EXHIBIT 1.2
DSA FINANCIAL CORPORATION
(a Delaware corporation)
830,760 Shares
(Subject to an Increase Up to 955,374 Shares)
COMMON STOCK
(Par Value $0.01 Per Share)
Subscription Price $10.00 Per Share
AGENCY AGREEMENT
May __, 2004
Xxxxx, Xxxxxxxx & Xxxxx, Inc.
000 Xxxxxxxxx Xxxxx
Xxxxxx, Xxxx 00000-0000
Ladies and Gentlemen:
DSA Financial Corporation a newly formed Delaware corporation (the
"Company"), Dearborn Mutual Holding Company, a federally chartered mutual
holding company (the "MHC"), Dearborn Financial Corporation, a federally
chartered stock holding corporation (the "Mid-Tier Holding Company"), and
Dearborn Savings Association, F.A., a federally chartered stock savings
association (the "Association"), hereby confirm, jointly and severally, their
agreement with Xxxxx, Xxxxxxxx & Xxxxx, Inc. ("KBW" or the "Agent"), as follows:
SECTION 1. THE OFFERING. In accordance with a Plan of Conversion and
Reorganization (the "Plan" or "Plan of Conversion") adopted by the Boards of
Directors of the MHC and the Mid-Tier Holding Company, the MHC will convert from
a federally chartered mutual holding company to a Delaware-chartered stock
corporation. As part of the Plan, the following steps will be effectuated: (i)
the Association's establishment of the Company as a Delaware-chartered
corporation; (ii) the conversion of the MHC to an interim federal stock savings
association ("Interim One"); (iii) the conversion of the MHC's subsidiary stock
holding company, the Mid-Tier Holding Company, to an interim federal stock
savings association ("Interim Two") and its simultaneous merger with and into
the Association; (iv) the merger of Interim One (formerly the MHC) with and into
the Association, whereupon the outstanding common stock of the Mid-Tier Holding
Company held by the MHC will be cancelled; (v) the establishment by the Company
of a third interim federal stock savings association ("Interim Three"); (vi) the
merger of Interim Three with and into the Association, with the Association as
the surviving entity; and (vii) the sale and exchange of the Common Shares (as
herein defined) of the Company pursuant to the Plan of Conversion and Office of
Thrift Supervision (the "OTS") regulations. As a result of the
merger of Interim Three with and into the Association, the Association will
become a wholly owned subsidiary of the Company. The outstanding shares of
common stock par value per share $0.10 of the Mid-Tier Holding Company
("Mid-Tier Holding Company Common Stock") by persons other than the MHC will be
converted into the Common Shares of the Company pursuant to an exchange ratio as
defined in the Plan, which will result in the holders of such shares receiving
and owning in the aggregate approximately the same percentage of the Common
Shares to be outstanding upon the completion of the Conversion (as herein
defined) as the percentage of Mid-Tier Holding Company Common Stock owned by
them in the aggregate immediately prior to the consummation of the Conversion.
Pursuant to the Plan, the Company will offer and sell up to 955,374 of
its Common Shares, in a subscription offering (the "Subscription Offering") to:
(1) depositors of the Association with Qualifying Deposits, as defined in the
Plan, as of October 31, 2002 ("Eligible Account Holders"); (2) Tax-Qualified
Employee Stock Benefit Plan of the Association (as defined in the Plan); (3)
depositors of the Association with Qualifying Deposits as of March 31, 2004
("Supplemental Eligible Account Holders"); and (4) Voting Members, as defined in
the Plan, who are not either Eligible Account Holders or a Supplemental Eligible
Account Holders ("Other Members"). The Common Shares to be sold by the Company
in the Offering (as defined below) are hereinafter called the "Shares." Subject
to the prior subscription rights of the above-listed parties, the Company is
offering for sale in a direct community offering (the "Community Offering," or
"Direct Community Offering," and when referred to together with the Subscription
Offering, the "Subscription and Community Offering") which may be commenced
concurrently with, during, or after the Subscription Offering, the Shares not
subscribed for or ordered in the Subscription Offering to members of the general
public to whom a copy of the Prospectus (as hereinafter defined) is delivered
with a preference given to natural persons residing in the Indiana county of
Dearborn ("Preferred Subscribers"). It is anticipated that shares not subscribed
for in the Subscription and Community Offering will be offered to certain
members of the general public on a best efforts basis through a selected dealers
agreement (the "Syndicated Community Offering") (the Subscription Offering,
Community Offering and Syndicated Community Offering are collectively referred
to as the "Offering"). It is acknowledged that the purchase of Shares in the
Offering is subject to the minimum and maximum purchase limitations as described
in the Plan and that the Company may reject, in whole or in part, any orders
received in the Community Offering or Syndicated Community Offering.
Collectively, these transactions are referred to herein as the "Conversion."
The Company has filed with the United States Securities and Exchange
Commission (the "SEC") a registration statement on Form SB-2 (File No.
333-______) (the "Registration Statement") containing a prospectus relating to
the Offering for the registration of the Shares under the Securities Act of 1933
(the "1933 Act"), and has filed such amendments thereof and such amended
prospectuses as may have been required to the date hereof. The term
"Registration Statement" shall include any documents incorporated by reference
therein and all financial schedules and exhibits thereto, as amended, including
post-effective amendments. The prospectus, as amended, on file with the SEC at
the time the Registration Statement initially became effective is hereinafter
called the "Prospectus," except that if any Prospectus is filed by the Company
pursuant to Rule 424(b) or (c) of the rules and regulations of the SEC under the
1933 Act (the "1933 Act Regulations") differing from the prospectus on file at
the time the
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Registration Statement 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 SEC.
In accordance with Title 12, Parts 575 and 563b of the Code of Federal
Regulations (the "Conversion Regulations"), the MHC filed with the OTS an
Application for Approval of Conversion on Form AC, and has filed such amendments
thereto and supplementary materials as may have been required to the date hereof
and amendments thereto as required by the OTS including applications to form and
merge Interim One, Interim Two and Interim Three (the "Conversion Application").
The Company has also filed with the OTS an application for approval to acquire
the Association and to become a registered savings and loan holding company on
Form H-(e) 1-S (the "Holding Company Application") under the Home Owners' Loan
Act of 1933, as amended, and the regulations promulgated thereunder (the
"HOLA").
SECTION 2. RETENTION OF AGENT; COMPENSATION; SALE AND DELIVERY OF THE
SHARES. Subject to the terms and conditions herein set forth, the Company, the
MHC, the Mid-Tier Holding Company and the Association hereby appoint the Agent
as their exclusive financial advisor and marketing agent to utilize its best
efforts to solicit subscriptions for Shares and to advise and assist the
Company, the MHC, the Mid-Tier Holding Company and the Association with respect
to the Company's sale of the Shares in the Offering.
On the basis of the representations, warranties, and agreements herein
contained, but subject to the terms and conditions herein set forth, the Agent
accepts such appointment and agrees to consult with and advise the Company, the
MHC, the Mid-Tier Holding Company and the Association as to the matters set
forth in the letter agreement, dated December 10, 2003, between the Mid-Tier
Holding Company and KBW. It is acknowledged by the Company, the MHC, the
Mid-Tier Holding Company and the Association that the Agent shall not be
required to purchase any Shares or be obligated to take any action that is
inconsistent with all applicable laws, regulations, decisions or orders.
The obligations of the Agent pursuant to this Agreement shall terminate
upon the completion or termination or abandonment of the Plan by the Company,
the MHC, the Mid-Tier Holding Company, or the Association or upon termination of
the Offering, but in no event later than 45 days after the completion of the
Subscription Offering (the "End Date"). All fees or expenses due to the Agent
hereunder but unpaid will be payable to the Agent in next day funds at the
earlier of the Closing Date (as hereinafter defined) or the End Date. In the
event the Offering is extended beyond the End Date, the Company, the MHC, the
Mid-Tier Holding Company, the Association and the Agent may agree to renew this
Agreement under mutually acceptable terms.
In the event the Company is unable to sell a minimum of 614,000 Shares
within the period herein provided, this Agreement shall terminate and the
Company shall refund to any persons who have subscribed for any of the Shares
the full amount that it may have received from them plus accrued interest, as
set forth in the Prospectus, and none of the parties to this Agreement shall
have any obligation to the other parties hereunder, except as set forth in this
Section 2 and in Sections 6, 8 and 9 hereof.
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In the event the Offering is terminated for any reason not attributable
to the action or inaction of the Agent, the Agent shall be paid the fees due to
the date of such termination pursuant to subparagraphs (a) and (d) below.
If all conditions precedent to the consummation of the Conversion,
including, without limitation, the sale of all Shares required by the Plan to be
sold, are satisfied, the Company agrees to issue, or have issued, the Shares
sold in the Offering and to release for delivery certificates for such Shares on
the Closing Date (as hereinafter defined) against payment to the Company by any
means authorized by the Plan; provided, however, that no funds shall be released
to the Company until the conditions specified in Section 7 hereof shall have
been complied with to the reasonable satisfaction of the Agent and its counsel.
The release of Shares against payment therefor shall be made on a date and at a
place acceptable to the Company, the MHC, the Mid-Tier Holding Company, the
Association and the Agent. Certificates for Shares shall be delivered directly
to the purchasers in accordance with their directions. The date upon which the
Company shall release or deliver the Shares sold in the Offering, in accordance
with the terms herein, is called the "Closing Date."
The Agent shall receive the following compensation for its services
hereunder:
(a) A Management Fee of $25,000, payable in four consecutive monthly
installments of $6,250, all of which have been paid. Such fees
shall be deemed to have been earned when due. Should the
Conversion be terminated for any reason not attributable to the
action or inaction of the Agent, the Agent shall have earned and
be entitled to be paid fees accruing through the stage at which
the termination occurred, including any accrued legal fees
expended by the Agent.
(b) A Success Fee upon completion of the Offering of 1.50% of the
aggregate purchase price of the Common Stock sold in the
Subscription Offering and Community Offering excluding shares
purchased by the officers, directors or employees (or members of
their immediate families) of the Company, the MHC, the Mid-Tier
Holding Company or the Association plus any ESOP, tax-qualified
or stock based compensation plans (except IRAs) or similar plan
created by the Association for some or all of its directors or
employees. The Success Fee described in this subparagraph 2(b)
shall be reduced by the Management Fee described in subparagraph
2(a).
(c) If any of the Common Shares remain available after the
Subscription Offering, at the request of the Company, KBW will
seek to form a syndicate of registered broker-dealers ("Selected
Dealers") to assist in the sale of such Common Shares on a best
efforts basis, subject to the terms and conditions set forth in
the selected dealers agreement. KBW will endeavor to distribute
the Common Shares among the Selected Dealers in a fashion which
best meets the distribution objectives of the Company, the MHC,
the Mid-Tier Holding Company, the Association and the Plan. KBW
will be paid a fee not to exceed 5.5% of the aggregate purchase
price of the shares sold by the Selected Dealers. From this fee,
KBW will pass onto the Selected Dealers who assist in the
Syndicated Community Offering an amount
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competitive with gross underwriting discounts charged at such
time for comparable amounts of stock sold at a comparable price
per share in a similar market environment. Fees with respect to
purchases affected with the assistance of Selected Dealers other
than KBW shall be transmitted by KBW to such Selected Dealers.
The decision to utilize Selected Dealers will be made by the
Company, the MHC, the Mid-Tier Holding Company and the
Association upon consultation with KBW. In the event, with
respect to any stock purchases, fees are paid pursuant to this
subparagraph 2(c), such fees shall be in lieu of, and not in
addition to, payment pursuant to subparagraphs 2(a) and 2(b).
(d) The Agent shall be reimbursed for reasonable out-of-pocket
expenses, including costs of travel, meals and lodging,
photocopying, telephone, facsimile and couriers. Reimbursement
of the Agent's total out-of-pocket expenses shall not exceed
$7,500 without the prior consent of the Association. In
addition, the Association will reimburse KBW for the fees and
expenses of its counsel, which will not exceed $35,000. The
Company, the MHC, the Mid-Tier Holding Company and the
Association will bear the expenses of the Offering customarily
borne by issuers including, without limitation, regulatory
filing fees, SEC, "Blue Sky," and NASD filing and registration
fees; the fees of the Company, the MHC's, the Mid-Tier Holding
Company's and Association's accountants, attorneys, appraiser,
transfer agent and registrar, printing, mailing and marketing
and syndicate expenses associated with the Conversion; the fees
set forth under this Section 2; and fees for "Blue Sky" legal
work. The Company, the MHC, the Mid-Tier Holding Company and the
Association will reimburse KBW for such expenses incurred by KBW
on their behalf.
