1,610,000 Shares
(subject to increase up to 1,851,500 shares
in the event of an oversubscription)
BEN FRANKLIN FINANCIAL, INC.
(a Delaware corporation)
Common Stock
(par value $.01 per share)
Agency Agreement
____________, 1998
Friedman, Billings, Xxxxxx & Co., Inc.
0000 Xxxxxxxxxx Xxxxxx Xxxxx
00xx Xxxxx
Xxxxxxxxx, XX 00000
Ladies and Gentlemen:
Ben Franklin Financial, Inc., a Delaware corporation (the "Company"),
and Ben Franklin Bank of Illinois, a federal savings bank (the "Bank"), hereby
confirm their agreement with Friedman, Billings, Xxxxxx & Co., Inc. ("FBR" or
the "Agent") with respect to the offer and sale by the Company of 1,610,000
shares (subject to increase up to 1,851,500 shares in the event of an
oversubscription) of the Company's common stock, par value $.01 per share (the
"Common Stock"). The shares of Common Stock to be sold by the Company in the
Offerings (as hereinafter deemed) are hereinafter called the "Securities."
The Securities are being offered in accordance with the plan of
conversion (the "Plan") adopted by the Board of Directors of the Bank pursuant
to which the Bank intends to convert from a federally chartered mutual savings
bank to a federally chartered stock savings bank and issue all of its stock to
the Company. Pursuant to the Plan, the Company is offering to certain of the
Bank's depositors and borrowers and its tax qualified employee benefit plans
(the "Employee Plans") rights to subscribe for the Securities in a subscription
offering (the "Subscription Offering"). To the extent Securities are not
subscribed for in the Subscription Offering, such Securities may be offered to
certain members of the general public, in a public offering and/or direct
community offering (the "Public Offering," and together with the Subscription
Offering, as each may be extended or reopened from time to time, the
"Subscription/Public Offering") to be commenced concurrently with the
Subscription Offering. It is currently anticipated by the Bank and the Company
that any Securities not subscribed for in the Subscription/Public Offering will
be offered, subject to Section 2 hereof, in a syndicated public offering (the
"Syndicated Public Offering"). The Subscription/Public Offering and the
Syndicated Public Offering are hereinafter referred to collectively as the
"Offerings" and the conversion of the Bank from mutual to stock form, the
acquisition of all of the capital stock of the Bank by the Company and the
Offerings are
hereinafter referred to collectively as the "Conversion." It is acknowledged
that the number of Securities to be sold in the Conversion may be increased or
decreased as described in the Prospectus (as hereinafter defined). If the number
of Securities is increased or decreased in accordance with the Plan, the term
"Securities" shall mean such greater or lesser number, where applicable. In the
event that a holding company form of organization is not utilized, all pertinent
terms of this Agreement will apply to the conversion of the Bank from the mutual
to stock form of organization and the sale of the Bank's common stock.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-1 (No. 333-_____), including a
related prospectus, for the registration of the Securities under the Securities
Act of 1933, as amended (the "1933 Act"), has filed such amendments thereto, if
any, and such amended prospectuses as may have been required to the date hereof
by the Commission in order to declare such registration statement effective, and
will file such additional amendments thereto and such amended prospectuses and
prospectus supplements as may hereafter be required. Such registration statement
(as amended to date, if applicable, and as from time to time amended or
supplemented hereafter) and the prospectus constituting a part thereof
(including in each case all documents incorporated or deemed to be incorporated
by reference therein and the information, if any, deemed to be part thereof
pursuant to the rules and regulations of the Commission under the 1933 Act, as
from time to time amended or supplemented pursuant to the 1933 Act or otherwise
(the "1933 Act Regulations")), are hereinafter referred to as the "Registration
Statement" and the "Prospectus," respectively, except that if any revised
prospectus shall be used by the Company in connection with the Subscription/
Public Offering or the Syndicated Public Offering which differs from the
Prospectus on file at the Commission at the time the Registration Statement
becomes effective (whether or not such revised prospectus is required to be
filed by the Company pursuant to Rule 424(b) of the 1933 Act Regulations), the
term "Prospectus" shall refer to such revised prospectus from and after the time
it is first provided to the Agent for such use.
Concurrently with the execution of this Agreement, the Company is
delivering to the Agent copies of the Prospectus of the Company to be used in
the Subscription/ Public Offering. Such Prospectus contains information with
respect to the Bank, the Company, the Conversion and the Common Stock.
Section 1. Representations and Warranties. (a) The Company and the Bank
jointly and severally represent and warrant to the Agent as of the date hereof
as follows:
(i) The Registration Statement has been declared effective by the
Commission, no stop order has been issued with respect thereto and no
proceedings therefor have been initiated or, to the knowledge of the
Company and the Bank, threatened by the Commission. At the time the
Registration Statement became effective and at the Closing Time referred to
in Section 2 hereof, the Registration Statement complied and
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will comply in all material respects with the requirements of the 1933 Act
and the 1933 Act Regulations and did not and will 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 not
misleading. The Prospectus, at the date hereof does not and at the Closing
Time referred to in Section 2 hereof will not, include 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; provided, however, that the representations
and warranties in this subsection shall not apply to statements in or
omissions from the Registration Statement or Prospectus or the Plan made in
reliance upon and in conformity with information with respect to the Agent
furnished to the Company in writing by the Agent expressly for use in the
Registration Statement or Prospectus (the "Agent Information," which the
Company and the Bank acknowledge appears only in the cover page and the
sections captioned "Market for Common Stock" and "The Conversion--Public
Offering and Direct Community Offering" and "The Conversion--Marketing
Arrangements" of the Prospectus).
(ii) The Company has filed with the Department of the Treasury, Office
of Thrift Supervision (the "OTS") the Company's application for approval of
its acquisition of the Bank (the "Holding Company Application") on Form
H-(e)1 promulgated under the savings and loan holding company provisions of
the Home Owners' Loan Act ("HOLA") and the regulations promulgated
thereunder. The Company has received written notice dated _________ __,
1998 from the OTS of its approval of the acquisition of the Bank, 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, to the knowledge of the Company or the Bank,
threatened by the OTS. At the date of such approval, the Holding Company
Application complied in all material respects with the applicable
provisions of HOLA and the regulations promulgated thereunder.
(iii) Pursuant to the rules and regulations of the OTS governing the
conversion of federally chartered mutual savings institutions to stock form
(the "Conversion Regulations"), the Bank has filed with the OTS an
application for conversion on Form AC, and has filed such amendments
thereto and supplementary materials as may have been required to the date
hereof (such application, as amended to date, if applicable, and as from
time to time amended or supplemented hereafter, is hereinafter referred to
as the ("Conversion Application")), including copies of the Bank's Proxy
Statement, dated _________ __, 1998, relating to the Conversion (the"Proxy
Statement"), and the Prospectus. The OTS has, by order dated _________ __,
1998 (the "Order"), approved the Conversion Application (which Application
includes the Plan), 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
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therefor have been initiated or, to the knowledge of the Company or the
Bank, threatened by the OTS. At the date of such approval, the Conversion
Application complied in all material respects with the applicable
provisions of the Conversion Regulations except for those provisions
specifically waived by the OTS in the Order.
(iv) 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.
(v) 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.
(vi) At the Closing Time referred to in Section 2, the Company and the
Bank will have satisfied all 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 Federal
Deposit Insurance Corporation (the "FDIC"), or any other regulatory
authority, other than those which the regulatory authority permits to be
completed after the Conversion.
(vii) Xxxxxxxx & Co., which prepared the valuation of the Bank as part
of the Conversion, has advised the Company in writing that it is
independent of the Company and the Bank, within the meaning of the
Conversion Regulations.
(viii) The accountants who certified the financial statements and
supporting schedules of the Bank included in the Registration Statement
have advised the Company in writing that they are independent public
accountants within the meaning of the Code of Ethics of the American
Institute of Certified Public Accountants, and such accountants have
advised the Company in writing that they are, with respect to the Company
and the Bank, independent certified public accountants as required by the
1933 Act and the 1933 Act Regulations.
(ix) The consolidated financial statements of the Bank and the related
notes thereto included in the Registration Statement and the Prospectus
present fairly the financial position of the Bank as at the 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
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in the Registration Statement, said consolidated 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. The financial statements of the Company are
not required to be included in the Registration Statement and Prospectus
under applicable accounting requirements of the 1933 Act Regulations.
