Exhibit 1.2
CFS BANCORP, INC.
Up to 17,853,750 Conversion Shares and 5,507,424 Exchange Shares
COMMON STOCK
($0.01 Par Value)
Subscription Price for Conversion Shares: $10.00 Per Share
AGENCY AGREEMENT
______________, 1998
Xxxxxxx Xxxx & Company,
a division of Xxxxx, Xxxxxxxx & Xxxxx, Inc.
000 Xxxxxxxxx Xxxxx
Xxxxxx, Xxxx 00000-0000
Ladies and Gentlemen:
CFS Bancorp, Inc., a Delaware corporation (the "Company") and Citizens
Financial Services, FSB, a federally chartered savings bank currently in mutual
form (the "Bank," which shall include all references to 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
Xxxxxxx Xxxx & Company, a division of Xxxxx, Xxxxxxxx & Xxxxx, Inc. ("Xxxx" or
"Agent") as follows:
Section 1. The Offering. The Bank, in accordance with its plan of
conversion adopted by its Board of Directors of the Bank (the "Plan"), intends
to convert from a federally chartered mutual savings bank to a federally
chartered stock savings bank, and to issue all of its issued and outstanding
capital stock to the Company. In addition, pursuant to the Plan, the Company
will offer and sell up to 17,853,750 shares of its common stock, par value $0.01
per share (the "Shares" or "Common Stock"), in a subscription offering (the
"Subscription Offering") to (1) depositors of the Bank with savings accounts of
$50 or more as of the close of business on January 31, 1996 ("Eligible Account
Holders"), (2) the Company's Employee Stock Ownership Plan ("ESOP"), (3)
depositors of the Bank with savings accounts of $50 or more as of March 21, 1998
("Supplemental Eligible Account Holders") and (4) depositors and certain
borrowers of the Bank as of the Voting Record Date, _____________, 1998 ("Other
Members"), and (v) certain officers, directors and employees of the Bank.
Subject to the prior subscription rights of the above-listed parties, the
Company is
offering for sale in a direct community offering (the "Community Offering" and,
when referred to together with the Subscription Offering, the "Subscription and
Community Offering") conducted concurrently with the Subscription Offering, the
Shares not so subscribed for or ordered in the Subscription Offering to certain
members of the general public to whom a copy of the Prospectus (as hereinafter
defined) is delivered ("Other Subscribers") (all such offerees being referred to
in the aggregate as "Eligible Offerees"). It is anticipated that shares not
subscribed for in the Subscription and Community Offering will be offered to
members of the general public on a best efforts basis by a selling group of
broker-dealers managed by Xxxx (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. Collectively, these transactions are referred
to herein as the "Conversion."
In addition, on December 29, 1997, the Bank entered into an Agreement
and Plan of Merger (the "Merger Agreement") with SuburbFed Financial Corp., a
Delaware corporation ("SFC"), pursuant to which SFC will be merged with and into
the Company. Pursuant to the terms of the Merger Agreement, upon consummation of
the merger of SFC with and into the Company (the "Merger"), each share of SFC
common stock, par value $0.01 per share (the "SFC Common Stock"), will be
converted into the right to receive shares of Company Common Stock with a value
of $36.00, or 3.6 shares based on the Purchase Price of $10.00. It is
anticipated that, based on the number of outstanding shares of SFC Common Stock
as of December 31, 1997, the Merger will result in an aggregate of 4,556,451
shares of Common Stock being issued in exchange for shares of SFC Common Stock
and, in the event all previously granted options to acquire SFC Common Stock
were exercised, up to 5,507,424 shares of Common Stock could be issued in
exchange for SFC Common Stock (the "Exchange Shares").
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-1 (File No. 333-_______) (the
"Registration Statement") containing a prospectus relating to the Offering and
Exchange Shares (defined herein) for the registration of the Shares under the
Securities Act of 1933 (the "1933 Act"), and has filed such amendments thereof,
if any, and such amended prospectuses as may have been required to the date
hereof. 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.
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In accordance with the Rules and Regulations of the Office of Thrift
Supervision ("OTS"), the Bank has filed with the OTS an Application for
Conversion (the "Conversion Application"), including the prospectus, and has
filed such amendments thereto, if any, as may have been required by the OTS. The
Conversion Application has been approved by the OTS and the related Prospectus
has been authorized for use by the OTS. In addition, the Company has filed with
the OTS an application (the "Holding Company Application") to become a savings
and loan holding company and for approval to acquire the Bank.
Section 2. Retention of Xxxx; Compensation; Sale and Delivery of the
Shares. Subject to the terms and conditions herein set forth, the Company and
the Bank hereby appoint Xxxx (ii) as their exclusive financial advisory and
marketing agent to utilize its best efforts to solicit subscriptions for Shares
of the Common Stock and to advise and assist the Company and the Bank with
respect to the Company's sale of the Shares in the Offering and (ii) to
participate in the Offering in the areas of market making, research coverage and
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, Xxxx
accepts such appointment and agrees to consult with and advise the Company and
the Bank as to the matters set forth in the letter agreement ("Letter
Agreement"), dated November 17, 1997, between the Bank and Xxxx (a copy of which
is attached hereto as Exhibit A). It is acknowledged by the Company and the Bank
that Xxxx shall not be required to purchase any Shares and shall not be
obligated to take any action which is inconsistent with all applicable laws,
regulations, decisions or orders. In the event of a Syndicated Community
Offering, Xxxx will assemble and manage a selling group of broker-dealers which
are members of the National Association of Securities Dealers, Inc. (the "NASD")
to participate in the solicitation of purchase orders for shares under a
selected dealers' agreement ("Selected Dealers' Agreement"), the form of which
is set forth as Exhibit B to this Agreement.
The obligations of Xxxx pursuant to this Agreement 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 September 30, 1998 (the
"End Date"). All fees or expenses due to Xxxx but unpaid will be payable to Xxxx
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 Xxxx may agree to renew this Agreement under mutually
acceptable terms.
In the event the Company is unable to sell a minimum of 11,475,000
Shares (or such lesser amount approved by the OTS) 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 otherwise set forth in this Section 2 and in
Sections 6, 8 and 9 hereof.
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In the event the Offering is terminated for any reason not attributable
to the action or inaction of Xxxx, Xxxx 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 Conversion,
including, without limitation, the sale of all Shares required by the Plan to be
sold, are satisfied, the Company agrees to issue, or have issued, the Shares
sold in the Offering and to release for delivery certificates for such Shares on
the Closing Date (as hereinafter defined) against payment to the Company by any
means authorized by the Plan, provided however, that no funds shall be released
to the Company until the conditions specified in Section 7 hereof shall have
been complied with to the reasonable satisfaction of Xxxx and its counsel. The
release of Shares against payment therefor shall be made at _____ _.m., Central
Time, on a date and at a place acceptable to the Company, the Bank and Xxxx (it
being understood that such date shall not be more than ten business days after
termination of the Offering) or such other time or place as shall be agreed upon
by the Company, the Bank and Xxxx. 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, or have released or delivered, the
Shares sold in the Offering, in accordance with the terms herein, is called the
"Closing Date."
Xxxx shall receive the following compensation for their services hereunder:
(a) A Management Fee of $40,000 payable in four consecutive monthly
installments of $10,000 commencing with the signing of this letter. Such fees
shall be deemed to have been earned when due. Should the Merger or Conversion be
terminated for any reason not attributable to the action or inaction of Xxxx,
Xxxx shall have earned and be entitled to be paid fees accruing through the
stage at which point the termination occurred.
(b) With respect to the Merger, a Success Fee of 0.50% of the total
fair market value of any securities issued and any non-cash and cash
consideration paid as of the closing of the Merger, including any amounts paid
by the Company or SFC to any stock benefit plans maintained by SFC or an
affiliate or paid to any holders of any options or stock appreciation rights
granted by SFC, whether or not vested, provided that for purposes of determining
the amounts paid with respect to such options or appreciation rights, as the
case may be, which remain unexercised immediately prior to the closing of the
Merger, the amount paid with respect to such stock options or appreciation
rights, shall be deemed to equal the difference between the aggregate fair
market value of the common stock underlying such options and rights and the
aggregate exercise price of such options and rights. The Merger Success Fee
shall be due and payable at the closing of the Merger. In the event this
transaction occurs prior to November 17, 1998, the Management Fee will be
deducted from the total Success Fee in this section.
(c) For delivery of a fairness opinion pursuant to the Merger, Xxxx
shall receive a fee of $25,000, payable upon the issuance of the fairness
opinion to the Board at the time the definitive agreement is signed; provided
that such fee shall be deemed earned at the time of the events
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described whether or not the Merger is eventually consummated. (Such fairness
opinion fees shall be deducted from amounts due under (a) above.)
(d) With respect to the Conversion, a Success Fee of 1.15% of the
aggregate Purchase Price of Common Stock sold in the conversion, excluding
shares purchased by the Bank's officers, directors, or employees (or members of
their immediate families) plus any ESOP, tax-qualified or stock-based
compensation plans (except IRA's) or similar plan created by the Bank for some
or all of its directors or employees.
For purposes of Paragraph 2 (b) above, "total fair market value" of
securities and non-cash consideration shall have the following meaning: (i) in
the case of an exchange of common stock in a transaction in which the number of
shares of the Company to be received by the shareholders of SFC will vary in a
manner designed to produce a fixed value to be received in exchange for each
share of SFC, the "total fair market value" shall mean the maximum number of
shares of Company stock to be exchanged in such transaction, multiplied by the
value per share specified in the agreement between Company and SFC; (ii) in the
case of an exchange of common stock in a transaction in which the number of
shares of the Company to be received in exchange for each share of SFC is fixed
and the value of such shares may vary, the "total fair market value" shall mean
the per share price of the Company's stock as sold in the Conversion, multiplied
by the maximum number of shares of common stock of the Company issuable upon
conversion of SFC's common stock in the transaction.
(e) If any shares of the Company's stock remain available after the
Subscription and Community Offering, at the request of the Bank, Xxxx will seek
to form a syndicate of registered broker-dealers to assist in the sale of such
shares of Common Stock on a best efforts basis, subject to the terms and
conditions set forth in the selected dealers agreement. Xxxx will endeavor to
distribute the Common Stock among dealers in a fashion which best meets the
distribution objectives of the Bank and the Plan of Conversion. Xxxx will be
paid a fee not to exceed 5.5% of the aggregate Purchase Price of the shares of
Common Stock sold pursuant to the selected dealers agreement and then will pass
on to selected broker-dealers who assist in the syndicated community 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 affected with the assistance
of a broker/dealer shall be transmitted by Xxxx to such broker/dealer. The
decision to utilize selected broker-dealers will be made by the Bank upon
consultation with Xxxx. In the event, with respect to any stock purchases, fees
are paid pursuant to this subparagraph 2(e), such fees shall be in lieu of, and
not in addition to, payment pursuant to subparagraphs 2(a) and 2(d).
(f) The Bank and the Company hereby agree to reimburse Xxxx, from time
to time upon Xxxx'x request, for its reasonable out-of-pocket expenses and the
reasonable fees and expenses of its counsel. The Bank will bear the expenses of
the Offering customarily borne by issuers including, without limitation,
Division, SEC, "Blue Sky," and NASD filing and registration fees; the fees of
the Bank's accountants, conversion agent, attorneys, appraiser, transfer agent
and registrar, printing,
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mailing and marketing expenses associated with the Conversion; and the fees set
forth under this Section 2.
