EX-1.2
BIG FOOT FINANCIAL CORP.
2,185,000 SHARES
(anticipated maximum)
(subject to increase to up to 2,512,750
shares in the event of an oversubscription)
COMMON STOCK
($.01 Par Value)
AGENCY AGREEMENT
November __, 1996
Xxxxx Securities, Inc.
0000 Xxxxxxxxx Xxxxx, X.
Xxxxxxxxxx, X.X. 20036
Big Foot Financial Corp., an Illinois corporation (the "Company"), and
Fairfield Savings Bank, F.S.B., a federally chartered mutual savings bank (the
"Bank"), hereby confirm their agreement with Xxxxx Securities, Inc. ("Xxxxx"),
and Xxxxx xxxxxx confirms its obligations with respect to the sale of up to
2,185,000 shares (the "Shares") of common stock, par value $.01 per share, of
the Company (the "Common Stock"), as follows:
1. Introduction. On May 21, 1996 the Board of Directors of the Bank adopted
a plan of conversion (as amended and restated on September 17, 1996, the "Plan
of Conversion"), which provides for the conversion of the Bank from a federal
mutual savings bank to a federal stock savings bank and the issuance of all of
the Bank's outstanding stock to the Company (the "Conversion"). The Conversion
will be accomplished through the adoption by the Bank of a new federal stock
charter which authorizes the issuance of capital stock. The Bank will issue all
of its outstanding stock to the Company and will thereby become a wholly owned
subsidiary of the Company.
The Bank has filed an application for conversion on Form AC, including a
proxy statement, prospectus, exhibits, and all amendments and supplements
required to be filed with respect thereto to the date hereof (as so amended and
supplemented, the "Form AC"), with the Office of Thrift Supervision (the "OTS")
for approval of the Conversion. The Form AC includes, among other things, the
Bank's Plan of Conversion and the Bank's proxy statement for the Special Meeting
of the Bank's members to approve the Plan of Conversion to be held on December
__, 1996 (the "Proxy Statement") and the Prospectus (defined below). Pursuant to
the terms and provisions of the Plan of Conversion, nontransferable rights to
subscribe ("Subscription Rights") for an aggregate of up to 2,185,000 shares
(subject to increase to up to 2,512,750 shares in the event of an
oversubscription) of the Common Stock (the "Subscription Offering") have been
granted, in the following priority, to: (i) the depositors of the Bank with
aggregate account balances of $50 or more as of December 31, 1994 ("Eligible
Account Holders" and "Eligibility Record Date", respectively); (ii) the
tax-qualified stock employee benefit plans of the Company (the "Employer
Plans"), including the Employee Stock Ownership Plan of the Company (the
"ESOP"); (iii) the depositors of the Bank with aggregate account balances of $50
or more as of September 30, 1996 (other than depositors who otherwise qualify as
Eligible Account Holders or depositors who are directors or officers of the Bank
or their Associates, as defined in the Prospectus (as hereinafter defined))
("Supplemental Eligible Account Holders" and "Supplemental Eligibility Record
Date," respectively); (iv) members of the Bank, consisting of depositors of the
Bank as of October 31, 1996 ("Voting Record Date"), and borrowers of the Bank as
of July 1, 1991, other than Eligible Account Holders and Supplemental Eligible
Account Holders ("Other Members") and (v) bank employees ("Bank Employees").
Shares of Common Stock not subscribed for in the Subscription Offering may be
offered in a direct community offering to members of the general public, with a
first preference to natural persons residing in Cook and Lake counties in
Illinois (the "Local Community") on the Voting Record Date (the "Community
Offering," and together with the Subscription Offering, as each may be extended
or reopened from time to time, the "Subscription and Community Offering"). Any
Shares not subscribed for in the Subscription and Community Offering may be
offered, subject to Section 3 hereof, to the general public in a syndicated
community offering (the "Syndicated Community Offering"). It is acknowledged
that the number of Shares to be sold in the Conversion may be increased or
decreased as described in the Prospectus (as hereinafter defined); that the
purchase of Shares in the Subscription and Community Offering is subject to
maximum and minimum purchase limitations as described in the Prospectus; and
that the Company and Bank may reject, in whole or in part, any subscription
received in the Community Offering. If the number of Shares is increased or
decreased in accordance with the Plan of Conversion, the term "Shares" shall
mean such greater or lesser number where applicable.
Concurrently with the execution of this Agreement, the Company is
delivering to Xxxxx copies of the Prospectus dated November __, 1996 of the
Company to be used in the Subscription Offering and Community Offering (if any),
and, if necessary, will deliver copies of the Prospectus or prospectus
supplement for use in a Syndicated Community Offering and/or Public Offering, as
defined in the Prospectus (as hereinafter defined).
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2. Representations and Warranties of the Company and the Bank. The Company
and the Bank hereby jointly and severally represent and warrant to Xxxxx that:
(a) The Company has filed with the Securities and Exchange Commission
(the "Commission") a registration statement, including exhibits, and
pre-effective amendments thereto, on Form S-1 (No. 333-12083), including a
prospectus, for the registration of the Shares under the Securities Act of 1933,
as amended (the "1933 Act"), in the form heretofore delivered to Xxxxx; such
registration statement has become effective under the 1933 Act; and no order has
been issued by the Commission or any applicable state regulatory authority
preventing or suspending the use of the Prospectus with respect thereto and no
proceedings regarding same have been initiated or, to the best knowledge of the
Company, threatened. Except as the context may otherwise require, such
registration statement, as amended, on file with the Commission at the time the
registration statement became effective, including the prospectus, financial
statements, schedules, exhibits and all other documents filed as part thereof,
is herein called the "Registration Statement," and the prospectus on file with
the Commission at the time the Registration Statement became effective is herein
called the "Prospectus," except that if any prospectus filed by the Company with
the Commission in a post-effective amendment or pursuant to Rule 424(b) of the
rules and regulations of the Commission promulgated under the 1933 Act (the
"Regulations") differs from the prospectus on file at the time the Registration
Statement became effective, the term "Prospectus" shall refer to the Rule 424(b)
prospectus from and after the time it is filed with or mailed for filing to the
Commission and shall include any amendments or supplements thereto from and
after their dates of effectiveness or use, respectively. Following completion of
the Subscription and Community Offering, in the event of a Syndicated Community
Offering, the Company: (i) will promptly file with the Commission a
post-effective amendment to such Registration Statement relating to the results
of the Subscription and Community 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 a prospectus or prospectus
supplement containing information relating to the results of the Subscription
and Community Offering and pricing information pursuant to Rule 424(c) of the
Regulations, in either case in a form acceptable to Xxxxx.
(b) The Company has filed with the OTS an application for approval of
the acquisition of the Bank by the Company on Form H-(e)1-S (the "Holding
Company Application") promulgated under the savings and loan holding company
provisions of the Home Owners' Loan Act, as amended, and the regulations
promulgated thereunder by the OTS (the Home Owners' Loan Act, as amended,
together with the regulations promulgated thereunder by the OTS, shall
hereinafter be referred to as the "HOLA"). The Holding Company Application has
been approved by the OTS as of November __, 1996. The Prospectus has been
approved for use by the OTS as of November __, 1996. No order has been issued by
the OTS preventing or suspending the use of the Prospectus and no action by or
before the OTS to revoke such approvals or authorizations is pending or, to the
best knowledge of the Company or Bank, threatened.
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(c) As of the date of the Prospectus and at all times subsequent
thereto through and including the Closing Date: (i) the Registration Statement
and the Prospectus (as amended or supplemented, if amended or supplemented)
complied and will comply in all material respects with the 1933 Act and the
Regulations; (ii) the Registration Statement (as amended or supplemented, if
amended or supplemented) did not and will not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading; (iii) the Prospectus (as amended or
supplemented, if amended or supplemented) did not and will not contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading, provided, however,
that none of the representations and warranties in this subsection shall apply
to statements in or omissions from the Prospectus, the Registration Statement or
any amendment or supplement thereto made in reliance upon and in conformity with
written information furnished to the Company or the Bank by Xxxxx expressly
regarding Xxxxx for use under the caption "The Conversion -- Marketing and
Underwriting Arrangements"; and (iv) any Application (as defined in Section 8)
(as amended or supplemented, if amended or supplemented), other than the Holding
Company Application and the Form AC, did not and will not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(d) At the date of the Holding Company Application and at all times
subsequent thereto through and including the Closing Date: (i) the Holding
Company Application (as amended or supplemented, if amended or supplemented)
complied and will comply in all material respects with the HOLA; and (ii) the
Holding Company Application (as amended or supplemented, if amended or
supplemented) did not and will not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading.
(e) The Bank has filed the Form AC with the OTS in the form heretofore
delivered to Xxxxx. The Form AC has been approved by the OTS as of November __,
1996. The Proxy Statement has been approved by the OTS as of November __, 1996.
The form of stock charter of the Bank has been approved by the OTS as part of
the Form AC. No order has been issued by the Federal Deposit Insurance
Corporation (the "FDIC"), the OTS or any applicable state regulatory authority
preventing or suspending the use of the Proxy Statement and no action by or
before any such governmental entity to revoke any approvals or authorizations is
pending or, to the best knowledge of the Company and the Bank, threatened.
(f) As of the date of their approval by the OTS and at all times
subsequent thereto, through and including the Closing Date: (i) the Form AC and
the Proxy Statement complied and will comply in all material respects with Title
12, Part 563b of the Code of Federal Regulations (the "Conversion Regulations");
(ii) the Form AC did not and will not contain any untrue statement of a material
fact or omit to state a material fact required to be
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stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; (iii) the Proxy
Statement did not and will not contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading; and (iv) as of the date of the special meeting of the
Bank's members with respect to which the Proxy Statement is being distributed,
the Proxy Statement will not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under which they are
made, not misleading.
(g) Except as disclosed in the Registration Statement and the
Prospectus, there is no suit, proceeding, charge, investigation or action
(including, but not limited to, any action related to expressions of
dissatisfaction with the Conversion by any member of the Bank) before or by any
court, regulatory authority or governmental agency or body pending or, to the
best knowledge of the Bank and the Company, threatened against the Bank or the
Company which might materially and adversely affect the Conversion, the
performance by the Bank or the Company of this Agreement or the consummation of
the transactions contemplated by the Plan of Conversion or which might result in
any material adverse change in the condition (financial or otherwise), business,
properties or results of operations of the Bank and the Company, taken as a
whole.
(h) The execution, delivery and performance of this Agreement and the
issuance and sale of the Shares and the consummation of the transactions
contemplated by this Agreement and the Plan of Conversion have been duly
authorized by all necessary action on the part of the Company and the Bank. The
Plan of Conversion has been duly adopted by the Board of Directors of the Bank,
and the consummation of the transactions contemplated by the Plan of Conversion
has been duly authorized by all necessary action on the part of the Bank. The
Plan of Conversion has not been amended since September 17, 1996, or terminated
and remains in full force and effect. This Agreement has been duly executed and
delivered by the Company and the Bank and is the legal, valid and binding
agreement of the Company and the Bank, enforceable in accordance with its terms,
except as enforceability thereof may be limited by bankruptcy, insolvency,
moratorium, reorganization or similar laws affecting the enforceability of
creditors' rights generally or the rights of creditors of federally chartered
savings banks, the accounts of which are insured by the FDIC, or by general
equity principles regardless of whether such enforceability is considered in a
proceeding in equity or at law.