(x) The pro forma financial statements and other pro forma information
included in the Prospectus present fairly the information shown therein,
have been prepared in accordance with generally accepted accounting
principles and the Commission's rules and guidelines with respect to pro
forma financial statements and other pro forma information, have been
properly compiled on the pro forma basis described therein, and, in the
opinion of the Company, the assumptions used in the preparation thereof are
reasonable and the adjustments used therein are appropriate under the
circumstances.
(xi) 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 and the
Bank considered as one enterprise, whether or not arising in the ordinary
course of business, and (B) except for transactions specifically referred
to or contemplated in the Prospectus, there have been no transactions
entered into by the Company or the Bank, other than those in the ordinary
course of business, which are material with respect to the Company and the
Bank considered as one enterprise.
(xii) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of Delaware
with corporate power and authority to own, lease and operate its properties
and to conduct its business as described in the Prospectus and to enter
into and perform its obligations under this Agreement; and the Company 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 the Bank considered as one enterprise.
(xiii) 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, subject to compliance with all conditions
imposed thereon by the OTS, in an amount as described in
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the Prospectus); except for shares issued in connection with the initial
capitalization of the Company, which shares shall be canceled 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.
(xiv) 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 and
the Bank 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 and the Conversion
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 and the Bank considered as one enterprise; all such licenses,
permits and other governmental authorizations are in full force and effect
and the Company and the Bank are in all material respects in compliance
therewith; neither the Company nor the Bank 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 finding,
might have a material adverse effect on the financial condition, results of
operations or business affairs of the Company and the Bank 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 any 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 and the Bank considered as one enterprise.
(xv) The deposit accounts of the Bank are insured by the FDIC and upon
consummation of the Conversion, the liquidation account for the benefit of
eligible account holders and supplemental eligible account holders will be
duly established in accordance with the requirements of the Conversion
Regulations.
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(xvi) No shares of common stock of the Bank 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.
(xvii) 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 accordance
with its terms, except as may be limited by bankruptcy, insolvency or other
laws affecting the enforceability of the rights of creditors generally or
the rights of creditors of a federally insured depository institution 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.
(xviii) 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 specifically described, indicated
or contemplated therein, neither the Company nor the Bank will have (A)
issued any securities 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 and the Bank, taken as a whole, excluding the origination of loans
or the purchase or sale of investment securities or mortgage-backed
securities in the ordinary course of business or otherwise as indicated in
the Prospectus.
(xix) 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 laws of various jurisdictions.
(xx) Neither the Company nor the Bank is in violation of its
certificate of incorporation, articles of incorporation or charter or
bylaws, as the case may be (and the Bank will not be in violation of its
charter or bylaws in stock form upon consummation of the Conversion); and
neither the Company nor the Bank 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,
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mortgage, loan agreement, note, lease or other instrument to which the
Company or the Bank 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 the Bank 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 and the Bank
considered as one enterprise.
(xxi) 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
creation or imposition of any lien, charge or encumbrance upon any property
or assets of the Company or the Bank pursuant to any contract, indenture,
mortgage, loan agreement, note, lease or other instrument to which the
Company or the Bank 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 the Bank 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 and the Bank
considered as one enterprise; nor will such action result in any violation
of the provisions of the certificate of incorporation, articles of
incorporation or charter, as the case may be, or bylaws of the Company or
the Bank; nor will such action result in any violation of any applicable
law, administrative regulation or administrative or court decree except for
immaterial 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.
(xxii) No labor dispute with the employees of the Company or the Bank
exists or, to the knowledge of the Company or the Bank, is imminent; and
the Company is not aware of any existing or imminent labor disturbance by
the employees of any of its principal suppliers or contractors which might
be expected to result in any material adverse change in the financial
condition, results of operations or business affairs of the Company and the
Bank considered as one enterprise.
(xxiii) The Company and the Bank have good and marketable title to all
properties and assets for which ownership is material to the business of
the Company or the Bank 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 affairs of the
Company and the Bank considered as one enterprise; and all of the leases
and subleases material to the business of the Company or the Bank under
which the Company and the Bank hold properties, including those described
in the Prospectus, are valid and binding agreements of the Company and the
Bank, enforceable in accordance with their terms.
8
(xxiv) The Company and the Bank are not in violation of any directive
from the OTS or the FDIC to make any change in the method of conducting
their respective businesses; the Bank has conducted and is conducting its
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).
(xxv) 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 or the Bank 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 and the Bank 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 Conversion; all pending legal or governmental
proceedings to which the Company or the Bank 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 their businesses, are considered in the aggregate not
material; and there are no contracts or documents of the Company or the
Bank which are required to be described in or filed as exhibits to the
Registration Statement or the Conversion Application which have not been so
described or filed.
(xxvi) The Bank has obtained an opinion of its counsel, Silver,
Xxxxxxxx & Xxxx, L.L.P., with respect to the legality of the Securities to
be issued and the federal 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.
(xxvii) The Company is not required to be registered under the
Investment Company Act of 1940, as amended.
(xxviii) All of the loans reflected as assets on the most recent
financial statements or selected financial information of the Bank 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
9
financial condition, results of operations or business affairs of the
Company and the Bank considered as one enterprise.
(xxix) With the exception of the loan from the Company to the Employee
Stock Ownership Plan as described in the Prospectus, 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.
(xxx) The Company and the Bank 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.
(xxxi) Neither the Company or the Bank nor any properties owned or
operated by the Company or the Bank 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 and the Bank 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 or the Bank thereof, 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.
(xxxii) The Company and the Bank have filed all federal income and
state and local franchise tax returns required to be filed and have made
timely 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.
10
(xxxiii) The Company has received approval, subject to regulatory
approval to consummate the Offerings and issuance, to have the Common Stock
quoted on the Nasdaq National Market effective as of the Closing Time.
(b) Any certificate signed by any officer of the Company or the Bank
and delivered to the Agent or counsel for the Agent shall be deemed a
representation and warranty by the Company or the Bank to the Agent as to the
matters covered thereby.
Section 2. Appointment of FBR; Sale and Delivery of the Securities;
Closing. On the basis of the representations and warranties herein contained and
subject to the terms and conditions herein set forth, the Company hereby
appoints FBR as its Agent to consult with and advise the Company, and to assist
the Company with the solicitation of subscriptions and purchase orders for
Securities, in connection with the Company's sale of Common Stock in the
Subscription/Public Offering and the Syndicated Public Offering. On the basis of
the representations and warranties herein contained, and subject to the terms
and conditions herein set forth, FBR hereby accepts such appointment and agrees
to use its best efforts to assist the Company with the solicitation of
subscriptions and purchase orders for Securities in accordance with this
Agreement; provided, however, that the Agent shall not be obligated to take any
action which is inconsistent with any applicable laws, regulations, decisions or
orders. The services to be rendered by FBR pursuant to this appointment include
the following: (i) consulting as to the securities marketing implications of any
aspect of the Plan of Conversion or related corporate documents; (ii) reviewing
with the Board of Directors the independent appraiser's appraisal of the Common
Stock; (iii) reviewing all offering documents, including the Prospectus, stock
order form and related offering materials (it being understood that preparation
and filing of such documents is the sole responsibility of the Company and the
Bank and their counsel); (iv) assisting in the design and implementation of a
marketing strategy for the Offerings; (v) providing support to the Company and
the Bank in obtaining all requisite regulatory approvals; (vi) assisting Bank
management in preparing for meetings with potential investors and
broker-dealers; and (vii) providing such other general advice and assistance as
may be requested to promote the successful completion of the Offerings.
The appointment of the Agent hereunder shall terminate upon the earlier
to occur of (a) forty-five (45) days after the last day of the Subscription
Offering, unless the Company and the Agent agree in writing to extend such
period and the OTS agrees to extend the period of time in which the Securities
may be sold, or (b) the receipt and acceptance of subscriptions and purchase
orders for all of the Securities.