Full payment of Xxxx'x 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.
Xxxx will provide financial advisory assistance for a period of one
year following completion of the Conversion as set forth in the Letter
Agreement. Following this initial one-year term, if Xxxx and the Company wish to
continue the relationship, a fee will be negotiated and an agreement entered
into at that time.
Section 3. Prospectus: Offering. The Shares are to be
initially offered in the Offering at the Purchase Price as
defined and set forth on the cover page of the Prospectus.
Section 4. Representations and Warranties. The Company
and the Bank jointly and severally represent and warrant to Xxxx
on the date hereof as follows:
(a) The Registration Statement was declared effective by the Commission
on _____________, 1998 At the time the Registration Statement, including the
Prospectus contained therein (including any amendment or supplement thereto),
became effective, the Registration Statement complied in all material respects
with the requirements of the 1933 Act and the 1933 Act Regulations and the
Registration Statement, including the 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 was filed with
the Commission; 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 Xxxx expressly regarding Xxxx for use in the Prospectus under the
captions "The Conversion-Plan of Distribution for the Subscription, Direct
Community and Syndicated of Community Offerings" and "-Description of Sales
Activities" or statements in or omissions from any Sales Information or
information filed pursuant to state securities or blue sky laws or regulations
regarding Xxxx.
(b) The Bank has filed with the Department of the Treasury, Office of
Thrift Supervision ("OTS"), the Conversion Application and has filed such
amendments thereto and supplementary materials as may have been required to the
date hereof including copies of the Bank's Proxy Statement, to be dated
_____________, 1998 relating to the Conversion (the "Proxy Statement"), and the
Prospectus. The OTS has, by letter dated _____________, 1998, approved the
Conversion Application, such order remains in full force and effect and no order
has been issued by the OTS
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suspending or revoking such order and no proceedings therefor have been
initiated or, to the knowledge of the Company or the Bank, threatened by the
OTS. At the date of such approval and at the Closing Date referred to in Section
2, the Conversion Application complied and will comply in all material respects
with the applicable provisions of the OTS' Conversion Regulations except as
waived in writing by the OTS. The Conversion Application, including the
Prospectus (including any amendment or supplement thereto), do not include any
untrue statement of 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 Xxxx expressly regarding Xxxx for use in the Prospectus
contained in the Conversion Application under the caption "The Conversion-Plan
of Distribution for the Subscription, Direct Community and Syndicated Community
Offerings" or statements in or omissions from any sales information or
information filed pursuant to state securities or blue sky laws or regulations
regarding Xxxx.
(c) The Company has filed with the OTS the Company's application for
approval of its acquisition of the Bank on Form H-(e)1-S (the "Holiday Company
Application") pursuant to the Home Owners' Loan Act ("HOLA") and the regulations
promulgated thereunder.
(d) No order has been issued by the Commission or the OTS preventing or
suspending the use of the Prospectus and no action by or before any such
government entity to revoke any approval, authorization or order of
effectiveness related to the Conversion is, to the best knowledge of the Company
or the Bank, pending or threatened.
(e) To the best knowledge of the Company, no person has sought to
obtain review of the final action of the OTS in approving or taking no objection
to the Plan or in approving the Conversion or the Holding Company Application
pursuant to the Conversion Regulations, the HOLA, or any other applicable
statute or regulation.
(f) At the time of their use, the Proxy Statement and any other proxy
solicitation materials will complying all material respects with the applicable
provisions of the Conversion 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 the light of the circumstances under which
they were made, not misleading. The Company and the Bank will promptly file the
Prospectus and any supplemental sales literature with the OTS. The Prospectus
and all supplemental sales literature, as of the date the Registration Statement
became effective and at the Closing Date referred to in Section 2, complied and
will comply in all material respects with the applicable requirements of the
Conversion Regulations and, at or prior to the time of their first use, will
have received all required authorizations of the OTS for use in final form.
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(g) The Bank has filed with the OTS an application for merger ("Merger
Application") pursuant to Section 1828(c) of the Federal Deposit Insurance Act
("FDIA"), the provisions of the HOLA and the regulations promulgated thereunder
with respect to the Merger. The Bank has received written notice from the OTS of
its approval of the Merger, such approval remains in full force and effect and
no order has been issued by the OTS suspending or revoking such approval and no
proceedings therefor have been initiated or threatened by the OTS. At the date
of such approval, the Merger Application complied in all material respects with
the applicable provisions of the FDIA, the HOLA and the regulations promulgated
thereunder.
(h) At the time of their use, the Proxy Statement and any other proxy
solicitation materials will comply in all material respects with the applicable
provisions of the Conversion 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 the light of the circumstances under which
they were made, not misleading. The Prospectus and all supplemental sales
literature, as of the date the Registration Statement became effective and at
the Closing Time referred to in Section 2, complied and will comply in all
material respects with the applicable requirements of the Conversion Regulations
and, at or prior to the time of their first use, will have received all required
authorizations of the OTS for use in final form.
(i) The OTS has not, by order or otherwise, prevented or suspended the
use of the Prospectus or any supplemental sales literature authorized by the
Company or the Bank for use in connection with the Offerings.
(j) At the Closing Time referred to in Section __, the Company and the
Bank will have completed the conditions precedent to the Conversion in
accordance with the Plan, the applicable Conversion Regulations and all other
applicable laws, regulations, decisions and orders, including all material
terms, conditions, requirements and provisions precedent to the Conversion
imposed upon the Company or the Bank by the OTS, the FDIC, or any other
regulatory authority, other than those which the regulatory authority permits to
be completed after the Conversion. As of the Closing Time, as defined in Section
___ hereof, the Company, the Bank, SFC and its subsidiaries will have completed
the conditions precedent to the Merger in accordance with the Merger Agreement,
provisions of the FDIA and HOLA and all other applicable laws, regulations,
decisions and orders, including all material terms, conditions, requirements and
provisions precedent to the Merger imposed upon the Company, the Bank, SFC or
Suburban Federal, A Federal Savings Bank, the wholly owned federal savings bank
subsidiary of SFC ("Suburban") by the OTS, the FDIC or any other regulatory
authority, other than those which the regulatory authority permits to be
completed after the effective time of the Merger ("Effective Time").
(k) RP Financial, Inc., which prepared the valuation of the Bank as
part of the Conversion, satisfies all requirements for an appraiser set forth in
the Conversion Regulations.
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(l) The accountants who certified the financial statements and
supporting schedules of the Bank included in the Registration Statement are
independent public accountants within the meaning of the Code of Ethics of the
AICPA, and such accountants are, with respect to the Company, the Bank and each
subsidiary of the Bank, independent certified public accountants as required by
the 1933 Act and the 1933 Act Regulations. The accountants who certified the
financial statements and supporting schedules of SFC included in the
Registration Statement are independent public accountants within the meaning of
the Code of Ethics of the AICPA, and such accountants are, with respect to SFC,
Suburban and each subsidiary of Suburban, independent certified public
accountants as required by the 1933 Act and the 1933 Act Regulations.
(m) The consolidated financial statements and the related notes thereto
included in the Registration Statement and the Prospectus present fairly the
financial position of each of (i) the Company, the Bank and its consolidated
subsidiaries and (ii) SFC, Suburban and its consolidated subsidiaries as at the
respective dates indicated and the results of operations, retained earnings and
cash flows for the periods specified, and comply as to form in all material
respects with the applicable accounting requirements of the 1933 Act Regulations
and the Conversion Regulations; except as otherwise stated in the Registration
Statement, said financial statements have been prepared in conformity with
generally accepted accounting principles applied on a consistent basis; and the
supporting schedules and tables included in the Registration Statement present
fairly the information required to be stated therein.
(n) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, except as otherwise stated therein
(A) there has been no material adverse change in the financial condition,
results of operations or business affairs of the Company, the Bank, SFC,
Suburban or their respective subsidiaries, whether or not arising in the
ordinary course of business, (B) except for transactions specifically referred
to or contemplated in the Prospectus, there have been no transactions entered
into by the Company, the Bank or any of its subsidiaries, other than those in
the ordinary course of business, which are material with respect to the Company
and its subsidiaries considered as one enterprise, and (C) except for
transactions specifically referred to or contemplated in the Prospectus, there
have been no transactions entered into by SFC, Suburban or any of its
subsidiaries, other than those in the ordinary course of business, which are
material with respect to SFC and its subsidiaries considered as one enterprise.
(o) Each of the Company and SFC has been duly incorporated and is
validly existing as a corporation in good standing under the laws of the State
of Delaware with corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the Prospectus; and each
of the Company and SFC is duly qualified as a foreign corporation to transact
business in each jurisdiction in which such qualification is required, whether
by reason of the ownership or leasing of property or the conduct of business,
except where the failure to so qualify would not have a material adverse effect
on the financial condition, results of operations or business affairs of the
Company and its subsidiaries considered as one enterprise on the one hand or the
financial condition, results of operations or business affairs of SFC and its
subsidiaries considered as one enterprise on the other hand.
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(p) Upon consummation of the Conversion, the authorized, issued and
outstanding capital stock of the Company will be within the range set forth in
the Prospectus under "Capitalization" (except for subsequent issuances, if any,
pursuant to reservations, agreements or employee benefit plans referred to in
the Prospectus); except for shares issued in connection with the initial
capitalization of the Company, which shares will be cancelled upon consummation
of the Conversion, no shares of Common Stock have been or will be issued and
outstanding prior to the Closing Time referred to in Section 2; at the time of
Conversion, the Securities will have been duly authorized for issuance and, when
issued and delivered by the Company pursuant to the Plan against payment of the
consideration calculated as set forth in the Plan, will be duly and validly
issued and fully paid and non-assessable; the terms and provisions of the Common
Stock and the capital stock of the Company conform to all statements relating
thereto contained in the Prospectus; and the issuance of the Securities is not
subject to preemptive or other similar rights.
