EXHIBIT 1.2
FIRST FEDERAL FINANCIAL SERVICES, INC.
(a federal stock corporation)
1,914,750 Shares
(subject to increase to 2,201,963 shares)
COMMON SHARES ($.10 Par Value)
Subscription Price $10.00 Per Share
AGENCY AGREEMENT
______________, 2004
Xxxxx, Xxxxxxxx & Xxxxx, Inc.
000 Xxxxxxxxx Xxxxx
Xxxxxx, Xxxx 00000-0000
Ladies and Gentlemen:
First Federal Financial Services MHC, a federal mutual holding company
(the "MHC"), First Federal Financial Services, Inc., a federal corporation (the
"Company"), and First Federal Savings and Loan Association of Edwardsville, a
federally chartered savings and loan association located in Edwardsville,
Illinois (the "Bank") (references to the "Bank" include the Bank in the mutual
or stock form, as indicated by the context), with its deposit accounts insured
by the Savings Association Insurance Fund ("SAIF") administered by the Federal
Deposit Insurance Corporation ("FDIC"), hereby confirm their agreement with
Xxxxx, Xxxxxxxx & Xxxxx, Inc. (the "Agent") as follows:
SECTION 1. THE OFFERING. The Company, in accordance with its Stock
Issuance Plan adopted by its Board of Directors (the "Plan"), will offer and
sell up to 1,914,750 shares (subject to increase to 2,201,963 shares) of its
common stock, $.10 par value per share (the "Shares" or "Common Shares"), in a
subscription offering (the "Subscription Offering") to (1) depositors of the
Bank with Qualifying Deposits (as defined in the Plan) as of September 30, 2002
("Eligible Account Holders"), (2) the Employee Stock Ownership Plan of the Bank
(the "ESOP") and (3) depositors of the Bank with Qualifying Deposits as of March
31, 2004 ("Supplemental Eligible Account Holders"). Subject to the prior
subscription rights of the above-listed parties, the Company may offer for sale
in a community offering (the "Community Offering" and when referred to together
with or subsequent to the Subscription Offering, the "Subscription and Community
Offering") conducted concurrently with 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 first to people who are residents of Madison County,
Illinois. It is anticipated that shares not subscribed for in the Subscription
and Community Offering may 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 maximum and minimum purchase limitations as described in the Plan
and that the Company and the Bank may reject, in whole or in part, any orders
received in the Community Offering or Syndicated Community Offering. The Common
Shares offered for sale in the Offering will represent a minority ownership
interest of 45% of the Company* s total outstanding shares of Common Shares. The
Company will issue the Shares at a purchase price of $10.00 per share (the
"Purchase Price").
The Company has filed with the Securities and Exchange Commission (the
"Commission") 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 Commission 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 Commission under the 1933
Act (the "1933 Act Regulations") differing from the prospectus on file at the
time the 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 Commission.
In accordance with Title 12, Part 575 of the Code of Federal Regulations
(the "MHC Regulations"), the Bank has filed with the Office of Thrift
Supervision ("OTS") a Form MHC-2 Application for Approval of a Minority Stock
Issuance by a Subsidiary of a Mutual Holding Company (the "MHC Application"),
including the Prospectus and the Valuation Appraisal Report prepared by Xxxxxx &
Company, Inc. (the "Appraisal") and has filed such amendments thereto as may
have been required by the OTS. The MHC Application has been approved by the OTS
and the related Prospectus has been authorized for use by the OTS.
SECTION 2. RETENTION OF AGENT; COMPENSATION; SALE AND DELIVERY OF THE
SHARES. Subject to the terms and conditions herein set forth, the Company and
the Bank hereby appoint the Agent as their exclusive financial advisor and
marketing agent (i) to utilize its best efforts to solicit subscriptions for
Common Shares and to advise and assist the Company and the Bank with respect to
the Company* s sale of the Shares in the Offering and (ii) to participate in the
Offering in the areas of market making, research coverage and in syndicate
formation (if necessary).
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 and
the Bank as to the matters set forth in the letter agreement, dated November 21,
2003, between the Bank and the Agent (a copy of which is attached hereto as
Exhibit A). It is acknowledged by the Company and the Bank that the Agent
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shall not be required to purchase any Shares or be obligated to take any action
which is inconsistent with all applicable laws, regulations, decisions or
orders.
The obligations of the Agent pursuant to this Agreement (other than
those set forth in Section 2(a) and (c) hereof) shall terminate upon the
completion or termination or abandonment of the Plan by the Company 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 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 Bank 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 1,415,250 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 which 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. 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 and expenses due to the date of such
termination pursuant to subparagraphs (a) and (d) below.
If all conditions precedent to the consummation of the Offering,
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 Bank 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 commencing with the adoption of the Plan. This
fee shall be due as it is earned and shall be non-refundable.
(b) A success fee upon completion of the Offering of 1.35% of the
aggregate Purchase Price of the Common Shares sold in the Subscription
Offering and Community Offering, excluding shares purchased by the
Bank's officers, directors, or employees (or members of their immediate
family) plus any ESOP, tax-qualified or stock based compensation plans
(except IRAs) or similar plan created by the Bank for some or all of its
directors or employees. The management fee described in subparagraph
2(a) will be applied against this success fee.
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(c) If any of the Common Shares remain available after the
Subscription Offering, at the request of the Bank, the Agent 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. The Agent will endeavor to distribute the Common Shares among
the Selected Dealers in a fashion which best meets the distribution
objectives of the Bank and the Plan. The Agent will be paid a fee not to
exceed 5.5% of the aggregate Purchase Price of the Shares sold by the
Selected Dealers. The Agent will pass onto the Selected Dealers who
assist in the Syndicated Community Offering an amount competitive with
gross underwriting discounts charged at such time for comparable amounts
of stock sold at a comparable price per share in a similar market
environment. Fees with respect to purchases effected with the assistance
of Selected Dealers other than the Agent shall be transmitted by the
Agent to such Selected Dealers. The decision to utilize Selected Dealers
will be made by the Bank upon consultation with the Agent. In the event
any fees are paid pursuant to this subparagraph 2(c), such fees shall be
in lieu of, and not in addition to any fees for the sale of Shares
payable pursuant to subparagraph 2(b).
(d) The Bank and Company shall reimburse the Agent for reasonable
out-of-pocket expenses, including costs of travel, meals and lodging,
photocopying, telephone, facsimile and couriers. The Bank and Company
shall reimburse the Agent for the fees of its counsel (which do not
include legal fees to complete the qualification of the Common Shares
under the various state securities "Blue Sky" laws) up to $35,000. The
Bank 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 Bank* s
accountants, attorneys, appraiser, transfer agent and registrar,
printing, mailing and marketing expenses associated with the
reorganization; and the fees set forth under this Section 2. The Company
or the Bank will reimburse the Agent for any such expenses incurred by
the Agent on their behalf.
Full payment of Agent* s actual and accountable expenses, advisory fees
and compensation shall be made in next day funds on the earlier of the Closing
Date or a determination by the Bank to terminate or abandon the Plan.
SECTION 3. SALE AND DELIVERY OF SHARES. If all conditions precedent to
the consummation of the Offering, 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 MHC, the Company and the Bank 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."