If any of the Securities remain available after the expiration of the
Subscription/Public Offering, at the request of the Company and the Bank, the
Agent will seek to form a syndicate of registered broker or dealers ("Selected
Dealers") to assist in the solicitation of purchase orders of such Securities on
11
a best efforts basis, subject to the terms and conditions set forth in a
selected dealers' agreement (the "Selected Dealers' Agreement"), substantially
in the form set forth in Exhibit A to this Agreement. FBR will endeavor to limit
the aggregate fees to be paid by the Company and the Bank under any such
Selected Dealers' Agreement to an amount competitive with gross underwriting
discounts charged at such time for underwritings of comparable amounts of stock
sold at a comparable price per share in a similar market environment. The Agent
will endeavor to distribute the Securities among the Selected Dealers in a
fashion which best meets the distribution objective of the Company and the
requirements of the Plan, which may result in limiting the allocation of stock
to certain Selected Dealers. It is understood that in no event shall the Agent
be obligated to act as a Selected Dealer or to take or purchase any Securities.
In the event the Company is unable to sell at least the total minimum
of the Securities, as set forth on the cover page of the Prospectus, within the
period herein provided, this Agreement shall terminate and the Company shall
refund to any persons who have subscribed for any of the Securities the full
amount which it may have received from them, together with interest as provided
in the Prospectus, and no party to this Agreement shall have any obligation to
the others hereunder, except for the obligations of the Company and the Bank as
set forth in Sections 4, 6 and 7 hereof and the obligations of the Agent as
provided in Sections 6 and 7 hereof. Appropriate arrangements for placing the
funds received from subscriptions for Securities or other offers to purchase
Securities in special interest-bearing accounts with the Bank until all
Securities are sold and paid for were made prior to the commencement of the
Subscription Offering, with provision for refund to the purchasers as set forth
above, or for delivery to the Company if all Securities are sold.
If at least the total minimum of Securities, as set forth on the cover
page of the Prospectus, are sold, the Company agrees to issue or have issued the
Securities sold and to release for delivery certificates for such Securities at
the Closing Time against payment therefor by release of funds from the special
interest-bearing accounts referred to above. The closing shall be held at the
offices of Silver, Xxxxxxxx & Xxxx, L.L.P., at 10:00 a.m., local time, or at
such other place and time as shall be agreed upon by the parties hereto, on a
business day to be agreed upon by the parties hereto. The Company shall notify
the Agent by telephone, confirmed in writing, when funds shall have been
received for all the Securities. One or more certificates for Securities shall
be delivered in such denomination or denominations and registered in such name
or names as FBR requests. Notwithstanding the foregoing, certificates for
Securities purchased through Selected Dealers shall be made available to the
Agent for inspection at least 48 hours prior to the Closing Time at such office
as the Agent shall designate. The hour and date upon which the Company shall
release for delivery all of the Securities, in accordance with the terms hereof,
is herein called the "Closing Time."
The Company will pay any stock issue and transfer taxes which may be
payable with respect to the sale of the Securities.
12
In addition to reimbursement of the expenses specified in Section 4
hereof, the Agent will receive the following compensation for its services
hereunder:
(a) a management fee of $20,000 (the "Management Fee") (in recognition
of services already provided by FBR, the Bank [has made] advance payment to
FBR of the Management Fee, which Management Fee shall be credited against
the Marketing Fee (as defined below)); FBR is entitled to the Management
Fee irrespective of any termination of the Conversion for any reason; and
(b) a marketing fee of $150,000 payable in immediately available funds
at the Closing Time (the "Marketing Fee").
If this Agreement is terminated by the Agent in accordance with the
provisions of Section 9(a) hereof or the Conversion is terminated by the Company
or the Bank, no fee other than the Management Fee shall be payable by the
Company to FBR; provided, however, the Company shall reimburse the Agent for all
of its reasonable out-of-pocket expenses incurred prior to termination,
including the reasonable fees and disbursements of counsel for the Agent in
accordance with the provisions of Section 4 hereof.
Section 3. Covenants of the Company. The Company and the Bank covenant
with the Agent as follows:
(a) The Company and the Bank will prepare and file such amendments or
supplements to the Registration Statement, the Prospectus, the Conversion
Application and the Proxy Statement as may hereafter be required by the 1933 Act
Regulations or the Conversion Regulations or as may hereafter be reasonably
requested by the Agent. The Company and the Bank will promptly file the
Prospectus and any supplemental sales literature with the OTS and, if required,
with the Commission. Following completion of the Subscription/Public Offering,
in the event of a Syndicated Public Offering, the Company and the Bank will (i)
promptly prepare and file with the Commission a post-effective amendment to the
Registration Statement relating to the results of the Subscription/Public
Offering, any additional information with respect to the proposed plan of
distribution and any revised pricing information or (ii) if no such
post-effective amendment is required, will file with, or mail for filing to, the
Commission, if necessary as determined by counsel to the Company, a prospectus
or prospectus supplement containing information relating to the results of the
Subscription/Public Offering and pricing information pursuant to Rule 424(c) of
the 1933 Act Regulations, in either case in a form acceptable to the Agent. The
Company and the Bank will notify the Agent immediately, and confirm the notice
in writing, (i) of the effectiveness of any post-effective amendment of the
Registration Statement, the filing of any supplement to the Prospectus and the
filing of any amendment to the Conversion Application, (ii) of the receipt of
any comments from the OTS or the Commission with respect to the transactions
contemplated by this Agreement or the Plan, (iii) of any request by the
Commission or the OTS for any
13
amendment to the Registration Statement, the Conversion Application or the
Holding Company Application or any amendment or supplement to the Prospectus or
for additional information, (iv) of the issuance by the OTS of any order
suspending the Offerings or the use of the Prospectus or the initiation of any
proceedings for that purpose, (v) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or the
initiation of any proceedings for that purpose, and (vi) of the receipt of any
notice with respect to the suspension of any qualification of the Securities for
offering or sale in any jurisdiction. The Company and the Bank will make every
reasonable effort to prevent the issuance of any stop order and, if any stop
order is issued, to obtain the lifting thereof at the earliest possible moment.
(b) The Company and the Bank will give the Agent notice of its
intention to file or prepare any amendment to the Conversion Application, the
Holding Company Application or the Registration Statement (including any
post-effective amendment) or any amendment or supplement to the Prospectus
(including any revised prospectus which the Company proposes for use in
connection with the Syndicated Public Offering of the Securities which differs
from the prospectus on file at the Commission at the time the Registration
Statement becomes effective, whether or not such revised prospectus is required
to be filed pursuant to Rule 424(b) of the 1933 Act Regulations), will furnish
the Agent with copies of any such amendment or supplement a reasonable amount of
time prior to such proposed filing or use, as the case may be, and will not file
any such amendment or supplement or use any such prospectus to which the Agent
or counsel for the Agent may reasonably object.
(c) The Company and the Bank will deliver to the Agent one signed copy
and as many conformed copies of the Conversion Application and the Registration
Statement as originally filed and of each amendment thereto (including exhibits
filed therewith) as the Agent may reasonably request, and from time to time such
number of copies of the Prospectus as the Agent may reasonably request.
(d) During the period when the Prospectus is required to be delivered,
the Company and the Bank will comply, at their own expense, with all
requirements imposed upon them by the OTS, by the applicable Conversion
Regulations, as from time to time in force, and by the 1933 Act, the 1933 Act
Regulations, the Securities Exchange Act of 1934, as amended (the "1934 Act"),
and the rules and regulations of the Commission promulgated thereunder,
including, without limitation, Regulation M under the 1934 Act, 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.