(q) The Bank, as of the date hereof, is a federally chartered savings
bank in mutual form and upon consummation of the Conversion will be a federally
chartered savings bank in stock form, in both instances with full corporate
power and authority to own, lease and operate its properties and to conduct its
business as described in the Prospectus; the Company, the Bank and its
subsidiaries have obtained all licenses, permits and other governmental
authorizations currently required for the conduct of their respective businesses
or required for the conduct of their respective businesses as contemplated by
the Holding Company Application, the Conversion Application and the Merger
Application, except where the failure to obtain such licenses, permits or other
governmental authorizations would not have a material adverse effect on the
financial condition, results of operations or business affairs of the Company,
the Bank and its subsidiaries considered as one enterprise; all such licenses,
permits and other governmental authorizations are in full force and effect and
the Company, the Bank and its subsidiaries are in all material respects in
compliance therewith; neither the Company, the Bank nor any of the Bank's
subsidiaries has received notice of
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any proceeding or action relating to the revocation or modification of any such
license, permit or other governmental authorization which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or finding, might
have a material adverse effect on the financial condition, results of operations
or business affairs of the Company, the Bank and its subsidiaries, considered as
one enterprise; and the Bank is in good standing under the laws of the United
States and is qualified as a foreign corporation in each jurisdiction in which
the failure to so qualify would have a material adverse effect on the financial
condition, results of operations or business affairs of the Company, the Bank
and its subsidiaries, considered as one enterprise. Suburban is a federally
chartered savings association in stock form, with full corporate power and
authority to own, lease and operate its properties and to conduct its business
as described in the Prospectus; SFC, Suburban and its subsidiaries have obtained
all licenses, permits and other governmental authorizations currently required
for the conduct of their respective businesses, except where the failure to
obtain such licenses, permits or other governmental authorizations would not
have a material adverse effect on the financial condition, results of operations
or business affairs of SFC, Suburban and its subsidiaries considered as one
enterprise; all such licenses, permits and other governmental authorizations are
in full force and effect and SFC, Suburban and its subsidiaries are in all
material respects in compliance therewith; neither SFC, Suburban nor any of
SFC's subsidiaries has received notice of any proceeding or action relating to
the revocation or modification of any such license, permit or other governmental
authorization which, singly or in the aggregate if the subject of an unfavorable
decision, ruling or find, might have a material adverse effect on the financial
condition, results of operations or business affairs of SFC, Suburban and its
subsidiaries, considered as on enterprise; and SFC is in good standing under the
laws of the United States and is qualified as a foreign corporation in each
jurisdiction in which the failure to so qualify would have a material adverse
effect on the financial condition, results of operations or business affairs of
SFC, Suburban and its subsidiaries considered as one enterprise.
(r) The deposit accounts of each of the Bank and Suburban are insured
by the FDIC and upon consummation of the Conversion, the liquidation account for
the benefit of the Bank's eligible account holders and supplemental eligible
account holders will be duly established in accordance with the requirements of
the Conversion Regulations.
(s) No shares of Bank common stock have been or will be issued prior to
the Closing Time referred to in Section 2; and as of Closing Time referred to in
Section 2, all of the issued and outstanding capital stock of the Bank will be
duly authorized, validly issued and fully paid and nonassessable, and all such
capital stock will be owned beneficially and of record by the Company free and
clear of any mortgage, pledge, lien, encumbrance or claim. Upon consummation of
the transactions contemplated by the Merger Agreement, there will be no issued
and outstanding shares of capital stock of either SFC or Suburban and the
separate corporate existence of each of SFC and Suburban shall have ceased.
(t) Each direct and indirect subsidiary of the Bank and Suburban has
been duly incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation, has full corporate
power and authority to own, lease and operate its properties and to conduct its
business as described in the Registration Statement and Prospectus, and is duly
qualified to transact business and is in good standing in each jurisdiction in
which such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the failure to so
qualify would not have a material adverse effect on the financial condition,
results of operations or business affairs of the Company, the Bank and its
subsidiaries considered as one enterprise on the one hand or the financial
condition, results of operations or business affairs of SFC, Suburban and its
subsidiaries considered as one enterprise on the other hand; the activities of
each such subsidiary are permitted to subsidiaries of a federally chartered
savings association by the rules, regulations, resolutions and practices of the
OTS; all of the issued and outstanding capital stock of each such subsidiary has
been duly authorized and validly issued, is fully paid and nonassessable and is
owned by the Bank or Suburban as the case may be, directly or through a
subsidiary, free and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equity.
(u) The Company and the Bank have taken all corporate action necessary
for them to execute, deliver and perform this Agreement, and this Agreement has
been duly executed and delivered by, and is the valid and binding agreement of,
the Company and the Bank, enforceable in
11
accordance with its terms, except as may be limited by bankruptcy, insolvency or
other laws affecting the enforceability of the rights of creditors generally and
judicial limitations on the right of specific performance and except as the
enforceability of indemnification and contribution provisions may be limited by
applicable securities laws.
(v) Subsequent to the respective dates as of which information is given
in the Registration Statement and the Prospectus and prior to the Closing Time,
except as otherwise may be indicated or contemplated in the Prospectus, none of
the Company, the Bank, SFC, Suburban or any of their respective subsidiaries
will have (A) issued any securities (except, with respect to SFC, pursuant to
SFC's existing Option Plans) or incurred any material liability or obligation,
direct or contingent, or borrowed money, except borrowings in the ordinary
course of business from the same or similar sources and in similar amounts as
indicated in the Prospectus, or (B) entered into any transaction or series of
transactions which is material in light of the business of the Company, the Bank
and its subsidiaries, taken as a whole, on the one hand or in light of the
business of SFC, Suburban and its subsidiaries, taken as a whole, on the other
hand, excluding transactions in the ordinary course of business and consistent
with past practice or otherwise as indicated in the Prospectus.
(w) 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 Securities, except for the declaration of
effectiveness of any required post-effective amendment to the Registration
Statement by the Commission and approval thereof by the OTS, the issuance of the
federal stock charter by the OTS and as may be required under the securities law
of various jurisdictions.
(x) None of the Company, the Bank, SFC, Suburban or any of their
respective subsidiaries is in violation of its charter or bylaws (and the Bank
will not be in violation of its charter or bylaws in stock form upon
consummation of the Conversion); and none of the Company, the Bank, SFC,
Suburban or any of their respective subsidiaries is in default (nor has any
event occurred which, with notice or lapse of time or both, would constitute a
default) in the performance or observance of any obligation, agreement, covenant
or condition contained in any contract, indenture, mortgage, loan agreement,
note, lease or other instrument to which the Company, the Bank, SFC, Suburban or
any of their respective subsidiaries is a party or by which it or any of them
may be bound, or to which any of the property or assets of the Company, the
Bank, SFC, Suburban or any other of their respective subsidiaries is subject,
except for such defaults that would not, individually or in the aggregate, have
a material adverse effect on the financial condition, results of operations or
business of the Company, the Bank and its subsidiaries considered as one
enterprise on the one hand or the financial condition, results of operations or
business of SFC, Suburban and its subsidiaries considered as one enterprise on
the other hand.
(y) The execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated herein have been duly authorized
by all necessary corporate action and do not and will not conflict with or
constitute a breach of, or default under, or result in the
12
creation or imposition of any lien, charge or encumbrance upon any property or
assets of the Company, the Bank or any of its subsidiaries pursuant to, any
contract, indenture, mortgage, loan agreement, note, lease or other instrument
to which the Company, the Bank or any of its subsidiaries is a party or by which
it or any of them may be bound, or to which any of the property or assets of the
Company or any of its subsidiaries is subject, except for such defaults that
would not, individually or in the aggregate, have a material adverse effect on
the financial condition, results of operations or business affairs of the
Company, the Bank and its subsidiaries considered as one enterprise; nor will
such action result in any violation of the provisions of the charter or bylaws
of the Company, the Bank or any of its subsidiaries; nor will such action result
in any violation of any applicable law, administrative regulation or
administrative or court decree except for violations that would not impair the
ability of the Company and the Bank to execute, deliver and perform under this
Agreement or consummate the transactions contemplated herein and except for
violations that would not, individually or in the aggregate, have a material
adverse effect on the financial condition, results of operations or business of
the Company, the Bank and its subsidiaries considered as one enterprise.
(z) No labor dispute with the employees of the Company, the Bank, SFC,
Suburban or any of their respective subsidiaries exists or, to the knowledge of
the Company or the Bank, is imminent.
(aa) The Company, the Bank and its subsidiaries have good and
marketable title to all properties and assets for which ownership is material to
the business of the Company, the Bank or its subsidiaries and to those
properties and assets described in the Prospectus as owned by them, free and
clear of all liens, charges, encumbrances or restrictions, except such as are
described in the Prospectus or are not material in relation to the business of
the Company, the Bank or its subsidiaries considered as one enterprise; and all
of the leases and subleases material to the business of the Company, the Bank or
its subsidiaries under which the Company, the Bank or its subsidiaries hold
properties, including those described in the Prospectus, are valid and binding
agreements of the Company, the Bank and its subsidiaries, enforceable in
accordance with their terms. SFC, Suburban and its subsidiaries have good and
marketable title to all properties and assets for which ownership is material to
the business of SFC, Suburban or its subsidiaries and to those properties and
assets described in the Prospectus as owned by them, free and clear of all
liens, charges, encumbrances or restrictions, except such as are described in
the Prospectus or are not material in relation to the business of SFC, Suburban
or its subsidiaries considered as one enterprise; and all of the leases and
subleases material to the business of SFC, Suburban or its subsidiaries under
which SFC, Suburban or its subsidiaries hold properties, including those
described in the Prospectus, are valid and binding agreements of SFC, Suburban
and it subsidiaries, enforceable in accordance with their terms.
(bb) The Company, the Bank, SFC, Suburban and their respective
subsidiaries are not in violation of any directive from the OTS or the FDIC to
make any material change in the method of conducting their respective
businesses; the Bank, Suburban and their respective subsidiaries have conducted
and are conducting their business so as to comply in all material respects with
all applicable statutes, regulations and administrative and court decrees
(including, without limitation, all regulations, decisions, directives and
orders of the OTS or the FDIC).
13
(cc) There is no action, suit or proceeding before or by any court or
governmental agency or body, domestic or foreign, now pending, or, to the
knowledge of the Company or the Bank, threatened, against or affecting the
Company, the Bank or any of its subsidiaries which is required to be disclosed
in the Registration Statement (other than as disclosed therein), or which might
result in any material adverse change in the financial condition, results of
operations or business affairs of the Company, the Bank and its subsidiaries
considered as one enterprise, or which might materially and adversely affect the
consummation of the Conversion; all pending legal or governmental proceedings to
which the Company, the Bank or any subsidiary is a party or of which any of
their respective property or assets is the subject which are not described in
the Registration Statement, including ordinary routine litigation incidental to
the business, are considered in the aggregate not material; and there are no
contracts or documents of the Company or any of its subsidiaries which are
required to be filed as exhibits to the Registration Statement or the Conversion
Application which have not been so filed. There is no action, suit or proceeding
before or by any court or governmental agency or body, domestic or foreign, now
pending, or, to the knowledge of the Company or the Bank, threatened, against or
affecting SFC, Suburban or any of its subsidiaries which is required to be
disclosed in the Registration Statement (other than as disclosed therein), or
which might result in any material adverse change in the financial condition,
results of operations or business affairs of SFC, Suburban and its subsidiaries
considered as one enterprise, or which might materially and adversely affect the
properties or assets thereof or which might materially and adversely affect the
consummation of the Merger; all pending legal or governmental proceedings to
which SFC, Suburban or any subsidiary is a party or of which any of their
respective property or assets is the subject which are not described in the
Registration Statement, including ordinary routine litigation incidental to the
business, are considered in the aggregate not material.
(dd) The Bank has obtained an opinion of its counsel, Elias, Matz,
Xxxxxxx & Xxxxxxx, with respect to the legality of the Securities to be issued
and the federal and State of Illinois income tax consequences of the Conversion,
copies of which are filed as exhibits to the Registration Statement; all
material aspects of the aforesaid opinions are accurately summarized in the
Prospectus; the facts and representations upon which such opinions are based are
truthful, accurate and complete in all material respects; and neither the Bank
nor the Company has taken any action inconsistent therewith.
(ee) Neither the Company nor SFC is required to be registered under
the Investment Company Act of 1940, as amended.