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SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE MHC, THE COMPANY AND
THE BANK. The MHC, the Company and the Bank jointly and severally represent and
warrant to and agree with the Agent as follows:
(a) The Registration Statement which was prepared by the Company and
the Bank and filed with the Commission has been declared effective by
the Commission, no stop order has been issued with respect thereto and
no proceedings therefor have been initiated or, to the knowledge of the
Company, the Bank and the MHC, threatened by the Commission. At the time
the Registration Statement, including the Prospectus contained therein
(including any amendment or supplement), became effective and at the
closing time, the Registration Statement complied and will comply 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 regarding the Company or the Bank contained in Sales
Information (as such term is defined in Section 8 hereof) authorized by
the Company or the Bank for use in connection with the Offering, did not
contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading, and at the time any Rule 424(b) or (c) Prospectus
is filed with the Commission and at the Closing Date referred to in
Section 2, the Prospectus (including any amendment or supplement
thereto) and any information regarding the Company or the Bank contained
in Sales Information (as such term is defined in Section 8 hereof)
authorized by the Company or the Bank for use in connection with the
Offering will contain all statements that are required to be stated
therein in accordance with the 1933 Act and the 1933 Act Regulations and
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) shall not apply to statements or omissions made in reliance
upon and in conformity with written information furnished to the Company
or the Bank by the Agent or its counsel expressly regarding the Agent
for use in the Prospectus under the caption "The Stock Offering-- Plan
of Distribution and Marketing Arrangements" or statements in or
omissions from any Sales Information or information filed pursuant to
state securities or blue sky laws or regulations regarding the Agent.
(b) The MHC Application which was prepared by the Company and the
Bank and filed with the OTS has been approved by the OTS and the related
Prospectus have been authorized for use by the OTS and the MHC
Application complied in all material respects with the MHC Regulations.
No order has been issued by the OTS or the Federal Deposit Insurance
Corporation (the "FDIC") (hereinafter any reference to the FDIC shall
include the SAIF) preventing or suspending the use of the Prospectus,
and no action by or before any such government entity to revoke any
approval, authorization or order of effectiveness related to the
Offering is, to the best knowledge of the Company or the Bank, pending
or threatened. At the time of the approval of the MHC Application,
including the Prospectus (including any amendment or supplement
thereto), by the OTS and at all times subsequent thereto until the
Closing Date, the MHC Application, including the Prospectus (including
any amendment or supplement thereto), will comply
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in all material respects with the MHC Regulations, except to the extent
waived in writing by the OTS. The MHC Application, including the
Prospectus (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(b) shall not apply to statements or
omissions made in reliance upon and in conformity with written
information furnished to the Company or the Bank by the Agent or its
counsel expressly regarding the Agent for use in the Prospectus
contained in the MHC Application under the caption "The Stock
Offering--Plan of Distribution and Marketing Arrangements" or statements
in or omissions from any sales information or information filed pursuant
to state securities or blue sky laws or regulations regarding the Agent.
(c) The Company and the MHC have registered with the OTS as savings
and loan holding companies under the Home Owners Loan Act, as amended
("HOLA").
(d) At the Closing Date, the Plan will have been adopted by the
Board of Directors of the Company, and the offer and sale of the Shares
will have been conducted in all material respects in accordance with the
Plan, the MHC Regulations, and all other applicable laws, regulations,
decisions and orders, including all terms, conditions, requirements and
provisions precedent to the Offering imposed upon the MHC, the Company
or the Bank by the OTS, the Commission, or any other regulatory
authority and in the manner described in the Prospectus. To the best
knowledge of the MHC, the Company and the Bank, no person has sought to
obtain review of the final action of the OTS in approving the Plan.
(e) The Bank has been duly organized and is a validly existing
federally-chartered savings bank association in permanent capital stock
form of organization, duly authorized to conduct its business and own
its property as described in the Registration Statement and the
Prospectus; the Bank has obtained all licenses, permits and other
governmental authorizations currently required for the conduct of its
business, except those that individually or in the aggregate would not
materially adversely affect the financial condition, results of
operations or business of the Bank; all such licenses, permits and
governmental authorizations are in full force and effect, and the Bank
is in compliance with all material laws, rules, regulations and orders
applicable to the operation of its business, except where failure to be
in compliance would not materially adversely affect the financial
condition, results of operations or business of the Bank, the Bank 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 have a material adverse effect on the
financial condition, results of operations or business of the Bank. The
Bank does not own equity securities or any equity interest in any other
business enterprise except as described in the Prospectus or as would
not be material to the operations of the Bank. Upon completion of the
sale by the Company of the Shares contemplated by the Prospectus, (i)
all of the authorized and outstanding capital stock of the Bank will be
owned by the Company and (ii) the Company will have no direct
subsidiaries other than the Bank. The Offering will be
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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-Offering reports, and documents in
compliance with the 1933 Act Regulations, the MHC Regulations or letters
of approval at the time of the Closing all terms, conditions,
requirements and provisions with respect to the Offering imposed by the
Commission, the OTS and the FDIC, if any, will have been complied with
by the Company and the Bank in all material respects or appropriate
waivers will have been obtained and all material notice and waiting
periods will have been satisfied, waived or elapsed.
(f) The Company is, and as of the Closing Date, will continue to be
duly incorporated and validly existing as a corporation 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, and at the
Closing Date the Company will be 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,
results of operations or business of the Company. At the Closing Date
the Company will have 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, results of
operations or business of the Company and the Bank, taken as a whole;
all such licenses, permits and governmental authorizations will be in
full force and effect, and the Company will be in all material respects
complying with all laws, rules, regulations and orders applicable to the
operation of its business.
(g) The MHC is and, as of the Closing Date will continue to be duly
incorporated and validly existing as a corporation 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, and at the
Closing Date the MHC will be 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,
results of operations or business of the Company and the Bank, taken as
a whole. The MHC will have 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, results of
operations or business of the Company and the Bank, taken as a whole;
all such licenses, permits and governmental authorizations will be in
full force and effect, and the MHC will be in all material respects
complying with all laws, rules, regulations and orders applicable to the
operation of its business.
(h) The MHC does not own any equity securities or any equity
interest in any business enterprise except as described in the
Prospectus.
(i) The MHC is not authorized to issue any shares of its capital
stock.
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(j) The Bank is a member of the Federal Home Loan Bank of Chicago
("FHLB-Chicago"). The deposit accounts of the Bank 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 MHC, the Company or the Bank, threatened. The Bank is a "qualified
thrift lender" within the meaning of 12 U.S.C. ss.l467(a)(m).
(k) The Bank, the Company and the MHC, have good and marketable
title to all real property and good title to all other assets material
to the business of the Company and the Bank, taken as a whole, and to
those properties and assets described in the Registration Statement and
Prospectus as owned by them, free and clear of all liens, charges,
encumbrances or restrictions, except such as are described in the
Registration Statement and Prospectus, or are not material to the
business of the Company and the Bank, taken as a whole; and all of the
leases and subleases material to the business of the Company and the
Bank, taken as a whole, under which the MHC, the Company or the Bank
hold properties, including those described in the Registration Statement
and Prospectus, are in full force and effect.
(l) The Company and the Bank have received an opinion of their
special counsel, Xxxx Xxxxxx Xxxxxxxx & Xxxxxx P.C., with respect to the
federal income tax consequences of the Offering, and an opinion of RSM
McGladrey, Inc. with respect to the Illinois income tax consequences of
the Offering; all material aspects of such opinions are accurately
summarized in the Registration Statement and the Prospectus. The MHC,
the Company and the Bank represent and warrant that the facts upon which
such opinions are based are truthful, accurate and complete. Neither the
Company, the Bank nor the MHC will take any action inconsistent
therewith.
(m) The Company, the MHC and the Bank have all such power,
authority, authorizations, approvals and orders as may be required to
enter into this Agreement, to carry out the provisions and conditions
hereof and to issue and sell the Shares to be sold by the Company as
provided herein and as described in the Prospectus, subject to approval
or confirmation by the OTS of the final appraisal of the Company. 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 and the Bank. This Agreement has been validly executed
and delivered by the Company, the MHC and the Bank and is the valid,
legal and binding agreement of the Company, the MHC and the Bank
enforceable in accordance with its terms (except as the enforceability
thereof may be limited by bankruptcy, insolvency, moratorium,
reorganization or similar laws relating to or affecting the enforcement
of creditors* rights generally or the rights of creditors of savings and
loan holding companies, the accounts of whose subsidiaries are insured
by the FDIC, or by general equity principles, regardless of whether such
enforceability is considered in a proceeding in equity or at law, and
except to the extent, if any, that the provisions of Sections 8 and 9
hereof may be unenforceable as against public policy).