(e) If any event or circumstance shall occur as a result of which it is
necessary, in the reasonable opinion of counsel for the Agent, to amend or
supplement the Prospectus in order to make the Prospectus not misleading in the
light of the circumstances existing at the time it is delivered to a purchaser,
the Company and the Bank will forthwith amend or supplement the
14
Prospectus (in form and substance satisfactory to counsel for the Agent) so
that, as so amended or supplemented, the Prospectus will not include 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 existing at
the time it is delivered to a purchaser, not misleading, and the Company and the
Bank will furnish to the Agent a reasonable number of copies of such amendment
or supplement. For the purpose of this subsection, the Company and the Bank will
each furnish such information with respect to itself as the Agent may from time
to time reasonably request.
(f) The Company and the Bank will take all necessary action, in
cooperation with the Agent, to qualify the Securities for offering and sale
under the applicable securities laws of such states of the United States and
other jurisdictions as the Conversion Regulations may require and as the Agent
and the Company have agreed; provided, however, that the Company and the Bank
shall not be obligated to file any general consent to service of process or to
qualify as a foreign corporation in any jurisdiction in which it is not so
qualified.
(g) The Company authorizes FBR and any Selected Dealers to act as agent
of the Company in distributing the Prospectus to persons entitled to receive
subscription rights and other persons to be offered Securities having record
addresses in the states or jurisdictions set forth in a survey of the securities
or "blue sky" laws of the various jurisdictions in which the Offerings will be
made (the "Blue Sky Survey").
(h) The Company will make generally available to its security holders
as soon as practicable, but not later than 60 days after the close of the period
covered thereby, an earnings statement (in form complying with the provisions of
Rule 158 of the 1933 Act Regulations) covering a twelve month period beginning
not later than the first day of the Company's fiscal quarter next following the
"effective date" (as defined in said Rule 158) of the Registration Statement.
(i) During the period ending on the third anniversary of the expiration
of the fiscal year during which the closing of the transactions contemplated
hereby occurs, the Company will furnish to its stockholders as soon as
practicable after the end of each such fiscal year an annual report (including
consolidated statements of financial condition and consolidated statements of
income, stockholders' equity and cash flows, certified by independent public
accountants). In addition, such annual report shall be made public through the
issuance of appropriate press releases at the same time or prior to the time of
the furnishing thereof to stockholders of the Company.
(j) During the period ending on the third anniversary of the expiration
of the fiscal year during which the closing of the transactions contemplated
hereby occurs, the Company will furnish to the Agent (i) as soon as available, a
copy of each report or other document of the Company furnished generally to
stockholders of the Company or furnished to or filed with the Commission
15
under the 1934 Act or any national securities exchange or system on which any
class of securities of the Company is listed or quoted, and (ii) from time to
time, such other nonconfidential information concerning the Company as the Agent
may reasonably request.
(k) The Company and the Bank will conduct the Conversion in all
material respects in accordance with the Plan, the Conversion Regulations (to
the extent not waived by the provisions of the Order) and all other applicable
regulations, decisions and orders, including all applicable terms, requirements
and conditions precedent to the Conversion imposed upon the Company or the Bank
by the OTS.
(l) The Company and the Bank will use the net proceeds received by them
from the sale of the Securities in the manner specified in the Prospectus under
"Use of Proceeds."
(m) The Company will file with the Commission such reports on Form SR
as may be required pursuant to Rule 463 of the 1933 Act Regulations.
(n) The Company will file a registration statement for the Common Stock
under Section 12(g) of the 1934 Act prior to completion of the Offerings and
will request that such registration statement be effective upon completion of
the Conversion. The Company will maintain the effectiveness of such registration
for not less than three years. The Company will file with the Nasdaq Stock
Market all documents and notices required by the Nasdaq Stock Market of
companies that have issued securities that are traded in the over-the-counter
market and quotations for which are reported by the Nasdaq National Market.
(o) The Company and the Bank will take such actions and furnish such
information as are reasonably requested by the Agent in order for the Agent to
ensure compliance with the NASD's "Interpretation Relating to Free-Riding and
Withholding."
(p) Other than in connection with any employee benefit plan or
arrangement described in the Prospectus, the Company will not, without the prior
written consent of the Agent, which consent shall not be unreasonably withheld,
sell or issue, contract to sell or otherwise dispose of, any shares of Common
Stock or any securities convertible or exchangeable for shares of Common Stock
other than the Securities for a period of 180 days following the Closing Time.
(q) The Company and the Bank will comply with the conditions imposed by
or agreed to with the OTS in connection with its approval of the Holding Company
Application and the Conversion Application.
(r) During the period beginning on the date hereof and ending on the
later of the third anniversary of the Closing Time or the date on which the
Agent receives full payment in satisfaction of any claim for indemnification or
16
contribution to which it may be entitled pursuant to Sections 6 or 7 hereof,
respectively, neither the Company nor the Bank shall, without the prior written
consent of the Agent, which consent shall not be unreasonably withheld, take or
permit to be taken any action that could result in the common stock of the Bank
becoming subject to any security interest, mortgage, pledge, lien or
encumbrance; provided, however, that this covenant shall be null and void if the
Board of Governors of the Federal Reserve System, by regulation, policy
statement or interpretive release, or by written order or written advice
addressed to the Bank or the Agent specifically addressing the provisions of
Section 6(a) hereof, permits indemnification of the Agent by the Bank as
contemplated by such provisions.
Section 4. Payment of Expenses. The Company and the Bank jointly and
severally agree to pay all expenses incident to the performance of their
obligations under this Agreement, including but not limited to (i) the cost of
obtaining all securities and bank regulatory approvals, (ii) the printing and
filing of the Registration Statement and the Conversion Application as
originally filed and of each amendment thereto, (iii) the preparation, issuance
and delivery of the certificates for the Securities to the purchasers in the
Offerings, (iv) the fees and disbursements of the Company's and the Bank's
counsel, accountants, conversion agent, appraiser and other advisors, (v) the
qualification of the Securities under securities laws in accordance with the
provisions of Section 3(f) hereof, including filing fees and the fees and
disbursements of counsel in connection therewith and in connection with the
preparation of the Blue Sky Survey, (vi) the printing and delivery to the Agent
of copies of the Registration Statement as originally filed and of each
amendment thereto and the printing and delivery of the Prospectus and any
amendments or supplements thereto to the purchasers in the Offerings and the
Agent, (vii) the printing and delivery to the Agent of copies of a Blue Sky
Survey, and (viii) the fees and expenses incurred in connection with the listing
of the Common Stock on the Nasdaq National Market. In the event the Agent incurs
any such fees and expenses on behalf of the Bank or the Company, the Bank will
reimburse the Agent for such fees and expenses whether or not the Conversion is
consummated; provided, however, that the Agent shall not incur any substantial
expenses on behalf of the Bank or the Company pursuant to this Section without
the prior approval of the Bank or the Company.
The Company and the Bank jointly and severally agree to pay certain
expenses incident to the performance of the Agent's obligations under this
Agreement, including (i) the filing fees paid or incurred by the Agent in
connection with all filings with the NASD, (ii) legal fees and expenses of the
Agent's counsel up to an aggregate of $20,000, and (iii) all reasonable out of
pocket expenses incurred by the Agent relating to the Offerings, including,
without limitation, advertising, promotional, syndication and travel expenses
and fees, up to an aggregate of $10,000, provided that should the expenses in
clauses (ii) and/or (iii) above exceed $30,000 in the aggregate, the Company
must approve such expenses above that amount for FBR to be reimbursed. All fees
and expenses to which the Agent is entitled to reimbursement under this
paragraph of this Section 4 shall be due and payable upon receipt by the
17
Company or the Bank of a written accounting therefor setting forth in reasonable
detail the expenses incurred by the Agent.
Section 5. Conditions of Agent's Obligations. The Company, the Bank and
the Agent agree that the issuance and the sale of Securities and all obligations
of the Agent hereunder are subject to the accuracy of the representations and
warranties of the Company and the Bank herein contained as of the date hereof
and the Closing Time, to the accuracy of the statements of officers and
directors of the Company and the Bank made pursuant to the provisions hereof, to
the performance by the Company and the Bank of their obligations hereunder, and
to the following further conditions:
(a) No stop order suspending the effectiveness of the Registration
Statement shall have been issued under the 1933 Act or proceedings therefor
initiated or threatened by the Commission, no order suspending the Offerings or
authorization for final use of the Prospectus shall have been issued or
proceedings therefor initiated or threatened by the OTS and no order suspending
the sale of the Securities in any jurisdiction shall have been issued.