Full payment of Agent's fees and expenses, as described above, shall be
made in next day funds on the earlier of the Closing Date or a determination by
the Company, the MHC, the Mid-Tier Holding Company or the Association to
terminate or abandon the Plan.
SECTION 3. PROSPECTUS; OFFERING. The Shares are to be initially offered
in the Offering at the purchase price set forth on the cover page of the
Prospectus.
SECTION 4. REPRESENTATIONS AND WARRANTIES.
(a) The Company, the MHC, the Mid-Tier Holding Company and the
Association jointly and severally represent and warrant to and agree with the
Agent as follows:
(i) The Registration Statement, which was prepared by the Company,
the MHC, the Mid-Tier Holding Company and the Association and
filed with the SEC, was declared effective by the SEC on May __,
2004. At the time the Registration Statement, including the
Prospectus contained therein (including any amendment or
supplement), became effective, the Registration Statement
complied in all material respects with the requirements of the
1933 Act and the 1933 Act Regulations, and the Registration
Statement, including the Prospectus contained therein (including
any amendment or supplement thereto), and any information
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regarding the Company, the MHC, the Mid-Tier Holding Company or
the Association contained in Sales Information (as such term is
defined in Section 8 hereof) authorized by the Company, the MHC,
the Mid-Tier Holding Company or the Association for use in
connection with the Offering, did not contain an untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which
they were made, not misleading, and at the time any Rule 424(b)
or (c) Prospectus was filed with the SEC and at the Closing Date
referred to in Section 2, the Registration Statement, including
the Prospectus contained therein (including any amendment or
supplement thereto), will contain all statements that are
required to be stated therein in accordance with the 1933 Act
and the 1933 Act Regulations and such Registration Statement and
any information regarding the Company, the MHC, the Mid-Tier
Holding Company or the Association contained in the Sales
Information authorized by the Company, the MHC, the Mid-Tier
Holding Company or the Association for use in connection with
the Offering will not contain an untrue statement of a material
fact or omit to state a material fact necessary in order to make
the statements therein, in light of the circumstances under
which they were made, not misleading; provided, however, that
the representations and warranties in this Section 4(a)(i) shall
not apply to statements or omissions made in reliance upon and
in conformity with written information furnished to the Company,
the MHC, the Mid-Tier Holding Company or the Association by the
Agent or its counsel expressly regarding the Agent for use in
the Prospectus under the caption "The Conversion - Plan of
Distribution; Selling Agent Compensation" or in any Sales
Information or statements in or omissions from any Sales
Information regarding the Agent. The proxy statement for the
solicitation of proxies from stockholders of the Mid-Tier
Holding Company for the special meeting to approve the Plan (the
"Stockholders' Proxy Statement"), which was prepared by the
Company, the MHC, the Mid-Tier Holding Company and the
Association and filed with the SEC, has been authorized for use
by the SEC. As of the date hereof and at all times subsequent
thereto until the Closing Date, the Stockholders' Proxy
Statement (including any amendment or supplement thereto), will
comply in all material respects with all applicable provisions
of the Securities Exchange Act of 1934, as amended (the "1934
Act") and the regulations of the SEC under the 1934 Act (the
"1934 Act Regulations"). The Stockholders' Proxy Statement
(including any amendment or supplement thereto), will not
include 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.
(ii) The Conversion Application, including the Prospectus and the
proxy statement for the solicitation of proxies from members of
the MHC for the special meeting to approve the Plan (the
"Members' Proxy Statement"), which was prepared by the Company,
the MHC, the Mid-Tier Holding Company and the Association and
filed with the OTS, was approved by the OTS on May __, 2004 and
the Prospectus and Members' Proxy Statement have been authorized
for use by the
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OTS. At the time of the approval of the Conversion Application,
including the Prospectus, the Members' Proxy Statement
(including any amendment or supplement thereto), by the OTS and
at all times subsequent thereto until the Closing Date, the
Conversion Application, including the Prospectus and the
Members' Proxy Statement (including any amendment or supplement
thereto), will comply in all material respects with the
Conversion Regulations, except to the extent waived in writing
by the OTS. The Conversion Application, including the Prospectus
and the Members' Proxy Statement (including any amendment or
supplement thereto), does not include 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; provided, however, that the representations and
warranties in this Section 4(a)(ii) shall not apply to
statements or omissions made in reliance upon and in conformity
with written information furnished to the Company, the MHC, the
Mid-Tier Holding Company or the Association by the Agent or its
counsel expressly regarding the Agent for use in the Prospectus
contained in the Conversion Application under the caption "The
Conversion - Plan of Distribution; Selling Agent Compensation"
or in any Sales Information.
(iii) The Holding Company Application has been prepared by the Company
in material conformity with the requirements of the OTS and has
been approved by the OTS. A conformed copy of the Holding
Company Application has been delivered to the Agent and its
counsel, receipt of which is hereby acknowledged by the Agent.
(iv) No order has been issued by the OTS, the SEC or any state
securities administrator preventing or suspending the use of the
Prospectus or any supplemental sales literature authorized by
the Company, the MHC, the Mid-Tier Holding Company or the
Association for use in connection with the offering 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 Company,
the MHC, the Mid-Tier Holding Company or the Association,
threatened.
(v) Pursuant to the Conversion Regulations, the Plan has been
approved by the Boards of Directors of the MHC and the Mid-Tier
Holding Company; at the Closing Date, the offer and sale of the
Shares will have been conducted in all material respects in
accordance with the Plan, the Conversion Regulations, and all
other applicable laws, regulations, decisions and orders,
including all terms, conditions, requirements and provisions
precedent to the Conversion imposed upon the MHC, the Mid-Tier
Holding Company or the Association by the OTS, the SEC or any
other regulatory authority, other than those which the
regulatory authority permits to be completed after the
Conversion and in the manner described in the Prospectus. No
person has sought to obtain review of the final action of the
OTS in approving the Plan or in approving the Conversion or the
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Holding Company Application pursuant to HOLA or any other
statute or regulation.
(vi) The Association has been duly organized and is a validly
existing federally chartered savings association in the stock
form of organization and upon the Conversion will become a
wholly-owned subsidiary of the Company, in both instances duly
authorized to conduct its business and own its property as
described in the Registration Statement and the Prospectus; the
Association has obtained all licenses, permits and other
governmental authorizations currently required for the conduct
of its business, except those that individually or in the
aggregate would not materially adversely affect the financial
condition, earnings, capital, assets, properties or business of
the Company, the MHC, the Mid-Tier Holding Company and the
Association, taken as a whole; all such licenses, permits and
governmental authorizations are in full force and effect, and
the Association is in compliance with all material laws, rules,
regulations and orders applicable to the operation of its
business; the Association is existing under the laws of the
United States of America and is duly qualified as a foreign
corporation to transact business and is in good standing in each
jurisdiction in which its ownership of property or leasing of
property or the conduct of its business requires such
qualification, unless the failure to be so qualified in one or
more of such jurisdictions would not individually or in the
aggregate have a material adverse effect on the financial
condition, earnings, capital, assets, properties or business of
the Association. The Association does not own equity securities
or any equity interest in any other active business enterprise
except as described in the Prospectus or as would not be
material to the operations of the Association. Upon completion
of the Conversion, (i) all of the authorized and outstanding
capital stock of the Association will be owned by the Company
free and clear of any security interest, mortgage, pledge, loan,
encumbrance, claim or equity and (ii) the Company will have no
direct subsidiaries other than the Association. At the Closing
Date, the Conversion will have been effected in all material
respects in accordance with all applicable statutes,
regulations, decisions and orders; and, except with respect to
the filing of certain post-sale, post-Conversion reports, and
documents in compliance with the 1933 Act Regulations, all
terms, conditions, requirements and provisions with respect to
the Conversion imposed by the OTS, if any, will have been
complied with by the Company, the MHC, the Mid-Tier Holding
Company and the Association in all material respects or
appropriate waivers will have been obtained and all material
notices will have been satisfied.
(vii) The Mid-Tier Holding Company has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of the United States of America with corporate power and
authority to own, lease and operate its properties and to
conduct its business as described in the Registration Statement
and the Prospectus; the Mid-Tier Holding Company is qualified to
do business as a foreign corporation in each jurisdiction in
which the conduct of its business requires such qualification,
except where the failure to so qualify would not have a material
adverse effect on the financial condition, earnings, capital,
assets, properties or business of the Mid-Tier Holding Company.
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 materially adversely affect the financial
condition, earnings, capital, assets,
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properties or business of the Company, the MHC, the Mid-Tier
Holding Company and the Association, taken as a whole; all such
licenses, permits and governmental authorizations are in full
force and effect, and the Mid-Tier Holding Company is in all
material respects complying with all laws, rules, regulations
and orders applicable to the operation of its business.
(viii) The authorized capital stock of the Mid-Tier Holding Company
consists of 8,000,000 shares of common stock, par value $0.10
per share (the "Mid-Tier Holding Company Common Stock") and
2,000,000 shares of preferred stock, par value $0.10 per share
(the "Mid-Tier Preferred Stock"), of which 484,579 shares of
Mid-Tier Holding Company Common Stock and no shares of Mid-Tier
Holding Company Preferred Stock are issued and outstanding as of
the date hereof; no additional shares of Mid-Tier Holding
Company and no shares of Mid-Tier Holding Company Preferred
Stock will be issued and outstanding shares of Mid-Tier Holding
Company Common Stock have been duly authorized and validly
issued and are fully paid and nonassessable and have been issued
in compliance with all federal and state securities laws; the
MHC owns 250,000 shares of Mid-Tier Holding Company Common Stock
beneficially and of record free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity;
the terms and provisions of the Mid-Tier Holding Company Common
Stock conform to all statements relating thereto contained in
the Prospectus.
(ix) The MHC has been duly chartered and is validly existing as a
mutual holding company in good standing under the laws of the
United States of America with corporate power and authority to
own, lease and operate its properties and to conduct its
business as described in the Registration Statement and the
Prospectus; the MHC is qualified to do business as a foreign
corporation in each jurisdiction in which the conduct of its
business requires such qualification, except where the failure
to so qualify would not have a material adverse effect on the
financial condition, earnings, capital, assets, properties or
business of the MHC. The MHC has obtained all licenses, permits
and other governmental authorizations currently required for the
conduct of its business except those that individually or in the
aggregate would not materially adversely affect the financial
condition, earnings capital, assets, properties or business of
the Company, the MHC, the Mid-Tier Holding Company and the
Association, taken as a whole; all such licenses, permits and
governmental authorizations are in full force and effect, and
the MHC is in all material respects complying with all laws,
rules, regulations and orders applicable to the operation of its
business; upon consummation of the Conversion, the MHC will
cease to exist.
(x) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of
Delaware with corporate power
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and authority to own, lease and operate its properties and to
conduct its business as described in the Registration Statement
and the Prospectus; the Company is qualified to do business as a
foreign corporation in each jurisdiction in which the conduct of
its business requires such qualification, except where the
failure to so qualify would not have a material adverse effect
on the financial condition, earnings, capital, assets,
properties or business of the Company. The 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 materially
adversely affect the financial condition, earnings, capital,
assets, properties or business of the Company, the MHC, the
Mid-Tier Holding Company and the Association, taken as a whole;
all such licenses, permits and governmental authorizations are
in full force and effect, and the Company is in all material
respects complying with all laws, rules, regulations and orders
applicable to the operation of its business.
(xi) The Association is a member of the Federal Home Loan Bank of
Indianapolis ("FHLB-Indianapolis"). The deposit accounts of the
Association are insured by the FDIC up to the applicable limits,
and no proceedings for the termination or revocation of such
insurance are pending or, to the best knowledge of the Company,
the MHC and the Mid-Tier Holding Company or the Association,
threatened. Upon consummation of the Conversion, the liquidation
account for the benefit of Eligible Account Holders and
Supplemental Eligible Account Holders will be duly established
in accordance with the requirements of the Conversion
Regulations.
(xii) The only direct subsidiary of the MHC is the Mid-Tier Holding
Company. The only direct subsidiary of the Mid-Tier Holding
Company is the Association. The Association does not own any
subsidiaries.