(n) Neither the Bank, the Company nor the MHC is in violation of any
directive received from the OTS, the FDIC, or any other agency to make
any material change in the method of conducting their businesses so as
to comply in all material respects with all
8
applicable statutes and regulations (including, without limitation,
regulations, decisions, directives and orders of the OTS and the FDIC)
and, except as may be set forth in the Registration Statement and the
Prospectus, there is no suit or proceeding or charge or action before or
by any court, regulatory authority or governmental agency or body,
pending or, to the knowledge of the MHC, the Company or the Bank,
threatened, which might materially and adversely affect the Offering,
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, results of
operations or business of the MHC, the Company or the Bank, or which
would materially affect their properties and assets.
(o) The financial statements, schedules and notes related thereto
which are included in the Prospectus fairly present the balance sheet,
income statement, statement of changes in equity capital and statement
of cash flows of the Company 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. Such financial statements,
schedules and notes related thereto have been prepared in accordance
with generally accepted accounting principles ("GAAP") consistently
applied through the periods involved, present fairly in all material
respects the information required to be stated therein and are
consistent with the most recent financial statements and other reports
filed by the Bank with the OTS, except that accounting principles
employed in such regulatory filings conform to the requirements of the
OTS 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 Bank included in
the Prospectus, and as to the pro forma adjustments, the adjustments
made therein have been properly applied on the basis described therein.
(p) 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, financial or otherwise, in the
condition of the MHC, the Company or the Bank and its subsidiaries,
considered as one enterprise, or in the earnings, capital properties or
business of the MHC, the Company or the Bank, 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 Bank or in the principal amount of
the Bank* s assets which are classified by the Bank 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 Bank, nor has the MHC, the Company or the Bank
issued any securities (other than in connection with the incorporation
of the Company) 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 MHC, the Company or the
Bank; (iv) there has not been any material adverse change in the
aggregate dollar amount of the Bank's deposits or its net worth; (v)
there has been no material adverse change in the MHC* s, the Company* s
or the Bank* s relationship with its insurance carriers, including,
without limitation, cancellation or other termination of the MHC* s, the
Company* s or the Bank* s fidelity bond or any other type of insurance
coverage; (vi) except as disclosed in the Prospectus,
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there has been no material change in management of the MHC, the Company
or the Bank; (vii) neither the MHC, the Company nor the Bank 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) neither the MHC,
the Company nor the Bank has defaulted in the payment of principal or
interest on any outstanding debt obligations; (ix) the capitalization,
liabilities, assets, properties and business of the MHC, the Company and
the Bank conform in all material respects to the descriptions thereof
contained in the Prospectus; and (x) neither of the MHC, the Company and
the Bank have any material contingent liabilities, except as set forth
in the Prospectus.
(q) Neither the MHC, the Company nor the Bank is or will be (i) in
violation of its charter or articles of incorporation, respectively, or
bylaws and/or constitution 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 the 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 MHC, the Company or the Bank pursuant to the Charter and
Bylaws of the Company and the MHC or the Articles of Incorporation,
Constitution and Bylaws of the Bank or any material contract, lease or
other instrument in which the MHC, the Company or the Bank has a
beneficial interest, or any applicable law, rule, regulation or order;
(ii) violate any authorization, approval, judgment, decree, order,
statute, rule or regulation applicable to the MHC, the Company or the
Bank, except for such violations which would not have a material adverse
effect on the financial condition and results of operations of the MHC,
the Company and the Bank on a consolidated basis; or (iii) result in the
creation of any material lien, charge or encumbrance upon any property
of the MHC, the Company or the Bank.
(r) All documents made available to or delivered or to be made
available to or delivered by the MHC, the Company and the Bank or their
representatives in connection with the issuance and sale of the Shares,
including records of account holders, depositors and borrowers of the
Bank, or in connection with the Agent's exercise of due diligence,
except for those documents which were prepared by parties other than the
MHC, the Company and the Bank or their representatives, to the best
knowledge of the MHC, the Company and the Bank, 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.
(s) 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
MHC, the Company or the Bank in the due performance and observance of
any term, covenant or condition of any indenture, mortgage, deed of
trust, note, bank loan or credit agreement or any other instrument or
agreement to which the MHC, the Company or the Bank 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 affect on the
financial condition or results of operations of the
10
MHC, the Company and the Bank 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 MHC, the Company and the
Bank, threatened any action or proceeding wherein the MHC, the Company
or the Bank would or might be alleged to be in default thereunder, where
such action or proceeding, if determined adversely to the MHC, the
Company or the Bank, would have a material adverse effect on the
financial condition, results of operations, or business of the MHC, the
Company or the Bank considered as one enterprise.
(t) Upon consummation of the Offering, the authorized, issued and
outstanding equity capital of the Company will be within the range set
forth in the Prospectus under the caption "Capitalization," and no
Shares have been or will be issued and outstanding prior to the Closing
Date (other than Shares held by the MHC); the Shares (including shares
to be issued to the MHC) 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 ESOP 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 Shares will conform in all material respects to the
description thereof contained in the Registration Statement and the
Prospectus. To the best knowledge of the Company and the Bank, 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.
(u) No approval of any regulatory or supervisory or other public
authority is required in connection with the execution and delivery of
this Agreement or the issuance of the Shares, except for the approval of
the Commission and the OTS, 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").
(v) McGladrey & Xxxxxx, LLP, which has certified the audited
financial statements and schedules of the Bank included in the
Prospectus, has advised the MHC, the Company and the Bank in writing
that they are, with respect to the MHC, the Company and the Bank,
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 OTS.
(w) Xxxxxx & Company, Inc., which has prepared the Company* s
Valuation Appraisal Report (as amended or supplemented, if so amended or
supplemented) (the "Appraisal"), has advised the Company in writing that
it is independent of the MHC, the Company and the Bank within the
meaning of the MHC Regulations.
11
(x) The Company, the MHC and the Bank have timely filed all required
federal, state and local tax returns; the Company, the MHC and the Bank
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.
(y) The Bank, the Company and the MHC, is and will be, as the case
may be 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.
(z) To the knowledge of the MHC, the Company and the Bank, neither
the MHC, the Company, the Bank nor employees of the MHC, the Company or
the Bank has made any payment of funds of the MHC, the Company or the
Bank 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.
(aa) Prior to the Offering, neither the MHC, the Company nor the Bank
has: (i) issued any securities within the last 18 months (except for
notes to evidence bank loans and reverse repurchase agreements or other
liabilities in the ordinary course of business or as described in the
Prospectus); (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 MHC, the Company and the Bank
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 Bank until all
Shares are sold and paid for, with provision for refund to the
purchasers in the event that the Offering is not completed for whatever
reason or for delivery to the Company if all Shares are sold.
(bb) The Company, the MHC and the Bank have not relied upon the Agent
or its legal counsel for any legal, tax or accounting advice in
connection with the Offering.
(cc) The records used by the MHC, the Company and the Bank to
determine the identity of Eligible Account Holders and Supplemental
Eligible Account Holders are accurate and complete in all material
respects.
(dd) The Company and the MHC are not required to be registered under
the Investment Company Act of 1940, as amended.