(b) At Closing Time, the Agent shall have received:
(1) The favorable opinion, dated as of Closing Time, of Silver,
Xxxxxxxx & Taff, L.L.P., counsel for the Company and the Bank, in form and
substance satisfactory to counsel for the Agent, 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.
(ii) The Company 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 to enter into and perform its
obligations under this Agreement.
(iii) The Company is duly qualified as a foreign corporation to
transact business and is in good standing in the State of Illinois and each
jurisdiction in which the failure to so qualify would have a material
adverse effect upon the consolidated financial condition, results of
operations or business affairs of the Company and the Bank considered as
one enterprise.
(iv) Upon consummation of the Conversion and subject to compliance
with all conditions imposed upon the formation and contribution thereof by
the OTS under the terms of the Order, in an amount as described in the
Prospectus, the authorized, issued and outstanding capital stock of the
Company will be within the range described in the Prospectus and, except
for shares issued upon incorporation of the Company, which shares shall be
canceled prior to or
18
concurrently with the Closing Time, no shares of Common Stock have been
issued and are outstanding prior to the Closing Time.
(v) The Securities have been duly and validly authorized for issuance
and sale 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.
(vi) The issuance of the Securities is not subject to preemptive or
other similar rights arising by operation of law or, to their knowledge,
otherwise.
(vii) The Bank has been at all times since the date hereof and prior
to the Closing Time organized and validly existing under the laws of the
United States of America as a federally chartered savings bank of mutual
form, and, at Closing Time, has become duly chartered and validly existing
under the laws of the United States of America as 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 Registration Statement and the Prospectus; and
the Bank is duly qualified as a foreign corporation in each jurisdiction in
which the failure to so qualify would have a material adverse effect upon
the financial condition, results of operations or business affairs of the
Bank.
(viii) The Bank is a member of the Federal Home Loan Bank of Chicago
and the deposit accounts of the Bank are insured by the FDIC up to the
applicable limits.
(ix) Upon consummation of the Conversion, all of the issued and
outstanding capital stock of the Bank will be duly authorized and 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
security interest, mortgage, pledge, lien, encumbrance or claim, legal,
equitable or otherwise.
(x) The OTS has approved the Holding Company Application and the
Conversion Application and no action is pending, or to such counsel's
knowledge, threatened with respect to the Holding Company Application or
the Conversion Application or the acquisition by the Company of all of the
Bank's issued and outstanding capital stock; the Holding Company
Application and the Conversion Application comply as to form in all
material respects with the applicable requirements of the OTS (other than
financial statements, the notes thereto, and other tabular, financial,
statistical and appraisal data included therein, as. to which no opinion
need be rendered) except as compliance therewith is specifically waived by
the provisions of the Order and include all documents required to be filed
as exhibits thereto; and the Company is authorized
19
to become a savings association holding company and is duly authorized to
own all of the issued and outstanding capital stock of the Bank to be
issued pursuant to the Plan.
(xi) The execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby have been duly and validly
authorized by all necessary corporate action on the part of each of the
Company and the Bank, and this Agreement constitutes the legal, valid and
binding agreement of each of the Company and the Bank, enforceable in
accordance with its terms, except as rights to indemnity and contribution
hereunder may be limited under applicable law (it being understood that
such counsel may avail itself of customary exceptions concerning the effect
of bankruptcy, insolvency or similar laws and the availability of equitable
remedies); the execution and delivery of this Agreement, the incurrence of
the obligations herein set forth and the consummation of the transactions
contemplated herein will not result in any violation of the provisions of
the certificate of incorporation, articles of incorporation or charter, as
the case may be, or bylaws of the Company or the Bank or any applicable
law, statute, rule, regulation, judgment, order, writ or decree of any
government, governmental instrumentality or court, domestic or foreign,
having jurisdiction over the Company or the Bank or any of these respective
assets, properties or operations; and, to the best of such counsel's
knowledge, the execution and delivery of this Agreement, the incurrence of
the obligations herein set forth and the consummation of the transactions
contemplated herein will not conflict with or constitute a breach of, or
default under, and no default exists, and no event has occurred which, with
notice or lapse of time or both, would constitute a default under, or
result in the creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company or the Bank pursuant to any
contract, indenture, mortgage, loan agreement, note, lease or other
instrument to which the Company or the Bank is a party or by which any of
them may be bound, or to which any of the property or assets of the Company
or the Bank is subject that, individually or in the aggregate, would have a
material adverse effect on the financial condition, results of operations
or business affairs of the Company and the Bank considered as one
enterprise.
(xii) The Prospectus has been duly authorized by the OTS for final use
pursuant to the Conversion Regulations and the Order and no action is
pending or, to the best of such counsel's knowledge, is threatened, by the
OTS to revoke such authorization.
(xiii) The Registration Statement is effective under the 1933 Act and
no stop order suspending the effectiveness of the Registration Statement
has been issued under the 1933 Act or proceedings therefor initiated or, to
the best of such counsel's knowledge and information, threatened by the
Commission.
20
(xiv) To the best of such counsel's knowledge, no further approval,
authorization, consent or other order of any federal, Delaware or Illinois
board or body is required in connection with the execution and delivery of
this Agreement, the issuance of the Securities 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.
(xv) At the time the Registration Statement became effective, the
Registration Statement (other than the financial statements and appraisal,
financial and statistical data included therein, as to which no opinion
need be rendered) complied as to form in all material respects with the
requirements of the 1933 Act, the 1933 Act Regulations and the Conversion
Regulations.
(xvi) The Common Stock conforms to the description thereof contained
in the Prospectus, and the form of certificate used to evidence the Common
Stock is in due and proper form and complies with all applicable statutory
requirements.
(xvii) There are no legal or governmental proceedings pending or, to
the best of such counsel's knowledge, threatened against or affecting the
Company or the Bank which are required to be disclosed in the Registration
Statement and Prospectus, other than those disclosed therein, and all
pending legal or governmental proceedings to which the Company or the Bank
is a party or to which any of their property is subject which are not
described in the Registration Statement, including ordinary routine
litigation incidental to the business, are, considered in the aggregate,
not material.
(xviii) The information in the Prospectus under "Dividends," "The
Conversion--Income Tax Consequences," "Regulation," "The Conversion--
Effects of Conversion to Stock Form on Depositors and Borrowers of the
Bank," "Restrictions on Acquisitions of Stock and Related Takeover
Defensive Provisions" and "Description of Capital Stock," to the extent
that it constitutes matters of law, summaries of legal matters, documents
or proceedings, or legal conclusions, has been reviewed by them and is
correct in all material respects.
(xix) To the best of such counsel's knowledge, there are no contracts,
indentures, mortgages, loan agreements, notes, leases or other instruments
required to be described or referred to in the Registration Statement or to
be filed as exhibits thereto other than those described or referred to
therein or filed as exhibits thereto, and the descriptions thereof or
references thereto are correct in all material respects.
(xx) The Plan has been duly authorized by the Board of Directors of
the Company and the Board of Directors of the Bank and, to the best
21
of such counsel's knowledge, the OTS's approval of the Plan remains in full
force and effect; the Bank's charter has been amended, effective upon
consummation of the Conversion and the filing of such amended charter with
the OTS, to authorize the issuance of permanent capital stock; 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 Conversion Regulations (except to the extent the
requirement to comply therewith was waived specifically by the terms of the
Order), the Plan 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 no order has been issued by the OTS to
suspend the Offerings and no action for such purpose has been instituted
or, to the best of such counsel's knowledge, threatened 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 Conversion Application and
the Holding Company Application.
(xxi) To the best of such counsel's knowledge, the Company and the
Bank have obtained all material licenses, permits and other governmental
authorizations currently required for the conduct of their respective
businesses as described in the Registration Statement and Prospectus, and
all such licenses, permits and other governmental authorizations are in
full force and effect, and the Company and the Bank are in all material
respects complying therewith.