(xiii) The Company, the MHC, the Mid-Tier Holding Company and the
Association have good and marketable title to all real property
and good title to all other assets material to the business of
the Company, the MHC, the Mid-Tier Company and the Association,
taken as a whole, and to those properties and assets described
in the Registration Statement and Prospectus as owned by them,
in each case free and clear of all liens, charges, encumbrances
or restrictions, except such as are described in the
Registration Statement and Prospectus, or are not material to
the business of the Company, the MHC, the Mid-Tier Holding
Company and the Association, taken as a whole; and all of the
leases and subleases material to the business of the Company,
the MHC and the Mid-Tier Holding Company and the Association,
taken as a whole, under which the Company, the MHC, the Mid-Tier
Holding Company or the Association hold properties, including
those described in the Registration Statement and Prospectus,
are in full force and effect.
(xiv) The Company, the MHC, the Mid-Tier Holding Company and the
Association have received an opinion of their special counsel,
Xxxx Xxxxxx Xxxxxxxx & Xxxxxx, P.C., with respect to the federal
income tax consequences of the Conversion and an opinion from
Xxxxx Xxxxxxxx LLP with respect to the Indiana income tax
consequences of the
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Conversion; all material aspects of the opinions of Xxxx Xxxxxx
Xxxxxxxx & Xxxxxx, P.C. and Xxxxx Xxxxxxxx LLP are accurately
summarized in the Registration Statement and Prospectus; the
facts upon which such opinions are based are truthful, accurate
and complete.
(xv) The Company, the MHC, the Mid-Tier Holding Company and the
Association have all such power, authority, authorizations,
approvals and orders as may be required to enter into this
Agreement, to carry out the provisions and conditions hereof and
to issue and sell the Shares to be sold by the Company as
provided herein and as described in the Prospectus, except
approval or confirmation by the OTS of the final appraisal of
the Association. The consummation of the Conversion, the
execution, delivery and performance of this Agreement and the
consummation of the transactions herein contemplated have been
duly and validly authorized by all necessary corporate action on
the part of the Company, the MHC, the Mid-Tier Holding Company
and the Association and this Agreement has been validly executed
and delivered by the Company, the MHC, the Mid-Tier Holding
Company and the Association and is the valid, legal and binding
agreement of the Company, the MHC, the Mid-Tier Holding Company
and the Association enforceable in accordance with its terms
(except as the enforceability thereof may be limited by
bankruptcy, insolvency, moratorium, the Conversion or similar
laws relating to or affecting the enforcement of creditors'
rights generally or the rights of creditors of Association
holding companies, the accounts of whose subsidiaries are
insured by the FDIC, or by general equity principles, regardless
of whether such enforceability is considered in a proceeding in
equity or at law, and except to the extent, if any, that the
provisions of Sections 8 and 9 hereof may be unenforceable as
against public policy).
(xvi) None of the Company, the MHC, the Mid-Tier Holding Company or
the Association is in violation of any directive received from
OTS, the SEC, or any other agency to make any material change in
the method of conducting their businesses so as to comply in all
material respects with all applicable statutes and regulations
(including, without limitation, regulations, decisions,
directives and orders of the OTS or the SEC) and, except as set
forth in the Registration Statement and the Prospectus, there is
no suit, proceeding, charge or action before or by any court,
regulatory authority or governmental agency or body, pending or,
to the best knowledge of the Company, the MHC, the Mid-Tier
Holding Company or the Association, threatened, which might
materially and adversely affect the Conversion, the performance
of this Agreement or the consummation of the transactions
contemplated in the Plan and as described in the Registration
Statement and the Prospectus or which might result in any
material adverse change in the financial condition, earnings,
capital, assets, properties or business of the Company, the MHC,
the Mid-Tier Holding Company and the Association, taken as a
whole.
-11-
(xvii) The financial statements, schedules and notes related thereto
that are included in the Prospectus fairly present the financial
condition, results of operations, equity and cash flows of the
Company, the MHC, the Mid-Tier Holding Company and the
Association at the respective dates indicated and for the
respective periods covered thereby and comply as to form in all
material respects with the applicable accounting requirements of
Title 12 of the Code of Federal Regulations, Regulation S-X of
the SEC and accounting principles generally accepted in the
United States of America (including those requiring the
recording of certain assets at their current market value). Such
financial statements, schedules and notes related thereto have
been prepared in accordance with generally accepted accounting
principles consistently applied through the periods involved
(except as noted in the Notes to the financial statements)
present fairly in all material respects the information required
to be stated therein and are consistent with the most recent
financial statements and other reports filed by the Company, the
MHC, the Mid-Tier Holding Company and the Association with the
OTS and the SEC, and any other applicable regulatory authority,
except that accounting principles employed in such regulatory
filings conform to the requirements of the OTS and the SEC and
not necessarily to GAAP. 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 unaudited financial
statements of the MHC, the Mid-Tier Holding Company and the
Association included in the Prospectus, and as to the pro forma
adjustments, the adjustments made therein have been properly
applied on the basis described therein.
(xviii) Since the respective dates as of which information is given in
the Registration Statement including the Prospectus: (i) there
has not been any material adverse change in the financial
condition, earnings, capital, assets, properties or business of
the Company, the MHC, the Mid-Tier Holding Company and the
Association, taken as a whole, whether or not arising in the
ordinary course of business; (ii) there has not been any
material increase in the long-term debt of the Association or in
the principal amount of the Association's assets that are
classified by the Association as substandard, doubtful or loss
or in loans past due 90 days or more or real estate acquired by
foreclosure, by deed-in-lieu of foreclosure or deemed
in-substance foreclosure or any material decrease in equity
capital or total assets of the Association, nor has the Company,
the MHC, the Mid-Tier Holding Company or the Association issued
any securities or incurred any liability or obligation for
borrowing other than in the ordinary course of business; (iii)
there have not been any material transactions entered into by
the Company, the MHC, the Mid-Tier Holding Company or the
Association; (iv) there has not been any material adverse change
in the aggregate dollar amount of the Association's deposits or
its consolidated net worth; (v) there has been no material
adverse change in the Company's, the MHC's, the Mid-Tier Holding
Company's or the Association's relationship with its insurance
carriers, including, without limitation, cancellation or other
termination of the Company's, the MHC's, the Mid-Tier Holding
Company's or the Association's fidelity bond or any other type
-12-
of insurance coverage; (vi) except as disclosed in the
Prospectus, there has been no material change in management of
the Company, the MHC, the Mid-Tier Holding Company or the
Association; (vii) none of the Company, the MHC, the Mid-Tier
Holding Company, or the Association has sustained any material
loss or interference with its respective business or properties
from fire, flood, windstorm, earthquake, accident or other
calamity, whether or not covered by insurance; (viii) none of
the Company, the MHC, the Mid-Tier Holding Company, or the
Association is in default in the payment of principal or
interest on any outstanding debt obligations; (ix) the
capitalization, liabilities, assets, properties and business of
the Company, the MHC, the Mid-Tier Holding Company and the
Association conform in all material respects to the descriptions
thereof contained in the Prospectus; and (x) none of the
Company, the MHC, the Mid-Tier Holding Company, or the
Association has any material contingent liabilities, except as
set forth in the Prospectus.
(xix) All documents made available to or delivered or to be made
available to or delivered by the Company, the MHC, the Mid-Tier
Holding Company or the Association or their representatives in
connection with the issuance and sale of the Shares, including
records of account holders, depositors and borrowers of the
Association, or in connection with the Agent's exercise of due
diligence, except for those documents which were prepared by
parties other than the Company, the MHC, the Mid-Tier Holding
Company or the Association or their representatives, to the best
knowledge of the Company, the MHC, the Mid-Tier Holding Company
and the Association, were on the dates on which they were
delivered, or will be on the dates on which they are to be
delivered, true, complete and correct in all material respects.
(xx) None of the Company, the MHC, the Mid-Tier Holding Company, or
the Association is (i) in violation of their respective
certificate of incorporation, charters or bylaws, as applicable
or (ii) in default in the performance or observance of any
material obligation, agreement, covenant, or condition contained
in any material contract, lease, loan agreement, indenture or
other instrument to which it is a party or by which it or any of
its property may be bound. The execution and delivery of this
Agreement and the consummation of the transactions herein
contemplated will not: (i) conflict with or constitute a breach
of, or default under, or result in the creation of any material
lien, charge or encumbrance upon any of the assets of the
Company, the MHC, the Mid-Tier Holding Company or the
Association pursuant to their respective certificate of
incorporation, charter or bylaws, as applicable, or any material
contract, lease or other instrument in which the Company, the
MHC, the Mid-Tier Holding Company or the Association has a
beneficial interest, or any applicable law, rule, regulation or
order; (ii) violate any authorization, approval, judgment,
decree, order, statute, rule or regulation applicable to the
Company, the MHC, the Mid-Tier Holding Company or the
Association, except for such violations which would not have a
material adverse effect on the financial condition and results
of operations of the Company, the MHC, the Mid-Tier Holding
Company and the
-13-
Association on a consolidated basis; or (iii) with the exception
of the liquidation account established in the Conversion result
in the creation of any material lien, charge or encumbrance upon
any property of the Company, the MHC, the Mid-Tier Holding
Company or the Association.
(xxi) No default exists, and no event has occurred which with notice
or lapse of time, or both, would constitute a default on the
part of the Company, the MHC, the Mid-Tier Holding Company or
the Association 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 the Company, the MHC, the
Mid-Tier Holding Company or the Association is a party or by
which any of them or any of their property is bound or affected,
except such defaults which would not have a material adverse
effect on the financial condition or results of operations of
the Company, the MHC, the Mid-Tier Holding Company and the
Association on a consolidated basis; such agreements are in full
force and effect; and no other party to any such agreements has
instituted or, to the best knowledge of the Company, the MHC,
the Mid-Tier Holding Company and the Association, threatened any
action or proceeding wherein the Company, the MHC, the Mid-Tier
Holding Company or the Association would or might be alleged to
be in default thereunder, where such action or proceeding, if
determined adversely to the Company, the MHC, the Mid-Tier
Holding Company or the Association, would have a material
adverse effect on the financial condition, earnings, capital,
assets, properties or business of the Company, the MHC, the
Mid-Tier Holding Company and the Association, taken as a whole.
(xxii) Upon consummation of the Conversion, the authorized, issued and
outstanding equity capital of the Company will be within the
range set forth in the Prospectus under the captions
"Capitalization" and "Pro Forma Data" and no Common Shares have
been or will be issued and outstanding prior to the Closing
Date; the Shares will have been duly and validly authorized for
issuance and, when issued and delivered by the Company pursuant
to the Plan against payment of the consideration calculated as
set forth in the Plan and in the Prospectus, will be duly and
validly issued, fully paid and non-assessable, except for shares
purchased by the Tax-Qualified Employee Stock Benefit Plan with
funds borrowed from the Company to the extent payment therefor
in cash has not been received by the Company; except to the
extent that subscription rights and priorities pursuant thereto
exist pursuant to the Plan, no preemptive rights exist with
respect to the Shares; and the terms and provisions of the
Common Shares conform in all material respects to the
description thereof contained in the Registration Statement and
the Prospectus. Upon the issuance of the Shares, good title to
the Shares will be transferred from the Company to the
purchasers thereof against payment therefor, subject to such
claims as may be asserted against the purchasers thereof by
third-party claimants.
(xxiii) No approval of any regulatory or supervisory or other public
authority is required in connection with the execution and
delivery of this Agreement or the issuance
-14-
of the Shares, except for the approval of the OTS and the SEC,
and any necessary qualification, notification, registration or
exemption under the securities or blue sky laws of the various
states in which the Shares are to be offered, and except as may
be required under the rules and regulations of the National
Association of Securities Dealers, Inc. ("NASD") and/or the OTC
Bulletin Board.
(xxiv) Xxxxx Xxxxxxxx LLP, which has certified the audited financial
statements and schedules of the Mid-Tier Holding Company and the
Association included in the Prospectus, has advised the Company,
the MHC, the Mid-Tier Holding Company and the Association in
writing that they are, with respect to the Company, the MHC, the
Mid-Tier Holding Company and the Association, independent public
accountants within the meaning of the Code of Professional
Ethics of the American Institute of Certified Public Accountants
and applicable regulations of the SEC and the OTS.
(xxv) Xxxxxx & Company, which has prepared the Association's
Independent Appraisal as of _______, 2004, and updated on
_________, 2004 (as amended or supplemented, if so amended or
supplemented) (the "Appraisal"), has advised the Company in
writing that it is independent of the Company, the MHC, the
Mid-Tier Holding Company and the Association within the meaning
of the Conversion Regulations.
(xxvi) The Company, the MHC, the Mid-Tier Holding Company and the
Association have timely filed all required federal, state and
local tax returns; the Company, the MHC, the Mid-Tier Holding
Company and the Association have paid all taxes that have become
due and payable in respect of such returns, except where
permitted to be extended, have made adequate reserves for
similar future tax liabilities and no deficiency has been
asserted with respect thereto by any taxing authority.