(ff) All of the loans represented as assets on the most recent
financial statements or selected financial information of the Bank and Suburban
included in the Prospectus meet or are exempt from all requirements of federal,
state or local law pertaining to lending, including without limitation truth in
lending (including the requirements of Regulations Z and 12 C.F.R. Part 226 and
Section 563.99), real estate settlement procedures, consumer credit protection,
equal credit opportunity and all disclosure laws applicable to such loans,
except for violations which, if asserted, would not result in a material adverse
effect on the financial condition, results of operations or business of the
Company, the Bank and its subsidiaries considered as one enterprise on the one
hand
14
or the financial condition, results of operations or business of SFC, Suburban
and its subsidiaries considered as one enterprise on the other hand.
(gg) To the knowledge of the Company and the Bank, none of the Company,
the Bank or employees of the Bank has made any payment of funds of the Company
or the Bank as a loan for the purchase of the Common Stock 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 and none of SFC, Suburban or any of their
employees has made any payment of funds prohibited by law or set aside any funds
for any payment prohibited by law.
(hh) The Company, the Bank, SFC, Suburban and their respective
subsidiaries are in compliance in all material respects with the applicable
financial recordkeeping and reporting requirements of the Currency and Foreign
Transaction Reporting Act of 1970, as amended, and the rules and regulations
thereunder.
(ii) Neither the Company, the Bank nor its subsidiaries, nor any
properties owned or operated by the Company, the Bank or its subsidiaries is in
violation of or liable under any Environmental Law (as defined below), except
for such violations or liabilities that, individually or in the aggregate, would
not have a material adverse effect on the financial condition, results of
operations or business affairs of the Company, the Bank and the subsidiaries
considered as one enterprise. Neither SFC, Suburban nor its subsidiaries, nor
any properties owned or operated by SFC, Suburban or its subsidiaries is in
violation of or liable under any Environmental Law (as defined below), except
for such violations or liabilities that, individually or in the aggregate, would
not have a material adverse effect on the financial condition, results of
operations or business affairs of SFC, Suburban and the subsidiaries considered
as one enterprise. 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 or the Bank,
threatened, relating to the liability of any property owned or operated by the
Company, the Bank, SFC, Suburban or their respective subsidiaries, 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.
(jj) The Company, the Bank, SFC, Suburban and their respective
subsidiaries have filed all federal income and state and local franchise tax
returns required to be filed and have made timely
15
payments of all taxes shown as due and payable in respect of such returns, and
no deficiency has been asserted with respect thereto by any taxing authority.
(kk) The Company has received approval to have the Securities quoted on
the National Association of Securities Dealers' Automated Quotation Stock Market
("Nasdaq National Market") effective as of the Closing Time.
Section 5. Representations and Warranties of Xxxx.
(a) Xxxx represents and warrants to the Company and the Bank that:
(i) Xxxxx, Xxxxxxxx & Xxxxx, Inc. 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
and the Company hereunder.
(ii) The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby
have been duly and validly authorized by all
necessary action on the part of Xxxx, and this
Agreement has been duly and validly executed and
delivered by Xxxx and is the legal, valid and binding
agreement of Xxxx, enforceable in accordance with its
terms, except as may be limited by bankruptcy,
insolvency or other laws affecting the enforceability
of the rights of creditors generally and judicial
limitations on the right of specific performance and
except as the enforceability of indemnification and
contribution provisions may be limited by applicable
securities laws.
(iii) Each of Xxxx and its employees, agents and
representatives who shall perform any of the services
hereunder shall be duly authorized and empowered, and
shall have all licenses, approvals and permits
necessary to perform such services.
(iv) The execution and delivery of this Agreement by Xxxx,
the consummation of the transactions contemplated
hereby and compliance with the terms and provisions
hereof will not conflict with, or result in a breach
of, any of the terms, provisions or conditions of, or
constitute a default (or event which with notice or
lapse of time or both would constitute a default)
under, the articles of incorporation of Xxxx or any
agreement, indenture or other instrument to which
Xxxx is a party or by which it or its property is
hound.
(v) No approval of any regulatory or supervisory or other
public authority is required in connection with
Xxxx'x execution and delivery of this Agreement,
except as may have been received.
16
(vi) There is no suit or proceeding or charge or action
before or by any court, regulatory authority or
government agency or body or, to the best knowledge
of Xxxx, pending or threatened, which might
materially adversely affect Xxxx'x performance under
this Agreement.
Section 5.1 Covenants of the Company and the Bank. The Company and the
Bank hereby jointly and severally covenant with Xxxx 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 Xxxx and its counsel an opportunity to
review such amendment or supplement or file any amendment or supplement to which
amendment or supplement Xxxx or its counsel shall reasonably object.
(b) The Bank will not, at any time after the Conversion Application is
approved by the OTS, file any amendment or supplement to such Conversion
Application without providing Xxxx and its counsel an opportunity to review such
amendment or supplement or file any amendment or supplement to which amendment
or supplement Xxxx or its counsel shall reasonably object.
(c) The Company will not, at any time before the Holding Company
Application is approved by the OTS, file any amendment or supplement to such
Holding Company Application without providing Xxxx and its counsel an
opportunity to review such amendment or supplement or file any amendment or
supplement to which amendment or supplement Xxxx or its counsel shall reasonably
object.
(d) The Company and the Bank will use their best efforts to cause any
post-effective amendment to the Registration Statement to be declared effective
by the Commission and any post-effective amendment to the Conversion Application
to be approved by the OTS and will immediately upon receipt of any information
concerning the events listed below notify Xxxx: (i) when the Registration
Statement, as amended, has become effective; (ii) when the Conversion
Application, as amended, has been approved by the OTS; (iii) when the Holding
Company Application, as amended, has been approved by the OTS; (iv) of any
comments from the Commission or the OTS or any other governmental entity with
respect to the Conversion or the transactions contemplated by this Agreement;
(v) of the request by the Commission or the OTS or any other governmental entity
for any amendment or supplement to the Registration Statement, the Conversion
Application, the Holding Company Application or for additional information; (vi)
of the issuance by the Commission or 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 Conversion Regulations, or other applicable law, or the threat of any such
action; (vii) the issuance by the Commission or OTS of any stop order suspending
the effectiveness of the Registration Statement or the approval of the
Conversion Application or Holding Company Application, or of the initiation or
threat of initiation or threat of any proceedings for any such purpose; or
(viii) of the occurrence of any event mentioned in
17
paragraph (h) below. The Company and the Bank will make every reasonable effort
(i) to prevent the issuance by the Commission or the OTS of any such order and,
if any such order shall at any time be issued, (ii) to obtain the lifting
thereof at the earliest possible time.
(e) The Company and the Bank will deliver to Xxxx and to its counsel
two conformed copies of the Registration Statement, the Conversion Application,
the Holding Company Application and Merger Application, 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 Xxxx as may be required for any NASD filings.
(f) The Company and the Bank will furnish to Xxxx, 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 Xxxx 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 Xxxx 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 Xxxx.
(g) The Company and the Bank will prepare and file such amendments or
supplements to the Merger Application as may be appropriate in order to receive
all necessary regulatory approvals of the Merger. The Company will notify Xxxx
immediately and confirm notice in writing of the receipt of any comments from
the OTS with respect to the transactions described in the Merger Application, of
any request for supplemental information to the Merger Application, or issuance
of any order regarding the Merger or the initiation of any proceedings regarding
the Merger.
(h) The Company and the Bank will comply with any and all material
terms, conditions, requirements and provisions with respect to the Conversion
and Merger imposed by the Commission, the OTS, the Conversion Regulations or the
HOLA and regulations promulgated thereunder, 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, the Company and the Bank will comply, at their own expense, with all
material requirements imposed upon them by the Commission, the OTS, the
Conversion Regulations, the HOLA, and by the 1993 Act, the 1933 Act Regulations,
the 1934 Act and the 1934 Act Regulations, in each case as from time to time in
force, so far as necessary to permit the continuance of sales or dealing in
shares of Common Stock during such period in accordance with the provisions
hereof and the Prospectus.
(i) 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
Company, the Bank or a Subsidiary shall occur, as a result of which it is
necessary or appropriate, in the opinion of counsel for the Company and the Bank
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
18
the Prospectus is delivered to a purchaser, the Company and the Bank will, at
their expense, prepare and file with the Commission and the OTS, and furnish to
Xxxx a reasonable number of copies of an amendment or amendments of, or a
supplement or supplements to, the Registration Statement and Prospectus (in form
and substance satisfactory to Xxxx and its counsel after a reasonable time for
review) which will amend or supplement the Registration Statement and Prospectus
so that as amended or supplemented it will not contain an untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein, in light of the circumstances existing at the time the
Prospectus is delivered to a purchaser, not misleading. For the purpose of this
Agreement, the Company and the Bank each will timely furnish to Xxxx such
information with respect to itself as Xxxx may from time to time reasonably
request.
(j) At the Closing Date referred to in Section 2, the Plan and Merger
Agreement will have been adopted by the Board of Directors of the Company and
the Board of Directors of the Bank and the offer and sale of the Shares and
exchange of Exchange Shares will have been conducted in all material respects in
accordance with the Plan, Merger Agreement, the Conversion Regulations, and all
other applicable laws, regulations, decisions and orders, including all terms,
conditions, requirements and provisions precedent to the Conversion and Merger
imposed upon the Company or the Bank by the Commission, the OTS, or any other
regulatory authority and in the manner described in the Prospectus.
(k) Upon completion of the sale by the Company of the Shares
contemplated by the Prospectus, (i) the Bank will be converted pursuant to the
Plan to a federally chartered stock savings bank, (ii) all of the authorized and
outstanding capital stock of the Bank will be owned by the Company, and (iii)
the Company will have no direct subsidiaries other than the Bank. The Conversion
will have been effected in all material respects in accordance with all
applicable statutes, regulations, decisions and orders; and, except with respect
to the filing of certain post-sale, post-Conversion reports, and documents in
compliance with the 1933 Act Regulations, and all terms, conditions,
requirements and provisions with respect to the Conversion (except those that
are conditions subsequent) imposed by the Commission and the OTS, 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.
(l) The Company and the Bank will take all necessary actions, in
cooperation with Xxxx, and furnish to whomever Xxxx may direct, such information
as may be required to qualify or register the Shares for offering and sale by
the Company or to exempt such Shares from registration, or to exempt the Company
as a broker-dealer and its officers, directors and employees as broker-dealers
or agents under the applicable securities or blue sky laws of such jurisdictions
in which the Shares are to be offered and sold as Xxxx and the Company 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 or to qualify to do
business in any jurisdiction in which it is not so qualified. In each
jurisdiction where any of the Shares shall have been qualified or registered as
above provided, the Company will make and file such statements and reports in
each fiscal period as are or may be required by the laws of such jurisdiction.
19
(m) The liquidation account for the benefit of Eligible Account Holders
and Supplemental Eligible Account Holders will be duly established and
maintained in accordance with the requirements of the OTS.
(n) The Company and the Bank will not sell or issue, contract to sell
or otherwise dispose of, for a period of 180 days after the Closing Date,
without Xxxx'x prior written consent, any shares of Common Stock other than the
Shares or other than in connection with any plan or arrangement described in the
Prospectus
(o) The Company shall register its Common Stock under Section 12(g) of
the 1934 Act concurrent with the Offering pursuant to the Plan and shall request
that such registration be effective no later than upon completion of the
Conversion. The Company shall maintain the effectiveness of such registration
for not less than three (3) years or such shorter period as may be required by
the OTS.