(ee) Neither the Company, the Bank nor the MHC nor any properties
owned or operated by the Company, the Bank or the MHC, is in violation
of or liable under any Environmental Law (as defined below), except for
such violations or liabilities that,
12
individually or in the aggregate, would not have a material adverse
effect on the financial condition, results of operations or business of
the Company, the Bank and the MHC, taken as a whole. There are no
actions, suits or proceedings, or demands, claims, notices or
investigations (including, without limitation, notices, demand letters
or requests for information from any environmental agency) instituted or
pending or, to the knowledge of the Company, the Bank or the MHC,
threatened relating to the liability of any property owned or operated
by the Company, the Bank or the MHC under any Environmental Law. For
purposes of this subsection, the term "Environmental Law" means any
federal, state, local or foreign law, statute, ordinance, rule,
regulation, code, license, permit, authorization, approval, consent,
order, judgment, decree, injunction or agreement with any regulatory
authority relating to (i) the protection, preservation or restoration of
the environment (including, without limitation, air, water, vapor,
surface water, groundwater, drinking water supply, surface soil,
subsurface soil, plant and animal life or any other natural resource),
and/or (ii) the use, storage, recycling, treatment, generation,
transportation, processing, handling, labeling, production, release or
disposal of any substance presently listed, defined, designated or
classified as hazardous, toxic, radioactive or dangerous, or otherwise
regulated, whether by type or by quantity, including any material
containing any such substance as a component.
(ff) The Company will file a registration statement for the Common
Shares under Section 12(g) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act Registration Statement").
(gg) The Company and its subsidiaries maintain a system of internal
accounting controls sufficient to provide reasonable assurance that (A)
transactions are executed in accordance with management* s general or
specific authorizations, (B) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for
assets, (C) access to assets is permitted only in accordance with
management* s general or specific authorization, and (D) the recorded
accounts or assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect thereto. The
books, records and accounts and systems of internal accounting control
of the Company and its subsidiaries comply in all material respects with
the requirements of Section 13(b)(2) of the 1934 Act. The Company
maintains "disclosure controls and procedures" (as defined in Rule 13a-
14(c) under the Exchange Act) that are effective in ensuring that the
information it will be required to disclose in the reports it files or
submits under the Exchange Act is accumulated and communicated to the
Company* s management (including the Company* s chief executive officer
and chief financial officer) in a timely manner and recorded, processed,
summarized and reported within the periods specified in the Commission*
s rules and forms.
(hh) All of the loans represented as assets of the Bank in the
Prospectus meet or are exempt from all requirements of federal, state
and local law pertaining to lending, including, without limitation,
truth in lending (including the requirements of Regulations Z and 12
C.F.R. Part 226), real estate settlement procedures, consumer credit
protection, equal credit opportunity and all disclosure laws applicable
to such loans, except for violations which, if asserted, would not have
a material adverse effect on the financial
13
condition, results of operations, or business of the MHC, the Company or
the Bank considered as one enterprise.
(ii) The MHC, the Company and the Bank have taken all actions
necessary to obtain at Closing a Blue Sky Memorandum from Xxxx Xxxxxx
Xxxxxxxx & Xxxxxx P.C.
(jj) Any certificates signed by an officer of the MHC, the Company or
the Bank 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 MHC, the Company or the Bank
to the Agent as to the matters covered thereby with the same effect as
if such representation and warranty were set forth herein.
SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE AGENT. The Agent
represents and warrants to the MHC, Company and the Bank as follows:
(a) The Agent is a corporation and is validly existing in good
standing under the laws of the State of New York with full power and
authority to provide the services to be furnished to the Bank, the MHC
and the Company hereunder.
(b) The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly and
validly authorized by all necessary action on the part of the Agent, and
this Agreement has been duly and validly executed and delivered by the
Agent and is a legal, valid and binding agreement of the Agent,
enforceable in accordance with its terms, except as the legality,
validity, binding nature and enforceability thereof may be limited by
(i) bankruptcy, insolvency, moratorium, reorganization, conservatorship,
receivership or other similar laws relating to or affecting the
enforcement of creditors' rights generally, and (ii) general equity
principles regardless of whether such enforceability is considered in a
proceeding in equity or at law.
(c) Each of 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.
(d) The execution and delivery of this Agreement by the Agent, the
consummation of the transactions contemplated hereby and compliance with
the terms and provisions hereof will not conflict with, or result in a
breach of, any of the terms, provisions or conditions of, or constitute
a default (or an event which with notice or lapse of time or both would
constitute a default) under, the Articles of Incorporation or Bylaws of
the Agent or any agreement, indenture or other instrument to which the
Agent is a party or by which it or its property is bound.
(e) No 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.
14
(f) 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 under this Agreement.
SECTION 5.1 COVENANTS OF THE MHC, THE COMPANY AND THE BANK. The MHC, the
Company and the Bank hereby jointly and severally covenant with the Agent as
follows:
(a) The Company will not, at any time after the date the
Registration Statement is declared effective, file any amendment or
supplement to the Registration Statement without providing 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 and the Bank will not, at any time after the MHC
Application is approved by the OTS, file any amendment or supplement to
such MHC Application without providing the Agent and its counsel an
opportunity to review such amendment or supplement or file any amendment
or supplement to which amendment or supplement the Agent or its counsel
shall reasonably object.
(c) The Company, the MHC and the Bank will use their best efforts to
cause any post-effective amendment to the Registration Statement to be
declared effective by the Commission and any post-effective amendment to
the MHC 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 MHC Application, as amended, has been approved
by the OTS; (iii) of any comments from the Commission, the OTS or any
other governmental entity with respect to the Offering or the
transactions contemplated by this Agreement; (iv) of the request by the
Commission, the OTS or any other governmental entity for any amendment
or supplement to the Registration Statement, the MHC Application or for
additional information; (v) of the issuance by the Commission, the OTS
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 or the Bank under the MHC
Regulations, or other applicable law, or the threat of any such action;
(vi) of the issuance by the Commission, the OTS 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) of the occurrence of any event mentioned in
paragraph (h) below. The Company, the MHC and the Bank will make every
reasonable effort (i) to prevent the issuance by the Commission, the OTS
or any other state authority of any such order and, (ii) if any such
order shall at any time be issued, to obtain the lifting thereof at the
earliest possible time.
(d) The Company, the MHC and the Bank will deliver to the Agent and
to its counsel two conformed copies of the Registration Statement, the
MHC Application and as originally filed and of each amendment or
supplement thereto, including all exhibits. Further, the Company and the
Bank will deliver such additional copies of the foregoing documents to
counsel to the Agent as may be required for any NASD filings.
15
(e) The Company, the MHC and the Bank 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 Securities Exchange Act of 1934 (the "1934 Act"),
such number of copies of such Prospectus (as amended or supplemented) as
the Agent may reasonably request for the purposes contemplated by the
1933 Act, the 1933 Act Regulations, the 1934 Act or the rules and
regulations promulgated under the 1934 Act (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.
(f) The Company, the MHC and the Bank will comply with any and all
material terms, conditions, requirements and provisions with respect to
the Offering and the transactions contemplated thereby imposed by the
Commission, the OTS or the MHC 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 and the Bank will comply, at their own expense, with all
material requirements imposed upon them by the Commission, the OTS or
the MHC 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.
(g) If, at any time during the period when the Prospectus relating
to the Shares is required to be delivered, any event relating to or
affecting the MHC, the Company or the Bank shall occur, as a result of
which it is necessary or appropriate, in the opinion of counsel for the
MHC, the Company and the Bank 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 to a purchaser, the MHC, the Company and the
Bank will immediately so inform the Agent and prepare and file, at their
own expense, with the Commission and the OTS, and furnish to the Agent a
reasonable number of copies, of an amendment or amendments of, or a
supplement or supplements to, the Registration Statement 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 MHC, the Company and the Bank each will
timely furnish to the Agent such information with respect to itself as
the Agent may from time to time reasonably request.
(h) The Company, the MHC and the Bank will take all necessary
actions in cooperating with the Agent and furnish to whomever the Agent
may direct such information as may be required to qualify or register
the Shares for offering and sale by
16
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
MHC Regulations to be sold or as the Agent and the Company, the MHC and
the Bank 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.
(i) The Company and the Bank 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 Common
Shares, other than the Common Shares or other than in connection with
any plan or arrangement described in the Prospectus, including existing
stock benefit plans.