(xxvii) The Association is in compliance 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.
(xxviii) To the knowledge of the Company, the MHC, the Mid-Tier Holding
Company and the Association, with the exception of the loan by
the Company to the ESOP to purchase securities in an amount up
to 8.0% of the securities sold in the Conversion, none of the
Company, the MHC, the Mid-Tier Holding Company, the Association
or employees of the Company, the MHC, the Mid-Tier Holding
Company or the Association has made any payment of funds of the
Company, the MHC, the Mid-Tier Holding Company or the
Association as a loan for the purchase of the Shares or made any
other payment of funds prohibited by law, and no funds have been
set aside to be used for any payment prohibited by law.
-15-
(xxix) None of the Company, the MHC and the Mid-Tier Holding Company or
the Association has: (i) issued any securities within the last
18 months (except for (a) notes to evidence Association loans or
other liabilities in the ordinary course of business or as
described in the Prospectus, (b) shares issued in connection
with the incorporation of the Company, and (c) shares issued
upon the exercise of options pursuant to the Mid-Tier Holding
Company's existing stock option plan); (ii) had any material
dealings within the 12 months prior to the date hereof with any
member of the NASD, or any person related to or associated with
such member, other than discussions and meetings relating to the
proposed Offering and routine purchases and sales of United
States government and agency and other securities in the
ordinary course of business; (iii) entered into a financial or
management consulting agreement except as contemplated
hereunder; and (iv) engaged any intermediary between the Agent
and the Company, the MHC, the Mid-Tier Holding Company and the
Association in connection with the offering of the Shares, and
no person is being compensated in any manner for such service.
Appropriate arrangements have been made for placing the funds
received from subscriptions for Shares in a special
interest-bearing account with the Association until all Shares
are sold and paid for, with provision for refund to the
purchasers in the event that the Conversion is not completed for
whatever reason or for delivery to the Company if all Shares are
sold.
(xxx) The Company, the MHC, the Mid-Tier Holding Company and the
Association have not relied upon the Agent or its legal counsel
or other advisors to the Agent for any legal, tax or accounting
advice in connection with the Conversion.
(xxxi) The Company is not required to be registered under the
Investment Company Act of 1940, as amended.
(xxxii) Any certificates signed by an officer of the Company, the MHC,
the Mid-Tier Holding Company or the Association pursuant to the
conditions of this Agreement and delivered to the Agent or their
counsel that refers to this Agreement shall be deemed to be a
representation and warranty by the Company, the MHC, the
Mid-Tier Holding Company or the Association to the Agent as to
the matters covered thereby with the same effect as if such
representation and warranty were set forth herein.
(b) The Agent represents and warrants to the Company that:
(i) The Agent is a corporation validly existing in good standing
under the laws of the State of New York and licensed to conduct
business in the State of Indiana and all states in which the
common shares will be offered for sale with full power and
authority to provide the services to be furnished to the
Company, the MHC, the Mid-Tier Holding Company and the
Association hereunder.
(ii) The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been
duly and validly authorized by all
-16-
necessary action on the part of the Agent, and this Agreement
has been duly and validly executed and delivered by the Agent
and is a legal, valid and binding agreement of the Agent,
enforceable in accordance with its terms (except as the
enforceability thereof may be limited by bankruptcy, insolvency,
moratorium, the Conversion or similar laws relating to or
affecting the enforcement of creditors' rights generally, or by
general equity principles, regardless of whether such
enforceability is considered in a proceeding in equity or at
law, and except to the extent, if any, that the provisions of
Sections 8 and 9 hereof may, with respect to the Agent, be
unenforceable as against public policy).
(iii) Each of the Agent and its employees, agents and representatives
who shall perform any of the services hereunder shall be duly
authorized and empowered, and shall have all licenses, approvals
and permits necessary to perform such services; and the Agent is
a registered selling agent in each of the jurisdictions in which
the Shares are to be offered by the Company in reliance upon the
Agent as a registered selling agent as set forth in the blue sky
memorandum prepared with respect to the Offering.
(iv) The execution and delivery of this Agreement by the Agent, the
consummation of the transactions contemplated hereby and
compliance with the terms and provisions hereof will not
conflict with, or result in a breach of, any of the terms,
provisions or conditions of, or constitute a default (or an
event which with notice or lapse of time or both would
constitute a default) under, the Certificate of Incorporation or
Bylaws of the Agent or any material agreement, indenture or
other instrument to which the Agent is a party or by which it or
its property is bound.
(v) No approval of any regulatory or supervisory or other public
authority is required in connection with the Agent's execution
and delivery of this Agreement, except as may have been
received.
(vi) There is no suit or proceeding or charge or action before or by
any court, regulatory authority or government agency or body or,
to the knowledge of the Agent, pending or threatened, which
might materially adversely affect the Agent's performance of
this Agreement.
SECTION 5. COVENANTS OF THE COMPANY, THE MHC, THE MID-TIER HOLDING
COMPANY AND THE ASSOCIATION. The Company, the MHC, the Mid-Tier Holding Company
and the Association hereby jointly and severally covenant with the Agent as
follows:
(a) The Company will not file any amendment or supplement to the
Registration Statement without providing the Agent and its
counsel an opportunity to review such amendment or supplement or
file any amendment or supplement to which amendment or
supplement the Agent or its counsel shall reasonably object.
(b) The MHC will not file any amendment or supplement to the
Conversion Application without providing the Agent and its
counsel an opportunity to review
-17-
such amendment or supplement or file any amendment or supplement
to which amendment or supplement the Agent or its counsel shall
reasonably object.
(c) The Company will not file any amendment or supplement to the
Holding Company Application without providing the Agent and its
counsel an opportunity to review the nonconfidential portions of
such amendment or supplement or file any amendment or supplement
to which amendment or supplement the Agent or its counsel shall
reasonably object.
(d) The Company, the MHC, the Mid-Tier Holding Company and the
Association will use their best efforts to cause any
post-effective amendment to the Registration Statement to be
declared effective by the SEC and any post-approval amendment to
the Conversion Application to be approved by the OTS and will
immediately upon receipt of any information concerning the
events listed below notify the Agent: (i) when the Registration
Statement, as amended, has become effective; (ii) when the
Conversion Application, as amended, has been approved by the
OTS; (iii) when the Company, the MHC, the Mid-Tier Holding
Company or the Association receives any comments from the OTS,
the SEC, or any other governmental entity with respect to the
Conversion or the transactions contemplated by this Agreement;
(iv) when the OTS, the SEC, or any other governmental entity
requests any amendment or supplement to the Registration
Statement, the Conversion Application or any additional
information; (v) the issuance by the OTS, the SEC, or any other
governmental entity of any order or other action suspending the
Offering or the use of the Registration Statement or the
Prospectus or any other filing of the Company, the MHC, the
Mid-Tier Holding Company or the Association under the Conversion
Regulations, or other applicable law, or the threat of any such
action; (vi) the issuance by the OTS, the SEC, or any authority
of any stop order suspending the effectiveness of the
Registration Statement or of the initiation or threat of
initiation or threat of any proceedings for that purpose; or
(vii) the occurrence of any event mentioned in paragraph (h)
below. The Company, the MHC, the Mid-Tier Holding Company and
the Association will make every reasonable effort (x) to prevent
the issuance by the OTS, the SEC or any other regulatory
authority of any such order and, if any such order shall at any
time be issued, (y) to obtain the lifting thereof at the
earliest possible time.
(e) The Company, the MHC, the Mid-Tier Holding Company and the
Association will deliver to the Agent and to its counsel two
conformed copies of the Registration Statement, the Conversion
Application and the Holding Company Application, as originally
filed and of each amendment or supplement thereto, including all
exhibits.
(f) The Company, the MHC, the Mid-Tier Holding Company and the
Association will furnish to the Agent, from time to time during
the period when the Prospectus (or any later prospectus related
to this offering) is required to be delivered under the 1933 Act
or the 1934 Act, such number of copies of such Prospectus (as
-18-
amended or supplemented) as the Agent may reasonably request for
the purposes contemplated by the 1933 Act, the 1933 Act
Regulations, 1934 Act or the 1934 Act Regulations. The Company
authorizes the Agent to use the Prospectus (as amended or
supplemented, if amended or supplemented) in any lawful manner
contemplated by the Plan in connection with the sale of the
Shares by the Agent.
(g) The Company, the MHC, the Mid-Tier Holding Company and the
Association will comply with any and all material terms,
conditions, requirements and provisions with respect to the
Conversion and the transactions contemplated thereby imposed by
the OTS, SEC or the Conversion Regulations, and by the 1933 Act,
the 1933 Act Regulations, the 1934 Act and the 1934 Act
Regulations to be complied with prior to or subsequent to the
Closing Date and when the Prospectus is required to be
delivered, and during such time period, the Company, the MHC,
the Mid-Tier Holding Company and the Association will comply, at
their own expense, with all material requirements imposed upon
them by the OTS, the SEC or the Conversion Regulations, and by
the 1933 Act, the 1933 Act Regulations, the 1934 Act and the
1934 Act regulations, including, without limitation, Rule 10b-5
under the 1934 Act, in each case as from time to time in force,
so far as necessary to permit the continuance of sales or
dealing in the Common Shares during such period in accordance
with the provisions hereof and the Prospectus.
(h) If, at any time during the period when the Prospectus is
required to be delivered, any event relating to or affecting the
Company, the MHC, the Mid-Tier Holding Company or the
Association shall occur, as a result of which it is necessary or
appropriate, in the opinion of counsel of the Company, the MHC,
the Mid-Tier Holding Company or in the reasonable opinion of the
Agent's counsel, to amend or supplement the Registration
Statement or Prospectus in order to make the Registration
Statement or Prospectus not misleading in light of the
circumstances existing at the time the Prospectus is delivered,
the Company, the MHC, the Mid-Tier Holding Company and the
Association will at their own expense, prepare and file with the
OTS, the SEC 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 or Prospectus (in
form and substance reasonably satisfactory to the Agent and its
counsel after a reasonable time for review) which will amend or
supplement the Registration Statement or Prospectus so that as
amended or supplemented it will not contain an untrue statement
of a material fact or omit to state a material fact necessary in
order to make the statements therein, in light of the
circumstances existing at the time the Prospectus is delivered
to a purchaser, not misleading. For the purpose of this
Agreement, the Company, the MHC, the Mid-Tier Holding Company
and the Association each will timely furnish to the Agent such
information with respect to itself as the Agent may from time to
time reasonably request.
(i) The Company, the MHC, the Mid-Tier Holding Company and the
Association will take all necessary actions in cooperating with
the Agent and furnish to
-19-
whomever the Agent may direct such information as may be
required to qualify or register the Shares for offering and sale
by the Company or to exempt such Shares from registration, or to
exempt the Company as a broker-dealer and its officers,
directors and employees as broker-dealers or agents under the
applicable securities or blue sky laws of such jurisdictions in
which the Shares are required under the Conversion Regulations
to be sold or as the Agent and the Company, the MHC, the
Mid-Tier Holding Company and the Association may reasonably
agree upon; provided, however, that the Company shall not be
obligated to file any general consent to service of process, to
qualify to do business in any jurisdiction in which it is not so
qualified, or to register its directors or officers as brokers,
dealers, salesmen or agents in any jurisdiction. In each
jurisdiction where any of the Shares shall have been qualified
or registered as above provided, the Company will make and file
such statements and reports in each fiscal period as are or may
be required by the laws of such jurisdiction.
(j) At the consummation of the Conversion, the Association shall
duly establish and maintain the liquidation account for the
benefit of Eligible Account Holders and Supplemental Eligible
Account Holders in accordance with the requirements of the
Conversion Regulations and such Eligible Account Holders and
Supplemental Eligible Account Holders who continue to maintain
their savings accounts in the Association will have an inchoate
interest in their pro rata portion of the liquidation account,
which shall have a priority superior to that of the holders of
the Common Shares in the event of a complete liquidation of the
Association.
(k) The Company and the Association will not sell or issue, contract
to sell or otherwise dispose of, for a period of 90 days after
the Closing Date, without the Agent's prior written consent, any
of their capital stock, other than in connection with any plan
or arrangement described in the Prospectus or upon the exercise
of any option issued pursuant to the Mid-Tier Holding Company's
existing stock option plan.
(l) The Company shall register its Common Shares under Section 12(g)
of the 1934 Act during the Offering and shall request that such
registration be effective prior to or upon completion of the
Conversion. The Company shall maintain the effectiveness of such
registration for not less than three years or such shorter
period as may be required by applicable law.