(i) The Company and the Bank have all such power and authority as may
be required to enter into this Agreement and to carry out the provisions and
conditions hereof. All consents, approvals, authorizations or orders necessary
to permit the issuance and sale of the Shares as provided herein (other than
approvals under the securities or Blue Sky laws of certain states, as to which
no representation is made) contemplated by the Plan of Conversion and this
Agreement, including, but not limited to, the approval of the OTS required to be
received as of the date hereof, have been received, and all transactions
contemplated by the Plan of Conversion will, as of the Closing Date, have been
duly consummated in accordance with all material terms
5
of the Plan of Conversion, and all regulatory consents, approvals,
authorizations and orders, including, but not limited to, the approval of the
OTS (except with respect to the filing of certain post-sale, post-Conversion
reports and documents in compliance with the OTS's resolutions or letters of
approval and approvals under the securities or Blue Sky laws of certain states,
as to which no representation is made), and any and all applicable waiting
periods have expired, or will have expired by the Closing Date, and all such
regulatory consents, approvals, authorizations and orders, including, but not
limited to, the approval of the OTS, will, as of the Closing Date, be in full
force and effect.
(j) The Company has been duly organized as a an Illinois corporation,
and the Bank has been duly organized as a federally chartered mutual savings
bank, and each of them is validly existing and in good standing under the laws
of the jurisdiction of its organization with full corporate power and authority
to own its property and conduct its business as described in the Registration
Statement and the Prospectus. Each of the Company and the Bank is duly qualified
to transact business and is in good standing in each other jurisdiction in which
the failure to so qualify would have a material adverse effect on the condition
(financial or otherwise) or the business, properties or results of operations of
the Company or the Bank. The Bank does not own equity securities of or an equity
interest in any other business enterprise except as described in the Prospectus.
The Company and the Bank have obtained all material licenses, permits and other
governmental authorizations required for the conduct of their respective
businesses; all such licenses, permits and governmental authorizations are in
full force and effect, and the Company and the Bank are in compliance in all
material respects with all laws, rules, regulations and orders applicable to the
operation of their respective businesses. On the Closing Date, upon amendment of
the Bank's charter and bylaws as provided in the rules and regulations of the
OTS and completion of the sale by the Company of the Shares as contemplated by
the Prospectus: (i) the Bank will be converted pursuant to the Plan of
Conversion to a federally chartered stock savings bank with full power and
authority to own its property and conduct its business as described in the
Prospectus; (ii) all of the outstanding capital stock of the Bank will be owned
of record and beneficially by the Company; and (iii) the Company will have no
direct subsidiaries other than the Bank. At the Closing Date, the Conversion
will have been effected in accordance with all applicable statutes, regulations,
decisions and orders; and, except with respect to the filing of certain
post-sale, post-Conversion reports and documents in compliance with the OTS's
resolutions or letters of approval, all of the terms, conditions, requirements
and provisions of and to the Conversion imposed on the Bank by the OTS will have
been complied with by the Bank in all material respects or appropriate waivers
will have been obtained.
(k) Each of the Company and the Bank has good and marketable title to,
or valid and enforceable leasehold estates in, all items of real and personal
property which are stated in the Prospectus to be owned or leased by them, in
each case free and clear of all liens, encumbrances, claims, security interests
and defects, other than (i) the lien of the Federal Home Loan Bank of Chicago;
(ii) those referred to in the Prospectus; or (iii) those which individually or
in the aggregate would not have a material adverse effect upon the operations of
the Company and the Bank, taken as a whole, and all of the leases and subleases
material to the business
6
of the Company and Bank under which either of them hold properties, including
those described in the Prospectus, are valid, subsisting and enforceable leases.
(l) All contracts and other documents required to be filed as exhibits
to the Registration Statement, the Form AC or the Holding Company Application
have been filed with the Commission or the OTS, as the case may be.
(m) The financial statements and schedules which are included in the
Registration Statement and Prospectus present fairly the financial condition,
results of operations, retained earnings and cash flows of the Bank at the dates
thereof and for the periods covered thereby and comply as to form in all
material respects with the applicable accounting requirements of the 1933 Act,
the Regulations and the Conversion Regulations. Such financial statements have
been prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved, and such financial
statements are consistent with the most recent financial statements and other
reports filed by the Company or the Bank with supervisory and regulatory
authorities, except that the accounting principles employed in such filings
conform to the requirements of such authorities and not necessarily to generally
accepted accounting principles. The tables and other financial, statistical, and
pro forma information and related notes included in the Prospectus that relate
to the Company or the Bank or both of them present fairly in all material
respects the information purported to be shown thereby at the respective dates
thereof for the respective periods covered thereby.
(n) Subsequent to the respective dates as of which information is
given in the Prospectus, except as may otherwise be disclosed therein, there has
not been: (i) any material adverse change in, or any adverse development that
materially affects, and neither the Company nor the Bank is aware of any
prospective change or development (other than prospective changes or
developments affecting the savings institution industry generally) which
reasonably could be expected to have a material adverse effect on, the condition
(financial or otherwise), business, properties, or results of operations of the
Company and the Bank taken as a whole; (ii) any change in the capital stock, or
material increase in the long-term debt of the Company or the Bank; (iii) the
issuance of any securities or incurrence of any liability or obligation, direct
or contingent, for borrowing other than in the ordinary course of business by
the Company or the Bank; or (iv) any material transactions entered into by the
Company or the Bank other than in the ordinary course of business. The
capitalization, liabilities, assets, properties and business of the Bank conform
in all material respects to the descriptions thereof contained in the Prospectus
and the Registration Statement. The Bank has no material liability of any kind,
contingent or otherwise, except as set forth in the Prospectus.
(o) No default exists, and no event has occurred which with notice or
passage of time, or both, would constitute a default on the part of the Company
or the Bank in the due performance and observance of any term, covenant or
condition of any contract, lease, indenture, mortgage, deed of trust, note, loan
or credit agreement or any other instrument or agreement to which the Company or
the Bank is a party or by which either of them or any of their respective
properties may be bound or affected in any respect which, in any such case,
7
would have a material adverse effect on the condition (financial or otherwise),
business, properties or results of operations of the Company or the Bank; such
agreements are in full force and effect; and no other party to any such
agreements has instituted or, to the best knowledge of the Company or the Bank,
threatened, any action or proceeding wherein the Company or the Bank is alleged
to be in default thereunder. As of the date hereof, neither the Company nor the
Bank is, and as of the Closing Date, neither the Company nor the Bank will be:
(i) in breach of any term or provision of its respective articles of
incorporation or charter or bylaws (and the Bank will not be in violation of its
charter or bylaws in stock from upon consummation of the Conversion); (ii) in
violation of any authorization, approval, judgment, decree or order; or (iii) in
violation of any statute, rule or regulation that individually or in the
aggregate would have a material adverse effect on the Company and the Bank,
taken as a whole.
(p) The execution, delivery and performance of this Agreement and the
Plan of Conversion, the consummation of the transactions contemplated by this
Agreement and the Plan of Conversion, and compliance with the terms and
provisions hereof and thereof will not: (i) conflict with, or result in a
material breach of, any of the terms, provisions or conditions of, or constitute
a default (or an event which with notice or passage of time, or both, would
constitute a default) under, the certificate of incorporation or charter or
bylaws of the Company or the Bank; (ii) conflict with, or result in a material
breach of, any of the terms, provisions or conditions of or constitute a default
(or any event which with notice or passage of time, or both, would constitute a
default) under any material contract, lease, agreement, indenture, mortgage,
deed of trust, note or any other instrument or agreement to which the Company or
the Bank is a party or by which either of them or their respective properties is
bound; (iii) violate any authorization, approval, judgment, decree, order,
statute, rule or regulation applicable to the Company or the Bank or any of
their properties; or (iv) with the exception of the liquidation account
established in the Conversion, result in the creation of any lien, charge or
encumbrance upon any of the assets of the Company or the Bank.
(q) The Conversion, when consummated in accordance with the terms of
the Plan of Conversion, will conform in all material respects to the description
thereof contained in the Prospectus and the Proxy Statement. The issuance and
sale of the capital stock of the Bank to the Company have been duly authorized
by all necessary action of the Bank, the Company and appropriate regulatory
authorities and such capital stock, when issued and paid for in accordance with
the terms of the Plan of Conversion, will be fully paid and non-assessable, will
conform in all material respects to the description thereof contained in the
Prospectus and the Form AC and will not be subject to any preemptive rights.
There are no options, agreements, contracts or other rights to purchase or
acquire any shares of Common Stock or shares of the Bank's common stock (other
than Subscription Rights, the purchase of the Bank common stock by the Company
pursuant to the Conversion, rights to purchase or acquire Common Stock pursuant
to benefit plans of the Company as expressly described in the Prospectus and any
other rights expressly described in the Plan of Conversion). The issuance and
sale of the Shares by the Company have been duly authorized: (i) by all
necessary action of the Company; and (ii) subject to the receipt of OTS
approvals prior to the Closing Date, by the OTS. The Shares, when issued and
paid for in accordance with the terms of the Plan of Conversion, will be duly
8
and validly issued and fully paid and non-assessable, will conform in all
material respects to the description thereof contained in the Prospectus and
will not be subject to any preemptive rights. The purchasers of the Shares from
the Company, upon issuance thereof against payment therefor, will acquire such
Shares free and clear of all claims, encumbrances, security interests and liens
whatsoever created or suffered to be created by the Company. The certificates
representing the Shares will conform with the requirements of applicable laws
and regulations. Upon consummation of the Conversion, the authorized, issued and
outstanding equity capital of the Company will be within the range that is set
forth in the Prospectus under the caption "Capitalization," based on the
assumptions stated therein.
(r) No approval of any regulatory or supervisory or other public
authority is required in connection with the execution and delivery of this
Agreement or the issuance of the Shares, except for the declaration of
effectiveness of the Registration Statement and any required post-effective
amendment to the Registration Statement by the Commission, approval of the Form
AC and Proxy Statement and other marketing materials by the OTS, the issuance of
the Bank's federal stock charter and bylaws by the OTS, the approval of the
holding Company Application by the OTS and any necessary qualification or
registration under the securities or Blue Sky laws of the various states in
which the Shares are to be offered and as may be required under the regulations
of The Nasdaq National Market.
(s) KPMG Peat Marwick LLP, the firm which has certified the financial
statements of the Bank included in the Prospectus, are independent certified
public accountants, as required by the 1933 Act, the Regulations and the
Conversion Regulations.
(t) Capital Resources Group, Inc., which has prepared the Bank's
conversion valuation appraisal report dated as of September 6, 1996 and updated
as of October __, 1996 (the "Appraisal"), which Appraisal (as amended or
supplemented, if amended or supplemented) is referred to in the Prospectus, is
independent with respect to the Company and the Bank within the meaning of the
Conversion Regulations and is believed by the Company and the Bank to be
experienced and expert in rendering corporate appraisals of thrift institutions.
(u) The Company and the Bank have filed all federal income and state
and local franchise tax returns required to be filed (or have timely filed
extensions therefor) and have made timely payments of all taxes due and payable
in respect of such returns, and no deficiency has been asserted with respect
thereto by any taxing authority.
