive a confirmation of
sale a copy of the Prospectus filed pursuant to Rule 424(b) or Rule 424(c) under
the Securities Act. We agree that in purchasing Securities in an Offering we
will rely upon no statements whatsoever, written or oral, other than the
statements in the Prospectus delivered to us by you. We will not be authorized
by the issuer or other seller of Securities offered pursuant to a Prospectus or
by any Underwriters to give any information or to make any representation not
contained in the Prospectus in connection with the sale of such Securities.
(b) Offer and Sale to the Public. With respect to any Offering of
Securities, you will inform us by a Written Communication of the public offering
price, the selling concession, the reallowance (if any) to dealers, and the time
when we may commence selling Securities to the public. After such public
offering has commenced, you may change the public offering price, the selling
concession, and the reallowance to dealers. With respect to each Offering of
Securities, until the provisions of this Section 3(b) shall be terminated
pursuant to Section 4, we agree to offer Securities to the public only at the
public offering price, except that if a reallowance is in effect, a reallowance
from the public offering price not in excess of such reallowance may be allowed
as consideration for services rendered in distribution to dealers who are
actually engaged in the investment banking or securities business, who execute
the written agreement prescribed by Rule 2740 of the Rules of Conduct of the
National Association of Securities Dealers, Inc. (the "NASD") and who are either
members in good standing of the NASD or foreign brokers or dealers not eligible
for membership in the NASD who represent to us that they will promptly reoffer
such Securities at the public offering price and will abide by the conditions
with respect to foreign brokers and dealers set forth in Section 3(e).
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(c) Stabilization and Overallotment. You may, with respect to any
Offering, be authorized to over-allot in arranging sales to Selected Dealers, to
purchase and sell Securities, any other securities of the issuer of the
Securities of the same class and series and any other securities of such issuer
that you may designate for long or short account, and to stabilize or maintain
the market price of the Securities. We agree to advise you from time to time
upon request, prior to the termination of the provisions of Section 3(b) with
respect to any Offering, of the amount of Securities purchased by us hereunder
remaining unsold and we will, upon your request, sell to you, for the accounts
of the Underwriters, such amount of Securities as you may designate, at the
public offering price thereof less an amount to be determined by you not in
excess of the concession to dealers. In the event that prior to the later of (i)
the termination of the provisions of Section 3(b) with respect to any Offering,
or (ii) the covering by you of any short position created by you in connection
with such Offering for your account or the account of one or more Underwriters,
you purchase or contract to purchase for the account of any of the Underwriters,
in the open market or otherwise, any Securities theretofore delivered to us, you
reserve the right to withhold the above-mentioned concession to dealers on such
Securities if sold to us at the public offering price, or if such concession has
been allowed to us through our purchase at a net price, we agree to repay such
concession upon your demand, plus in each case any taxes on redelivery,
commissions, accrued interest, and dividends paid in connection with such
purchase or contract to purchase.
(d) Open Market Transactions. We agree to abide by Regulation M under the
Exchange Act and we agree not to bid for, purchase, attempt to purchase, or
sell, directly or indirectly, any Securities, any other Reference Securities (as
defined in Regulation M) of the issuer, or any other securities of such issuer
as you may designate, except as brokers pursuant to unsolicited orders and as
otherwise provided in this Agreement. If the Securities are common stock or
securities convertible into common stock, we agree not to effect, or attempt to
induce others to effect, directly or indirectly, any transactions in or relating
to any stock of such issuer, except to the extent permitted by Rule 101 of
Regulation M under the Exchange Act.
(e) NASD. We represent that we are actually engaged in the investment
banking or securities business and we are either a member in good standing of
the NASD, or, if not such a member, a foreign dealer not eligible for
membership. If we are such a member we agree that in making sales of the
Securities we will comply with all applicable Rules of the NASD, including,
without limitation, the NASD's Interpretation with Respect to Free-Riding and
Withholding and Rule 274 of the Conduct Rules. If we are such a foreign dealer,
we agree not to offer or sell any Securities in the United States of America
except through you and in making sales of Securities outside the United States
of America we agree to comply as though we were a member with such
Interpretation and Rule 2730, 2740 and 2750 of the Conduct Rules of the NASD and
to comply with Rule 2420 of the Conduct Rules of the NASD as it applies to a
nonmember broker or dealer in a foreign country.
(f) Relationship among Underwriters and Selected Dealers. You may buy
Securities from or sell Securities to any Underwriter or Selected Dealer and,
with your consent, the Underwriters (if any) and the Selected Dealers may
purchase Securities from and sell Securities to each other at the public
offering price less all or any part of the concession. We are not authorized to
act as agent for you or any Underwriter or the issuer or other seller of any
Securities in offering Securities to the public or otherwise. Nothing contained
herein or in any
B-3
Written Communication from you shall constitute the Selected Dealers partners
with you or any Underwriter or with one another. Neither you nor any Underwriter
shall be under any obligation to us except for obligations assumed hereby or in
any Written Communication from you in connection with any Offering. In
connection with any Offering, we agree to pay our proportionate share of any
claim, demand, or liability asserted against us, and the other Selected Dealers
or any of them, or against you or the Underwriters, if any, based on any claim
that such Selected Dealers or any of them constitute an association,
unincorporated business, or other separate entity, including in each case our
proportionate share of any expense incurred in defending against any such claim,
demand, or liability.