(m) During the period during which the Common Shares are registered
under the 1934 Act or for three (3) years from the date hereof,
whichever period is greater, the Company will furnish to its
shareholders as soon as practicable after the end of each fiscal
year an annual report of the Company in accordance with the 1934
Act Regulations (including a consolidated balance sheet and
statements of consolidated income, shareholders' equity and cash
flows of the Company and its subsidiaries as at the end of and
for such year, certified by independent public accountants in
accordance with Regulation S-X under the 1933 Act and the 1934
Act).
-20-
(n) During the period of three years from the date hereof, the
Company will furnish to the Agent: (i) as soon as practicable
after such information is publicly available, a copy of each
report of the Company furnished to or filed with the SEC under
the 1934 Act or any national securities exchange or system on
which any class of securities of the Company is listed or quoted
(including, but not limited to, reports on Forms 10-K, 10-Q and
8-K and all proxy statements and annual reports to
stockholders), (ii) a copy of each other non-confidential report
of the Company mailed to its shareholders or filed with the OTS,
the SEC or any other supervisory or regulatory authority or any
national securities exchange or system on which any class of
securities of the Company is listed or quoted, each press
release and material news items and additional documents and
information with respect to the Company or the Association as
the Agent may reasonably request; and (iii) from time to time,
such other nonconfidential information concerning the Company or
the Association as the Agent may reasonably request.
(o) The Company and the Association will use the net proceeds from
the sale of the Shares in the manner set forth in the Prospectus
under the caption "How We Intend to Use The Proceeds From the
Offering."
(p) Other than as permitted by the Conversion Regulations, the HOLA,
the 1933 Act, the 1933 Act Regulations and its rules and
regulations and the laws of any state in which the Shares are
registered or qualified for sale or exempt from registration,
none of the Company, the MHC, the Mid-Tier Holding Company or
the Association will distribute any prospectus, offering
circular or other offering material in connection with the offer
and sale of the Shares.
(q) The Company will use its best efforts to cooperate with the
Agent to effect the quotation of the Shares on the OTC Bulletin
Board on or prior to the Closing Date.
(r) The Association will maintain appropriate arrangements for
depositing all funds received from persons mailing subscriptions
for or orders to purchase Shares in the Offering on an
interest-bearing basis at the rate described in the Prospectus
until the Closing Date and satisfaction of all conditions
precedent to the release of the Association's obligation to
refund payments received from persons subscribing for or
ordering Shares in the Offering in accordance with the Plan and
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 Association will maintain such
records of all funds received to enable the Association 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.
(s) The Company will promptly take all necessary action to register
as a unitary savings and loan holding company under HOLA.
-21-
(t) The Company, the MHC, the Mid-Tier Holding Company and the
Association will take such actions and furnish such information
as are reasonably requested by the Agent in order for the Agent
to ensure compliance with the NASD's "Interpretation Relating to
Free Riding and Withholding."
(u) None of the Company, the MHC, the Mid-Tier Holding Company or
the Association will amend the Plan of Conversion without
notifying the Agent prior thereto.
(v) The Company shall assist the Agent, if necessary, in connection
with the allocation of the Shares in the event of an
oversubscription and shall provide the Agent with any
information necessary to assist the Company in allocating the
Shares in such event and such information shall be accurate and
reliable in all material respects.
(w) Prior to the Closing Date, the Company, the MHC, the Mid-Tier
Holding Company and the Association will inform the Agent of any
event or circumstances of which it is aware as a result of which
the Registration Statement and/or Prospectus, as then amended or
supplemented, would 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.
(x) Subsequent to the date the Registration Statement is declared
effective by the SEC and prior to the Closing Date, except as
otherwise may be indicated or contemplated therein or set forth
in an amendment or supplement thereto, none of the Company, the
MHC, the Mid-Tier Holding Company or the Association will have:
(i) issued any securities or incurred any liability or
obligation, direct or contingent, for borrowed money, except
borrowings from the same or similar sources indicated in the
Prospectus in the ordinary course of its business, or (ii)
entered into any transaction which is material in light of the
business and properties of the Company, the MHC, the Mid-Tier
Holding Company and the Association, taken as a whole.
SECTION 6. PAYMENT OF EXPENSES. Whether or not the Conversion is
completed or the sale of the Shares by the Company is consummated, the Company,
the MHC, the Mid-Tier Holding Company and the Association jointly and severally
agree to pay or reimburse the Agent for: (a) all filing fees in connection with
all filings related to the Offering with the NASD; (b) any stock issue or
transfer taxes which may be payable with respect to the sale of the Shares; (c)
all reasonable expenses of the Conversion, including but not limited to the
Company's, the MHC's, the Mid-Tier Holding Company's and the Association's and
the Agent's attorneys' fees (subject to Section 2 of this Agreement) and
expenses, blue sky fees, transfer agent, registrar and other agent charges, fees
relating to auditing and accounting or other advisors and costs of printing all
documents necessary in connection with the Conversion. In the event the Company
is unable to sell a minimum of 614,000 Shares or the Conversion is terminated or
otherwise abandoned, the Company, the MHC, the Mid-Tier Holding Company and the
Association shall promptly reimburse the Agent in accordance with Section 2(d)
hereof.
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SECTION 7. CONDITIONS TO THE AGENT'S OBLIGATIONS. The obligations of the
Agent hereunder are subject, to the extent not waived in writing by the Agent,
to the condition that all representations and warranties of the Company, the
MHC, the Mid-Tier Holding Company and the Association herein are, at and as of
the commencement of the Offering and at and as of the Closing Date, true and
correct in all material respects, the condition that the Company, the MHC, the
Mid-Tier Holding Company and the Association shall have performed all of their
obligations hereunder to be performed on or before such dates, and to the
following further conditions:
(a) At the Closing Date, the Company, the MHC, the Mid-Tier Holding
Company and the Association shall have conducted the Conversion
in all material respects in accordance with the Plan, the
Conversion Regulations and all other applicable laws,
regulations, decisions and orders, including all terms,
conditions, requirements and provisions precedent to the
Conversion imposed upon them by the OTS, the SEC or any other
authority government.
(b) The Registration Statement shall have been declared effective by
the SEC and the Conversion Application approved by the OTS not
later than 5:30 p.m. on the date of this Agreement, or with the
Agent's consent at a later time and date; and at the Closing
Date, no stop order suspending the effectiveness of the
Registration Statement shall have been issued under the 1933 Act
or proceedings therefor initiated or threatened by the SEC or
any state authority, and no order or other action suspending the
authorization of the Prospectus or the consummation of the
Conversion shall have been issued or proceedings therefor
initiated or, to the Company's, the MHC's, the Mid-Tier Holding
Company's or the Association's knowledge, threatened by the OTS,
the SEC or any other governmental authority.
(c) At the Closing Date, the Agent shall have received:
(1) The favorable opinion, dated as of the Closing Date and
addressed to the Agent and for its benefit, of Xxxx Xxxxxx
Xxxxxxxx & Xxxxxx, P.C., special counsel for the Company, the
MHC, the Mid-Tier Holding Company and the Association, in form
and substance to the effect that:
(i) The Company has been duly incorporated
and is validly existing in good standing as a
corporation under the laws of the State of Delaware; the
MHC has been duly organized and is validly existing in
good standing as a federal mutual holding company under
the laws of the United States of America; the Mid-Tier
Holding Company has been duly incorporated and is
validly existing as a federally-chartered holding
company in good standing under the laws of the United
States of America.
(ii) Each of the Company, the MHC and the
Mid-Tier Holding Company have full corporate power and
authority to own, lease and operate their respective
properties and to conduct their business as described in
the Registration Statement and the Prospectus.
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(iii) The Association is a validly existing
federally-chartered savings association in stock form
duly authorized to conduct its business and own its
property as described in the Registration Statement and
the Prospectus. All of the capital stock of the
Association to be outstanding upon completion of the
Conversion will be duly authorized and will be validly
issued, fully paid and non-assessable and will be owned
by the Company, to such counsel's Actual Knowledge, free
and clear of any liens, encumbrances, claims or other
restrictions.
(iv) The Association is a member in good
standing of the FHLB-Indianapolis. The deposit accounts
of the Association are insured by the FDIC up to the
maximum amount allowed under law and no proceedings for
the termination or revocation of such insurance are
pending or, to such counsel's Actual Knowledge,
threatened; the description of the liquidation account
as set forth in the Prospectus under the captions "The
Conversion - Effects of Conversion on Depositors,
Borrowers and Members - Effect on Liquidation Rights"
and "Liquidation Rights" to the extent that such
information constitutes matters of law and legal
conclusions, has been reviewed by such counsel and is
accurately described in all material respects.
(v) Immediately following the consummation
of the Conversion, the authorized, issued and
outstanding Common Shares of the Company will be within
the range set forth in the Prospectus under the captions
"Capitalization," and except for shares issued upon
incorporation of the Company, no Common Shares have been
issued prior to the Closing Date; the Shares subscribed
for pursuant to the Offering have been duly and validly
authorized for issuance, and when issued and delivered
by the Company pursuant to the Plan against payment of
the consideration calculated as set forth in the Plan
and the Prospectus, will be duly and validly issued and
fully paid and non-assessable, except for Shares
purchased by the Tax-Qualified Employee Stock Benefit
Plan with funds borrowed from the Company to the extent
payment therefor in cash has not been received by the
Company, the issuance of the Shares is not subject to
preemptive rights and the terms and provisions of the
Common Shares conform in all material respects to the
description thereof contained in the Prospectus. The
form of certificate used to evidence the Common Shares
complies with applicable laws. Upon the issuance of the
Shares, good title to the Shares will be transferred
from the Company to the purchasers thereof against
payment therefor, subject to such claims as may be
asserted against the purchasers thereof by third-party
claimants.
(vi) The Company, the MHC, the Association
and the Mid-Tier Holding Company have full corporate
power and authority to enter into this Agreement and to
consummate the transactions contemplated hereby and by
the Plan. The execution and delivery of this Agreement
and the
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consummation of the transactions contemplated hereby
have been duly and validly authorized by all necessary
action on the part of the Company, the MHC, the Mid-Tier
Holding Company and the Association; and this Agreement
is a valid and binding obligation of the Company, the
MHC, the Mid-Tier Holding Company and the Association,
enforceable against the Company, the MHC, the Mid-Tier
Holding Company and the Association in accordance with
its terms, except as the enforceability thereof may be
limited by (i) bankruptcy, insolvency, reorganization,
moratorium, conservatorship, receivership or other
similar laws now or hereafter in effect relating to or
affecting the enforcement of creditors' rights
generally, (ii) general equitable principles, (iii) laws
relating to the safety and soundness of insured
depository institutions, and (iv) applicable law or
public policy with respect to the indemnification and/or
contribution provisions contained herein, including
without limitation the provisions of Sections 23A and
23B of the Federal Reserve Act and except that no
opinion need be expressed as to the effect or
availability of equitable remedies or injunctive relief
(regardless of whether such enforceability is considered
in a proceeding in equity or at law).
(vii) The Conversion Application and Holding
Company Application have been approved by OTS and the
Prospectus and Members' Proxy Statement have been
authorized for use by the OTS, and no action has been
taken or is pending, or to the best of such counsel's
Actual Knowledge, none is pending or threatened to
revoke any such authorization or approval.
(viii) Pursuant to the Conversion Regulations,
the Plan has been approved by the MHC's members and duly
adopted by the required vote of the directors of the
Company, the MHC, the Mid-Tier Holding Company and
Association.
(ix) Subject to the satisfaction of the
conditions to the OTS' approval of the Conversion, no
further approval, registration, authorization, consent
or other order of any federal or state regulatory agency
is required in connection with the execution and
delivery of this Agreement, the issuance of the Common
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) and except as may be required under the rules
and regulations of the NASD and/or the OTC Bulletin
Board (as to which no opinion need by rendered).
(x) The Registration Statement is effective
under the 1933 Act and no stop order suspending the
effectiveness has been issued under the 1933 Act or
proceedings therefor initiated or, to such counsel's
Actual Knowledge, threatened by the SEC.
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(xi) At the time the Conversion Application,
including the Prospectus and Members' Proxy Statement
and Stockholders' Proxy Statement contained therein, was
approved by the OTS, the Conversion Application,
including the Prospectus and Members' Proxy Statement
and Stockholders' Proxy Statement contained therein,
complied as to form in all material respects with the
requirements of the Conversion Regulations, the 1934 Act
Regulations, federal and state law and all applicable
rules and regulations promulgated thereunder (other than
the financial statements, the notes thereto, and other
tabular, financial, statistical and appraisal data
included therein, as to which no opinion need be
rendered).