(j) The Company will register its Common Shares under Section 12(g)
of the 1934 Act. The Company shall maintain the effectiveness of such
registration for not less than three years from the time of
effectiveness or such shorter period as may be required by the OTS.
(k) During the period during which the Common Shares are registered
under the 1934 Act or for three 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 (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).
(l) 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 Commission under the 1934 Act or any
national securities exchange or system on which any class of securities
of the Company is listed or quoted (including, but not limited to,
reports on Forms 10-K or 10-KSB, 10-Q or 10-QSB 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 Commission, the OTS or any other supervisory or
regulatory authority or any national securities exchange or system on
which any class of securities of the Company is listed or quoted, each
press release and material news items and additional documents and
information with respect to the Company or the Bank as the Agent may
reasonably request; and (iii) from time to time, such other
nonconfidential information concerning the MHC, the Company or the Bank
as the Agent may reasonably request.
17
(m) The Company, the MHC and the Bank will use the net proceeds from
the sale of the Shares in the manner set forth in the Prospectus under
the caption "Use of Proceeds."
(n) Other than as permitted by the MHC Regulations, the HOLA, the
1933 Act, the 1933 Act Regulations and the rules and regulations and the
laws of any state in which the Shares are registered or qualified for
sale or exempt from registration, neither the Company nor the Bank will
distribute any prospectus, offering circular or other offering material
in connection with the offer and sale of the Shares.
(o) The Company will use its best efforts to maintain listing of the
Shares on the NASDAQ Stock Market.
(p) The Bank will maintain appropriate arrangements for depositing
all funds received from persons mailing subscriptions for or orders to
purchase Shares in the Offering on an interest-bearing basis at the rate
described in the Prospectus until the Closing Date and satisfaction of
all conditions precedent to the release of the Bank* s obligation to
refund payments received from persons subscribing for or ordering Shares
in the Offering in accordance with the Plan 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 Bank will maintain
such records of all funds received to permit the funds of each
subscriber to be separately insured by the FDIC (to the maximum extent
allowable) and to enable the Bank to make the appropriate refunds of
such funds in the event that such refunds are required to be made in
accordance with the Plan and as described in the Prospectus.
(q) The Company, the MHC and the Bank will take such actions and
furnish such information as are reasonably requested by the Agent in
order for the Agent to ensure compliance with the NASD* s
"Interpretation Relating to Free Riding and Withholding."
(r) Neither the Company, the MHC nor the Bank will amend the Plan
without notifying the Agent and the Agent* s counsel prior thereto.
(s) 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.
(t) Prior to the Closing Date, the Company, the MHC and the Bank
will inform the Agent of any event or circumstances of which it is aware
as a result of which the Registration Statement and/or Prospectus, as
then 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.
(u) The Company will not deliver the Shares until the MHC, the
Company and the Bank have satisfied or caused to be satisfied each
condition set forth in Section 7 hereof, unless such condition is waived
in writing by the Agent.
18
(v) The Company and the Bank shall notify the Agent when funds shall
have been received for the minimum number of Shares set forth in the
Prospectus.
(w) Subsequent to the date the Registration Statement is declared
effective by the Commission and prior to the Closing Date, except as
otherwise may be indicated or contemplated therein or set forth in an
amendment or supplement thereto, neither the MHC, the Company nor the
Bank 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 MHC,
the Company and the Bank, taken as a whole.
(x) Until the Closing Date, the MHC, the Company and the Bank will
conduct their businesses in compliance in all material respects with all
applicable federal and state laws, rules, regulations, decisions,
directives and orders, including all decisions, directives and orders of
the Commission, the FDIC and the OTS.
(y) The MHC, the Company and the Bank shall comply with any and all
terms, conditions, requirements and provisions with respect to the
Offering and the transactions contemplated thereby imposed by the OTS,
the MHC Regulations, the Commission, the 1933 Act and the 1933 Act
Regulations, the 1934 Act and the 1934 Act Regulations to be complied
with subsequent to the Closing Date. The Company will comply with all
provisions of all undertakings contained in the Registration Statement.
(z) The facts and representations provided to Xxxx Xxxxxx Xxxxxxxx &
Xxxxxx P.C. by the Bank and the Company and upon which Xxxx Xxxxxx
Xxxxxxxx & Xxxxxx P.C. will base its opinion under Section 7(c)( 1) are
and will be truthful, accurate and complete.
(aa) The Company shall comply with all applicable provisions of the
Xxxxxxxx-Xxxxx Act.
SECTION 6. PAYMENT OF EXPENSES. Whether or not the Offering is completed
or the sale of the Shares by the Company is consummated, the Company and the
Bank 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) subject to Section 2(d), all reasonable expenses of
the Offering, including but not limited to the Agent* s attorneys* fees 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 Offering. In the event the Company is
unable to sell the minimum number of shares necessary to complete the offering
or the Offering is terminated or otherwise abandoned, the Company, the MHC and
the Bank shall promptly reimburse the Agent in accordance with Section 2(d)
hereof.
In the event that the Agent incurs any expenses on behalf of the MHC,
the Company or the Bank, the MHC, the Company and the Bank will pay or reimburse
the Agent for such expenses regardless of whether the Offering is successfully
completed, and such reimbursements
19
will not be included in the expense limitations set forth in Section 2(d)
hereof. The MHC, the Company and the Bank acknowledge, however, that such
limitations may be increased by the mutual consent of the Bank and Agent in the
event of delay in the Offering requiring the Agent to utilize a Syndicated
Community Offering, a delay as a result of circumstances requiring material
additional work by Agent or its counsel or an update of the financial
information in tabular form contained in the Prospectus for a period later than
December 31, 2003. Not later than two days prior to the Closing Date, the Agent
will provide the Bank with an accounting of all reimbursable expenses to be paid
at the Closing in next day funds. In the event the Bank determines to abandon or
terminate the Plan prior to Closing, payment of such expenses shall be made in
next day funds on the date such determination is made.
SECTION 7. CONDITIONS TO THE AGENT* S OBLIGATIONS. The obligations of
the Agent hereunder, as to the Shares to be delivered at the Closing Date, are
subject, to the extent not waived in writing by the Agent, to the condition that
alt representations and warranties of the Company, the MHC and the Bank herein
are, at and as of the commencement of the Offering and at and as of the Closing
Date, true and correct in all material respects, the condition that the Company,
the MHC and the Bank 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 and the Bank shall
have conducted the Offering in all material respects in accordance with
the Plan, the MHC Regulations and all other applicable laws,
regulations, decisions and orders, including all terms, conditions,
requirements and provisions precedent to the Offering imposed upon them
by the OTS.
(b) The Registration Statement shall have been declared effective by
the Commission and the MHC Application and 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 therefore initiated or
threatened by the Commission or any state authority, and no order or
other action suspending the authorization of the Prospectus or the
consummation of the Offering shall have been issued or proceedings
therefore initiated or, to the Company* s or the Bank* s knowledge,
threatened by the Commission, the OTS, the FDIC or any other state
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
and the Bank, in form and substance to the effect that:
(i) The Company and the MHC have been duly
incorporated and are validly existing as corporations
under the laws of the United States of America.
20
(ii) The Company and the MHC have corporate power and
authority to own, lease and operate their properties and
to conduct their business as described in the
Registration Statement and the Prospectus.
(iii) The Bank is a validly existing
federally-chartered savings and loan 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 outstanding
capital stock of the Bank upon completion of the
Offering will be duly authorized and, upon payment
therefor, 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 Bank is a member of the FHLB-Chicago. The
deposit accounts of the Bank 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;
(v) Immediately following the consummation of the
Offering, the authorized, issued and outstanding Common
Shares of the Company will be within the range set forth
in the Prospectus under the caption "Capitalization,"
and no Common Shares have been issued prior to the
Closing Date (except to the MHC); at the time of the
Offering, the Common Shares subscribed for pursuant to
the Offering 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
Prospectus, will be duly and validly issued and fully
paid and non-assessable, except for shares purchased by
the ESOP 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, the issuance of the Shares is not subject to
preemptive rights (other than subscription rights as
provided in the Plan) and the terms and provisions of
the Shares conform in all material respects to the
description thereof contained in the Prospectus. To our
Actual Knowledge, the Shares will not, when issued, be
subject to any liens, charges, encumbrances or other
claims created by the Company or the Bank.