(v) Neither the Company nor the Bank or, to the best knowledge of the
Company or the Bank, any employee of the Company or the Bank has made any
payment of funds of the Company or the Bank which would be prohibited by law,
and no funds of the Company or the Bank have been set aside to be used for any
payment so prohibited by law. Neither the Company nor the Bank, or, to the best
knowledge of the Company and Bank, any employee of the Company or the Bank has
made any payment of funds of the Company or the Bank as a loan for the purchase
of Shares. The Company and the Bank are in compliance with
9
the applicable financial record-keeping and reporting requirements of the
Currency and Foreign Transaction Reporting Act of 1970, as amended, and the
regulations and rules thereunder.
(w) The Company has received approval, subject to notice of issuance,
to have the Shares quoted on The Nasdaq National Market effective on the Closing
Date.
(x) Upon consummation of the Conversion, the Company will be a savings
and loan holding company. The deposit accounts of the Bank are insured by the
Savings Association Insurance Fund of the FDIC up to the maximum amount allowed
under law, and no proceeding for the termination or revocation of such insurance
is pending or, to the best knowledge of the Company and the Bank, threatened.
The Bank is a member in good standing of the Federal Home Loan Bank of Chicago.
Neither the Company nor the Bank is in violation of any directive, order,
agreement or understanding from the FDIC, the OTS or any other agency to make
any material change in the method of conducting its business so as to comply in
all material respects with all applicable statutes and regulations (including,
without limitation, regulations, decisions, directives and orders of the FDIC
and the OTS).
(y) Neither the Company nor the Bank has relied upon Xxxxx or Xxxxx'x
legal counsel for any legal, tax or accounting advice in connection with the
Conversion.
(z) Neither the Company nor the Bank is required to be registered
under the Investment Company Act of 1940, as amended.
(aa) There are no contracts, agreements or understandings between the
Company or the Bank and any person granting such person the right to require the
Company or the Bank to file a registration statement under the 1933 Act with
respect to any securities of the Company or the Bank owned or to be owned by
such person or to require the Company or the Bank to include such securities in
the Registration Statement or in any other registration statement filed by the
Company or the Bank under the 1933 Act.
(ab) Neither the Company nor the Bank has: (i) issued any securities
within the last 18 months (except for notes to evidence other bank loans and
reverse repurchase agreements or other liabilities and the issuance of the
minimum number of shares of Common Stock by the Company necessary to conduct
business as a corporation in Illinois); (ii) had any material dealings with
respect to sales of its securities within the 12 months prior to the date hereof
with any member of the National Association of Securities Dealers, Inc. (the
"NASD"), or any person related to or associated with such member, other than
discussions and meetings with Xxxxx relating to the Conversion; (iii) entered
into a financial or management consulting agreement with any member of the NASD
with respect to its securities or any person related to or associated with such
member, except as contemplated hereunder and except in connection with the
Conversion as described in the Prospectus under the caption "The
Conversion--Marketing and Underwriting Arrangements"; or (iv) engaged any
intermediary between Xxxxx and the
10
Company in connection with the offering of the Shares, and no person is being
compensated in any manner for such service.
3. Appointment of Xxxxx; Sale and Delivery of the Shares. Subject to the
terms and conditions herein set forth, the Company and the Bank hereby appoint
Xxxxx as their agent to consult with and advise the Company and the Bank, and to
solicit subscriptions and purchase orders for Shares on behalf of the Company
and the Bank on a best efforts basis, in connection with the Company's sale of
the Shares in the Subscription Offering, the Community Offering, if any, and the
Syndicated Community Offering, if any. On the basis of the representations and
warranties herein contained, and subject to the terms and conditions herein set
forth, Xxxxx accepts such appointment and agrees to provide, consult with and
advise the Company and the Bank as to the Conversion services set forth as
Exhibit A to the letter agreement between Xxxxx and the Bank dated as of
February 15, 1996, which Exhibit A is incorporated by reference herein;
provided, however, that Xxxxx shall not be obligated to take any action which is
inconsistent with any applicable laws, regulations, decisions or orders and,
provided further, that Xxxxx shall not be responsible for obtaining
subscriptions or purchase orders for any specific number of Shares and shall not
be required to purchase any Shares. The appointment of Xxxxx hereunder shall
terminate upon consummation of the Conversion. Except where specifically
incorporated by reference herein, this Agreement supersedes all other letter
agreements, engagement letters or other agreements previously entered into
between Xxxxx and the Company and/or the Bank.
In connection with the solicitation of offers to buy Shares in the
Syndicated Community Offering, if any, Xxxxx may use the services of other
brokers or dealers ("Selected Dealers") acceptable to the Company in its
reasonable discretion and, in that connection, it may invite (if requested to do
so by the Company) any Selected Dealer to become a "Sponsoring Dealer," that is,
a Selected Dealer who will solicit offers which result in sales on behalf of the
Company of at least the number of Shares specified by Xxxxx. Each Selected
Dealer, including each Sponsoring Dealer, shall enter into a Selected Dealer
Agreement substantially in the form attached hereto as Exhibit A.
In the event the Company is unable to sell all of the minimum number of
Shares within the period provided in the Plan of Conversion and the Conversion
Regulations, and as described in the Prospectus, this Agreement shall terminate
and the Company shall refund to any persons who have subscribed for any of the
Shares the full amount which it may have received from them, together with
interest as provided in the Prospectus, and no party to this Agreement shall
have any obligation to the others hereunder, except for payment by the Company
as set forth in Sections 6, 8(a) and 8(d) hereof and payment by Xxxxx as
provided in Sections 8(b) and 8(d). Appropriate arrangements for placing the
funds received from subscriptions for Shares or other offers to purchase Shares
in special interest-bearing accounts with the Bank pending consummation or
termination of the Subscription Offering, Community Offering (if any) and
Syndicated Community Offering (if any) were made prior to the commencement of
the Subscription and Community Offering, with provision for refund to the
purchasers as set forth above, or for delivery to the Company if all of the
Shares are sold.
11
If all of the minimum number of Shares are sold and all other conditions
precedent to the consummation of the Conversion are satisfied, the Company
agrees to issue or have issued the Shares sold and to release for delivery
certificates for such Shares on the Closing Date against payment therefor by
release of funds from the special interest-bearing accounts referred to above
and from a special account which the Company agrees to establish prior to the
retention of any Selected Dealer. The closing shall be held at the offices of
Xxxxxxx Xxxxxxxx & Xxxx, Two World Trade Center, New York, New York 10048 at
9:00 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 Xxxxx by telephone, confirmed in writing, when
funds shall have been received for all of the Shares. Certificates for Shares
shall be delivered directly to the purchasers thereof or in accordance with the
Company's directions. Notwithstanding the foregoing, certificates for Shares
purchased through Selected Dealers shall be made available to Xxxxx for checking
at least 24 hours prior to the Closing Date at such office as Xxxxx and the
Company shall mutually designate. The hour and date upon which the Company shall
release for delivery all of the Shares, in accordance with the terms hereof, are
herein called the "Closing Date."
The Company and the Bank (or their respective agents) shall advise Xxxxx,
whenever an allocation of the Shares does not strictly correspond to all
subscriptions for Shares, as to the allocation of the Shares. Xxxxx shall have
no liability to any party for the records or other information provided by the
Company and the Bank (or their respective agents) to Xxxxx for use in allocating
the Shares. The Company and the Bank shall indemnify and hold harmless Xxxxx for
any liability arising out of the allocation of the Shares in accordance with the
Plan of Conversion generally and the records or other information provided to
Xxxxx by the Company and the Bank (or their respective agents).
The Company will pay any stock issue and transfer taxes which may be
payable with respect to the sale of the Shares.
In addition to the expenses specified in Section 6 hereof, Xxxxx has
received or will receive the following compensation from the Company for Xxxxx'x
services hereunder:
(a) A management fee of $37,500 has been paid to Xxxxx.
(b) For services rendered by Xxxxx in connection with the sale of
Shares in the Subscription Offering, the Community Offering (if any) and the
Syndicated Community Offering (if any), a fee equal to one and three quarters
percent (1.75%) of the aggregate purchase price of Shares sold in the
Subscription Offering, excluding Shares sold to the Company's directors,
officers and employees (or members of their immediate families) and the ESOP,
and three percent (3%) of the aggregate purchase price of shares sold in the
Direct Community Offering. The sales commissions due Xxxxx shall be paid to
Xxxxx at Closing.
(c) In connection with the solicitation of offers to buy Shares in the
Syndicated Community Offering (if any), Xxxxx and the Company agree to negotiate
a fee in
12
an amount up to seven percent (7%) of the aggregate purchase price of Shares
sold in the Syndicated Community Offering, which fee shall be paid to Xxxxx at
Closing for allocation by Xxxxx in accordance with the Selected Dealers
Agreement.
The fees specified in clauses (b) and (c) above shall be payable to Xxxxx
by wire transfer of immediately available funds or a check in next-day funds, as
agreed to by the parties hereto, at the time so indicated above.
Notwithstanding anything to the contrary contained in this Agreement (but
subject to Section 10 hereof) Xxxxx reserves the right to renegotiate the amount
of fees (but only in those circumstances where the conduct of the Company or the
Bank triggers the need for renegotiation pursuant to this paragraph) and
expenses payable or reimbursable, as the case may be, by the Company and the
Bank in the event that (i) the Company and/or the Bank are required to resolicit
subscribers for Shares in the Subscription and Community Offering, or (ii) the
regulations governing the Conversion are changed in a manner that materially
affects the ability of Xxxxx to perform its duties as set forth in this
Agreement. Until any renegotiation called for by this paragraph is completed,
Xxxxx shall not accrue expenses relating to any resolicitation or change in
regulations in an amount that would cause the total expenses incurred by Xxxxx,
that are reimbursable by the Bank pursuant to Section 6 hereof, to be greater
than $60,000, without the prior written consent of the Company or the Bank,
which consent shall not be unreasonably withheld.
4. Offering. The Company is offering up to 2,185,000 Shares (which number
may be increased to up to 2,512,750 shares in the event of an oversubscription
or decreased as described in the Prospectus) in the Subscription Offering and
Community Offering, if any, and, if any Shares remain unsubscribed at the
conclusion of the Subscription Offering and Community Offering, if any, in the
Syndicated Community Offering.
5. Covenants of the Company and the Bank. The Company and the Bank jointly
and severally covenant and agree with Xxxxx that:
(a) The Company shall immediately upon the receipt of any information
concerning the events listed below notify Xxxxx and promptly confirm the notice
in writing: (i) when any post-effective amendment to the Registration Statement
or any supplement to the Prospectus has been filed; (ii) of the issuance by the
Commission of any order or other action suspending the use of the Prospectus or
of the initiation or the threat of any such action; (iii) of the receipt of any
notice with respect to the suspension of the qualification of the Shares for
offering or sale in any jurisdiction; and (iv) of the receipt of any comments or
requests for additional information or any amendment or supplement from the
staff of the Commission relating to the Registration Statement. The Company will
use its reasonable, good faith and diligent efforts to prevent the issuance by
the Commission or any other governmental authority of any such order and, if any
such order shall at any time be issued, to obtain the lifting, termination or
withdrawal thereof at the earliest possible time.