(xii) At the time that the Registration
Statement became effective, (i) the Registration
Statement (as amended or supplemented, if so amended or
supplemented) (other than the financial statements, the
notes thereto, and other tabular, financial, statistical
and appraisal data included therein, as to which no
opinion need be rendered), complied as to form in all
material respects with the requirements of the 1933 Act
and the 1933 Act Regulations, and (ii) the Prospectus
(other than the financial statements, the notes thereto,
and other tabular, financial, statistical and appraisal
data included therein, as to which no opinion need be
rendered) complied as to form in all material respects
with the requirements of the 1933 Act, the 1933 Act
Regulations, the Conversion Regulations and federal law.
(xiii) To such counsel's Actual Knowledge,
there are no legal or governmental proceedings pending
or threatened which are required to be disclosed in the
Registration Statement and Prospectus, other than those
disclosed therein.
(xiv) To such counsel's Actual Knowledge,
there are no material contracts, indentures, mortgages,
loan agreements, notes, leases or other instruments
required to be described or referred to in the
Conversion Application, the Registration Statement or
the Prospectus or required to be filed as exhibits
thereto other than those described or referred to
therein or filed as exhibits thereto in the Conversion
Application, the Registration Statement or the
Prospectus. The description in the Conversion
Application, the Registration Statement and the
Prospectus of such documents and exhibits is accurate in
all material respects and fairly presents the
information required to be shown.
(xv) The Plan complies in all material
respects with all applicable laws, rules, regulations,
decisions and orders including, but not limited to, the
Conversion Regulations; no order has been issued by the
OTS, the SEC or any other governmental authority to
suspend the Offering or the use of the Prospectus, and
no action for such purposes has been instituted, or to
such counsel's Actual Knowledge, threatened by the
-26-
OTS, the SEC or any other governmental authority and, to
such counsel's Actual Knowledge, no person has sought to
obtain regulatory or judicial review of the final action
of the OTS approving the Plan, the Conversion
Application, the Holding Company Application or the
Prospectus.
(xvi) To such counsel's Actual Knowledge, the
Company, the MHC, the Mid-Tier Holding Company and the
Association have obtained all material licenses, permits
and other governmental authorizations currently required
for the conduct of their businesses and all such
licenses, permits and other governmental authorizations
are in full force and effect, and the Company, the MHC,
the Mid-Tier Holding Company and the Association are in
all material respects complying therewith.
(xvii) To such counsel's Actual Knowledge, none
of the Company the MHC, the Mid-Tier Holding Company or
the Association is in violation of its Certificate of
Incorporation and Bylaws or its Charter and Bylaws, as
appropriate or, to such counsel's Actual Knowledge, in
default or violation of any obligation, agreement,
covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or
other instrument to which it is a party or by which it
or its property may be bound, except for such defaults
or violations which would not have a material adverse
impact on the financial condition or results of
operations of the Company, the MHC, the Mid-Tier Holding
Company and the Association on a consolidated basis; the
execution and delivery of this Agreement, the incurrence
of the obligations herein set forth and the consummation
of the transactions contemplated herein do not (a), to
such counsel's Actual Knowledge, conflict with or
constitute a breach of, or default under, or result in
the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company,
the MHC, the Mid-Tier Holding Company or the Association
pursuant to any material contract, indenture, mortgage,
loan agreement, note, lease or other instrument to which
the Company, the MHC, the Mid-Tier Holding Company or
the Association is a party or by which any of them may
be bound, or to which any of the property or assets of
the Company, the MHC, the Mid-Tier Holding Company or
the Association are subject (other than the
establishment of the liquidation account), (b) result in
any violation of the provisions of the Certificate of
Incorporation or Bylaws of the Company or the Charter or
the Bylaws of the MHC, the Mid-Tier Holding Company or
the Association or, (c) result in any violation of any
applicable federal or state law, act, regulation (except
that no opinion with respect to the securities and blue
sky laws of various jurisdictions or the rules or
regulations of the NASD and/or OTC Bulletin need be
rendered) or order or court order, writ, injunction or
decree.
(xviii) The Company's Certificate of
Incorporation and Bylaws comply in all material respects
with the laws of the State of Delaware.
-27-
The MHC's, the Mid-Tier Holding Company's and the
Association's respective Charter and Bylaws comply in
all material respects with federal law.
(xix) To such counsel's Actual Knowledge, none
of the Company, the MHC, the Mid-Tier Holding Company or
the Association is in violation of any directive from
the OTS and the SEC to make any material change in the
method of conducting its respective business.
(xx) The information in the Prospectus under
the captions "Our Dividend Policy," "Supervision and
Regulation," "Taxation," "The Conversion," "Restrictions
on Acquisition of DSA Financial Corporation," and
"Description of Capital Stock of Dearborn Following the
Conversion" 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 correct in all material
respects. The description of the Conversion process in
the Prospectus under the caption "The Conversion" 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
fairly describes such process in all material respects.
The descriptions in the Prospectus of statutes or
regulations are accurate summaries and fairly present
the information required to be shown. The information
under the caption "The Conversion - Effects of
Conversion on Depositors, Borrowers and Members - Tax
Effects" and "- Tax Aspects" has been reviewed by such
counsel and fairly describes the opinions rendered by
them to the Company, the MHC, the Mid-Tier Holding
Company and the Association with respect to such
matters.
In giving such opinion, such counsel may rely as
to all matters of fact on certificates of officers or
directors of the Company, the MHC, the Mid-Tier Holding
Company and the Association and certificates of public
officials. Such counsel's opinion shall be limited to
matters governed by federal laws and by the laws of the
State of Delaware. The term "Actual Knowledge" as used
herein shall have the meaning set forth in the Legal
Opinion Accord of the American Bar Association Section
of Business Law. For purposes of such opinion, no
proceedings shall be deemed to be pending, no order or
stop order shall be deemed to be issued, and no action
shall be deemed to be instituted unless, in each case, a
director or executive officer of either of the Company,
the MHC, the Mid-Tier Holding Company or the Association
shall have received a copy of such proceedings, order,
stop order or action. In addition, such opinion may be
limited to present statutes, regulations and judicial
interpretations and to facts as they presently exist; in
rendering such opinion, such counsel need assume no
obligation to revise or supplement it should the present
laws be changed by legislative or regulatory action,
judicial decision or otherwise;
-28-
and such counsel need express no view, opinion or belief
with respect to whether any proposed or pending
legislation, if enacted, or any proposed or pending
regulations or policy statements issued by any
regulatory agency, whether or not promulgated pursuant
to any such legislation, would affect the validity of
the Conversion or any aspect thereof. Such counsel may
assume that any agreement is the valid and binding
obligation of any parties to such agreement other than
each of the Company, the MHC, the Mid-Tier Holding
Company or the Association.
In addition, such counsel shall state in a
separate letter that during the preparation of the
Conversion Application, the Registration Statement, the
Prospectus, the Members' Proxy Statement and the
Stockholders' Proxy Statement, they participated in
conferences with certain officers of, the independent
public and internal accountants for, and other
representatives of, the Company, the MHC, the Mid-Tier
Holding Company and the Association, at which
conferences the contents of the Conversion Application,
the Registration Statement, the Prospectus, the Members'
Proxy Statement and Stockholders' Proxy Statement, and
related matters were discussed and, while such counsel
have not confirmed the accuracy or completeness of or
otherwise verified the factual information contained in
the Conversion Application, the Registration Statement,
the Prospectus, Members' Proxy Statement, or the
Stockholders' Proxy Statement, and do not assume any
responsibility for such information, based upon such
conferences and a review of documents deemed relevant
for the purpose of rendering their opinion (relying as
to materiality as to factual matters on certificates of
officers and other factual representations by the
Company, the MHC, the Mid-Tier Holding Company and the
Association), nothing has come to their attention that
would lead them to believe that the Conversion
Application, the Registration Statement, the Prospectus,
the Members' Proxy Statement or the Stockholders' Proxy
Statement, or any amendment or supplement thereto (other
than the financial statements, the notes thereto, and
other tabular, financial, statistical and appraisal data
included therein as to which no view need be rendered)
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.
(d) At the Closing Date, the Agent shall receive a certificate of
the Chief Executive Officer and the principal accounting officer
of each of the Company, the MHC, the Mid-Tier Holding Company
and the Association in form and substance reasonably
satisfactory to the Agent's Counsel, dated as of such Closing
Date, to the effect that: (i) they have carefully reviewed the
Prospectus, the Members' Proxy Statement and the Stockholders'
Proxy Statement, and, in their opinion, at the time the
Prospectus and the Members' Proxy Statement and the
Stockholders' Proxy Statement became authorized for final use,
the Prospectus and the
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Members' Proxy Statement and the Stockholders' Proxy Statement
did not contain any untrue statement of a material fact or omit
to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which
they were made, not misleading; (ii) since the date the
Prospectus became authorized for final use, no event has
occurred which should have been set forth in an amendment or
supplement to the Prospectus which has not been so set forth,
including specifically, but without limitation, any material
adverse change in the condition, financial or otherwise, or in
the earnings, capital, properties or business of the Company,
the MHC, the Mid-Tier Holding Company or the Association and the
conditions set forth in this Section 7 have been satisfied;
(iii) since the respective dates as of which information is
given in the Registration Statement and the Prospectus, there
has been no material adverse change in the condition, financial
or otherwise, or in the earnings, capital or properties of the
Company, the MHC, the Mid-Tier Holding Company or the
Association independently, or of the Company, the MHC, the
Mid-Tier Holding Company and the Association considered as one
enterprise, whether or not arising in the ordinary course of
business; (iv) the representations and warranties in Section 4
are true and correct with the same force and effect as though
expressly made at and as of the Closing Date; (v) the Company,
the MHC, the Mid-Tier Holding Company and the Association have
complied in all material respects with all agreements and
satisfied all conditions on their part to be performed or
satisfied at or prior to the Closing Date and will comply in all
material respects with all obligations to be satisfied by them
after the Conversion; (vi) no stop order suspending the
effectiveness of the Registration Statement has been initiated
or, to the best knowledge of the Company the MHC, the Mid-Tier
Holding Company or the Association, threatened by the OTS, the
SEC or any state authority; (vii) no order suspending the
Offering, the Conversion, the acquisition of all of the
outstanding capital stock of the Association by the Company or
the effectiveness of the Prospectus has been issued and no
proceedings for that purpose are pending or, to the best
knowledge of the Company, the Company, the MHC, the Mid-Tier
Holding Company or the Association, threatened by the SEC, or
any governmental authority; and (viii) to the best knowledge of
the Company, the MHC, the Mid-Tier Holding Company and the
Association, no person has sought to obtain review of the final
action of the OTS approving the Plan.
(e) Prior to and at the Closing Date: (i) in the reasonable opinion
of the Agent, there shall have been no material adverse change
in the condition, financial or otherwise, or in the earnings or
business of the Company, the MHC, the Mid-Tier Holding Company
or the Association independently, or of the Company, the MHC,
the Mid-Tier Holding Company and the Association considered as
one enterprise, from that as of the latest dates as of which
such condition is set forth in the Prospectus, other than
transactions referred to or contemplated therein; (ii) the
Company, the MHC, the Mid-Tier Holding Company or the
Association shall not have received from the OTS any direction
(oral or written) to make any material change in the method of
conducting their business with which it has not complied (which
direction, if any, shall have been disclosed to the Agent) or
which
-30-
materially and adversely would affect the business, operations
or financial condition or income of the Company, the MHC, the
Mid-Tier Holding Company and the Association taken as a whole;
(iii) none of the Company, the MHC, the Mid-Tier Holding Company
or the Association shall have been in default (nor shall an
event have occurred which, with notice or lapse of time or both,
would constitute a default) under any provision of any agreement
or instrument relating to any outstanding indebtedness; (iv) no
action, suit or proceeding, at law or in equity or before or by
any federal or state commission, board or other administrative
agency, shall be pending or, to the knowledge of the Company,
the MHC, the Mid-Tier Holding Company or the Association,
threatened against the Company, the MHC, the Mid-Tier Holding
Company or the Association or affecting any of their properties
wherein an unfavorable decision, ruling or finding would
materially and adversely affect the business, operations,
financial condition or income of the Company, the MHC, the
Mid-Tier Holding Company and the Association taken as a whole;
and (v) the Shares shall have been qualified or registered for
offering and sale or exempted therefrom under the securities or
blue sky laws of the jurisdictions as the Agent shall have
reasonably requested and as agreed to by the Company, the MHC,
the Mid-Tier Holding Company and the Association.