(p) During the period during which the Company's Common Stock is
registered under the 1934 Act or for three years from the date hereof, whichever
period is greater, the Company will furnish to its stockholders as soon as
practicable after the end of each fiscal year an annual report of the Company
(including a consolidated balance sheet and statements of consolidated income,
stockholders' 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).
(q) During the period of three years from the date hereof, the Company
will furnish to Xxxx: (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, 10-Q and 8-K and all
proxy statements and annual reports to stockholders), (ii) a copy of each other
non-confidential report of the Company mailed to its stockholders or filed with
the Commission or 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
Xxxx may reasonably request; and (iii) from time to time, such other
nonconfidential information concerning the Company or the Bank as Xxxx may
reasonably request.
(r) The Company 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."
(s) Other than as permitted by the Conversion Regulations, HOLA, the
1933 Act, the 1933 Act 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 or other offering
material in connection with the offer and sale of the Shares.
20
(t) The Company will use its best efforts to (i) encourage and assist
three market makers to establish and maintain a market for the Shares and (ii)
list the Shares on a national or regional securities exchange or on the Nasdaq
National Market of the Nasdaq Stock Market effective on or prior to the Closing
Date.
(u) 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 cancelled 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.
(v) Prior to the Closing Date, the Merger Application shall have been
approved and all applicable waiting periods shall have expired, the Holding
Company Application shall have been approved by the OTS. The Company will
promptly take all necessary action to register as a savings and loan holding
company under the HOLA within 90 days of the Closing Date.
(w) The Company and the Bank will take such actions and furnish such
information as are reasonably requested by Xxxx in order for Xxxx to ensure
compliance with the NASD's "Interpretation Relating to Free Riding and
Withholding."
(x) The Bank will not amend the Plan of Conversion without notifying
Xxxx prior thereto.
(y) The Company shall assist Xxxx, if necessary, in connection with the
allocation of the Shares in the event of an oversubscription and shall provide
Xxxx with any information necessary in allocating the Shares in such event.
(z) Prior to the Closing Date, the Company and the Bank will inform
Xxxx of any event or circumstances of which it is aware as a result of which the
Registration Statement, the Conversion Application 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.
21
Section 5.2 Covenants of Xxxx. Xxxx hereby covenants with
the Company and the Bank as follows:
(a) During the period when the Prospectus is delivered, Xxxx will
comply, in all material respects and at its own expense, with all requirements
imposed upon it by the Commission and the NASD, including to the extent
applicable, by the 1933 Act and the 1934 Act and the rules and regulations
promulgated thereunder.
(b) Xxxx will distribute copies of the Prospectus and Sales Information
in connection with the sales of the Common Stock only in accordance with NASD
and SEC regulations, the 1933 Act and the rules and regulations promulgated
thereunder.
(c) Xxxx shall use its best efforts to assist the Company in obtaining
at least three market makers for the shares of Common Stock.
Section 6. Payment of Expenses. Whether or not the Conversion is
completed or the sale of the Shares by the Company is consummated, the Company
and the Bank jointly and severally agree to pay or reimburse Xxxx for: (a) all
filing fees in connection with all filings with the NASD; (b) any stock issue or
transfer taxes which may be payable with respect to the sale of the Shares; (c)
all reasonable expenses of the Conversion, including but not limited to, the
Company's and the Bank's attorneys' fees, transfer agent, registrar and other
agent charges, fees relating to auditing and accounting or other advisors and
costs of printing all documents necessary in connection with the Conversion; and
(d) Xxxx'x attorneys' fees. In the event the Company is unable to sell a minimum
of _________ Shares or the Conversion is terminated or otherwise abandoned, the
Company and the Bank shall reimburse Xxxx in accordance with Section 2 hereof.
Section 7. Conditions to Xxxx'x Obligations. Xxxx'x obligations
hereunder, as to the Shares to be issued at the Closing Date, are subject, to
the extent not waived by Xxxx, to the condition that all representations and
warranties of the Company 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 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 and the Bank shall have conducted
the Conversion and Merger in all material respects in accordance with the Plan,
Merger Agreement, the Conversion Regulations, and all other applicable laws,
regulations, decisions and orders, including all terms, conditions, requirements
and provisions precedent to the Conversion imposed upon them by the OTS.
(b) The Registration Statement shall have been declared effective by
the Commission, the Conversion Application approved by the OTS and Merger
Application approved by OTS not later than 5:30 p.m. on the date of this
Agreement, or with Xxxx'x consent at a later time and date;
22
and at the Closing Date, the Holding Company Application shall have been
approved by the OTS and 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 Conversion or Merger shall have been issued or proceedings
therefore initiated or, to the Company's or the Bank's knowledge threatened by
the Commission, the OTS, or any other federal or state authority.
(c) At the Closing Date, Xxxx shall have received:
(1) The favorable opinion, dated as of the Closing Date
and addressed to Xxxx and for its benefit, of Elias,
Matz, Xxxxxxx & Xxxxxxx, special counsel for the
Company and the Bank, in form and substance to the
effect that:
(i) The Company has been duly incorporated and
is validly existing as a corporation in good
standing under the laws of the State of
Delaware and has full 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 to enter into and perform
its obligations under this Agreement. The
Company is duly qualified as a foreign
corporation to transact business and is in
good standing in each jurisdiction where it
owns or leases any material properties or
conducts any material business, unless the
failure to so qualify would not have a
material adverse effect on the financial
condition, results of operations or business
of the Company.
(ii) The Bank is organized and is validly
existing as a federally chartered savings
bank under the laws of the United States in
mutual form of organization and upon the
Conversion will become a duly organized and
validly existing federally chartered savings
bank in capital stock form of organization
under the laws of the United States, in both
instances duly authorized to conduct its
business and own its property as described
in the Registration Statement and
Prospectus. All of the outstanding capital
stock of the Bank will be duly authorized
and, upon payment therefor, will be validly
issued, fully paid and non-assessable and,
to the best of such counsel's knowledge,
will be owned by the Company, free and clear
of any liens, encumbrances, claims or other
restrictions.
(iii) The Bank is a member of the FHLB-Chicago.
The Bank is an insured depository
institution under the provisions of Section
4(a) of the FDI Act, as amended, and no
proceedings for the termination or
revocation of such insurance are, to the
best of such counsel's
23
knowledge, pending or threatened; the
description of the liquidation account as
set forth in the Prospectus under the
caption "The Conversion-Liquidation Account"
to the extent that such information
constitutes matters of law and legal
conclusions has been reviewed by such
counsel and is accurate in all material
respects.
(iv) Upon consummation of the Conversion, the
authorized, issued and outstanding capital
stock of the Company will be within the
range set forth in the Prospectus under the
caption "Capitalization," and except for
shares issued upon incorporation of the
Company, no shares of Common Stock have been
issued prior to the Closing Date; at the
time of the Conversion, the Shares
subscribed for pursuant to the 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 the Prospectus,
will be duly and validly issued and fully
paid and non-assessable; the issuance of the
Shares is not subject to statutory
preemptive rights (except for Subscription
Rights granted pursuant to the Plan) and the
terms and provisions of the Shares conform
in all material respects to the description
thereof contained in the Prospectus. To the
best of such counsel's knowledge, 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.
(v) The activities of the Subsidiary as
described in the Prospectus are permitted to
subsidiaries of a savings and loan holding
company and of a federally chartered savings
bank by the rules, regulations, resolutions
and practices of the OTS.
(vi) The OTS has duly approved the Holding
Company Application and, to the best of such
counsel's knowledge, no action is pending or
threatened respecting the Holding Company
Application or the acquisition by the
Company of all of the Bank's issued and
outstanding capital stock; the Holding
Company Application complies as to form in
all material respects with the BHCA.
(vii) The OTS has duly approved the Conversion
Application and, to the best of such
counsel's knowledge, no action is pending or
threatened respecting the OTS's approval of
the Conversion Application; the Conversion
Application complies as to form in all
material respects with the Conversion
Regulations of the OTS.
24
(viii) The execution and delivery of the Agreement
and the consummation of the transactions
contemplated hereby have been duly and
validly authorized by all necessary action
on the part of the Company and the Bank; and
the Agreement is a valid and binding
obligation of the Company and the Bank,
enforceable in accordance with its terms,
except as the enforceability thereof may be
limited by (i) bankruptcy, insolvency, or
other laws now or hereafter in effect
affecting the enforceability of the rights
of creditors generally or the rights of
creditors of federally chartered savings
banks and their holding companies, (ii)
general principles of equity, (iii)
applicable law with respect to the
indemnification and/or contribution
provisions contained herein, (regardless of
whether such enforceability is considered in
a proceeding in equity or at law); and such
action will not result in any violation of
the provisions of the certificate of
incorporation, bylaws or charter, as
applicable, of the Company or the Bank or
any applicable federal law, act, regulation
(except that no opinion need be rendered
with respect to the securities or blue sky
laws of various jurisdictions or the rules
and regulations of the NASD and/or the
National Market System of the Nasdaq Stock
Market).
(ix) The Plan has been duly adopted by the
required vote of the directors of the
Company and the Directors of the Bank and,
based upon the certificate of the inspector
of election, by the depositors and borrowers
of the Bank.
(x) Subject to the satisfaction of the
conditions to the OTS's, approval of the
Conversion, the Company and the Bank are not
required to receive any further approval,
authorization, consent or other order of,
register with, or submit a notice to any
other federal in connection with the
execution and delivery of the Agreement, the
issuance of the Shares and the consummation
of the Conversion, except as may be required
under the securities or blue sky laws of
various jurisdictions (as to which no
opinion need be rendered), except as may be
required under the rules and regulations of
the NASD and/or the National Market System
of the Nasdaq Stock Market (as to which no
opinion need be rendered) and except for the
registration of the Company as a savings
bank holding company.
(xi) The Registration Statement is effective
under the 1933 Act and no stop order
suspending the effectiveness has been issued
under the 1933 Act or, to the best of such
counsel's knowledge, proceedings therefor
pending or threatened by the Commission.
25
(xii) At the time that the Registration Statement
became effective, (i) the Registration
Statement (as amended or supplemented, if so
amended or supplemented) (other than the
financial statements, the notes thereto and
other tabular, financial, statistical and
appraisal data included therein or omitted
therefrom, as to which no opinion need be
rendered) complied as to form in all
material respects with the requirements of
the 1933 Act and the 1933 Act Regulations,
and (ii) the Prospectus (other than the
financial statements, the notes thereto and
other tabular, financial, statistical and
appraisal data included therein or omitted
therefrom, 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 law.
(xiv) The descriptions in the Conversion
Application, the Registration Statement and
the Prospectus of the contracts, indentures,
mortgages, loan agreements, notes, leases or
other instruments filed as exhibits thereto
are accurate in all material respects and
fairly present the information required to
be shown.