13
(b) During the time when a prospectus is required to be delivered
under the 1933 Act, the Company will comply with all requirements imposed upon
it by the 1933 Act, as now in effect and hereafter amended, and by the
Regulations, as from time to time in force, so far as necessary to permit the
continuance of offers and sales of or dealings in the Shares in accordance with
the provisions hereof and the Prospectus. If, at any time when the Prospectus is
required to be delivered under the 1933 Act, any event shall have occurred as a
result of which, in the opinion of counsel for the Company or counsel for Xxxxx,
the Prospectus as then amended or supplemented includes an untrue statement of a
material fact or omits to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, or if it is necessary at any time to
amend or supplement the Prospectus to comply with the 1933 Act, the Company
shall promptly notify Xxxxx in writing and prepare and file with the Commission
an appropriate amendment or supplement. The Company shall provide Xxxxx and
Xxxxx'x counsel notice of the Company's intention to file any amendment or
supplement to the Registration Statement or the Prospectus and shall not file or
use any amendment or supplement to the Registration Statement or the Prospectus
of which Xxxxx has not first been furnished a copy and given a reasonable amount
of time to review such copy or to which Xxxxx shall reasonably object. For the
purposes of and during the time frame contemplated by this subsection (b), each
of the Company and the Bank shall timely furnish such information with respect
to itself as Xxxxx may from time to time reasonably request. The Bank shall not
amend, without Xxxxx'x prior written consent (which consent shall not be
unreasonably withheld), the Plan of Conversion in any manner that, in the
reasonable opinion of Xxxxx, would materially and adversely affect the sale of
the Shares or the terms of this Agreement. Prior to the Closing Date, neither
the Company nor the Bank shall issue any press release or other public
communication with respect to the Company or the Bank or the Conversion without
first providing to Xxxxx a copy of such release or other communication and
allowing Xxxxx a reasonable amount of time to review such copy. Except as
otherwise required by law, neither the Company nor the Bank shall issue any
release or other communication prior to the Closing Date to which Xxxxx shall
reasonably object.
(c) The Bank shall not file any amendment or supplement to the Form
AC, including the Bank's Proxy Statement and Prospectus contained therein,
without notifying Xxxxx and without providing Xxxxx and Xxxxx'x counsel an
opportunity to review such amendment. The Bank shall not file any amendment or
supplement to the Form AC to which Xxxxx shall reasonably object. Xxxxx shall
have a reasonable amount of time to review any amendment or supplement to the
Form AC.
(d) The Company or the Bank shall immediately upon receipt of any
information concerning the events listed below notify Xxxxx and promptly confirm
the notice in writing: (i) of the request by the OTS, or any other governmental
entity, for any amendment or supplement to the Form AC or for additional
information relating to the Form AC or the holding Company Application; or (ii)
of the issuance by the OTS, or any other governmental entity, of any order or
other action suspending the use of the Prospectus, Proxy Statement or any other
filing of the Bank under the HOLA or other applicable law or regulations, or the
initiation or threat of any such action. The Company and the Bank will each use
its reasonable,
14
good faith and diligent efforts to prevent the issuance by the OTS, or any other
governmental entity, of any such order and, if any such order shall at any time
be issued, to obtain the lifting, termination or withdrawal thereof at the
earliest possible time.
(e) During the time when the Proxy Statement is required to be
delivered under the Conversion Regulations, the Bank will comply with all
requirements imposed upon it by the Conversion Regulations. If, at any time
prior to the date of the Special Meeting (as defined in the Prospectus) of the
Bank's members with respect to which the Proxy Statement is delivered, any event
shall have occurred as a result of which, in the opinion of counsel for the Bank
or counsel for Xxxxx, the Proxy Statement includes an untrue statement of a
material fact or omits to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, or if it is necessary at any time to amend
or supplement the Proxy Statement to comply with the Conversion Regulations, the
Bank shall notify Xxxxx in writing and prepare and file with the OTS, at the
Bank's expense, an appropriate amendment or supplement. The Bank shall not file
or use any amendment or supplement to the Proxy Statement of which Xxxxx has not
first been furnished a copy or to which Xxxxx shall reasonably object. For the
purpose of and during the time frame contemplated by this subsection (e), the
Bank shall timely furnish such information with respect to itself as Xxxxx may
from time to time reasonably request.
(f) The Company and the Bank shall deliver to Xxxxx, without charge,
such number of copies of the Registration Statement (including all exhibits),
the Holding Company Application (including all exhibits) and the Form AC
(including all exhibits) as originally filed and each amendment, including,
without limitation, any post-effective amendment, thereto as Xxxxx may
reasonably request. The Company will furnish to Xxxxx, from time to time during
such period as the Prospectus is required by law to be delivered in connection
with offers and sales of the Shares, such number of copies of the Prospectus (as
amended or supplemented, if amended or supplemented) as Xxxxx may reasonably
request. The Company authorizes Xxxxx, all members of any selling group which
may be formed in connection with the distribution of the Shares, and all dealers
to whom any of the Shares may be sold by members of the selling group, to use
the Prospectus (as amended or supplemented, if amended or supplemented) in
connection with the sale of the Shares.
(g) The Company and the Bank have taken or shall take all necessary
action, in cooperation with Xxxxx, to qualify or register the Shares for offer
and sale by the Company under the securities or "Blue Sky" laws of such
jurisdictions in which the Shares are required by the Conversion Regulations to
be offered or as Xxxxx and the Company shall reasonably agree to designate;
provided, however, that neither the Company nor the Bank shall be obligated to
qualify as a foreign corporation to do business under the laws of any such
jurisdiction or to file any general consent to service of process.
(h) The Company shall make generally available to its security holders
as soon as practicable, but not later than the first day of the 15th full
calendar month following the effective date of the Registration Statement, an
earnings statement of the Company and its
15
consolidated subsidiaries (which need not be certified by independent certified
public accountants unless required by the 1933 Act or the Regulations, but which
shall satisfy the provisions of Rule 158 under the 1933 Act) covering a period
of at least 12 months beginning after the effective date of the Registration
Statement.
(i) Title Company shall file a registration statement for the Common
Stock under Section 12(g) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), prior to completion of the stock offering pursuant to the
Plan of Conversion 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 use its reasonable, good faith and diligent efforts to obtain approval for
and maintain quotation of the Shares on The Nasdaq National Market effective on
or prior to the Closing Date. The Company will not sell or issue, contract to
sell or otherwise dispose of, for a period of 90 days after the Closing Date,
without Xxxxx'x prior written consent, which consent shall not be unreasonably
withheld, any shares of Common Stock other than in connection with any plan or
arrangement described in the Prospectus (and the Company shall notify Xxxxx of
any such sale, issuance, contract or disposition pursuant to such plan or
arrangement).
(j) During the period of three years hereafter, the Company shall
furnish: (i) to its security holders and to Xxxxx, as soon as practicable after
the end of each fiscal year of the Company, an audited balance sheet and
statements of operations, stockholders' equity and changes in financial position
as at the end of and for such year; (ii) to Xxxxx, as soon as practicable after
the end of each of the first three quarters of each fiscal year, a balance sheet
and statement of operations of the Company (which need not be audited) as at the
end of and for such quarter and the year to date and as at the end of and for
the corresponding periods of the preceding fiscal year; (iii) to Xxxxx, as soon
as available, a copy of each other report of the Company mailed to its
stockholders or filed with the Commission pursuant to the Exchange Act or
otherwise (including, without limitation, reports on Forms 10-K, 10-Q and 8-K,
and all proxy statements and annual reports to stockholders), or the OTS or any
other supervisory or regulatory authority or any national securities exchange or
system on which any class of securities of the Company is listed or quoted,
including, but not limited to, the Nasdaq National Market, other than on a
confidential basis; (iv) to Xxxxx, each press release and material news item and
article released by the Company or the Bank; and (v) such additional publicly
available documents and information with respect to and issued or prepared by
the Company and the Bank as Xxxxx may reasonably request. During any period when
the Company has an active subsidiary or subsidiaries, such financial statements
will be on a consolidated basis to the extent the accounts of the Company and
its subsidiary or subsidiaries are consolidated.
(k) The Company shall furnish to Xxxxx as early as practicable prior
to the Closing Date, but no later than two full business days prior thereto, a
copy of the latest available unaudited interim financial statements of the Bank
which have been read by KPMG Peat Marwick LLP, as stated in their letters to be
furnished pursuant to subsections (g) and (h) of Section 7 hereof.
16
(l) The Company and the Bank shall take such actions and furnish such
information as are reasonably requested by Xxxxx in order for Xxxxx to ensure
compliance with the NASD's "Interpretation Relating to Free-Riding and
Withholding."
(m) The Company shall not deliver the Shares until the Company and the
Bank each have satisfied or caused to be satisfied each condition set forth in
Section 7 hereof unless such condition is waived. The Company and the Bank shall
use their reasonable, good faith and diligent efforts to comply with or cause to
be complied with the conditions precedent to the obligations of Xxxxx as
specified in Section 7 hereof.
(n) Prior to the Closing Date, the Company and the Bank shall conduct
their respective businesses in compliance with, in all material respects, all
applicable federal and state laws, rules, regulations, decisions, directives and
orders, including all decisions, directives and orders of the FDIC and the OTS
and consistent with prior business practices of the Company and the Bank.
(o) The Company and the Bank shall comply with any and all terms,
conditions, requirements and provisions with respect to the Conversion and the
transactions contemplated thereby imposed by the OTS, the HOLA, the Commission,
the 1933 Act, the Regulations (including, without limitation, the filing of
reports on Form SR pursuant to Rule 463 of the Regulations or any successor
provision), the Exchange Act and the regulations promulgated by the Commission
pursuant to the Exchange Act to be complied with subsequent to the Closing Date.
The Company will comply with all provisions of all undertakings contained in the
Registration Statement. The liquidation account for the benefit of Eligible
Account Holders and Supplemental Eligible Account Holders (as defined in the
Prospectus) of the Bank shall be duly established and maintained in accordance
with the requirements of the OTS.
(p) The Company shall apply the proceeds from the sale of the Shares
in the manner set forth in the Prospectus under the caption "Use of Proceeds."
6. Payment of Expenses. Whether or not the sale of the Shares by the
Company is consummated, the Bank shall pay all expenses incident to the
performance of the obligations of the Company and the Bank under this Agreement,
including but not limited to the following: (a) the preparation, printing,
issuance and delivery of certificates for the Common Stock; (b) the fees and
disbursements of the Company's and the Bank's counsel, accountants and other
advisors; (c) the printing and delivery to Xxxxx in such quantities as Xxxxx
shall reasonably request of copies of the Registration Statement, the
Prospectus, the Proxy Statement, the Form AC and the Holding Company Application
as originally filed and as amended or supplemented and all other documents in
connection with the Conversion and this Agreement; (d) the fees for listing the
Shares on The Nasdaq National Market; (e) fees and expenses relating to the
preparation of the independent appraisal and all updates thereof; (f) fees and
expenses relating to advertising expenses, temporary personnel expenses and
conversion center expenses, investor meeting expenses, and other miscellaneous
expenses relating to the marketing of the Common Stock; (g) the fees and charges
of any transfer agent, registrar and other agents; (h) the
17
preparation, printing, filing, delivery and shipping of the Prospectus
(including the financial statements contained therein), and any amendments or
supplements thereto, this Agreement and related agreements and communications
and related documents; (i) filing fees and expenses in connection with the
qualification or registration of the Shares for offer and sale by the Company
under the securities or "Blue Sky" laws, including reasonable fees and expenses
of counsel in connection with such qualification or registration and all "Blue
Sky" memoranda; and (j) filing fees paid or incurred by Xxxxx in connection with
the filings with the NASD. In the event Xxxxx incurs any of the fees or expenses
enumerated above in connection with the Subscription Offering, the Community
Offering or the Syndicated Community Offering, the Bank will reimburse Xxxxx for
such fees and expenses; provided, however, that Xxxxx shall not incur any
substantial expenses on behalf of the Bank or the Company without the prior
written consent of the Bank or the Company. In addition, the Bank shall
reimburse Xxxxx for out-of-pocket expenses incurred by Xxxxx relating to the
offering of the Shares (including, without limitation, legal fees and
out-of-pocket disbursements of Xxxxx'x legal counsel); provided, however,
subject to Section 3 hereof, that such out-of-pocket expenses of Xxxxx shall not
exceed $45,000 without the prior written consent of the Company or the Bank.