(xxii) To the best of such counsel's knowledge, neither the Company
nor the Bank is in violation of (A) its certificate of incorporation,
articles of incorporation or charter, as the case may be (and the Bank will
not be in violation of its charter in stock form upon consummation of the
Conversion) or (B) any applicable law, statute, rule, regulation, judgment,
order, writ or decree of any government, governmental instrumentality or
court, domestic or foreign, having jurisdiction over the Company or the
Bank or any of these respective assets, properties or operations; to the
best of such counsel's knowledge, the Company and the Bank are not 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 or the Bank is a party or by which the Company or the
Bank or any of their property may be bound in any respect that would have a
material adverse effect upon the financial condition, results of operations
or business affairs of the Company and the Bank considered as one
enterprise.
(xxiii) The Company is not required to be registered as an investment
company under the Investment Company Act of 1940.
22
(2) The favorable opinion, dated as of Closing Time, of Elias, Matz,
Xxxxxxx & Xxxxxxx L.L.P., counsel for the Agent, with respect to such
matters as the Agent may reasonably require.
(3) In giving their opinions required by subsections (b)(l) and
(b)(2), respectively, of this Section, Silver, Xxxxxxxx & Taff, L.L.P. and
Elias, Matz, Xxxxxxx & Xxxxxxx L.L.P. 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 and appraisal data 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, statistical or
appraisal 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, Silver, Xxxxxxxx & Taff, L.L.P. and Elias, Matz,
Xxxxxxx & Xxxxxxx L.L.P. may rely as to matters of fact on certificates of
officers and directors of the Company and the Bank and certificates of
public officials, and Elias, Matz, Xxxxxxx & Xxxxxxx, L.L.P. may also rely
on the opinions of Silver, Xxxxxxxx & Taff, L.L.P.
(c) 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
and the Bank considered as one enterprise, whether or not arising in the
ordinary course of business, and the Agent shall have received a certificate of
the President and Chief Executive Officer of the Company and of 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 is set forth in the Registration Statement
and the Prospectus other than transactions referred to or contemplated therein
and transactions in the ordinary cause of business, (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
23
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 or the OTS approval of the Holding Company
Application.
(d) At the time of the execution of this Agreement, the Agent shall
have received from Xxxxx, Xxxxxx and Company LLP 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 the Company and the Bank within
the meaning of the Code of Ethics of the AICPA, 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 opinion 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 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 of net
interest income and net income 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) as of the date of the
most recent financial statements available prior to the date of this Agreement,
there has been any increase in the consolidated long-term or short-term debt of
the Bank or any decrease in consolidated total assets, the allowance for loan
losses, total deposits or equity of the Bank, 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 the
date of the most recent financial statements available 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 taxes or net
income of the Bank, 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 opinion 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
24
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 and the Bank identified in such letter.
(e) At Closing Time, the Agent shall have received from Xxxxx, Xxxxxx
and Company LLP a letter, dated as of Closing Time, to the effect that they
reaffirm the statements made in the letter 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.
(f) At Closing Time, the Common Stock shall have been approved for
listing on the Nasdaq National Market upon notice of issuance.
(g) At Closing Time, the Agent shall have received a letter from
Xxxxxxxx & Co., dated as of the Closing Time, confirming its appraisal.
(h) 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 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.
(i) 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, are
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 American Stock Exchange 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 Federal authorities.
Section 6. Indemnification. (a) The Company and the Bank, jointly and
severally, agree to indemnify and hold harmless the Agent, each person, if any,
who controls the Agent, within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act, and its respective partners, directors, officers and
employees as follows:
(i) from and against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, reasonably related to or resulting
25
from any action taken by the Agent in connection with the Conversion where
acting as agent of the Company or the Bank as described in Section 2
hereof;
(ii) from and against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, based upon or arising out of any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), or the omission or
alleged omission therefrom of a material fact required to be stated
therein, or necessary to make the statements therein not misleading or
arising out of any untrue statement or alleged untrue statement of a
material fact contained in the Prospectus (or any amendment or supplement
thereto) or the omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and
(iii) from and against reasonable expenses, as incurred (including,
subject to Section 6(c) hereof, the fees and disbursements of counsel
chosen by the Agent), reasonably incurred in investigating, preparing for
or defending against any litigation, or any investigation, proceeding or
inquiry by any governmental agency or body, commenced or threatened, or any
claim whatsoever described in clauses (i) or (ii) above, to the extent that
any such expense is not paid under (i) or (ii) above;
provided, however, that the indemnity in this paragraph (a) shall (i)
not apply to any settlement by the Agent effected without the prior written
consent of the Company or the Bank; (ii) not apply to the extent any loss,
claim, damage or liability is based on a false or misleading oral statement by
an FBR employee or representative which is not consistent with the Prospectus or
the supplemental sales literature; (iii) not apply to the extent that any loss,
claim, damage or liability is found in a final judgment by a court to have
resulted primarily from the Agent's gross negligence or willful misconduct; and
(iv) not apply to any loss, liability, claim, damage or liability to the extent
arising out of any untrue statement or alleged untrue statement of a material
fact contained in the Prospectus (or any amendment or supplement thereto) or
omission or alleged omission therefrom of a material fact necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading which was made in reliance upon and in conformity with
written information relating to the Agent furnished to the Company or the Bank
by the Agent expressly for use in the Registration Statement (or any amendment
or supplement thereto) or the Prospectus (or any amendment or supplement
thereto), which information the Company and the Bank acknowledge is included
only in the cover page and the sections captioned "Market for Common Stock,"
"The Conversion--Public Offering and Direct Community Offering" and "The
Conversion--Marketing Arrangements" of the Prospectus ("Agent's Information").
Notwithstanding the foregoing, the Bank shall not provide indemnification as
contemplated under the terms of this paragraph (a)
26
if such indemnification would cause the Bank to violate the provisions of
Section 23A or Section 23B of the Federal Reserve Act.
(b) The Agent agrees to indemnify and hold harmless the Company, the
Bank, their directors, each of the Company's officers who signed the
Registration Statement, and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act against
any and all loss, liability, claim, damage and expense described in the
indemnity contained in subsection (a) of this Section, as incurred, but only
with respect to untrue statements or omissions, or alleged untrue statements or
omissions, of a material fact made in the Registration Statement (or any
amendment or supplement thereto) in the Prospectus (or any amendment or
supplement thereto) in reliance upon and in conformity with the Agent's
Information; provided, however, that the indemnity in this paragraph (b) shall
not apply to any Settlement by any such party effected without the prior written
consent of the Agent.
(c) Each indemnified party shall give notice as promptly as reasonably
practicable to each indemnifying party of any action commenced against it in
respect of which indemnity may be sought hereunder, but failure to so notify an
indemnifying party shall not relieve such indemnifying party from any liability
which it may have otherwise than on account of this indemnity agreement. An
indemnifying party may participate at its own expense in the defense of any such
action. In no event shall the indemnifying parties be liable for fees and
expenses of more than one counsel (in addition to no more than one local counsel
in each separate jurisdiction in which any action or proceeding is commenced)
separate from their own counsel for all indemnified parties in connection with
any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances.
(d) The Company and the Bank also agree that the Agent shall not have
any liability (whether direct or indirect, in contract or tort or otherwise) to
the Bank, the Company, its security holders or the Bank's or the Company's
creditors relating to or arising out of the engagement of the Agent pursuant to,
or the performance by the Agent of the services contemplated by, this Agreement,
except to the extent that any loss, claim, damage or liability is found in a
final judgment by a court of competent jurisdiction to have resulted primarily
from the Agent's bad faith, willful misconduct or gross negligence.