(xv) To the best of such counsel's knowledge the
Company and the Bank have conducted the
Conversion in all material respects in
accordance with applicable requirements of
the Plan, the Conversion Regulations, and
all other applicable regulations, decisions
and orders thereunder, including all
material applicable terms, conditions,
requirements and conditions precedent to the
Conversion imposed upon the Company
or the Bank by the OTS and, to the best of
such counsel's knowledge, no person has
sought to obtain review of the final action
of the OTS in approving the Plan.
(xvi) To the best of such counsel's knowledge, the
Company, the Bank and the Subsidiary have
obtained all material federal licenses,
permits and other Federal governmental
authorizations currently required under the
HOLA and all applicable rules and
regulations promulgated thereunder for the
conduct of their businesses and to the best
of such counsel's knowledge all such
licenses, permits and other governmental
authorizations are in full force and effect,
and the Company, the Bank and the Subsidiary
are in all material respects complying
therewith, except whether the failure to
have such
26
licenses, permits and other governmental
authorizations or the failure to be in
compliance therewith would not have a
material adverse affect on the business or
operations of the Bank, the Company and the
Subsidiary, taken as a whole).
(xvii) The Company's certificate of incorporation
and bylaws comply in all material respects
with the Delaware General Corporate Law. The
Bank's charter and bylaws in mutual form
and, upon the completion of the Conversion,
in stock form, comply in all material
respects with the OTS.
(xviii) To the best of such counsel's knowledge,
neither the Company nor the Bank is in
violation of any directive from the OTS, to
make any material change in the method of
conducting its respective business.
(xix) The information in the Prospectus under the
captions "Regulation," "The Conversion,"
"Restrictions on Acquisition of the Holding
Company" and "Description of Capital Stock
of the Holding Company," to the extent that
such information constitutes matters of law,
summaries of legal matters, documents or
proceedings, or legal conclusions, has been
reviewed by such counsel and is correct in
all material respects. The description of
the Conversion process under the caption
"The Conversion" in the Prospectus has been
reviewed by such counsel and is in all
material respects correct. The discussion of
Federal statutes or regulations described or
referred to in the Prospectus are accurate
summaries. The information regarding the
federal tax opinion under the caption "The
Conversion-Tax Effects" has been reviewed by
such counsel and constitutes an accurate
summary of the opinion rendered by such
counsel to the Company and the Bank with
respect to such matters subject to the
qualifications and limitations noted
therein.
(xx) The Bank has the power and authority to
consummate the transactions contemplated by
the Merger Agreement.
(xxi) The Merger Agreement has been duly
authorized, executed and delivered by the
Bank and constitutes the valid and binding
obligation of the Bank enforceable in
accordance with its terms subject to
applicable bankruptcy, insolvency and
similar laws affecting creditors' rights and
remedies generally and subject, as to
enforceability, to general principles of
equity, whether applied in a court of law or
a court of equity.
27
(xxii) To the best knowledge of such counsel all
corporate acts and other proceedings
required to be taken by or on the part of
the Bank to consummate the transactions
contemplated by the Merger Agreement have
been properly taken; neither the execution
and delivery of the Merger Agreement, nor
the consummation of the transactions
contemplated thereby, with and without the
giving of notice or the lapse of time, or
both, will violate any provision of the
Charter or Bylaws of the Bank.
(xxiii) Except as disclosed in such opinion, to the
knowledge of such counsel there are no
actions, suits, proceedings or
investigations (public or private) of any
nature pending or threatened that challenge
the validity or propriety of the
transactions contemplated by the Merger
Agreement or which seek or threaten to
restrain, enjoin or prohibit or to obtain
substantial damages in connection with the
consummation of such transactions.
(xxiv) All regulatory and governmental approvals
and consents which are necessary to be
obtained by the Bank and its subsidiaries to
permit the execution, delivery and
performance of the Merger Agreement have
been obtained.
(xxv) All conditions precedent to consummation of
the Merger have been satisfied, including
but not limited to those referenced in the
Merger Agreement, all statutory waiting
periods with respect to all regulatory and
governmental approvals of the Acquisition
have expired and there are no facts or
circumstances which would preclude the
immediate consummation of the Merger.
(2) The favorable opinion, dated as of the Closing Time,
of Silver, Xxxxxxxx & Xxxx, counsel to SFC and
Suburban, concerning the following matters:
(i) SFC is a corporation duly organized, validly
existing and in good standing under the laws
of the State of Delaware, and Suburban is a
federally chartered stock savings bank duly
organized and in existence under the laws of
the United States of America.
(ii) SFC and Suburban have the power and
authority to carry on their business as
described in the Prospectus and to
consummate the transactions contemplated by
the Merger Agreement.
28
(iii) The Merger Agreement has been duly
authorized and approved by SFC and the
Merger Agreement and the transactions
contemplated thereby have been approved by
the requisite vote of SFC's shareholders and
duly authorized, executed and delivered by
SFC and the Merger Agreement constitutes the
valid and binding obligation of SFC
enforceable in accordance with its terms
subject to applicable bankruptcy, insolvency
and similar laws affecting creditors' rights
and remedies generally and subject, as to
enforceability, to general principles of
equity, whether applied in a court of law or
a court of equity.
(iv) To the best knowledge of such counsel, all
acts, other proceedings required to be taken
by or on the part of SFC, including the
adoption of the Merger Agreement by the
shareholders of SFC, and the necessary
approvals, consents, authorizations or
notifications required to be taken to
consummate the transactions contemplated by
the Merger Agreement, have been properly
taken or obtained; neither the execution and
delivery of the Merger Agreement nor the
consummation of the transactions
contemplated hereby and thereby, with or
without the giving of notice or the lapse of
time, or both, will (i) violate any
provision of the Certificate, Charter or
Bylaws; or (ii) to the knowledge of such
counsel, violate, conflict with, result in
the material breach or termination of,
constitute a material default under,
accelerate the performance required by, or
result in the creation of any material lien,
charge or encumbrance upon any of the
properties or assets of SFC or Suburban
pursuant to any indenture, mortgage, deed of
trust, or other agreement or instrument to
which SFC or Suburban are a party or by
which it or any of their properties or
assets may be bound, or violate any statute,
rule or regulation applicable to SFC or
Suburban, which would have a material
adverse effect on the financial condition,
assets, liabilities, or business of SFC or
Suburban; to the knowledge of such counsel,
no consent, approval, authorization, order,
registration or qualification of or with any
court, regulatory authority or other
governmental body other than as specifically
contemplated by the Merger Agreement is
required for the consummation by SFC or
Suburban of the transactions contemplated by
the Merger Agreement.
(v) To the best knowledge of such counsel, there
are no actions, suits, proceedings, or
investigations of any nature pending or
threatened that challenge the validity or
legality of the transactions contemplated by
the Merger Agreement which seek or threaten
to restrain, enjoin
29
or prohibit (or obtain substantial damages
in connection with) the consummation of such
transactions.
(vi) To the best knowledge of such counsel, there
is no litigation, appraisal or other
proceeding or governmental investigation
pending or threatened against or relating to
the business or property of SFC or Suburban
which would have a materially adverse effect
on the consolidated financial condition of
SFC , or any legal impediment to the
continued operation of the properties and
business of SFC or Suburban in the ordinary
course after the consummation of the
transactions contemplated by the Merger
Agreement.
(vii) All conditions precedent to consummation of
the Acquisition have been satisfied,
including but not limited to those
referenced in Article V of the Merger
Agreement, all statutory waiting periods
with respect to all regulatory and
governmental approvals of the Merger have
expired and there are no facts or
circumstances which would preclude the
immediate consummation of the Merger.
(3) The favorable opinion, dated as of the Closing Date,
of Xxxxxxx, Xxxxxx & Xxxxxxxx, Xxxx'x counsel, with
respect to such matters as Xxxx may reasonably
require. Such opinion may rely upon the opinions of
counsel to the Company and the Bank, and as to
matters of fact, upon certificates of officers and
directors of the Company and the Bank delivered
pursuant hereto or as such counsel shall reasonably
request.
(4) In giving their opinions required by subsections 1
and 3, respectively, of this Section, Elias, Matz,
Xxxxxxx & Xxxxxxx L.L.P. and Xxxxxxx, Xxxxxx &
Xxxxxxxx shall each additionally state that nothing
has come to their attention that would lead them to
believe that the Registration Statement (except for
financial statements, the notes thereto and other
financial, statistical data and appraisal included
therein, as to which counsel need make no statement),
at the time it became effective, 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 not
misleading or that the Prospectus (except for
financial statements and schedules and other
financial or statistical data included therein, as to
which counsel need make no statement), at the time
the Registration Statement became effective or at
Closing Time, included an untrue statement of a
material fact or omitted to state a material fact
necessary in order to make the statements therein, in
the light of the circumstances under which they were
made, not misleading. In giving their opinions,
Elias, Matz, Xxxxxxx & Xxxxxxx L.L.P. and Xxxxxxx,
Xxxxxx & Xxxxxxxx may rely as to matters of fact on
certificates of officers and directors
30
of the Company and the Bank and certificates of
public officials, and as to certain matters of
Delaware law upon the opinion of
_________________________________________, which
opinion shall be in form and substance satisfactory
to counsel for the Agent, and Xxxxxxx, Xxxxxx &
Xxxxxxxx may also rely on the opinion of Elias, Matz,
Xxxxxxx & Xxxxxxx L.L.P. and
_________________________________ hereof.
(d) At Closing Time, there shall not have been, since the date hereof
or since the respective dates as of which information is given in the
Registration Statement and the Prospectus, any material adverse change in the
financial condition, results of operations or business affairs of the Company,
the Bank, SFC, Suburban or their respective subsidiaries, whether or not arising
in the ordinary course of business, and the Agent shall have received a
certificate of the Chief Executive Officer of the Company and of the Bank, the
President of the Company and the Bank and the chief financial or chief
accounting officer of the Company and of the Bank, dated as of Closing Time, to
the effect that (i) there has been no such material adverse change, (ii) there
shall have been no material transaction entered into by the Company or the Bank
from the latest date as of which the financial condition of the Company or the
Bank as set forth in the Registration Statement and the Prospectus other than
transactions referred to or contemplated therein and transactions in the
ordinary course of business and consistent with past practices, (iii) neither
the Company nor the Bank shall have received from the OTS any direction (oral or
written) to make any material change in the method of conducting its 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
business, financial condition or results of operations of the Company or the
Bank, (iv) the representations and warranties in Section 1 hereof are true and
correct with the same force and effect as though expressly made at and as of the
Closing Time, (v) the Company and the Bank have complied with all agreements and
satisfied all conditions on their part to be performed or satisfied at or prior
to Closing Time, (vi) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that purpose have
been initiated or threatened by the Commission, and (vii) no order suspending
the Offerings or the authorization for final use of the Prospectus has been
issued and no proceedings for that purpose have been initiated or threatened by
the OTS and no person has sought to obtain regulatory or judicial review of the
action of the OTS in approving the Plan in accordance with the Conversion
Regulations.