7. Conditions of Obligations of Xxxxx. The Company, the Bank and Xxxxx
agree that all obligations of Xxxxx provided herein shall be subject to the
accuracy of the representations and warranties contained herein as of the date
hereof and as of the Closing Date, 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 each of the Company and the Bank of its
obligations hereunder to be performed at or prior to the Closing Date, and to
the following conditions:
(a) At the Closing Date, Xxxxx shall receive the favorable opinion of
Xxxxxxx Xxxxxxxx & Xxxx, counsel for the Company and the Bank, dated the Closing
Date, addressed to Xxxxx, in form and substance satisfactory to counsel for
Xxxxx and 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
Illinois and has full corporate power and authority to own its properties
and conduct its business as described in the Prospectus; and the Company is
duly qualified to transact business and is in good standing in each other
jurisdiction in which the failure to so qualify would have a material
adverse effect on the condition (financial or otherwise), or the business,
properties or results of operations of the Company;
(ii) The Bank has, prior to the Closing Date, been validly
existing as a federally chartered mutual savings bank under the laws of the
United States with full corporate power and authority to own its properties
and to conduct its business as described in the Prospectus and, as of the
Closing Date, the Bank will become duly organized and validly existing as a
federally chartered capital stock savings bank in good standing under the
laws of the United States with full corporate power and
18
authority to own its properties and to conduct its business as described in
the Prospectus; and the Bank is duly qualified to transact business in each
jurisdiction in which the failure to so qualify with have a material
adverse effect on the condition (financial or otherwise), or the business,
properties or results of operations of the Bank. The Bank is a member of
the Federal Home Loan Bank of Chicago, and the deposit accounts of the Bank
are insured by the Savings Association Insurance Fund of the FDIC up to the
maximum amount allowed under law;
(iii) The activities of the Bank described in the Prospectus are
permitted under federal law (and not expressly prohibited under the
Illinois Business Corporation Act) to subsidiaries of a savings bank
holding company that is a Illinois business corporation. To the best of
such counsel's knowledge, each of the Company and the Bank has obtained all
licenses, permits, and other governmental authorizations that are material
for the conduct of its business, and all such licenses, permits and other
governmental authorization are in full force and effect, and to the best of
such counsel's knowledge the Company and the Bank are complying therewith
in all material respects;
(iv) The Plan of Conversion complies with, and to the best of
such counsel's knowledge the Conversion has been effected in all material
respects in accordance with, all applicable laws, rules, regulations,
decisions and orders; and to the best of such counsel's knowledge all of
the terms, conditions, requirements and provisions with respect to the Plan
of Conversion and the Conversion (including those with respect to the
Subscription and Community Offering and the Syndicated Community Offering)
imposed by the OTS in writing or orally communicated to such counsel, the
Company or the Bank have been complied with by the Company and the Bank in
all material respects or appropriate waivers have been obtained;
(v) As of the Closing Date, the Company has authorized Common
Stock as set forth in the Registration Statement and the Prospectus and the
description of such Common Stock in the Registration Statement and the
Prospectus is accurate and complete in all material respects. Other than as
expressly disclosed in the Prospectus or in the certificate of
incorporation, charter, bylaws or minute books of the Company or the Bank,
to the best of such counsel's knowledge, there is no commitment, plan or
arrangement to issue, and no outstanding option, warrant or other right
calling for the issuance or sale of, any shares of capital stock of the
Company or the Bank or any security or other instrument which by its terms
is convertible into, exercisable for or exchangeable for capital stock of
the Company or of the Bank. To the best of such counsel's knowledge, there
are no options, agreements, contracts or other rights in existence to
purchase or acquire from the Company any issued and outstanding shares of
the common stock of the Bank;
(vi) The issuance and sale of the Shares have been duly and
validly authorized by all necessary action on the part of the Company and
have received all necessary regulatory approvals; the Shares, when issued
and paid for in accordance with
19
the terms of the Plan of Conversion and this Agreement, will be duly and
validly issued and fully paid and nonassessable and not subject to any
preemptive rights, and the purchasers of the Shares from the Company, upon
issuance thereof against payment therefor, will acquire such Shares free
and clear of all claims, encumbrances, security interests and liens
whatsoever created or suffered to be created by the Company (other than
encumbrances created by statute or regulation);
(vii) The issuance and sale of the capital stock of the Bank to
the Company, the Plan of Conversion and the Conversion have been duly
authorized by all necessary action of the Bank and have received the
approval of the OTS and such capital stock, when issued and paid for in
accordance with the terms of the Plan of Conversion, will be validly
issued, fully paid and non-assessable and owned beneficially and of record
by the Company;
(viii) The certificates for the Shares comply with applicable
requirements of Illinois law;
(ix) The execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated hereby have been duly
and validly authorized by all necessary action on the part of the Company
and the Bank, and this Agreement constitutes the legal, valid and binding
agreement of the Company and the Bank, enforceable in accordance with its
terms except as rights to indemnity and contribution thereunder may be
limited under applicable law, subject to the qualification that (i)
enforcement thereof may be limited by bankruptcy, insolvency, moratorium,
reorganization or other laws (including the laws of fraudulent conveyance)
or judicial decisions affecting the enforceability of creditors' rights
generally, the rights of creditors of federally chartered savings
associations, the accounts of which are insured by the FDIC, or the
reorganization of financial institutions and (ii) enforcement thereof is
subject to general equity principles (regardless of whether such
enforceability is considered in a proceeding in equity or at law) and to
the effect of certain laws and judicial decisions upon the availability of
injunctive relief and enforceability of equitable remedies, including the
remedies of specific performance and self-help;
(x) Except as set forth in the Prospectus, there are no material
legal or governmental proceedings pending or, to the best of such counsel's
knowledge, threatened against, or involving the properties of, the Company
or the Bank required to be disclosed in the Prospectus that have not been
disclosed therein; provided that for this purpose, any litigation or
governmental proceeding is not considered to be "threatened" unless the
potential litigant or governmental authority has manifested to the
management of the Company or the Bank, or to such counsel, a present
intention to initiate such litigation or proceeding;
20
(xi) The statements in the Prospectus under the captions "Market
for the Common Stock," "Dividend Policy," "Regulation," "Restrictions on
Acquisition of the Company and the Bank," "Description of Capital Stock of
the Company" and "Description of Capital Stock of the Bank," insofar as
they constitute statements of law or legal conclusions, are correct in all
material respects;
(xii) The Holding Company Application, the Form AC (including the
Prospectus, the Plan of Conversion and the Proxy Statement), the form of
stock charter and the Proxy Statement have been approved by the OTS; the
stock charter when issued to the Bank will be in full force and effect; the
Registration Statement has been declared effective by the Commission; the
OTS has issued its order of approval under the savings and loan holding
company provisions of the HOLA, and, subject to the satisfaction of the
conditions of the OTS's approval of the Conversion, no further approval of
any other governmental authority is required for the Conversion and the
issuance and sale of the Shares except any necessary qualifications or
registration under the securities or "Blue Sky" laws of the various
jurisdictions in which the Shares are offered (as to which no opinion need
be rendered) and any approvals of the NASD and The Nasdaq National Market;
and no action has been taken or is pending or, to the best of such
counsel's knowledge, threatened or contemplated, to revoke such approvals
or to suspend the use of the Prospectus or the Proxy Statement;
(xiii) The execution, delivery and performance of this Agreement
and the issuance and sale of the Shares will not result, and the
consummation of the transactions contemplated by the Plan of Conversion has
not resulted and will not result, in a breach or violation of any of the
terms and provisions of, or constitute a default under or, with exception
of the liquidation account established in the Conversion, as described in
the Plan of Conversion and the Prospectus, result in the creation or
imposition of any lien, charge or other encumbrance upon (A) any of the
properties or assets of the Company or the Bank that individually or in the
aggregate would have a material adverse effect on the Company and the Bank,
taken as a whole, (B) the certificate of incorporation, charter or bylaws
of the Company and the Bank (in mutual or stock form), or (C) any order,
statute, rule, regulation of any governmental agency or body or any court
having jurisdiction over the Company or the Bank or any of their
properties, that individually or in the aggregate would have a material
adverse effect on the Company and the Bank, taken as a whole, or (D) any
material agreement or instrument to which the Company or the Bank is a
party or by which the Company or the Bank is bound or to which any of the
properties of the Company or the Bank is subject;
(xiv) To the best of such counsel's knowledge, based upon the
conferences and other investigations referred to in subsection 7(b) below,
the Company and the Bank have good and marketable title to, or valid and
enforceable leasehold estates in, the items of real and personal property
stated in the Prospectus to be owned or leased by them and are material to
their business, in each case free and clear of all
21
liens, encumbrances, claims, security interests and defects, other than (i)
the lien of the Federal Home Loan Bank of Chicago, (ii) those referred to
in the Prospectus and (iii) those which individually or in the aggregate
would not have a material effect upon the operations of the Company and the
Bank, taken as a whole.
(xv) To the best of such counsel's knowledge, neither the Company
nor the Bank is presently: (i) in breach of, or in default (nor has an
event occurred which with notice or passage of time or both would
constitute a material default) under, any material indenture, mortgage,
deed of trust, note, loan or credit agreement or any other instrument or
agreement to which the Company or the Bank is party or by which either of
them or any of their respective properties may be bound or affected, which
contravention would be material to the business of the Company and the Bank
taken as a whole; or (ii) in violation of any term or provision of its
articles of incorporation, charter or bylaws;
(xvi) The Registration Statement and the Prospectus (in each case
as amended or supplemented, if so amended or supplemented) comply as to
form in all material respects with the requirements of the 1933 Act and the
rules, regulations, and all written decisions and orders of the Commission
(including, without limitation, the Regulations) (except as to financial
statements, notes to financial statements, financial tables, the appraisal
and other financial and statistical data included therein as to which no
opinion need be expressed) and the Form AC (including the Proxy Statement)
(as amended or supplemented, if so amended or supplemented) (except as to
financial statements, notes to financial statements, financial tables, the
appraisal, business plan and other financial and statistical data included
therein as to which no opinion need be expressed) complies as to form in
all material respects with the requirements of the Conversion Regulations
and any other applicable federal laws or regulations, decisions or orders
of the OTS; and
(xvii) To the best of such counsel's knowledge, neither the
Company nor the Bank is in violation of any directive, order, agreement or
understanding from or with the FDIC, the OTS or any applicable state
regulatory agency to make any material change in he method of conducting
its business.