(e) In addition to, and without limiting, the provisions of Section
(6)(a)(iii) hereof, in the event that any Agent, any person, if any, who
controls the Agent within the meaning of Section 15 of the 1933 Act or Section
20 of the 1934 Act or any of its partners, directors, officers and employees is
requested or required to appear as a witness or otherwise gives testimony in any
action, proceeding, investigation or inquiry brought by or on behalf of or
against the Company, the Bank, the Agent or any of their respective affiliates
or any participant in the transactions contemplated hereby in which the Agent or
such person or agent is not named as a defendant, the Company and the Bank
jointly and severally agree to reimburse the Agent for all reasonable and
necessary
27
out-of-pocket expenses incurred by it in connection with preparing or appearing
as a witness or otherwise giving testimony and to compensate the Agent in an
amount to be mutually agreed upon.
Section 7. Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnity agreement provided for in
Section 6 hereof is for any reason held to be unenforceable by the indemnified
parties although applicable in accordance with its terms, the Company, the Bank
and the Agent shall contribute to the aggregate losses, liabilities, claims,
damages and expenses of the nature contemplated by said indemnity agreement
incurred by the Company or the Bank and the Agent, as incurred, in such
proportions (i) that the Agent is responsible for that portion represented by
the percentage that the maximum aggregate marketing fees appearing on the cover
page of the Prospectus bears to the maximum aggregate gross proceeds appearing
thereon and the Company and the Bank are jointly and severally responsible for
the balance or (ii) if, but only if, the allocation provided for in clause (i)
is for any reason held unenforceable, in such proportion as is appropriate to
reflect not only the relative benefits to the Company and the Bank on the one
hand and the Agent on the other, as reflected in clause (i), but also the
relative fault of the Company and the Bank on the one hand and the Agent on the
other, as well as any other relevant equitable considerations; provided,
however, that no person guilty of fraudulent misrepresentation (within the
meaning of Section l(f) of the 0000 Xxx) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. For purposes
of this Section, each person, if any, who controls the Agent within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same
rights to contribution as the Agent, and each director of the Company and of the
Bank, each officer of the Company who signed the Registration Statement, 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 of the 1934 Act shall have the same
rights to contribution as the Company and the Bank. Notwithstanding anything to
the contrary set forth herein, to the extent permitted by applicable law, in no
event shall the Agent be required to contribute an aggregate amount in excess of
the aggregate marketing fees to which the Agent is entitled and actually paid
pursuant to this Agreement. Notwithstanding the foregoing, the Bank shall not
provide contribution as contemplated under the terms of this Section 7 if such
contribution would cause the Bank to violate the provisions of Section 23A or
Section 23B of the Federal Reserve Act.
Section 8. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement, or contained in certificates of officers of the Company or the Bank
submitted pursuant hereto, shall remain operative and in full force and effect,
regardless of any investigation made by or on behalf of any Agent or controlling
person, or by or on behalf of the Company, and shall survive delivery of the
Securities.
28
Section 9. Termination of Agreement. (a) The Agent may terminate this
Agreement, by notice to the Company and the Bank, at any time at or prior to
Closing Time (i) if there has been, since the date of this Agreement or since
the respective dates as of which information is given in the Registration
Statement, any material adverse change in the financial condition, results of
operations or business affairs of the Company or the Bank, or the Company and
the Bank considered as one enterprise, whether or not arising in the ordinary
course of business; (ii) if there has 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, are 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; (iii) or if trading
generally on either the American Stock Exchange or the New York Stock Exchange
has been suspended, or minimum or maximum prices for trading 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, or
if a banking moratorium has been declared by either Federal or New York
authorities; (iv) if any condition specified in Section 5 shall not have been
fulfilled when and as required to be fulfilled; (v) if there shall have been
such material adverse change in the condition or prospects of the Company or the
Bank or the prospective market for the Company's securities as in the Agent's
good faith opinion would make it inadvisable to proceed with the offering, sale
or delivery of the Securities; (vi) if in the Agent's good faith opinion, the
price for the Securities established by the Company is not reasonable or
equitable under then prevailing market conditions; or (vii) if the Conversion is
not consummated on or prior to _________, 1998.
(b) If this Agreement is terminated pursuant to this Section, such
termination shall be without liability of any party to any other party except as
provided in Section 4 hereof relating to the reimbursement of expenses and
except that the provisions of Sections 6 and 7 hereof shall survive any
termination of this Agreement.
Section 10. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the Agent
shall be directed to the Agent at 0000 Xxxxxxxxxx Xxxxxx Xxxxx, 00xx Xxxxx,
Xxxxxxxxx, XX 00000, attention of Xxxxxx X. Xxxxxxx, with a copy to Xxxxxxx X.
Xxxx, Esq., Elias, Matz, Xxxxxxx & Xxxxxxx L.L.P., 000 00xx Xxxxxx, XX,
Xxxxxxxxxx, XX 00000; notices to the Company and the Bank shall be directed to
either of them at Ben Franklin Bank of Illinois, 00 X. Xxxxxx Xxxxx, Xxxxxxxxx
Xxxxxxx, Xxxxxxxx 00000, attention of Xxxxxx X. Xxxxxxxx, President and Chief
Executive Officer, with a copy to Xxx X. Xxxxxxxx, P.C., Silver, Xxxxxxxx &
Taff, L.L.P., 0000 Xxx Xxxx Xxxxxx, X.X., Xxxxxxxxxx, X.X. 00000.
Section 11. Parties. This Agreement shall inure to the benefit of and
be binding upon the Agent, the Company and the Bank and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
29
shall be construed to give any person, firm or corporation, other than the
Agent, the Company and the Bank and their respective successors and the
controlling persons and officers and directors referred to in Sections 6 and 7
and their heirs and legal representatives, any legal or equitable right, remedy
or claim under or in respect of this Agreement or any provision herein or
therein contained. This Agreement and all conditions and provisions hereof and
thereof are intended to be for the sole and exclusive benefit of the Agent, the
Company and the Bank and their respective successors, and said controlling
persons and officers and directors and their heirs and legal representatives,
and for the benefit of no other person, firm or corporation.
Section 12. Entire Agreement; Amendment. This Agreement represents the
entire understanding of the parties hereto with reference to the transactions
contemplated hereby and supersedes any and all other oral or written agreements
heretofore made. No waiver, amendment or other modification of this Agreement
shall be effective unless in writing and signed by the parties hereto.
Section 13. Governing Law and Time. This Agreement shall be governed by
and construed in accordance with the laws of the State of Illinois applicable to
agreements made and to be performed in said State without regard to the
conflicts of laws provisions thereof. Unless otherwise noted, specified times of
day refer to Central time.
Section 14. Severability. Any term or provision of this Agreement which
is invalid or unenforceable in any jurisdiction shall, as to that jurisdiction,
be ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of this
Agreement is so broad as to be unenforceable, the provision shall be interpreted
to be only so broad as is enforceable.
Section 15. Headings. Sections headings are not to be considered part
of this Agreement, are for convenience and reference only, and are not to be
deemed to be full or accurate descriptions of the contents of any paragraph or
subparagraph.
30
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
between the Agent, the Company and the Bank in accordance with its terms.
Very truly yours,
BEN FRANKLIN FINANCIAL, INC.
By: _____________________________________
Xxxxxx X. Xxxxxxxx
President and Chief Executive Officer
BEN FRANKLIN BANK OF ILLINOIS
By: _____________________________________
Xxxxxx X. Xxxxxxxx
President and Chief Executive Officer
CONFIRMED AND ACCEPTED, as of the date first above written:
FRIEDMAN, BILLINGS, XXXXXX & CO., INC.
By: ____________________________
Xxxxxx X. Xxxxxxx
Senior Vice President
31
EXHIBIT A
SELECTED DEALERS' AGREEMENT
32
BEN FRANKLIN FINANCIAL, INC.