(f) Concurrently with the execution of this Agreement, the Agent
shall receive a letter from Xxxxx Xxxxxxxx LLP dated as of the
date of the Prospectus and addressed to the Agent: (i)
confirming that Xxxxx Xxxxxxxx LLP is a firm of independent
public accountants within the meaning of Rule 101 of the Code of
Professional Ethics of the American Institute of Certified
Public Accountants and applicable regulations of the SEC and
stating in effect that in their opinion the consolidated
financial statements, schedules and related notes of the
Mid-Tier Holding Company and the Association as of June 30, 2003
and 2002, and for each of the two years in the period ended June
30, 2003, included in the Prospectus and covered by their
opinion included therein, comply as to form in all material
respects with the applicable accounting requirements and related
published rules and regulations of the 1933 Act; (ii) stating in
effect that, on the basis of certain agreed upon procedures (but
not an audit in accordance with generally accepted auditing
standards) consisting of a reading of the latest available
unaudited interim financial statements of the Mid-Tier Holding
Company and the Association prepared by the Mid-Tier Holding
Company and the Association, a reading of the minutes of the
meetings of the Boards of Directors of the Mid-Tier Holding
Company and the Association and consultations with officers of
the MHC, the Mid-Tier Holding Company and the Association
responsible for financial and accounting matters, nothing came
to their attention which caused them to believe that: (A) the
unaudited financial statements included in the Prospectus are
not in conformity with the 1933 Act, and 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 financial statements included in
the Prospectus to a specified date not more than three business
days prior to the date
-31-
of the Prospectus, except as has been described in the
Prospectus, there was any increase in borrowings, other than
normal deposit fluctuations, the Mid-Tier Holding Company and
the Association; or (C) there was any decrease in the net assets
or retained earnings of the Mid-Tier Holding Company and the
Association at the date of such letter as compared with amounts
shown in the latest unaudited balance sheets included in the
Prospectus or there was any decrease in net income or net
interest income of the Mid-Tier Holding Company and the
Association for the number of full months commencing immediately
after the period covered by the latest audited income statement
included in the Prospectus and ended on the latest month end
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 referred to in their opinion
included in the Prospectus and the performance of the procedures
referred to in clause (ii) of this subsection (f), they have
compared with the general accounting records of the Mid-Tier
Holding Company and the Association, which are subject to the
internal controls of the Mid-Tier Holding Company and the
Association, the accounting system and other data prepared by
the Mid-Tier Holding Company and the Association, directly from
such accounting records, to the extent specified in such letter,
such amounts and/or percentages set forth in the Prospectus as
the Agent may reasonably request, and they have found such
amounts and percentages to be in agreement therewith.
(g) At the Closing Date, the Agent shall receive a letter dated the
Closing Date, addressed to the Agent, confirming the statements
made by Xxxxx Xxxxxxxx LLP in the letter delivered by it
pursuant to subsection (f) of this Section 7, the "specified
date" referred to in clause (ii) of subsection (f) to be a date
specified in the letter required by this subsection (g) which
for purposes of such letter shall not be more than three
business days prior to the Closing Date.
(h) At the Closing Date, the Agent shall receive a letter from
Xxxxxx & Company, dated the Closing Date and addressed to the
Agent (i) confirming that said firm is independent of the
Company, the MHC, the Mid-Tier Holding Company and the
Association and is experienced and expert in the area of
corporate appraisals within the meaning of the Conversion
Regulations, (ii) stating in effect that the Appraisal prepared
by such firm 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 Company, the MHC, the Mid-Tier Holding
Company and the Association expressed in its Appraisal, as most
recently updated, remains in effect.
(i) The Company, the MHC, the Mid-Tier Holding Company and the
Association shall not have sustained since the date of the
latest financial statements included in the Prospectus any
material loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental
action, order or decree, otherwise than as set forth or
contemplated in the Registration Statement and Prospectus and
-32-
since the respective dates as of which information is given in
the Registration Statement and Prospectus, there shall not have
been any change in the long-term debt of the Company, the MHC,
the Mid-Tier Holding Company or the Association other than debt
incurred in relation to the purchase of Shares by the
Association's eligible plans, or any change, or any development
involving a prospective change, in or affecting the general
affairs, management, financial position, shareholders' equity or
results of operations of the Company, the MHC, the Mid-Tier
Holding Company or the Association, otherwise than as set forth
or contemplated in the Registration Statement and Prospectus,
the effect of which, in any such case described above, is in
KBW's reasonable judgment sufficiently material and adverse as
to make it impracticable or inadvisable to proceed with the
Subscription Offering or the delivery of the Shares on the terms
and in the manner contemplated in the Prospectus.
(j) At or prior to the Closing Date, the Agent shall receive: (i) a
copy of the letters from the OTS approving the Conversion
Application and authorizing the use of the Prospectus; (ii) a
copy of the order from the SEC declaring the Registration
Statement effective; (iii) a certificate of good standing from
the Secretary of the State of Delaware evidencing the good
standing of the Company; (iv) a certificate of good standing
from the OTS evidencing the good standing of the MHC, the
Mid-Tier Holding Company and the Association; (v) a certificate
from the FDIC evidencing the Association's insurance of
accounts; (vi) a certificate from the FHLB-Indianapolis
evidencing the Association's membership in good standing
therein; (viii) a copy of the letter from the OTS approving the
Company's Holding Company Application; (ix) a certified copy of
the Company's Certificate of Incorporation and Bylaws and the
MHC's, the Mid-Tier Holding Company's and the Association's
Charter and Bylaws and (x) any other documents that the 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, 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 SEC or any other
governmental authority; (ii) a general moratorium on the
operations of commercial banks, or federal savings institutions
or a general moratorium on the withdrawal of deposits from
commercial banks or federal savings institutions declared by
federal or state authorities; (iii) the engagement by the United
States in hostilities which have resulted in the declaration by
the U.S. Congress, on or after the date hereof, of a national
emergency or war; or (iv) a material decline in the price of
equity or debt securities if the effect of such a declaration or
decline, in the Agent's reasonable judgment, makes it
impracticable or inadvisable to proceed with the Offering or the
delivery of the Shares on the terms and in the manner
contemplated in the Registration Statement and the Prospectus.
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(l) At or prior to the Closing Date, counsel to the Agent shall have
been furnished with such documents and opinions as they may
reasonably require for the purpose of enabling them to pass upon
the sale of the Shares as herein contemplated and related
proceedings or in order to evidence the occurrence or
completeness of any of the representations or warranties, or the
fulfillment of any of the conditions, herein contained; and all
proceedings taken by the Company, the MHC, the Mid-Tier Holding
Company or the Association in connection with the Conversion and
the sale of the Shares as herein contemplated shall be
satisfactory in form and substance to KBW and its counsel.
SECTION 8. INDEMNIFICATION.
(a) The Company, the MHC, the Mid-Tier Holding Company and the
Association jointly and severally agree to indemnify and hold
harmless the Agent, its officers and directors, employees and
agents, and each person, if any, who controls the Agent within
the meaning of Section 15 of the 1933 Act or Section 20(a) of
the 1934 Act, against any and all loss, liability, claim, damage
or expense whatsoever (including, but not limited to, settlement
expenses), joint or several, that the Agent or any of them may
suffer or to which the Agent and any such persons may become
subject under all applicable federal or state laws or otherwise,
and to promptly reimburse the Agent and any such persons upon
written demand for any expenses (including reasonable fees and
disbursements of counsel) incurred by the Agent or any of them
in connection with investigating, preparing to defend 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 related to the
Conversion or any action taken by the Agent where acting as
agent of the Company, the MHC, the Mid-Tier Holding Company and
the Association; (ii) arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact
contained in the Registration Statement (or any amendment or
supplement thereto), preliminary or final Prospectus (or any
amendment or supplement thereto), the Conversion Application (or
any amendment or supplement thereto), the Holding Company
Application or any instrument or document executed by the
Company, the MHC, the Mid-Tier Holding Company or the
Association or based upon written information supplied by the
Company, the MHC, the Mid-Tier Holding Company or the
Association filed in any state or jurisdiction to register or
qualify any or all of the Shares or to claim an exemption
therefrom or provided to any state or jurisdiction to exempt the
Company as a broker-dealer or its officers, directors and
employees as broker-dealers or agent, under the securities laws
thereof (collectively, the "Blue Sky Application"), or any
document, advertisement, oral statement or communication ("Sales
Information") prepared, made or executed by or on behalf of the
Company, the MHC, the Mid-Tier Holding Company or the
Association with their consent or based upon written or oral
information furnished by or on behalf of the Company, the MHC,
the Mid-Tier Holding Company or the Association, whether or not
filed in any jurisdiction, in order to qualify or register the
Shares or to claim an exemption therefrom under the securities
laws thereof; (iii) arise out
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of or are based upon the omission or alleged omission to state
in any of the foregoing documents or information a material fact
required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which
they were made, not misleading; or (iv) arise from any theory of
liability whatsoever relating to or arising from or based upon
the Registration Statement (or any amendment or supplement
thereto), preliminary or final Prospectus (or any amendment or
supplement thereto), the Conversion Application, including the
Members' Proxy Statement and the Stockholders' Proxy Statement,
(or any amendment or supplement thereto), any Blue Sky
Application or Sales Information or other documentation
distributed in connection with the Conversion; provided,
however, that no indemnification is required under this
paragraph (a) to the extent such losses, claims, damages,
liabilities or actions arise out of or are based upon any untrue
material statement or alleged untrue material statement in, or
material omission or alleged material omission from, the
Registration Statement (or any amendment or supplement thereto),
preliminary or final Prospectus (or any amendment or supplement
thereto), the Conversion Application, any Blue Sky Application
or Sales Information made in reliance upon and in conformity
with information furnished in writing to the Company, the MHC,
the Mid-Tier Holding Company or the Association by the Agent or
its counsel regarding the Agent, provided, that it is agreed and
understood that the only information furnished in writing to the
Company, the MHC, the Mid-Tier Holding Company or the
Association by the Agent regarding the Agent is set forth in the
Prospectus under the caption "The Conversion - Plan of
Distribution; Selling Agent Compensation;" and, provided
further, that the Company, the MHC, the Mid-Tier Holding
---------------- Company and the Association shall not be liable
under clause (i) of the foregoing indemnification provision to
the extent that any loss, claim, damage, liability or action is
found in a final judgment by a court of competent jurisdiction
to have resulted from the Agent's bad faith or gross negligence.
Notwithstanding anything to the contrary in this Agreement, the
Company, the MHC, the Mid-Tier Holding Company and/or the
Association shall not provide any indemnification under this
Agreement to the extent prohibited by applicable law, rule,
order or directive by the OTS or the SEC.
(b) The Agent agrees to indemnify and hold harmless, the Company,
the Mid-Tier Holding Company, the MHC and the Association, their
directors and officers and each person, if any, who controls the
Company or the Association within the meaning of Section 15 of
the 1933 Act or Section 20(a) of the 1934 Act against any and
all loss, liability, claim, damage or expense whatsoever
(including but not limited to settlement expenses), joint or
several, which they, or any of them, may suffer or to which
they, or any of them may become subject under all applicable
federal and state laws or otherwise, and to promptly reimburse
the Company, the Mid-Tier Holding Company, the MHC, the
Association, and any such persons upon written demand for any
expenses (including reasonable fees and disbursements of
counsel) incurred by them, or any of them, in connection with
investigating, preparing to defend or defending any actions,
proceedings or claims (whether commenced or threatened) to the
extent such losses, claims, damages,
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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 Conversion Application (or any
amendment or supplement thereto), the preliminary or final
Prospectus (or any amendment or supplement thereto), any Blue
Sky Application or Sales Information, (ii) 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, or
(iii) arise from any theory of liability whatsoever relating to
or arising from or based upon the Registration Statement (or any
amendment or supplement thereto), preliminary or final
Prospectus (or any amendment or supplement thereto), the
Conversion Application (or any amendment or supplement thereto),
or any Blue Sky Application or Sales Information or other
documentation distributed in connection with the Conversion;
provided, however, that the Agent's obligations under this
Section 8(b) shall exist only if and only to the extent that
such untrue statement or alleged untrue statement was made in,
or such material fact or alleged material fact was omitted from,
the Registration Statement (or any amendment or supplement
thereto), the preliminary or final Prospectus (or any amendment
or supplement thereto), the Conversion Application (or any
amendment or supplement thereto), any Blue Sky Application or
Sales Information in reliance upon and in conformity with
information furnished in writing to the Company, the MHC, the
Mid-Tier Holding Company or the Association by the Agent or its
counsel regarding the Agent, provided, that it is agreed and
understood that the only information furnished in writing to the
Company, the MHC, the Mid-Tier Holding Company or the
Association by the Agent regarding the Agent is set forth in the
Prospectus 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 8 or
otherwise. An indemnifying party may participate at its own
expense in the defense of such action. In addition, if it so
elects within a reasonable time after receipt of such notice, an
indemnifying party, jointly with any other indemnifying parties
receiving such notice, may assume defense of such action with
counsel chosen by it and approved by the indemnified parties
that are defendants in such action, unless such indemnified
parties reasonably object to such assumption on the ground that
there may be legal defenses available to them that are different
from or in addition to those available to such indemnifying
party. If an indemnifying party assumes the defense of such
action, the indemnifying parties shall not be liable for any
fees and expenses of counsel for the indemnified parties
incurred thereafter in connection with such action, proceeding
or claim, other than reasonable costs of investigation. In no
event shall the indemnifying parties be liable for the fees and
-36-
expenses of more than one separate firm of attorneys (and any
special counsel that said firm may retain) for each indemnified
party in connection with any one action, proceeding or claim or
separate but similar or related actions, proceedings or claims
in the same jurisdiction arising out of the same general
allegations or circumstances.