In rendering such opinion, such counsel may rely as to matters of fact on
certificates of officers, trustees and directors of the Company and the Bank and
certificates of public officials, and as to matters of law other than federal
law, on opinions of other counsel admitted to practice the applicable law
reasonably acceptable to counsel for Xxxxx; provided, however, that such counsel
shall provide a letter addressed to Xxxxx which states that with respect to the
opinion of such other counsel, nothing has come to such counsel's attention that
would lead it to believe that it and Xxxxx are not reasonably justified in
relying upon such opinion. In addition, such other counsel shall address its
opinion letter to Xxxxx or expressly state in its opinion letter or in a
separate letter addressed to Xxxxx that Xxxxx and Xxxxx'x counsel are entitled
to rely upon
22
such opinion. Such counsel may assume that any agreement is the valid and
binding obligation of any party to such agreement other than the Company or the
Bank.
(b) At the Closing Date, Xxxxx shall receive the letter of Xxxxxxx
Xxxxxxxx & Xxxx, counsel for the Company and the Bank, addressed to Xxxxx, dated
the Closing Date, in form and substance satisfactory to Xxxxx'x counsel to the
following effect: During the preparation of the Registration Statement and the
Prospectus and any amendments or supplements thereto, such counsel participated
in conferences with management of and the independent public accountants for the
Company and the Bank. Based upon such conferences and a review of corporate
records of the Company and the Bank as such counsel conducted in connection with
the preparation of the Registration Statement and the Prospectus, such counsel
has no knowledge that would lead them to believe that the Registration
Statement, as amended or supplemented, if amended or supplemented (except as to
financial statements, notes to financial statements, financial tables and other
financial and statistical data contained therein with respect to which no
opinion need be expressed), at the time it became effective and at the time any
post-effective amendment thereto became effective, contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements made therein, in light of the
circumstances under which they are made, not misleading, or that the Prospectus,
as amended or supplemented, if amended or supplemented (except as to financial
statements, notes to financial statements, financial tables, the appraisal and
other financial and statistical data included therein as to which no opinion
need be expressed), at the time the Registration Statement became effective or
at the time any amendment or supplement to the Prospectus was filed with the
Commission or transmitted to the Commission for filing or on such Closing Date,
contained any untrue statement of a material fact or omitted to state a material
fact necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading.
(c) At the Closing Date, Xxxxx shall receive the letter of Xxxxxxx
Xxxxxxxx & Xxxx, counsel for the Company and the Bank, addressed to Xxxxx, dated
the Closing Date, in form and substance satisfactory to Xxxxx'x counsel to the
effect that: nothing has come to their attention that would lead them to believe
that the Form AC and the Proxy Statement, as amended or supplemented, if amended
or supplemented (except as to financial statements, notes to financial
statements, financial tables, the business plan and the appraisal and other
financial and statistical data contained therein with respect to which no
opinion need be expressed), at the time it was approved by the OTS, contained
any untrue statement of material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements made therein,
23
in light of the circumstances under which they were made, not misleading, or
that the Form AC and the Proxy Statement, as amended or supplemented, if amended
or supplemented (except as to financial statements, notes to financial
statements, financial tables, the business plan and the appraisal and other
financial and statistical data included therein as to which no opinion need be
expressed), at the time the form AC and the Proxy Statement was approved by the
OTS or at the time the Proxy Statement was distributed to the Bank's members,
contained any untrue statement of a material fact or omitted to state a material
fact necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading.
(d) At the Closing Date, Xxxxx shall receive the favorable opinion of
Xxxxxx, Xxxxx, Xxxxxxx & Xxxxxxxx, counsel for Xxxxx, dated the Closing Date and
addressed to Xxxxx, with respect to such matters as Xxxxx reasonably may
require. In rendering such opinion, such counsel may rely as to matters of fact
upon certificates of officers and directors of the Company and the Bank
delivered pursuant hereto and as to matters of law relating to other
jurisdictions upon any opinion of local counsel.
(e) Prior to and at the closing Date: (i) in the reasonable opinion of
Xxxxx, there shall have been no material adverse change in the condition
(financial or otherwise) or the business, properties or results of operations of
the Company or the Bank, from the latest dates as of which such condition is set
forth in the Registration Statement and the Prospectus except as referred to
therein; (ii) there shall have been no material transaction entered into by the
company or the Bank without the prior written consent of Xxxxx (which consent
shall not be unreasonably withheld) from the latest date as of which the
financial condition of the Company or the Bank is set forth in the Registration
Statement and Prospectus, other than transactions referred to or contemplated
therein or transactions in the ordinary course of business; (iii) except as
disclosed in the Registration Statement and the Prospectus, 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 Xxxxx)
or which materially and adversely would affect the condition (financial or
otherwise), or the business, properties or results of operations of the Company
or the Bank; (iv) neither the company nor the Bank shall have been in material
default (nor shall an event have occurred which, with notice or passage of time
or both, would constitute a material default) under any provision of any
agreement or instrument relating to any outstanding indebtedness; (v) no action,
suit or proceeding, at law or in equity or before or by any federal or state
commission, board or other administrative agency, shall be pending or, to the
best knowledge of the Company or the Bank, threatened against the Company or the
Bank, or affecting any of their properties wherein an unfavorable decision,
ruling or finding would have a material adverse effect on the condition
(financial or otherwise), or the business, properties or results of operations
of the Company and the Bank, taken as a whole; (vi) the shares shall have been
qualified or registered for offering and sale under the securities or "Blue Sky"
laws of the designated jurisdictions; (vii) there shall have been no suspension
or limitation in trading in securities generally on the Nasdaq National Market
or the New York Stock Exchange ("NYSE"), or the fixing of minimum or maximum
prices or the requiring of maximum ranges for prices for securities on or by the
NYSE or on or by The Nasdaq National
24
Market; (viii) there shall have been no domestic or international event, act or
occurrence which has materially disrupted the offering, sale or delivery of the
shares on the terms and in the manner contemplated in the Registration
Statement, the Form AC and the Prospectus; and (ix) there shall have been no
material decline in the price of equity or debt securities traded on the NYSE or
The Nasdaq National Market if the effect of such a decline, in Xxxxx'x good
faith opinion, would make it impracticable or inadvisable to proceed with the
offering, sale or delivery of the shares on the terms and in the manner
contemplated in the Registration Statement, the Form AC and the Prospectus.
(f) At the Closing Date, Xxxxx shall receive a certificate of the
chief executive officer and of the principal financial or accounting officer of
each of the Company and the Bank, dated the Closing Date, to the effect that:
(i) since the date as of which information is given in the Prospectus, the Proxy
Statement and the Registration Statement, there has been no material adverse
change in the condition (financial or otherwise), the business, properties or
results of operations of the Company or the Bank, whether or not arising in the
ordinary course of business, except as disclosed in the Prospectus, the Proxy
Statement and the Registration Statement; (ii) the representations and
warranties of the Company and the Bank in Section 2 hereof are true and correct
with the same force and effect as though expressly made at and as of the Closing
Date; (iii) the Company has complied in all material respects with all
agreements and satisfied all conditions on its part to be performed or satisfied
at or prior to the Closing Date under the Plan of Conversion; (iv) no order
revoking the approval of the Holding Company Application, the Form AC, the Proxy
Statement or the effectiveness of the Registration Statement or the Prospectus
has been initiated or threatened by the Commission, the OTS, the FDIC or any
applicable state authority; and (v) the conditions set Forth in clauses (ii)
through (v) of subsection (e) of this Section 7 have been satisfied.
(g) Concurrently with the execution of this Agreement, Xxxxx shall
receive a letter from KPMG Peat Marwick LLP dated the date hereof and addressed
to Xxxxx: (i) confirming that KPMG Peat Marwick LLP is a firm of independent
public accountants within the meaning of the code of Ethics of the American
Institute of Certified Public Accountants, the Regulations and the HOLA, and
that no information concerning its relationship with or interest in the Company
or the Bank is required by Item 509 of Regulation S-K promulgated under the 1993
Act; (ii) stating in effect that in their opinion the financial statements of
the Company and the Bank included in the Registration Statement and the
Prospectus and covered by their opinion included therein comply as to form in
all material respects with the applicable accounting requirements of the 1933
Act, the Regulations and applicable OTS regulations; (iii) stating in effect
that, on the basis of certain agreed upon procedures (but not an audit in
accordance with generally accepted auditing standards) consisting of a reading
of the latest available unaudited interim financial statements of the Bank
prepared by the Bank and consultations with officers of the Company and the Bank
responsible for financial and accounting matters, and any other procedures which
may be specified by such firm, nothing came to their attention which caused them
to believe that: (A) any unaudited financial statements included in the
Registration Statement or the Prospectus fail to comply as to form in any
material respect with the applicable requirements of the 1933 Act, the
Regulations or the HOLA; (B) such unaudited financial
25
statements are not in conformity with generally accepted accounting principles
applied on a basis substantially consistent with that of the audited financial
statements included in the Registration Statement and the Prospectus; (C) during
the period from the date of the latest audited financial statements (or
unaudited financial statements, if any later statements are included) included
in the Registration Statement or the Prospectus to a specified date not more
than three business days prior to the date of such letter, there was any
material increase in borrowings (other than as disclosed in the Prospectus or in
the ordinary course of business) by the Company or the Bank; (D) at a specified
date not more than three business days prior to the date of such letter there
was any decrease in excess of 2% in consolidated net assets of the Company or
the Bank as compared with amounts shown in the latest statement of condition (or
unaudited statement of condition if a later statement is included) included in
the Registration Statement of the Prospectus other than as disclosed in the
Prospectus; or (E) during the period from the date of the latest audited
statement of earnings (or unaudited statement of earnings if a later statement
is included) included in the Registration Statement or the Prospectus to a
specified date not more than three business days prior to the date of such
letter there was any decrease in net income of the Bank as compared with the
comparable period in the prior year, except in all instances as set forth in or
contemplated by the Registration Statement and the Prospectus or in such letter;
and (iv) stating that, in addition to the examination referred to in their
opinion included in the Registration Statement and the Prospectus and the
performance of the procedures referred to in clause (iii) of this subsection
(g), they have compared with the general accounting records of the Company or
the Bank which are subject to the internal controls of the accounting system of
the Company or the Bank, as appropriate, and other data prepared by the Company
or the Bank directly from such accounting records, to the extent specified in
such letter, such amounts and/or percentages set forth in the Registration
Statement and the Prospectus as Xxxxx may reasonably request; and they have
found such amounts and percentages to be in agreement therewith (subject to
rounding).
(h) At the Closing Date, Xxxxx shall receive a letter from KPMG Peat
Marwick LLP dated the closing Date and addressed to Xxxxx confirming the
statements made by them in the letter delivered by them pursuant to subsection
(g) of this Section 7, the "specified date" referred to in clauses (iii)(C), (D)
and (E) thereof to be a date specified in such letter, which shall be not more
than five business days prior to the Closing Date.
(i) At the Closing Date, the Company and the Bank will have received
favorable opinions of: Xxxxxxx Xxxxxxxx & Xxxx, counsel to the Company and the
Bank, with respect to the federal tax consequences of the Conversion; and KPMG
Peat Marwick LLP with respect to the Illinois tax consequences of the
Conversion.