(vi) The Bank, the Company and the MHC have full
corporate power and authority to enter into this
Agreement and to consummate the transactions
contemplated thereby and by the Plan. The execution and
delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly and
validly authorized by all necessary action on the part
of the Company, the MHC and the Bank; and this Agreement
is a valid and binding obligation of the Company, the
MHC and the Bank, enforceable against the Company, the
MHC and the
21
Bank 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 or the rights of creditors
of federally chartered savings institutions, (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 MHC Application has been approved by the OTS
and the Prospectus has been authorized for use by the
OTS and no action has been taken, and none is pending or
to such counsel* s Actual Knowledge threatened, to
revoke any such authorization or approval.
(viii) Based upon the minutes of the proceedings of the
Board of Directors, the Plan has been duly adopted by
the required vote of the directors of the Company, the
MHC and the Bank.
(ix) Subject to the satisfaction of the conditions to
the OTS* s approval of the Offering, no further
approval, registration, authorization, consent or other
order of any federal regulatory agency is required in
connection with the execution and delivery of this
Agreement, the issuance of the Shares and the
consummation of the Offering, 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 (as to which no opinion need be
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 Commission.
(xi) At the time the MHC Application, including the
Prospectus contained therein, was approved by the OTS,
the MHC Application, including the Prospectus contained
therein, complied as to form in all material respects
with the requirements of the MHC Regulations (other than
the financial statements, the notes thereto, and other
tabular, Financial Services, 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
22
supplemented) (other than the financial statements, the
notes thereto, and other tabular, Financial Services,
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 Services,
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.
(xiii) The terms and provisions of the Shares of the
Company conform, in all material respects, to the
description thereof contained in the Registration
Statement and Prospectus, and the form of certificate
used to evidence the Shares complies with applicable
laws.
(xiv) To such counsel's Actual Knowledge, there are no
legal or governmental proceedings pending or threatened
(i) asserting the invalidity of this Agreement, (ii)
seeking to prevent the offer, sale or issuance of the
Shares, or (iii) which are required to be disclosed in
the Registration Statement and Prospectus, other than
those disclosed therein.
(xv) Neither the MHC, the Company nor the Bank are
required to be registered as an investment company under
the Investment Company Act of 1940.
(xvi) To such counsel's Actual Knowledge, neither the
MHC, the Company nor the Bank is in violation of any
directive from the OTS or the FDIC to make any material
change in the method of conducting its respective
business.
(xvii) 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 MHC 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 MHC Application, the Registration
Statement or the Prospectus. The description in the MHC
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.
(xviii) To such counsel's Actual Knowledge, the Company,
the MHC and the Bank have conducted the Offering, in all
material respects, in accordance with all applicable
requirements of the Plan and applicable federal law,
except that no opinion is rendered with respect to (a)
the MHC Application, the Registration Statement or
Prospectus, which are covered by other clauses of this
opinion, (b) the satisifaction of the post-
23
Offering conditions in the MHC Regulations or in the OTS
approval of the MHC Application, (c) the securities or
"blue sky" laws of various jurisdictions, and (d) the
rules and regulations of the NASD. The Plan complies in
all material respects with all applicable federal law,
rules, regulations, decisions and orders including, but
not limited to, the MHC Regulations; no order has been
issued by the OTS, the Commission, the FDIC, or any
state 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 OTS, the Commission, the FDIC, or any
other state 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 MHC Application or the Prospectus.
(xix) To such counsel's Actual Knowledge, the Company,
the MHC and the Bank have obtained all material
licenses, permits and other governmental authorizations
currently required for the conduct of their businesses
as described in the Registration Statement, and all such
licenses, permits and other governmental authorizations
are in full force and effect, and the MHC and the Bank
are in all material respects complying therewith.
(xx) To such counsel* s Actual Knowledge, neither the
MHC, the Company nor the Bank is in violation of its
Charter and Bylaws or 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 MHC, the Company and the
Bank on a consolidated basis; to such counsel* s Actual
Knowledge, the execution and delivery of this Agreement,
the incurrence of the obligations herein set forth and
the consummation of the transactions contemplated herein
will not 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 MHC, the Company or the Bank pursuant to
any material contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which the
MHC, the Company or the Bank is a party or by which any
of them may be bound, or to which any of the property or
assets of the MHC, the Company or the Bank are subject;
and such action will not result in any violation of the
provisions of the Charter or Bylaws of the Company, Bank
or MHC, or 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 need be rendered) or order or court order,
writ, injunction or decree.
24
(xxi) The Company* s, Bank's and MHC's Charter and
Bylaws each comply in all material respects with the
laws of the United States of America.
(xxii) The information in the Prospectus under the
captions "Supervision and Regulation," "Federal and
State Taxation," "The Stock Offering," "Restrictions on
Acquisition of First Federal Financial Services, Inc.
and First Federal" and "Description of Capital Stock of
First Federal Financial Services, Inc.," 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 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
"________________________" has been reviewed by such
counsel and fairly describes the federal and state tax
opinions rendered by them and RSM McGladrey, Inc.,
respectively, to the Company, the MHC and the Bank with
respect to such matters.
In addition, such counsel shall state that during the
preparation of the MHC Application, the Registration
Statement and the Prospectus, they participated in
conferences with certain officers of, the independent
public and internal accountants for, and other
representatives of, the Company, the MHC and the Bank,
at which conferences the contents of the MHC
Application, the Registration Statement and the
Prospectus and related matters were discussed and, while
such counsel have not confirmed the accuracy or
completeness of or otherwise verified the information
contained in the MHC Application, the Registration
Statement or the Prospectus 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 and the Bank), nothing has come to
their attention that would lead them to believe that the
MHC Application, the Registration Statement, the
Prospectus, or any amendment or supplement thereto
(other than the financial statements, the notes thereto,
and other tabular, Financial Services, statistical and
appraisal data included therein as to which no view need
be rendered) contained an untrue statement of a material
fact or omitted to state a material fact required to be
stated therein or necessary to make the statements
therein, in light of the circumstances under which they
were made, not misleading.
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 and the Bank 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 New York.
25
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 the Company, the MHC or the Bank 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; 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 Offering 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 the Company or the Bank.
(d) A Blue Sky Memorandum from Xxxx Xxxxxx Xxxxxxxx & Xxxxxx P.C.
relating to the Offering, including Agent's participation therein, and
should be furnished to Agent with a copy thereof addressed to Agent or
upon which Xxxx Xxxxxx Xxxxxxxx & Xxxxxx P.C. shall state Agent may
rely. The Blue Sky Memorandum will relate to the necessity of obtaining
or confirming exemptions, qualifications or the registration of the
Shares under applicable state securities law.
(e) At the Closing Date, the Agent shall receive a certificate of
the Chief Executive Officer and the Chief Financial Officer of the
Company, the MHC and the Bank 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 examined the Prospectus and, in
their opinion, at the time the Prospectus became authorized for final
use, the Prospectus 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 or
the Bank 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 or the
Bank independently, or of the Company, the MHC and the Bank 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 and the Bank 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
26
Date and will comply in all material respects with all obligations to be
satisfied by them after the Offering; (vi) no stop order suspending the
effectiveness of the Registration Statement has been initiated or, to
the best knowledge of the Company, the MHC or the Bank, threatened by
the Commission or any state authority; (vii) no order suspending the
Offering 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 MHC or the Bank, threatened by the OTS, the Commission,
the FDIC, or any state authority; and (viii) to the best knowledge of
the Company or the Bank, no person has sought to obtain review of the
final action of the OTS approving the Plan.