(d) The agreements contained in this Section 8 and in Section 9
hereof and the representations and warranties of the Company,
the MHC, the Mid-Tier Holding Company and the Association set
forth in this Agreement shall remain operative and in full force
and effect regardless of: (i) any investigation made by or on
behalf of the Agent or its officers, directors or controlling
persons, agent or employees or by or on behalf of the Company,
the MHC, the Mid-Tier Holding Company or the Association or any
officers, directors, trustees or controlling persons, agent or
employees of the Company, the MHC, the Mid-Tier Holding Company
or the Association; (ii) delivery of and payment hereunder for
the Shares; or (iii) any termination of this Agreement.
SECTION 9. CONTRIBUTION. In order to provide for just and equitable
contribution in circumstances in which the indemnification provided for in
Section 8 is due in accordance with its terms but is for any reason held by a
court to be unavailable from the Company, the MHC, the Mid-Tier Holding Company,
the Association or the Agent, the Company, the MHC, the Mid-Tier Holding
Company, the Association and the Agent shall contribute to the aggregate losses,
claims, damages and liabilities (including any investigation, legal and other
expenses incurred in connection with, and any amount paid in settlement of, any
action, suit or proceeding, but after deducting any contribution received by the
Company, the MHC, the Mid-Tier Holding Company, the Association or the Agent
from persons other than the other parties thereto, who may also be liable for
contribution) in such proportion so that the Agent is responsible for that
portion represented by the percentage that the fees paid to the Agent pursuant
to Section 2 of this Agreement (not including expenses) bears to the gross
proceeds received by the Company from the sale of the Shares in the Offering,
and the Company, the MHC, the Mid-Tier Holding Company and the Association shall
be responsible for the balance. If, however, the allocation provided above is
not permitted by applicable law, then each indemnifying party shall contribute
to such amount paid or payable by such indemnified party in such proportion as
is appropriate to reflect not only such relative fault of the Company, the MHC,
the Mid-Tier Holding Company and the Association 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 thereto), but also the relative benefits received by the Company, the
MHC, the Mid-Tier Holding Company and the Association on the one hand and the
Agent on the other from the Offering (before deducting expenses). The relative
fault shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
Company, the MHC, the Mid-Tier Holding Company and/or the Association 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 Company, the MHC, the Mid-Tier Holding Company, the
Association and the Agent agree that it would not be just and equitable if
contribution pursuant to this Section 9 were determined by pro-rata
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allocation or by any other method of allocation which does not take into account
the equitable considerations referred to above in this Section 9. The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages or liabilities (or actions, proceedings or claims in respect thereof)
referred to above in this Section 9 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 pursuant to Section 8(b) or
this Section 9 which in the aggregate exceeds the amount paid (excluding
reimbursable expenses) to the Agent under this Agreement. It is understood that
the above stated limitation on the Agent's liability is essential to the Agent
and that the Agent would not have entered into this Agreement if such limitation
had not been agreed to by the parties to this Agreement. No person found guilty
of any fraudulent misrepresentation (within the meaning of Section 11(f) of the
0000 Xxx) shall be entitled to contribution from any person who was not found
guilty of such fraudulent misrepresentation. The obligations of the Company, the
MHC, the Mid-Tier Holding Company, the Association and the Agent under this
Section 9 and under Section 8 shall be in addition to any liability which the
Company, the MHC, the Mid-Tier Holding Company, the Association and the Agent
may otherwise have. For purposes of this Section 9, each of the Agent's, the
Company's, the MHC's, the Mid-Tier Holding Company's or the Association's
officers and directors and each person, if any, who controls the Agent or the
Company, the MHC, the Mid-Tier Holding Company or the Association within the
meaning of the 1933 Act and the 1934 Act shall have the same rights to
contribution as the Agent, the Company, the MHC, the Mid-Tier Holding Company or
the Association. 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 9, 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 9. Notwithstanding anything to
the contrary in this Agreement, the Company, the MHC, the Mid-Tier Holding
Company and/or the Association shall not provide any contribution under this
Agreement to the extent prohibited by applicable law, rule, order or directive
by the OTS or the SEC.
SECTION 10. SURVIVAL OF AGREEMENTS, REPRESENTATIONS AND INDEMNITIES. The
respective indemnities of the Company, the MHC, the Mid-Tier Holding Company,
the Association and the Agent and the representations and warranties and other
statements of the Company, the MHC, the Mid-Tier Holding Company, the
Association and the Agent set forth in or made pursuant to this Agreement shall
remain in full force and effect, regardless of any termination or cancellation
of this Agreement or any investigation made by or on behalf of the Agent, the
Company, the MHC, the Mid-Tier Holding Company, the Association or any
controlling person referred to in Section 8 hereof, and shall survive the
issuance of the Shares, and any successor or assign of the Agent, the Company,
the MHC, the Mid-Tier Holding Company, the Association, and any such controlling
person shall be entitled to the benefit of the respective agreements,
indemnities, warranties and representations.
-38-
SECTION 11. TERMINATION. The Agent may terminate this Agreement by
giving the notice indicated below in this Section 11 at any time after this
Agreement becomes effective as follows:
(a) In the event the Company fails to sell the required minimum
number of the Shares by June 30, 2005, and in accordance with
the provisions of the Plan or as required by the Conversion
Regulations, and applicable law, this Agreement shall terminate
upon refund by the Company to each person who has subscribed for
or ordered any of the Shares the full amount which it may have
received from such person, together with interest as provided in
the Prospectus, and no party to this Agreement shall have any
obligation to the other hereunder, except as set forth in
Sections 2(a), 6, 8 and 9 hereof.
(b) If any of the conditions specified in Section 7 shall not have
been fulfilled when and as required by this Agreement, unless
waived in writing, or by the Closing Date, this Agreement and
all of the Agent's obligations hereunder may be canceled by the
Agent by notifying the Company, the MHC, the Mid-Tier Holding
Company and the Association of such cancellation in writing or
by telegram at any time at or prior to the Closing Date, and any
such cancellation shall be without liability of any party to any
other party except as otherwise provided in Sections 2(a), 6, 8
and 9 hereof.
(c) In the event one of the Company, the MHC, the Mid-Tier Holding
Company or the Association is in material breach of the
representations and warranties or covenants contained in
Sections 4 and 5 and such breach has not been cured after the
Agent has provided the Company, the MHC, the Mid-Tier Holding
Company and the Association with notice of such breach.
If the Agent elects to terminate this Agreement as provided in this
Section, the Company, the MHC and the Mid-Tier Holding Company and the
Association shall be notified promptly by telephone or telegram, confirmed by
letter.
The Company, the MHC, the Mid-Tier Holding Company and the Association
may terminate this Agreement in the event the Agent is in material breach of the
representations and warranties or covenants contained in Section 5 and such
breach has not been cured after the Company, the MHC, the Mid-Tier Holding
Company and the Association have provided the Agent with notice of such breach.
This Agreement may also be terminated by mutual written consent of the
parties hereto.
SECTION 12. NOTICES. All communications hereunder, except as herein
otherwise specifically provided, shall be mailed in writing and if sent to the
Agent shall be mailed, delivered or telegraphed and confirmed to Xxxxx, Xxxxxxxx
& Xxxxx, Inc., 000 Xxxxxxxxx Xxxxx, Xxxxxx, Xxxx 00000-0000, Attention: Xx.
Xxxxxx Xxxxxx (with a copy to Xxxxxx & Xxxxxxxxx LLP, Attention: Xxxxxx X.
Xxxxxxx, Esq.), and, if sent to the Company, the MHC, the Mid-Tier Holding
Company and the Association, shall be mailed, delivered or telegraphed and
confirmed to the Company, the MHC, the Mid-Tier Holding Company and the
Association at
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DSA Financial Corporation, 000 Xxxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxx 00000,
Attention: Xxxxxx X. Xxxxxxx, President and Chief Executive Officer (with a copy
to Xxxx Xxxxxx Xxxxxxxx & Xxxxxx, P.C., Attention: Xxx Xxxxx, Esq.).
SECTION 13. PARTIES. The Company, the MHC, the Mid-Tier Holding Company
and the Association shall be entitled to act and rely on any request, notice,
consent, waiver or agreement purportedly given on behalf of the Agent when the
same shall have been given by the undersigned. The Agent shall be entitled to
act and rely on any request, notice, consent, waiver or agreement purportedly
given on behalf of the Company, the MHC, the Mid-Tier Holding Company or the
Association, when the same shall have been given by the undersigned or any other
officer of the Company, the MHC, the Mid-Tier Holding Company or the
Association. This Agreement shall inure solely to the benefit of, and shall be
binding upon, the Agent, the Company, the MHC, the Mid-Tier Holding Company, the
Association, and their respective successors and assigns, and no other person
shall have or be construed to have any legal or equitable right, remedy or claim
under or in respect of or by virtue of this Agreement or any provision herein
contained. It is understood and agreed that this Agreement is the exclusive
agreement among the parties hereto, and supersedes any prior agreement among the
parties (except for specific references to the letter agreement with the Agent)
and may not be varied except in writing signed by all the parties.
SECTION 14. CLOSING. The closing for the sale of the Shares shall take
place on the Closing Date at such location as mutually agreed upon by the Agent
and the Company, the MHC, the Mid-Tier Holding Company and the Association. At
the closing, the Company, the MHC, the Mid-Tier Holding Company and the
Association shall deliver to the Agent in next day funds the commissions, fees
and expenses due and owing to the Agent as set forth in Sections 2 and 6 hereof
and the opinions and certificates required hereby and other documents deemed
reasonably necessary by the Agent shall be executed and delivered to effect the
sale of the Shares as contemplated hereby and pursuant to the terms of the
Prospectus.
SECTION 15. PARTIAL INVALIDITY. In the event that any term, provision or
covenant herein or the application thereof to any circumstance 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 circumstances
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 16. CONSTRUCTION. This Agreement shall be construed in
accordance with the laws of the State of New York.
SECTION 17. COUNTERPARTS. This Agreement may be executed in separate
counterparts, each of which so executed and delivered shall be an original, but
all of which together shall constitute but one and the same instrument.
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If the foregoing correctly sets forth the arrangement among the Company,
the MHC, the Mid-Tier Holding Company, the Association and the Agent, please
indicate acceptance thereof in the space provided below for that purpose,
whereupon this letter and the Agent's acceptance shall constitute a binding
agreement.
Very truly yours,
DEARBORN MUTUAL HOLDING COMPANY DSA FINANCIAL CORPORATION
(a Delaware corporation)
By Its Authorized By Its Authorized
Representative: Representative:
--------------------------------------- -------------------
Xxxxxx X. Xxxxxxx Xxxxxx X. Xxxxxxx
President and Chief Executive Officer President and Chief Executive
Officer
DEARBORN SAVINGS ASSOCIATION, X.X. XXXXXXXX FINANCIAL CORPORATION
(a federal corporation)
By Its Authorized By Its Authorized
Representative: Representative:
--------------------------------------- -------------------
Xxxxxx X. Xxxxxxx Xxxxxx X. Xxxxxxx
President and Chief Executive Officer President and Chief Executive
Officer
Accepted as of the date first above written
Xxxxx, Xxxxxxxx & Xxxxx, Inc.
By Its Authorized
Representative:
---------------------------------------
Xxxxxxxx X. XxXxxxx
Managing Director
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