(j) No order suspending the sale to the Shares in any designated
jurisdiction shall have been issued on or prior to the Closing Date, and no
proceedings for that purpose shall have been instituted or, to the knowledge of
Xxxxx or the Company, shall be contemplated.
All such opinions, certificates, letters and documents will be in
compliance with the provisions hereof only if they are reasonably satisfactory
in form and substance to Xxxxx
26
and of counsel for Xxxxx. Any certificates signed by an officer of the Company
or the Bank and delivered to Xxxxx or to counsel for Xxxxx shall be deemed a
representation and warranty by the Company or the Bank, as the case may be, to
Xxxxx as to the statements made herein. If any condition to Xxxxx'x obligations
hereunder to be fulfilled prior to or at the Closing Date is not fulfilled,
Xxxxx may terminate this Agreement (provided that if this Agreement is so
terminated but the sale of Shares is nevertheless consummated, Xxxxx shall be
entitled to the compensation provided for in Section 3 hereof) or, if Xxxxx so
elects, may waive any such conditions which have not been fulfilled or may
extend the time of their fulfillment.
8. Indemnification and Contribution.
(a) The Company and the Bank jointly and severally agree to indemnify
and hold harmless Xxxxx, its affiliates, directors, officers, agents and
employees and each person, if any, who controls Xxxxx or any of its affiliates
within the meaning of Section 15 of the 1933 Act or Section 20(a) of the
Exchange Act against any and all losses, liabilities, claims, damages and
expenses (including, without limitation, reasonable attorneys' fees) whatsoever
and shall further promptly reimburse such persons for any legal or other
expenses reasonably incurred by each or any of them in investigating, preparing
to defend or defending against any such action, proceeding or claim (whether
commenced or threatened) arising out of or based upon (A) any untrue or alleged
untrue statement of a material fact or the omission or alleged omission of a
material fact required to be stated in or necessary to make not misleading any
statements contained in (i) the Registration Statement, the Prospectus, the
Proxy Statement or the Form AC (as from time to time amended and supplemented)
or (ii) any application to regulatory authorities or other document,
advertisement or communication (in this Section 8, collectively called
"Application") prepared or executed by or on behalf of the Company or the Bank
with its consent or based upon information furnished by or on behalf of the
Company or the Bank, whether or not filed in any jurisdiction in order to
qualify the Shares under the securities laws thereof or with the OTS or the
Commission, unless such statement or omission was made in reliance upon and in
conformity with written information furnished to the Company or the Bank with
respect to Xxxxx by or on behalf of Xxxxx expressly for use in the Registration
Statement, the Prospectus, the Proxy Statement, the Form AC or any amendment or
supplement thereof or in any Application, as the case may be; or (B) the
participation by Xxxxx in the Conversion in accordance with the terms of this
Agreement. This indemnity shall be in addition to any liability the Company or
the Bank may otherwise have to Xxxxx; provided, however, that, with respect to
the Bank, such indemnification shall be to the full extent permitted by the OTS,
the FDIC and the Board of Governors of the Federal Reserve System. If any action
is brought against Xxxxx or any other person the Company and the Bank are
obligated hereby to indemnify (an "Indemnified Party"), then such Indemnified
Party shall promptly notify in writing the party or parties against whom
indemnification is to be sought of such action. The Company and the Bank agree
to promptly notify Xxxxx of the commencement of any litigation or proceeding
against the Company or the Bank or any of their officers or directors in
connection with sale of the Shares or in connection with the Registration
Statement, the Prospectus, the Proxy Statement, the Form AC or any amendment or
supplement thereto or any Application. In any and each such instance, Xxxxx
shall be entitled to counsel of its own choice.
27
(b) Xxxxx agrees to indemnify and hold harmless the Company and the
Bank and their directors, officers, agents and employees and each person, if
any, who controls the Company or the Bank within the meaning of Section 15 of
the 1933 Act or Section 20(a) of the Exchange Act, to the same extent as the
foregoing indemnity from the Company and the Bank to Xxxxx, but only with
respect to statements or omissions, if any, made in the Registration Statement,
the Prospectus, the Proxy Statement or any amendment or supplement thereto or in
any Application in reliance upon, and in conformity with, written information
furnished to the Company or the Bank with respect to Xxxxx by or on behalf of
Xxxxx expressly for use in the Registration Statement, the Prospectus, the Proxy
Statement or any amendment or supplement thereto or in any Application. In case
any action shall be brought against the Company or the Bank or any person so
indemnified based on the Registration Statement, the Prospectus, the Proxy
Statement or any amendment or supplement thereto or in any Application, and in
respect of which indemnity may be sought against Xxxxx, Xxxxx shall have the
rights and duties given to the Company and the Bank and each person so
indemnified shall have the rights and duties given to Xxxxx by the provisions of
subsection (a) above.
(c) Promptly after receipt by an indemnified party under subsection
(a) or (b) above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made by the indemnified
party against the indemnifying party under such subsection, notify each party
against whom indemnification is to be sought in writing of the commencement
thereof (but the failure so to notify an indemnifying party shall not relieve it
From any liability which it may have under this Section 8). In case any such
action is brought against any indemnified party, and it notifies an indemnifying
party of the commencement thereof, the indemnifying party will be entitled to
participate therein, and to the extent it may elect by written notice delivered
to the indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof with counsel satisfactory to
such indemnified party. Notwithstanding the foregoing, the indemnified party or
parties shall have the right to employ its or their own counsel in any such
case, but the fees and expenses of such counsel shall be at the expense of such
indemnified party or parties unless (i) the employment of such counsel shall
have been authorized in writing by one of the indemnifying parties in connection
with the defense of such action, (ii) the indemnifying parties shall not have
employed counsel to have charge of the defense of such action within a
reasonable time after notice of commencement of the action or (iii) such
indemnified party or parties shall have reasonably concluded that there may be
defenses available to it or them which are different from or additional to those
available to one or all of the indemnifying parties (in which case the
indemnifying parties shall not have the right to direct and defense of such
action on behalf of the indemnified party or parties), in any of which events
such fees and expenses shall be borne by the indemnifying parties. Anything in
this subsection to the contrary notwithstanding, an indemnifying party shall not
be liable for any settlement of any claim or action effected without its written
consent; provided, however, that such consent was not unreasonably withheld.
(d) If the indemnification provided for in subsection (a) or (b), as
the case may be, is unavailable or insufficient to hold harmless Xxxxx, an
Indemnified Party or the Company and the Bank, as the case may be, in respect of
any losses, claims, damages or liabilities or
28
actions in respect thereof) referred to therein, then the Company and the Bank
or Xxxxx, as the case may be, in lieu of indemnifying such Indemnified Party
thereunder, shall contribute to the amount paid or payable for such losses,
claims, damages or liabilities (or actions in respect thereof): (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company and the Bank on the one hand and Xxxxx on the other from the offering of
the Shares; or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the Company or the Bank on the one hand and of Xxxxx on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities (or actions in respect thereof), as well as any
other relevant equitable considerations. The relative benefits received by the
Company and the Bank on the one hand and Xxxxx on the other shall be deemed to
be in the same proportion as the total net proceeds from the offering of the
Shares (before deducting expenses) received by the Company and the Bank bear to
the total compensation received by Xxxxx. The relative fault of the Company and
the Bank on the one hand, and of Xxxxx on the other shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission to state a material fact relates to
information supplied by the Company or the Bank on the one hand or by Xxxxx on
the other and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
The Company, the Bank and Xxxxx agree that it would not be just and
equitable if contribution pursuant to this subsection (d) were determined by pro
rata allocation or by any other method of allocation which does not take account
of the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an Indemnified Party or the Company and
the Bank, as the case may be, as a result of the losses, claims, damages and
liabilities (or action in respect thereof) referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such Indemnified
Party or the Company and the Bank, as the case may be, in connection with
investigating or defending any such action or claim. Notwithstanding anything to
the contrary contained in this Agreement, Xxxxx shall not be required to
contribute any amount in excess of the amount by which the total compensation
received by Xxxxx pursuant to this Agreement exceeds the amount of any damages
which Xxxxx has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933
Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation.
9. Survival of Agreements, Representations and Indemnities. The respective
indemnities of the company, the Bank and Xxxxx and the representations and
warranties of the Company and the Bank set forth in or made pursuant to this
Agreement shall remain in full force and effect, regardless of any termination
or cancellation of this Agreement or any investigation made by or on behalf of
Xxxxx, the Company and the Bank or any controlling person referred to in Section
8 hereof, and shall survive any termination of this Agreement and/or issuance of
the Shares, and any successor or assign of Xxxxx, the Company, the Bank or any
such
29
controlling person or any legal representative of such controlling person shall
be entitled to the benefit of the respective indemnities, agreements, warranties
and representations.
10. Termination.
(a) Xxxxx shall have the right to terminate this Agreement at any time
prior to the Closing Date: (i) if the United States, having become involved in a
war or major hostilities, has materially disrupted or in Xxxxx'x good faith
opinion will in the immediate future materially disrupt, or any domestic or
international event or act or occurrence has materially disrupted, or in Xxxxx'x
good faith opinion will in the immediate future materially disrupt, the
offering, sale or delivery to the Shares on the terms and in the manner
contemplated in the Registration Statement and the Prospectus; (ii) if trading
in securities generally on the Nasdaq National Market or the NYSE shall have
been suspended, or minimum or maximum prices for trading shall have been fixed,
or maximum ranges of prices for securities shall have been required, on or by
the NYSE, on or by The Nasdaq National Market or by the order of the Commission
or any other governmental authority having jurisdiction; (iii) if a banking
moratorium has been declared by an Illinois, or federal authority or any other
state authority having an adverse impact on the national banking community; (iv)
if the Company or the Bank shall have sustained a loss material to the Company
and the Bank, taken as a whole, by fire, flood, accident, hurricane, earthquake,
theft, sabotage or other calamity or malicious act, whether or not covered by
insurance, which in Xxxxx'x good faith opinion would make it inadvisable to
proceed with the offering, sale or delivery of the Shares; (v) if there shall
have been such material adverse change or any development involving a
prospective material adverse change, in the condition (financial or otherwise),
business, properties or results of operations of the Company or the Bank taken
as a whole or the prospective market for the Company's securities as in Xxxxx'x
good faith opinion would make it inadvisable to proceed with the offering, sale
or delivery of the Shares; (vi) if there is material decline in the price of
equity or debt securities traded on the NYSE or the Nasdaq National Market if
the effect of such decline, in Xxxxx'x good faith judgement, makes it
impracticable or inadvisable to proceed with the offering, sale or delivery of
the Shares on the terms and in the manner contemplated in the Registration
Statement, the Form AC and the Prospectus; and (vii) if the Company fails to
receive orders for all of the minimum number of Shares within the period of time
specified by, and in accordance with, the provisions of the Plan of Conversion
and the Conversion Regulations.
(b) If Xxxxx elects to terminate this Agreement as provided in this
Section 10, the Company shall be notified promptly by Xxxxx by telephone or
telegram, confirmed by letter. A termination pursuant to this Section 10 shall
not prevent the sale or delivery of the Shares by the Company or the Conversion,
but such sale, delivery or consummation of the Conversion shall in no way limit
Xxxxx'x legal rights, if any, against the Bank or the Company hereunder.