Up to 1,610,000 Shares (Anticipated Maximum)
(Par Value $.01 Per Share)
Selected Dealers' Agreement
______________, 1998
Gentlemen:
We have agreed to assist Ben Franklin Financial, Inc. (the "Company"),
a Delaware corporation, and Ben Franklin Bank of Illinois (the "Bank"), a
federally chartered mutual savings bank, in connection with the offer and sale
of up to 1,610,000 shares of the Company's common stock, $.01 par value per
share (the "Common Stock"), to be issued in connection with the Plan (as defined
herein). The total number of shares of Common Stock to be offered may be
decreased to a minimum of 1,190,000 shares, or increased to a maximum of
1,851,500 shares. The price per share has been fixed at $10.00. The Common
Stock, the number of shares to be issued, and certain of the terms on which they
are being offered, are more fully described in the enclosed prospectus dated
__________, 1998 (the "Prospectus").
The Common Stock is being offered in accordance with the plan of
conversion (the "Plan") adopted by the Board of Directors of the Bank pursuant
to which the Bank intends to convert from a federally chartered mutual savings
bank to a federally chartered stock savings bank and issue all of its stock to
the Company. Pursuant to the Plan, the Company is offering to certain of the
Bank's depositors and borrowers and its tax qualified employee benefit plans
rights to subscribe for the Common Stock in a subscription offering (the
"Subscription Offering"). To the extent Common Stock is not subscribed for in
the Subscription Offering, such Common Stock may be offered to certain members
of the general public, in a public offering and/or direct community offering
(the "Public Offering," and together with the Subscription Offering, as each may
be extended or reopened from time to time, the "Subscription/Public Offering")
to be commenced concurrently with the Subscription Offering. It is currently
anticipated by the Bank and the Company that any Common Stock not subscribed for
in the Subscription/Public Offering will be offered in a syndicated public
offering (the "Syndicated Public Offering"). The Subscription/Public Offering
and the Syndicated Public Offering are hereinafter referred to collectively as
the "Offerings," and the conversion of the Bank from mutual to stock form, the
acquisition of all of the capital stock of the Bank by the Company and the
Offerings are hereinafter referred to collectively as the "Conversion." The
Offering is further being conducted in accordance with the regulations of the
Office of Thrift Supervision and the Federal Deposit Insurance Corporation
subject to the restrictions contained in the Plan.
The Common Stock is being offered in the Syndicated Public Offering by
broker/ dealers licensed by the National Association of Securities Dealers, Inc.
("NASD") which have been approved by the Company ("Approved Brokers").
We are offering the selected dealers (of which you are one) the
opportunity to participate in the solicitation of offers to buy the Common Stock
in the Syndicated Public Offering and we will pay you a fee in the amount of up
to ____________ percent (___%) of the dollar amount of the Common Stock sold on
behalf of the Company by you, as evidenced by the authorized-designation of your
firm on the order form or forms or summary record, in the event indications of
interest are solicited (the "Purchase Record") accompanying funds transmitted
for payment therefor to the special account established by the Company for the
purpose of holding such funds. It is understood, of course, that payment of your
fee will be made only out of compensation received by us for the Common Stock
sold on behalf of the Company by you, as evidenced in accordance with the
preceding sentence. As soon as practicable after the Closing Date of the
offering, we will remit to you, only out of our compensation as provided above,
the fees to which you are entitled hereunder.
Each order form for the purchase of Common Stock or the Purchase Record
must set forth the identity and address of each person to whom the certificates
for such Common Stock should be issued and delivered. Such order form for the
Purchase Record should clearly identify your firm. You shall instruct any
subscriber who elects to send his order form to you to make any accompanying
check payable to "Ben Franklin Financial, Inc."
This offer is made subject to the terms and conditions herein set forth
and is made only to selected dealers who are (i) members in good standing of the
NASD who are to comply with all applicable rules of the NASD, including, without
limitation, the NASD's Interpretation on Free-Riding and Withholding and Rule
2740 of the NASD's Rules of the Association, or (ii) foreign dealers not
eligible for membership in the NASD who agree (A) not to sell any Common Stock
within the United States, its territories or possessions or to persons who are
citizens thereof or resident therein and (B) in making other sales to comply
with the above-mentioned NASD Interpretation, Rules 2730, 2740 and 2750 of the
abovementioned Rules as if they were NASD members, and Rule 2420 of such Rules
as it applies to non-member brokers or dealers in a foreign country.
Orders for Common Stock will be strictly subject to confirmation and
we, acting on behalf of the Company, reserve the right in our unfettered
discretion to reject any order in whole or in part, to accept or reject orders
in the order of their receipt or otherwise, and to allot. Neither you nor any
other person is authorized by the Company, or by us to give any information or
make any representations other than those contained in the Prospectus in
connection with the sale of any of the Common Stock. No selected dealer is
authorized to act as agent for us when soliciting offers to buy the Common Stock
from the public or otherwise. No selected dealer shall engage in any stabilizing
(as defined in Regulation M promulgated under the Securities Exchange Act of
1934) with respect to the Company's Common Stock during the offering.
We and each selected dealer assisting in selling Common Stock pursuant
hereto agree to comply with the applicable requirements of the Securities
2
Exchange Act of 1934 and applicable state rules and regulations. Each selected
dealer that is not a $______ net capital reporting broker/dealer agrees that it
will not use a sweep arrangement and that it will transmit all customer checks
by noon of the next business day after receipt thereof. In addition, we and each
selected dealer confirm that the Securities and Exchange Commission interprets
Rule 15c2-8 promulgated under the Securities Exchange Act of 1934 as requiring
that a Prospectus be supplied to each person who is expected to receive a
confirmation of sale 48 hours prior to delivery of such person's order form or
mailing of such confirmation in the event indications of interest are solicited.
We and each selected dealer further agree that to the extent that your
customers desire to pay for shares with funds held by or to be deposited with
us, in accordance with the interpretation of the Securities and Exchange
Commission of Rule 15c2-4 promulgated under the Securities Exchange Act of 1934,
either (a) upon receipt of an executed order form or direction to execute an
order form on behalf of a customer to forward the offering price of the Common
Stock ordered on or before twelve noon Central time of the next business day
following receipt or execution of an order form by us to the Company for deposit
in a segregated account or Unto solicit indications of interest in which event
(i) we will subsequently contact any customer indicating interest to confirm the
interest and give instructions to execute and return an order form or to receive
authorization to execute the order form on the customer's behalf, (ii) we will
mail acknowledgements of receipt of orders to each customer confirming interest
on the business day following such conformation, (iii) we will debit accounts of
such customers on the fifth business day (the "debit date") following receipt of
the confirmation referred to in (i), and (iv) we will forward the Purchase
Record together with such funds to the Company on or before twelve noon on the
next business day and each selected dealer acknowledges that if the procedure in
(b) is adopted, our customers' funds are not required to be in their accounts
until the debit date.
Unless earlier terminated by us, this Agreement shall terminate upon
the Closing Date of the Offering. We may terminate this Agreement or any
provisions hereof at any time by written or telegraphic notice to you. Of
course, our obligations hereunder are subject to the successful completion of
the Conversion.
You agree that at any time or times prior to the termination of this
Agreement you will, upon our request, report to us the number of shares of
Common Stock sold on behalf of the Company by you under this Agreement.
We shall have full authority to take such actions as we may deem
advisable in respect of all matters pertaining to the offering. We shall be
under no liability to you except for lack of good faith and for obligations
expressly assumed by us in this Agreement.
Upon application to us, we will inform you as to the states in which we
believe the Common Stock has been qualified for sale under, or are exempt
3
from the requirements of, the respective blue sky laws of such states, but we
assume no responsibility or obligation as to your rights to sell Common Stock in
any state.
Additional copies of the Prospectus and any supplements thereto will be
supplied in reasonable quantities upon request.
Any notice from us to you shall be deemed to have been duly given if
mailed, telephoned, or telegraphed to you at the address to which this Agreement
is mailed.
This Agreement shall be construed in accordance with the laws of the
State of Illinois.
Please confirm your agreement hereto by signing and returning the
confirmation accompanying this letter at once to us at Friedman, Billings,
Xxxxxx & Co., Inc., 0000 Xxxxxxxxxx Xxxxxx Xxxxx, 00xx Xxxxx, Xxxxxxxxx,
Xxxxxxxx 00000. The enclosed duplicate copy will evidence the agreement between
us.
FRIEDMAN, BILLINGS, XXXXXX & CO., INC.
By: __________________________________
Name:
Title:
CONFIRMED AS OF:
______________, 1998.
__________________________
(Name of Dealer)
By: ______________________
Its: _____________________
4