(f) Neither the MHC, the Company nor the Bank shall have sustained,
since the date of the latest financial statements included in the
Registration Statement and Prospectus, any material loss or interference
with its business from fire, explosion, flood or other calamity, whether
or not covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set forth in the
Registration Statement and the Prospectus, and since the respective
dates as of which information is given in the Registration Statement and
the Prospectus, there shall not have been any material adverse effect on
the financial condition, results of operations, or business of the MHC,
the Company or the Bank that is in the Agent's reasonable judgment
sufficiently material and adverse as to make it impracticable or
inadvisable to proceed with the Offerings or the delivery of the Shares
on the terms and in the manner contemplated in the Prospectus.
(g) Prior to and at the Closing Date: (i) in the reasonable opinion
of the Agent, there shall have been no material adverse change in the
financial condition, results of operations or business of the Company,
the MHC and the Bank considered as one enterprise, from that as of the
latest dates as of which such condition is set forth in the Prospectus,
other than transactions referred to or contemplated therein; (ii) the
Company, the MHC or the Bank shall not have received from the OTS or the
FDIC any direction (oral or written) to make any material change in the
method of conducting their business with which it has not complied
(which direction, if any, shall have been disclosed to the Agent) or
which materially and adversely would affect the financial condition,
results of operations or business of the Company, the MHC and the Bank
taken as a whole; (iii) neither the Company nor the Bank shall have been
in default (nor shall an event have occurred which, with notice or lapse
of time or both, would constitute a default) under any provision of any
agreement or instrument relating to any 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 or the Bank,
threatened against the Company, the MHC or the Bank or affecting any of
their properties wherein an unfavorable decision, ruling or finding
would materially and adversely affect the financial condition, results
of operations or business 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 and the Bank.
27
(h) Concurrently with the execution of this Agreement, the Agent
shall receive a letter from McGladrey & Xxxxxx LLP dated as of the date
of the Prospectus and addressed to the Agent: (i) confirming that
McGladrey & Xxxxxx 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 OTS and stating in effect that in its opinion the
financial statements, schedules and related notes of the Company and the
Bank 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 OTS and 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 Bank
prepared by the Bank, a reading of the minutes of the meetings of the
Board of Directors and members of the Bank and consultations with
officers of the Bank responsible for financial and accounting matters,
nothing came to their attention which caused them to believe that: (A)
the unaudited financial statements included in the Prospectus are not in
conformity with the 1933 Act, applicable accounting requirements of the
OTS and accounting principles generally accepted in the United States of
America 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 of the Prospectus, except as has been
described in the Prospectus, there was any increase in borrowings, other
than normal deposit fluctuations, by the Bank; or (C) there was any
decrease in the net assets of the Bank at the date of such letter as
compared with amounts shown in the latest unaudited balance sheets
included in the Prospectus; 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 (g), they have compared with the general accounting records
of the Bank, which are subject to the internal controls of the Bank, the
accounting system and other data prepared by the Bank, 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 reported on the results of such
comparisons.
(i) At the Closing Date, the Agent shall receive a letter dated the
Closing Date, addressed to the Agent, confirming the statements made by
McGladrey & Xxxxxx LLP in the letter delivered by it pursuant to
subsection (h) of this Section 7, the "specified date" referred to in
clause (ii) of subsection (h) to be a date specified in the letter
required by this subsection (i) which for purposes of such letter shall
not be more than three business days prior to the Closing Date.
(j) At the Closing Date, the Bank shall receive a letter from Xxxxxx
& Company, Inc., dated the Closing Date (i) confirming that said firm is
independent of the Company, the MHC and the Bank and is experienced and
expert in the area of corporate appraisals within the meaning of Title
12 of the Code of Federal Regulations, Section 563b.200(b), (ii) stating
in effect that the Appraisal prepared by such firm complies in all
material respects with the applicable requirements of Title 12 of the
Code of Federal Regulations,
28
and (iii) further stating that its opinion of the aggregate pro forma
market value of the Company and the Bank, as most recently updated,
remains in effect.
(k) At or prior to the Closing Date, the Agent shall receive: (i) a
copy of the letters from the OTS approving the MHC Application and
authorizing the use of the Prospectus; (ii) a copy of the orders from
the Commission declaring the Registration Statement and the Exchange Act
Registration Statement effective; (iii) a certificate from the OTS
evidencing the valid existence of the Bank; (iv) a certificate from the
FDIC evidencing the Bank* s insurance of accounts; (v) a certificate
from the FHLB-Chicago evidencing the Bank* s membership therein; (vi) a
certificate from the OTS evidencing the Company's and the MHC's standing
as registered savings and loan holding companies; (vii) a copy of the
Bank's federal stock charter; and (viii) a copy of the Company's federal
charter; and (viii) a copy of the MHC's federal charter.
(l) Subsequent to the date hereof, there shall not have occurred any
of the following; (i) a suspension or limitation in trading in
securities generally on the New York Stock Exchange (the "NYSE") or in
the over-the-counter market, or quotations halted generally on The
Nasdaq Stock Market, or minimum or maximum prices for trading have been
fixed, or maximum ranges for prices for securities have been required by
either of such exchanges or the NASD or by order of the Commission or
any other governmental authority; (ii) a general moratorium on the
operations of commercial banks, or federal savings and loan associations
or a general moratorium on the withdrawal of deposits from commercial
banks or federal savings and loan associations declared by federal or
state authorities; (iii) the engagement by the United States in
hostilities which have resulted in the declaration, on or after the date
hereof, of a national emergency or war; or (iv) a material decline in
the price of equity or debt securities if the effect of 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.
(m) 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 or the Bank in
connection with the Offering and the sale of the Shares as herein
contemplated shall be satisfactory in form and substance to the Agent
and its counsel.
(n) All such opinions, certificates, letters and documents will be
in compliance with the provisions hereof only if they are reasonably
satisfactory in form and substance to the Agent and to counsel for the
Agent. Any certificate signed by an officer of the MHC, the Holding
Company or the Bank and delivered to the Agent or to counsel for the
Agent shall be deemed a representation and warranty by the MHC, the
Holding Company or the Bank, as the case may be, to the Agent as to the
statements made therein.
29
SECTION 8. INDEMNIFICATION.
(a) The Company, the MHC and the Bank jointly and severally agree to
indemnify and hold harmless the Agent, its respective 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 expense
(including reasonable fees and disbursements of counsel) incurred by the
Agent or any of them in connection with investigating, preparing or
defending any actions, proceedings or claims (whether commenced or
threatened) to the extent such losses, claims, damages, liabilities or
actions: (i) arise out of or are based upon any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment or supplement thereto),
preliminary or final Prospectus (or any amendment or supplement
thereto), the MHC Application (or any amendment or supplement thereto),
or any instrument or document executed by the Company, the MHC or the
Bank or based upon written information supplied by the Company, the MHC
or the Bank 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 or the Bank with their consent or based upon written or oral
information furnished by or on behalf of the Company, the MHC or the
Bank, 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; (ii) arise out of or are based upon the
omission or alleged omission to state in any of the foregoing documents
or information a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading; or (iii) arise from any
theory of liability whatsoever relating to or arising from or based upon
the Registration Statement (or any amendment or supplement thereto),
preliminary or final Prospectus (or any amendment or supplement
thereto), the MHC Application (or any amendment or supplement thereto),
any Blue Sky Application or Sales Information or other documentation
distributed in connection with the Offering; 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 MHC 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 or the Bank 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 or the Bank by the Agent regarding the Agent is set
forth in the Prospectus under the caption "The Stock Offering--Plan of
Distribution
30
and Marketing Arrangements"; and, provided further, that such
indemnification shall be to the extent not prohibited by the Commission,
the OTS, the FDIC and the Board of Governors of the Federal Reserve.