(d) At the Closing Date, Xxxx shall receive a certificate of the Chief
Executive Officer and the Chief Financial Officer of the Company and a
certificate of the Chief Executive Officer and the Chief Financial Officer of
the Bank, both dated as of such Closing Date, to the effect that: (i) they have
reviewed 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 material adverse change in the financial condition, or in the earnings,
capital, properties or business of the Company, the Bank and the Subsidiary has
occurred and, to their knowledge, no other event has occurred, which should have
been set forth in an
31
amendment or supplement to the Prospectus which has not been so set forth, 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 Prospectus, there has been no material adverse change in the financial
condition, results of operations or business prospects of the Company, the Bank
or the Subsidiary, independently, or of the Company, the Bank and the Subsidiary
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 a though expressly made at and as of the
Closing Date; (v) the Company 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 Date and will comply in all
material respects with all obligations to be satisfied by them after Conversion;
(vi) no stop order suspending the effectiveness of the Registration Statement is
pending or, to the best knowledge of the Company or the Bank, threatened by the
Commission or any state authority; (vii) no order suspending the Offering, the
Conversion, the acquisition of all of the shares of the Bank by the Company or
the effectiveness of the Prospectus has been issued and no proceedings for that
purpose are pending or, to the best knowledge of the Company or the Bank,
threatened by the OTS, the Commission or any other federal or 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.
(e) Prior to and at the Closing Date: (i) in the reasonable opinion of
Xxxx, there shall have been no material adverse change in the financial
condition, or in the earnings or business of the Bank independently, or of the
Company, the Bank and the Subsidiary 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; (iii) the Company
or the Bank shall not have received from the OTS any direction (oral or written)
to make any material change in the method of conducting their business with
which it has not complied (which direction, if any, shall have been disclosed to
Xxxx) or which materially and adversely would affect the business, operations or
financial condition or income of the Company and the Bank considered as one
enterprise; (iv) the Company, the Bank and the Subsidiary shall not have been in
material default (nor shall an event have occurred which, with notice or lapse
of time or both, would constitute a default) under any material provision of any
agreement or instrument relating to any outstanding indebtedness; (v) no action,
suit or proceedings, at law or in equity or before or by any federal or state
commission, board or other administrative agency, shall be pending or, to the
knowledge of the Company, the Bank or the Subsidiary, threatened against the
Company, the Bank or the Subsidiary or affecting any of their properties wherein
an unfavorable decision, ruling or finding would materially and adversely affect
the business operations, financially condition or income of the Company, the
Bank and the Subsidiary considered as one enterprise; and (vi) the Shares have
been qualified or registered for offering and sale or exempted therefore under
the securities or blue sky laws of the jurisdictions as Xxxx shall have
requested and as agreed to by the Company and the Bank.
(f) At the time of the execution of this Agreement, the Agent shall
have received from Ernst & Young LLP, independent auditors, a letter dated such
date, in form and substance satisfactory to the Agent, to the effect that (i)
they are independent public accountants with respect
32
to the Company, the Bank and its subsidiaries within the meaning of the Code of
Ethics of the American Institute of Certified Public Accountants, the 1933 Act
and the 1933 Act Regulations and the Conversion Regulations; (ii) it is their
opinion that the consolidated financial statements and supporting schedules
included in the Registration Statement and covered by their opinions therein
comply as to form in all material respects with the applicable accounting
requirements of the 1933 Act and the 1933 Act Regulations; (iii) based upon
limited procedures set forth in detail in such letter, nothing has come to their
attention which causes them to believe that (A) the unaudited financial
statements and supporting schedules of the Bank and its subsidiaries included in
the Registration Statement do not comply as to form in all material respects
with the applicable accounting requirements of the 1933 Act and the 1933 Act
Regulations or are not presented in conformity with generally accepted
accounting principles applied on a basis substantially consistent with that of
the audited financial statements included in the Registration Statement and the
Prospectus, (B) the unaudited amounts set forth under "Selected Financial
Information" in the Prospectus were not determined on a basis substantially
consistent with that used in determining the corresponding amounts in the
audited financial statements included in the Registration Statement, (C) at a
specified date not more than five days prior to the date of this Agreement,
there has been any increase in the consolidated long-term or short-term debt of
the Bank and its subsidiaries or any decrease in total deposits or net worth of
the Bank and its subsidiaries, in each case as compared with the amounts shown
in the December 31, 1997 balance sheet included in the Registration Statement or
(D) during the period from December 31, 1997 to a specified date not more than
five days prior to the date of this Agreement, there were any decreases, as
compared with the corresponding period in the preceding year, in total interest
income, net interest income, net interest income after provision for loan
losses, income before income tax expense or net income of the Bank and its
subsidiaries, except in all instances for increases or decreases which the
Registration Statement and the Prospectus disclose have occurred or may occur;
and (iv) in addition to the examination referred to in their opinions and the
limited procedures referred to in clause (iii) above, they have carried out
certain specified procedures, not constituting an audit, with respect to certain
amounts, percentages and financial information which are included in the
Registration Statement and Prospectus and which are specified by the Agent, and
have found such amounts, percentages and financial information to be in
agreement with the relevant accounting, financial and other records of the
Company, the Bank and its subsidiaries identified in such letter.
At the time of the execution of this Agreement, the Agent shall have
received from Cobitz, Xxxxxxxxxx & Xxxxxxxx a letter dated such date, in form
and substance satisfactory to the Agent, to the effect that (i) they are
independent public accountants with respect to SFC, Suburban and its
subsidiaries within the meaning of the Code of Ethics of the American Institute
of Certified Public Accountants, the 1933 Act and the 1933 Act Regulations and
the Conversion Regulations; (ii) it is their opinion that the consolidated
financial statements and supporting schedules included in the Registration
Statement and covered by their opinions therein comply as to form in all
material respects with the applicable accounting requirements of the 1933 Act
and the 1933 Act Regulations; (iii) based upon limited procedures set forth in
detail in such letter, nothing has come to their attention which causes them to
believe that (A) the unaudited financial statements and supporting schedules of
SFC, Suburban and its subsidiaries included in the Registration Statement do not
33
comply as to form in all material respects with the applicable accounting
requirements of the 1933 Act and the 1933 Act Regulations or are not presented
in conformity with generally accepted accounting principles applied on a basis
substantially consistent with that of the audited financial statements included
in the Registration Statement and the Prospectus, (B) the unaudited amounts set
forth under "Selected Financial Information" in the Prospectus were not
determined on a basis substantially consistent with that used in determining the
corresponding amounts in the audited financial statements included in the
Registration Statement, (C) at a specified date not more than five days prior to
the date of this Agreement, there has been any increase in the consolidated
long-term or short-term debt of SFC, Suburban and its subsidiaries or any
decrease in total deposits or net worth of SFC, Suburban and its subsidiaries,
in each case as compared with the amounts shown in the December 31, 1997 balance
sheet included in the Registration Statement, or (D) during the period from
December 31, 1997 to a specified date not more than five days prior to the date
of this Agreement, there were any decreases, as compared with the corresponding
period in the preceding year, in total interest income, net interest income, net
interest income after provision for loan losses, income before income tax
expense or net income of SFC, Suburban and its subsidiaries, except in all
instances for increases or decreases which the Registration Statement and the
Prospectus disclose have occurred or may occur; and (iv) in addition to the
examination referred to in their opinions and the limited procedures referred to
in clause (iii) above, they have carried out certain specified procedures, not
constituting an audit, with respect to certain amounts, percentages and
financial information which are included in the Registration Statement and
Prospectus and which are specified by the Agent, and have found such amounts,
percentages and financial information to be in agreement with the relevant
accounting, financial and other records of SFC, Suburban and its subsidiaries
identified in such letter.
(g) At Closing Time, the Agent shall have received from each of Ernst &
Young LLP and Cobitz, Xxxxxxxxxx & Xxxxxxxx a letter, dated as of Closing Time,
to the effect that they reaffirm the statements made in the letters furnished
pursuant to subsection (d) of this Section, except that the specified date
referred to shall be a date not more than five days prior to Closing time.
(h) All conditions precedent to consummation of the Merger have been
satisfied, including but not limited to those referenced in the Merger
Agreement, all statutory waiting periods with respect to all regulatory and
governmental approvals of the Merger have expired and there are no facts or
circumstances which would preclude the immediate consummation of the Merger.
(i) At Closing Time, the Securities shall have been approved for
listing on the Nasdaq Stock Market upon notice of issuance.
(j) At Closing Time, the Agent shall have received a letter from RP
Financial, dated as of the Closing Time, confirming its appraisal.
(k) At Closing Time, counsel for the Agent shall have been furnished
with such documents and opinions as they may require for the purpose of enabling
them to pass upon the issuance and sale of the Securities as herein contemplated
and related proceedings, or in order to
34
evidence the accuracy of any of the representations or warranties, or the
fulfillment of any of the conditions, herein contained; and all proceedings
taken by the Company in connection with the issuance and sale of the Securities
as herein contemplated shall be satisfactory in form and substance to the Agent
and counsel for the Agent.
(l) At any time prior to Closing Time, (i) there shall not have
occurred any material adverse change in the financial markets in the United
States or elsewhere or any outbreak of hostilities or escalation thereof or
other calamity or crisis the effect of which, in the judgment of the Agent, is
so material and adverse as to make it impracticable to market the Securities or
to enforce contracts, including subscriptions or orders, for the sale of the
Securities, and (ii) trading generally on either the Nasdaq Stock Market or the
New York Stock Exchange shall not have been suspended, and minimum or maximum
prices for trading shall not have been fixed, or maximum ranges for prices for
securities have been required, by either of said Exchanges or by order of the
Commission or any other governmental authority, and a banking moratorium shall
not have been declared by either Federal or New York authorities.
(m) At the Closing Date, Xxxx shall receive a letter from Ernst & Young
LLP, dated the Closing Date, addressed to Xxxx, confirming the statements made
by them in the letter delivered by it pursuant to subsection (f) of this Section
7, the "specified date" referred to in clause (ii) of subsection (f) thereof to
be a date specified in such letter, which shall not be more than three business
days prior to the Closing Date.
(n) At the Closing Date, Xxxx shall receive a letter from R.P.
Financial dated the date thereof and addressed to counsel for Xxxx, (i)
confirming that said firm is independent of the Company and the Bank and is
experienced and expert in the area of corporate appraisals and (ii) stating that
its opinion of the aggregate pro forma market value of the Company and the Bank
expressed in its Appraisal dated as of _______________, and most recently
updated, remains in effect.
(o) The Company and the Bank shall not have sustained since the date of
the latest audited financial statements included in the Prospectus any material
loss or interference with their businesses from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree, otherwise than as set forth or
contemplated in the Registration Statement and Prospectus.
(p) At or prior to the Closing Date, Xxxx shall receive: (i) a copy of
the letter from the OTS approving the Conversion Application and authorizing the
use of the Prospectus; (ii) a copy of the order from the Commission declaring
the Registration Statement effective; (iii) a certificate from the OTS
evidencing the existence of the Bank; (iv) certificates of good standing from
the States of Indiana and Delaware evidencing the good standing of the Company;
(v) a certificate of good standing from the States of Indiana and Delaware
evidencing the good standing of the subsidiaries; (vi) a certificate from the
FDIC evidencing the Bank's insurance of accounts; (vii) a certificate of the
35
FHLB-Chicago evidencing the Bank's membership thereof; (viii) a copy of the
letter from the OTS approving the Company's Holding Company Application.
(q) As soon as available after the Closing Date, Xxxx shall receive,
upon request, a copy of the Bank's federal stock charter.