(c) Notwithstanding anything contained herein to the contrary, if the
Conversion is not consummated as a result of the termination of this Agreement
pursuant to
30
Section 10(a) hereof or because the Plan of Conversion is terminated or the
period prescribed by regulations (including all extensions) in which the
Conversion must be completed expires prior to the completion of the Conversion,
Xxxxx shall be entitled to retain any fees paid to Xxxxx through the date of
termination, and thereafter the sole liability of the Company and the Bank to
Xxxxx will be to reimburse Xxxxx pursuant to Section 6 and for obligations
assumed by the Company and the Bank pursuant to subsections (a) and (c) of
Section 8 hereof. Upon demand and receipt of proper invoices for expenses, the
Company and the Bank will pay Xxxxx the full amount so owing. To the extent that
Xxxxx has received any amounts in excess of those to which it is entitled
hereunder it shall repay them to the Company and the Bank.
11. Notices. All communications hereunder, except as herein otherwise
specifically provided, shall be in writing and if sent to Xxxxx shall be mailed,
delivered or telegraphed and confirmed to Xxxxx Securities, Inc., 0000 Xxxxxxxxx
Xxxxx, X.X., Xxxxxxxxxx, X.X. 00000, attention: Xxxxxx X. Xxxx, Esq., General
Counsel (with a copy, in the case of communications under Section 8 hereof, to
Vedder, Xxxxx, Xxxxxxx & Kammholz, 000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000,
Xxxxxxx, Xxxxxxxx 00000, Attention: Xxxxxx X. XxXxx XX, Esq.); if sent to the
Company or the Bank shall be mailed, delivered or telegraphed and confirmed to
Fairfield Savings Bank, F.S.B., 0000 XXX, Xxxx Xxxxx, Xxxxxxxx 00000-0000,
attention: Xx. Xxxxxx X. Xxxxxx, President (with a copy in the case of
communications under Section 8 hereof to Xxxxxxx Xxxxxxxx & Xxxx, 0000 X Xxxxxx,
X.X., Xxxxx 000, Xxxxxxxxxx, X.X. 00000, attention: X. Xxxxxx Xxxxxxx, Esq.).
12. Parties. This Agreement shall inure solely to the benefit of, and shall
be binding upon, Xxxxx, the Company, the Bank and their respective successors,
legal representatives and assigns, and no other person shall have or be
construed to have any legal or equitable right, remedy or claim under or in
respect of or by virtue of this Agreement or any provision herein contained.
13. Construction. This Agreement shall be construed in accordance with the
laws of the State of Illinois.
14. Severability. ln the event that any term, provision or covenant herein
or the application thereof to any circumstance or situation shall be invalid or
unenforceable, in whole or in part, the remainder hereof and the application of
said term, provision or covenant to any other circumstance or situation shall
not be affected thereby, and each term, provision or covenant herein shall be
valid and enforceable to the full extent permitted by law.
15. Counterparts. This Agreement may be executed in separate counterparts,
each of which so executed and delivered shall be an original, but all of which
together shall constitute but one and the same instrument.
[SIGNATURE PAGE FOLLOWS IMMEDIATELY]
31
If the foregoing correctly sets forth the understanding between Xxxxx and
the Company and the Bank, please so indicate in the space provided below for the
purpose, whereupon this letter shall constitute a binding agreement between us.
Yours very truly,
BIG FOOT FINANCIAL CORP.
By: _____________________________________
Xxxxxx X. Xxxxxx
President
FAIRFIELD SAVINGS BANK, F.S.B.
By: _____________________________________
Xxxxxx X. Xxxxxx
President
Accepted as of the date first
above written.
XXXXX SECURITIES, INC.
By: _____________________________
Xxxxxxx X. Xxxxxx
Associate
32
EXHIBIT A
BIG FOOT FINANCIAL CORP.
2,185,000 SHARES
(anticipated maximum)
(subject to increase to up to 2,512,750
shares in the event of an oversubscription)
COMMON STOCK
(par Value $.01 Per Share)
SELECTED DEALER'S AGREEMENT
_______________, 1996
We have agreed to assist Big Foot Financial Corp., an Illinois corporation
(the "Company") in connection with the offer and sale of shares (the "Shares")
of Common Stock par value $.01 per share of the Company to be issued in
connection with the conversion of Fairfield Savings Bank, F.S.B., a federally
chartered savings bank (the "Bank") from mutual to stock form. The Company in
connection with this plan to effect such conversion offered 2,185,000 Shares for
subscription by certain of the Bank's depositors and borrowers in a subscription
offering and to certain members of the general public in a direct community
offering. The Shares which were not subscribed for pursuant to such subscription
and direct community offerings are being offered to the public in a syndicated
community offering (the "Syndicated Community Offering") in accordance with the
rules of the Office of Thrift Supervision Department of the Treasury. The
Shares, the bases on which the number of Shares to be issued may change and
certain of the terms on which they are being offered are more fully described in
the enclosed Prospectus (the "Prospectus").
We are offering to Selected Dealers (of which you are one) the opportunity
to participate in the solicitation of offers to buy the Shares in the Syndicated
Community Offering and we will pay you a fee in the amount of _________ percent
(___%) of the dollar amount of the Shares sold on behalf of the Company by you.
The number of Shares sold by you shall be determined based on the authorized
designation of your firm on the order form or forms for such Shares accompanying
the funds transmitted for payment therefor (whether in the form of a check
payable to the Bank or a withdrawal from an existing account at the Bank) 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 Shares sold on behalf of the Company
by you as evidenced in accordance with the preceding sentence. The Company has
requested us to invite you to become a "Sponsoring Dealer," that is a Selected
Dealer who solicits offers which result in the sale on behalf of the Company of
at least___________
____________ Shares. You may become a Sponsoring Dealer (subject to your
fulfillment of the requirement in the preceding sentence) by checking the box on
the confirmation at the end of this letter. If you become a Sponsoring Dealer
you shall be entitled to an additional fee in the amount of ________ percent
(___%) of the dollar amount of the Shares sold on behalf of the Company by you
as evidenced in the manner set forth above.
Each order form for the purchase of Shares must set forth the identity,
address and tax identification number of each person ordering Shares regardless
of whether the Shares will be registered in a street name or in the purchaser's
name. Such order form should clearly identify your firm.
As soon as practicable after all the Shares are sold, we will remit to you,
out of our compensation as provided above, the fees to which you are entitled
hereunder, including your Sponsoring Dealer fee.
This offer is made subject to the terms and conditions herein set forth and
is made only to Selected Dealers which are: (i) members in good standing of the
National Association of Securities Dealers, Inc. (the "NASD") which agree to
comply with all applicable rules of the NASD, including, without limitation, the
Interpretation of the NASD Board of Governors with respect to "Free-Riding and
Withholding" (IM-2110-1) and Conduct Rule 2740 of the NASD's Conduct Rules; or
(ii) foreign dealers not eligible for membership in the NASD which agree (A) not
to sell any Shares within the United States, its territories or possessions or
to person who are citizens thereof or resident therein and (B) in making other
sales to comply with the above mentioned NASD Interpretation and Conduct Rules
2730, 2740 and 2750 as if they were NASD members and Conduct Rule 2420 as it
applies to non-member brokers or dealers in a foreign country.
Orders for Shares will be strictly subject to confirmation and we, acting
on behalf to the Company, reserve the right in our absolute 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 or any other person is
authorized by the Company, the Bank or us to give any formation or make any
representations other than those contained in the Prospectus in connection with
the sale of any of the Shares. No Selected Dealer is authorized to act as agent
for us when soliciting offers to buy the Shares from the public or otherwise. No
Selected Dealer shall engage in any stabilizing (as defined in Rule 10b-7
promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange
Act")) with respect to the Company's Common Stock during the offering.
We and each Selected Dealer assisting in selling Shares pursuant hereto
agree to comply with the applicable requirements of the Exchange Act and
applicable rules and regulations issued by the Office of Thrift Supervision. In
addition, we and each Selected Dealer confirm that the Securities and Exchange
Commission interprets Rule 15c2-8 promulgated under the Exchange Act 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.
2
We and each Selected Dealer further agree to the extent that our 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 Exchange Act either: (a) upon receipt of an
executed order form or direction to execute an order form on behalf of a
customer, to forward the Syndicated Community Offering price for the Shares
ordered or before 12:00 p.m. on the business day following receipt or execution
of any order form by us to the Bank for deposit in a segregated account; or (b)
to 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 an order form on their behalf, (ii) we will mail acknowledgement of
receipt of order to each customer confirming interest on the business day
following such confirmation, (iii) we will debit accounts of such customers on
the fifth business day (the "debit late") following receipt of the confirmation
referred to in clause (i) above, and (iv) we will forward completed order forms
together with such funds to the Bank on or before 12:00 p.m. on the next
business day following the debit date for deposit in a segregated account. We
acknowledge that if the procedure in (b) is adopted, our customers' funds are
not required to be in their accounts until the debit date. We and each Selected
Dealer further acknowledge that, in order to use the foregoing "sweep
arrangements," we comply with the net capital requirements for broker/dealers
under Rule 15c3-1(a)(1) of the Exchange Act.
Unless earlier terminated by us, this Agreement shall terminate forty-five
(45) full business days after the date hereof, but may be extended by us for an
additional period or periods not exceeding thirty (30) full business days in the
aggregate. We may terminate this Agreement or any provisions hereof at any time
by written or telegraphic notice to you. The obligations hereunder are subject
to the successful completion of the offering, including the sale of all of the
Shares.
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 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 Shares have been qualified for sale under, or are exempt 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 Shares in any state.
Additional copies of the Prospectus and any supplements thereto will be
supplied in reasonable quantities upon request.
3
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 Xxxxx Securities, Inc.,
0000 Xxxxxxxxx Xxxxx, X.X. Washington, D.C. 20036. The enclosed duplicate copy
will evidence the agreement between us.
Very truly yours,
XXXXX SECURITIES, INC.
By: _________________________________
Xxxxxx X. Xxxxx
Managing Director
4
Xxxxx Securities, Inc.
0000 Xxxxxxxxx Xxxxx, X.X.
Washington, D.C. 20036
Re: Big Foot Financial Corp.
We hereby confirm our agreement to all the terms and conditions stated in
the foregoing letter. We acknowledge receipt of the Prospectus relating to the
Shares and we further state that in agreeing thereto we have relied upon the
Prospectus and no other statement whatsoever, written or oral. We confirm that
we are (i) a member in good standing of the National Association of Securities
Dealers, Inc. (the "NASD"), which agrees to comply with all applicable rules of
the NASD, including, without limitation, the Interpretation of the NASD Board of
Governors with respect to "Free-Riding and Withholding" (IM-2110-1) and Conduct
Rule 2740 of the NASD's Conduct Rules, or (ii) a foreign dealer not eligible for
membership in the NASD which agrees (A) not to sell any Shares within the United
States, its territories or possessions or to person who are citizens thereof or
resident therein and (B) in making other sales to comply with the
above-mentioned NASD Interpretation and Conduct Rule 2730, 2740 and 2750 as if
we were NASD members and Conduct Rules 2420 as it applies to a non-member broker
or dealer in a foreign country.
_______________ We wish to become a "Sponsoring Dealer."
_________________________________________
(Please print or type name of firm)
_________________________________________
(Authorized Representative)
Dated:___________________
5