(b) The Agent agrees to indemnify and hold harmless the Company, the
MHC and the Bank, their directors and officers and each person, if any,
who controls the Company, the MHC or the Bank within the meaning of
Section 15 of the 1933 Act or Section 20(a) of the 1934 Act against any
and all loss, liability, claim, damage or expense whatsoever (including
but not limited to settlement expenses), joint or several, which they,
or any of them, may suffer or to which they, or any of them may become
subject under all applicable federal and state laws or otherwise, and to
promptly reimburse the Company, the Bank, 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 or defending any actions,
proceedings or claims (whether commenced or threatened) to the extent
such losses, claims, damages, liabilities or actions: (i) arise out of
or are based upon any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement (or any amendment
or supplement thereto), the MHC 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 MHC Application (or any amendment
or supplement thereto), or any Blue Sky Application or Sales Information
or other documentation distributed in connection with the Offering;
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 MHC 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 or the Bank 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 or the Bank by the Agent regarding the Agent is set
forth in the Prospectus under the caption "The Stock Offering--Plan of
Distribution and Marketing Arrangements."
(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
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indemnifying parties receiving such notice, may assume defense of such
action with counsel chosen by it and approved by the indemnified parties
that are defendants in such action, unless such indemnified parties
reasonably object to such assumption on the ground that there may be
legal defenses available to them that are different from or in addition
to those available to such indemnifying party. If an indemnifying party
assumes the defense of such action, the indemnifying parties shall not
be liable for any fees and expenses of counsel for the indemnified
parties incurred thereafter in connection with such action, proceeding
or claim, other than reasonable costs of investigation. In no event
shall the indemnifying parties be liable for the fees and expenses of
more than one separate firm of attorneys (and any special counsel that
said firm may retain) for 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.
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 Bank or the Agent, the Company,
the MHC, the Bank 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 Bank 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 and the Bank 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
and the Bank on the one hand and the Agent on the other in connection with the
statements or omissions which resulted in such losses, claims, damages or
liabilities (or actions, proceedings or claims in respect thereto), but also the
relative benefits received by the Company, the MHC and the Bank 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 and/or the Bank on the one hand or the Agent on the other and
the parties* relative intent, good faith, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company, the
MHC, the Bank and the Agent agree that it would not be just and equitable if
contribution pursuant to this Section 9 were determined by pro-rata 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
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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 Bank
and the Agent under this Section 9 and under Section 8 shall be in addition to
any liability which the Company, the Bank and the Agent may otherwise have. For
purposes of this Section 9, each of the Agent* s, the Company* s or the Bank* s
officers and directors and each person, if any, who controls the Agent or the
Company, the MHC or the Bank within the meaning of the 1933 Act and the 1934 Act
shall have the same rights to contribution as the Agent, or the MHC, the Company
or the Bank. Any party entitled to contribution, promptly after receipt of
notice of commencement of any action, suit, claim or proceeding against such
party in respect of which a claim for contribution may be made against another
party under this Section 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.
SECTION 10. SURVIVAL OF AGREEMENTS, REPRESENTATIONS AND INDEMNITIES. The
respective indemnities of the Company, the MHC, the Bank and the Agent, the
representations and warranties and other statements of the Company, the MHC, the
Bank and the Agent set forth in or made pursuant to this Agreement and the
provisions relating to contribution 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 Bank
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 Bank, and any such controlling person shall be entitled to the
benefit of the respective agreements, indemnities, warranties and
representations.
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) If any domestic or international event or act or occurrence has
materially disrupted the United States securities markets such as to
make it, in the Agent* s reasonable opinion, impracticable to proceed
with the offering of the Shares; or if trading on the NYSE shall have
suspended (except that this shall not apply to the imposition of NYSE
trading collars imposed on program trading); or if the United States
shall have become involved in a war or major hostilities; or if a
general banking moratorium has been declared by a state or federal
authority which has a material effect on the Bank or the Offering; or if
a moratorium in foreign exchange trading by major international banks or
persons has been declared; or if there shall have been a material
adverse change in the financial condition, results of operations or
business of the Bank, or if the Bank shall have sustained a material or
substantial loss by fire, flood, accident, hurricane, earthquake, theft,
sabotage or other calamity or malicious act, whether or not said loss
shall have been insured; or if there shall have been a material adverse
change in the
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financial condition, results of operations or business of the Company,
the MHC or the Bank.
(b) In the event the Company fails to sell the required minimum
number of the Shares by __________ __, 2004, and in accordance with the
provisions of the Plan or as required by the MHC 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(b), 6, 8 and 9 hereof.
(c) 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 cancelled by the Agent by notifying the
Company, the MHC and the Bank of such cancellation in writing or by
telegram at any time at or prior to the Closing Date, and any such
cancellation shall be without liability of any party to any other party
except as otherwise provided in Sections 2(a), 2(d), 6, 8 and 9 hereof.
(d) If the Agent elects to terminate this Agreement as provided in
this Section, the Company, the MHC and the Bank shall be notified
promptly by telephone or telegram, confirmed by letter.
The Company, the MHC and the Bank 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 and the Bank 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, 000 Xxxxxxxxx Xxxxx, Xxxxxx, Xxxx 00000-0000, Attention: Xxxxxxx X.
Xxxxxx (with a copy to Silver, Xxxxxxxx & Xxxx, L.L.P., 0000 Xxxxxxxxx Xxxxxx,
XX, Xxxxxxxxxx, XX 00000, Attention: Xxxx X. Xxxxxxxxxx, P.C. and, if sent to
the Company and the Bank, shall be mailed, delivered or telegraphed and
confirmed to the Company and the Bank at 000 Xx. Xxxxx Xxxxxx, Xxxxxxxxxxxx,
Xxxxxxxx 00000, Attention: Xxxxx X. Xxxxx, President (with a copy to Xxxx Xxxxxx
Xxxxxxxx & Xxxxxx P.C., 0000 Xxxxxxxxx Xxxxxx, X.X., Xxxxx 000, Xxxxxxxxxx, X.X.
00000, Attention: Xxxxxx X. Xxxxxxxx, Esq.
SECTION 13. PARTIES. The Company, the MHC and the Bank 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
or the Bank, when the same shall have been given by the undersigned or any other
officer of the Company, the MHC or the Bank This Agreement shall inure solely to
34
the benefit of, and shall be binding upon, the Agent, the Company, the MHC, the
Bank, 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 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 and the Bank. At the closing, the Company and the Bank 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.
SECTION 18. ENTIRE AGREEMENT. This Agreement, including schedules and
exhibits hereto, which are integral parts hereof and incorporated as though set
forth in full, constitutes the entire agreement between the parties pertaining
to the subject matter hereof superseding any and all prior or contemporaneous
oral or prior written agreements, proposals, letters of intent and
understandings, and cannot be modified, changed, waived or terminated except by
a writing which expressly states that it is an amendment, modification or
waiver, refers to this Agreement and is signed by the party to be charged. No
course of conduct or dealing shall be construed to modify, amend or otherwise
affect any of the provisions hereof.
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If the foregoing correctly sets forth the arrangement among the Company,
the MHC, the Bank 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,
FIRST FEDERAL FINANCIAL FIRST FEDERAL SAVINGS AND SERVICES, INC.
LOAN ASSOCIATION
By Its Authorized Representative: By Its Authorized Representative:
------------------------------------ ----------------------------------------
Xxxxx X. Xxxxx, President Xxxxx X. Xxxxx, President
FIRST FEDERAL MHC
(In formation)
By Its Authorized Representative:
------------------------------------
Xxxxx X. Xxxxx, President
ACCEPTED AS OF THE DATE FIRST ABOVE
WRITTEN
Xxxxx, Xxxxxxxx & Xxxxx, Inc.
------------------------------------
Xxxxxxx X. Xxxxxx
Managing Director
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