(r) Subsequent to the date hereof, there shall not have occurred any of
the following: (i) a suspension or limitation in trading in securities generally
on the New York Stock; Exchange or in the over-the-counter market, or quotations
halted generally on the Nasdaq National 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 associations or a general moratorium on
the withdrawal of deposits from commercial banks or federal savings associations
declared by federal or Illinois 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 decline, in Xxxx'x
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 Prospectus.
Section 8. Indemnification.
(a) The Company and the Bank jointly and severally agree to indemnify
and hold harmless Xxxx, its officers, directors, agents, servants and employees
and each person, if any, who controls Xxxx 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
reasonable and documented settlement expenses), joint or several, that Xxxx or
any of them may suffer or to which Xxxx and any such persons may become subject
under all applicable federal or state laws or otherwise, and to promptly
reimburse Xxxx and any such persons upon written demand for any expense
(including reasonable and documented fees and disbursements of counsel) incurred
by Xxxx 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 Conversion Application (or any amendment or supplement thereto),
the Holding Company Application or any blue sky application or other instrument
or document executed by the Company or the Bank or based upon written
information supplied by the Company 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 agents, under the securities laws thereof (collectively, the
"Blue Sky Application"), or any application or other document, advertisement,
oral statement or communication ("Sales Information") prepared, made or executed
by or on behalf of the Company
36
or the Bank with their consent or based upon written or oral information
furnished by or on behalf of the Company 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
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 Conversion Application
(or any amendment or supplement thereto), any Blue Sky Application or Sales
Information or other documentation distributed in connection with the
Conversion; provided, however, that no indemnification is required under this
paragraph (a) to the extent such losses, claims, damages, liabilities or actions
arise out of or are based upon Xxxx'x xxxxx negligence, bad faith or willful
misconduct (as determined in a final judgment by a court of competent
jurisdiction) or upon any untrue material statement or alleged untrue material
statements in, or material omission or alleged material omission from, the
Registration Statement (or any amendment or supplement thereto), preliminary or
final Prospectus (or any amendment or supplement thereto), the Conversion
Application, any Blue Sky Application or Sales Information made in reliance upon
and in conformity with information furnished in writing to the Company or the
Bank by Xxxx regarding Xxxx or statistical information regarding national
averages provided by Xxxx for the Sales Information and provided further that
such indemnification shall be to the extent permitted by Sections 23A and 23B of
the Federal Reserve Act, as amended.
(b) Xxxx agrees to indemnify and hold harmless the Company and the
Bank, their directors and officers and each person, if any, who controls the
Company 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 reasonable and documented
settlement expenses), joint or several, which it, or any of them, may suffer or
to which it, 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 and
documented fees and disbursements of counsel) incurred by it, or any of them, in
connection with investigating, preparing or defending any actions, proceedings
or claims (whether commenced or threatened) to the extent such losses, claims,
damages, liabilities or actions arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment or supplement thereto), the Conversion
Application (or any amendment or supplement thereto) or the preliminary or final
Prospectus (or any amendment or supplement thereto), or are based upon the
omission or alleged omission to state in any of the foregoing documents a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; provided, however, that Xxxx'x 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) or the Conversion Application (or any amendment or supplement thereto),
any Blue Sky Application or
37
Sales Information in reliance upon and in conformity with information furnished
in writing to the Company or the Bank by Xxxx regarding Xxxx or statistical
information regarding national averages provided by Xxxx for the Sales
Information.
(c) Each indemnified party shall give prompt written notice to each
indemnifying party of any action, proceeding, claim (whether commenced or
threatened), or suit instituted against it in respect of which indemnity may be
sought hereunder, but failure to so notify an indemnifying party shall not
relieve it from any liability which it may have on account of this Section 8 or
otherwise. An indemnifying party may participate at its own expense in the
defense of such action. In addition, if it so elects within a reasonable time
after receipt of such notice, an indemnifying party, jointly with any other
indemnifying parties receiving such notice, may assumed 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 reasonable 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, proceeding or
claim or separate but similar or related actions, proceedings or claims in the
same jurisdiction arising out of the same general allegations or circumstances.
(d) The agreements contained in this Section 8 and in Section 9 hereof
and the representations and warranties of the Company and the Bank set forth in
this Agreement shall remain operative and in full force and effect regardless
of: (i) any investigation made by or on behalf of Xxxx or its officers,
directors or controlling persons, agents or employees or by or on behalf of the
Company or the Bank or any officers, directors or controlling persons, agents or
employees of the Company or the Bank; (ii) delivery of and payment hereunder for
the Shares; or (iii) any termination of this Agreement.
Section 9. Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnification provided for in
Section 8 is due in accordance with its terms but is for any reason held by a
court to be unavailable from the Company, the Bank or Xxxx, the Company, the
Bank and Xxxx shall contribute to the aggregate losses, claims, damages and
liabilities (including any investigation, legal and other expenses incurred in
connection with, and any amount paid in settlement of, any action, suit or
proceeding of any claims asserted, but after deducting any contribution received
by the Company, the Bank or Xxxx from persons other than the other party
thereto, who may also be liable for contribution) in such proportion so that
Xxxx are responsible for that portion represented by the percentage that the
fees paid to Xxxx pursuant to Section 2 of this Agreement (not including
expenses) bears to the gross proceeds received by the Company from the sale of
the Shares in the Offering and the Company and the Bank shall be
38
responsible for the balance. If, however, the allocation provided above is not
permitted by applicable law or if the indemnified party failed to give the
notice required under Section 8 above, then each indemnifying party shall
contribute to such amount paid or payable by such indemnified party in such
proportion as is appropriate to reflect not only such relative fault of the
Company and the Bank on the one hand and Xxxx 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 and the Bank on the one hand and Xxxx
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 and/or
the Bank on the one hand or Xxxx 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 Bank and Xxxx 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 Xxxx shall not be required to contribute
any amount which in the aggregate exceeds the amount paid (excluding
reimbursable expenses) to Xxxx under this Agreement. It is understood that the
above stated limitation on Xxxx'x liability for contribution is essential to
Xxxx and that Xxxx 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 ll(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 and
the Bank under this Section 9 and under Section 8 shall be in addition to any
liability which the Company and the Bank may otherwise have. For purposes of
this Section 9, each of Xxxx'x, the Company's or the Bank's officers and
directors and each person, if any, who controls Xxxx or the Company or the Bank
within the meaning of the 1933 Act and the 1934 Act shall have the same rights
to contribution as Xxxx, 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 Bank and Xxxx and the representations
and warranties and other statements of the Company, the Bank and Xxxx set forth
in or made pursuant to this Agreement shall remain in full force and effect,
regardless of any termination or cancellation of this Agreement or any
investigation made by or on behalf of Xxxx, the Company, the Bank or any
controlling person referred to in Section 8 hereof, and shall survive the
issuance of the Shares, and any legal
39
representative, successor or assign of Xxxx, the Company, the Bank, and any such
controlling person shall be entitled to the benefit of the respective
agreements, indemnities, warranties and representations.
Section 11. Termination. Xxxx may terminate its obligations under this
Agreement by giving the notice indicated below in this Section 11 at any time
after this Agreement becomes effective as follows:
(a) In the event the Company fails to sell all of the Shares by
September 30, 1998, and in accordance with the provisions of the Plan or as
required by the Conversion Regulations, and applicable law, this Agreement shall
terminate upon refund by the Bank to each person who has subscribed for or
ordered any of the Shares the full amount which it may have received from such
person, together with interest as provided in the Prospectus, and no party to
this Agreement shall have any obligation to the other hereunder, except for
payment by the Company and/or the Bank as set forth in Sections 2(a) and (d), 6,
8 and 9 hereof.
(b) If any of the conditions specified in Section 7 shall not have been
fulfilled when and as required by this Agreement unless waived in writing, or by
the Closing Date, this Agreement and all of Xxxx'x obligations hereunder may be
cancelled by Xxxx by notifying the Company and the Bank of such cancellation in
writing at any time at or prior to the Closing Date, and any such cancellation
shall be without liability of any party to any other party except as otherwise
provided in Sections 2, 6, 8 and 9 hereof.
(c) If Xxxx elects to terminate this Agreement with respect to it as
provided in this Section, the Company and the Bank shall be notified promptly by
such Agent by telephone or telegram, confirmed by letter.
The Company and the Bank may terminate this Agreement with respect to
Xxxx in the event Xxxx 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 Xxxx 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 Xxxx shall be mailed, delivered or
telegraphed and confirmed to Xxxxxxx Xxxx & Company, 000
Xxxxxxxxx, Xxxxxx, Xxxx 00000-0000, Attention: Xxxx Xxxxx (with a
copy to Xxxxxxx, Xxxxxx & Xxxxxxxx, 0000 Xxxxxxxxx Xxxxxx, X.X.,
Xxxxxxxxxx, X.X. 00000, Attention: Xxxx X. Xxxxxxxxx, Esq.) and,
if sent to the Company and the Bank, shall be mailed, delivered
or telegraphed and confirmed to the Company and the Bank at CFS
Bancorp, Inc., 000 Xxxxx Xxxx, Xxxxxxx, Xxxxxxx 00000, Attention:
Xxxxxx X. Xxxxxx, Chairman and Chief Executive Officer (with a
copy to Elias, Matz, Xxxxxxx & Xxxxxxx, 000 00xx Xxxxxx, X.X.,
Xxxxxxxxxx, X.X. 00000, Attention: Xxxxxxx Xxxxxxx, Esquire).
40
Section 13. Parties. The Company and the Bank shall be entitled to
act and rely on any request, notice, consent, waiver or agreement purportedly
given on behalf of Xxxx when the same shall have been given by the undersigned.
Xxxx shall be entitled to act and rely on any request, notice, consent, waiver
or agreement purportedly given on behalf of the Company or the Bank, when the
same shall have been given by the undersigned or any other officer of the
Company or the Bank. This Agreement shall inure solely to the benefit of, and
shall be binding upon, Xxxx, the Company, the Bank, and their respective
successors, legal representatives and assigns, and no other person shall have or
be construed to have any legal or equitable right, remedy or claim under or in
respect of or by virtue of this Agreement or any provision herein contained. It
is understood and agreed that this Agreement, including Exhibit A thereto, 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 Xxxx and
the Company and the Bank. At the closing, the Company and the Bank shall deliver
to Xxxx in next day funds the commissions, fees and expenses due and owing to
Xxxx as set forth in Sections 2 and 6 hereof and the opinions and certificates
required hereby and other documents deemed reasonably necessary by Xxxx 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
a binding agreement.
41
If the foregoing correctly sets forth the arrangement among the
Company, the Bank and Xxxx, please indicate acceptance thereof in the space
provided below for that purpose, whereupon this letter and Xxxx'x acceptance
shall constitute a binding agreement.
Very truly yours,
CFS BANCORP, INC. CITIZENS FINANCIAL SERVICES, FSB
By: By:
-------------------------- ------------------------------
Xxxxxx X. Xxxxxx Xxxxxx X. Xxxxxx
Chairman and Chief Chairman and Chief
Executive Officer Executive Officer
Accepted as of the date first above written
XXXXXXX XXXX & COMPANY
A DIVISION OF XXXXX, XXXXXXXX
& XXXXX, INC.
By:
--------------------------
Xxxxxxx X. Xxxx
42