(g) Blue Sky Laws. Upon application to you, you will inform us as to the
jurisdictions in which you believe the Securities have been qualified for sale
or are exempt under the respective securities or "blue sky" laws of such
jurisdictions. We understand and agree that compliance with the securities or
"blue sky" laws in each jurisdiction in which we shall offer or sell any of the
Securities shall be our sole responsibility and that you assume no
responsibility or obligations as to the eligibility of the Securities for sale
or our right to sell the Securities in any jurisdiction.
(h) Compliance with Law. We agree that in selling Securities pursuant to
any Offering (which agreement shall also be for the benefit of the issuer or
other seller of such Securities), we will comply with the applicable provisions
of the Securities Act and the Exchange Act, the applicable Rules and regulations
of the Securities and Exchange Commission thereunder, the applicable Rules and
regulations of the NASD, and the applicable Rules and regulations of any
securities exchange having jurisdiction over the Offering. You shall have full
authority to take such action as you may deem advisable in respect of all
matters pertaining to any Offering. Neither you nor any Underwriter shall be
under any liability to us, except for lack of good faith and for obligations
expressly assumed by you in this Agreement; provided, however, that nothing in
this sentence shall be deemed to relieve you from any liability imposed by the
Securities Act.
(4) Termination; Supplements and Amendments. This Agreement may be
terminated by either party hereto upon five business days' written notice to the
other party; provided that with respect to any Offering for which a Written
Communication was sent and accepted prior to such notice, this Agreement as it
applies to such Offering shall remain in full force and effect and shall
terminate with respect to such Offering in accordance with the last sentence of
this Section. This Agreement may be supplemented or amended by you by written
notice thereof to us, and any such supplement or amendment to this Agreement
shall be effective with respect to any Offering to which this Agreement applies
after the date of such supplement or amendment. Each reference to "this
Agreement" herein shall, as appropriate, be to this Agreement as so amended and
supplemented. The terms and conditions set forth in Sections 3(b) and (d) with
regard to any offering will terminate at the close of business on the thirtieth
day after the date of the initial public offering of the Securities to which
such Offering relates, but such terms and conditions, upon notice to us, may be
terminated by you at any time.
(5) Successors and Assigns. This Agreement shall be binding on, and inure
to the benefit of, the parties hereto and other persons specified or indicated
in Section 1, and the respective successors and assigns of each of them.
B-4
(6) Governing Law. This Agreement and the terms and conditions set forth
herein with respect to any Offering together with such supplementary terms and
conditions with respect to such Offering as may be contained in any Written
Communication from you to us in connection therewith shall be governed by, and
construed in accordance with, the laws of the State of New York.
By signing this Agreement we confirm that our subscription to, or our
acceptance of any reservation of, any Securities pursuant to an Offering shall
constitute (i) acceptance of and agreement to the terms and conditions of this
Agreement (as supplemented and amended pursuant to Section 4) together with and
subject to any supplementary terms and conditions contained in any Written
Communication from you in connection with such Offering, all of which shall
constitute a binding agreement between us and you, individually, or as
representative of any Underwriters, (ii) in confirmation that our
representations and warranties set forth in Section 3 are true and correct at
that time and (iii) confirmation that our agreements set forth in Sections 2 and
3 have been and will be fully performed by us to the extent and at the times
required thereby.
Very truly yours,
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(Name of Firm)
By:
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Confirmed, as of the date
first above written.
XXXX, XXXX & CO., INC.
By:
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Execution Date:
------------------------
B-5
XXXX XXXX & CO.
ADDITIONAL TERMS FOR
MASTER SELECTED DEALER AGREEMENT
If we communicate to you that an offering is being made on a best efforts basis
then these terms apply and other inconsistent terms do not apply.
1. The offering will be a best efforts offering. The offering also will be
contingent and involve a closing only after receipt of necessary
documentation from the issuer and satisfaction of other conditions, if any,
specified in the agency or engagement agreement. The offering is designed
to comply with applicable SEC rules, including Rule 15c2-4, Rule 10b-9, and
Rule 15c6-1. See NASD Notice to Members 98-4; 87-61 and 84-7.
2. The Selected Dealer represents and agrees that it shall take necessary
steps to comply with SEC Rules 15c2-4, 10b-9 and 15c6-1, including, but not
limited to, depositing funds in a complying escrow account.
Agreed to on __________, 2003
Date
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Name of Firm
By:
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