ALLIED FIRST BANCORP, INC.
608,350 Shares
COMMON STOCK
(Par Value $.0l Per Share)
Subscription Price $10.00 Per Share
AGENCY AGREEMENT
_________, 2001
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Allied First Bancorp, Inc., a Maryland corporation (the "Company") and
Allied First Bank, sb, an Illinois chartered mutual savings bank (the "Bank")
(references to the "Bank" include the Bank in mutual or stock form, as indicated
by the context), with its' deposit accounts insured by the Bank Insurance Fund (
"BIF") administered by the Federal Deposit Insurance Corporation ("FDIC"),
hereby confirm, jointly and severally, their agreement with ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ &
▇▇▇▇▇, Inc. (the "Agent"), as follows:
SECTION 1. THE OFFERING. In accordance with the plan of conversion
adopted by its Board of Directors (the "Plan"), the Company will offer and sell
up to 714,200 shares of its common stock, par value, $.01 per share (the
"Shares" or "Common Stock"), in a subscription offering (the "Subscription
Offering") to (1) depositors of the Bank with account balances of $50.00 or more
as of December 31, 1998 ("Eligible Account Holders"), (2) depositors of the Bank
with account balances of $50.00 or more as of September 30, 2001 ("Supplemental
Eligible Account Holders"), (3) depositors of the Bank as of the close of
business on ___________, who continue as depositors as of the Special Meeting
who are not Eligible Account Holders or Supplemental Eligible Account Holders
("Other Members"), and (4) employees, officers and directors of the Bank to the
extent they are not Eligible Account Holders, Supplemental Eligible Account
Holders, or Other Members. To the extent Shares remain unsold in the
Subscription Offering, the Company is offering for sale in a direct community
offering (the "Community Offering" and when referred to together with the
Subscription Offering, the "Subscription and Community Offering") the Shares not
so subscribed for or ordered in the Subscription Offering to members of the
general public, with preference given to natural persons residing in the
Illinois county of DuPage ("Other Subscribers"), (all such offerees being
referred to in the aggregate as "Eligible Offerees"). It is anticipated that
shares not subscribed
for in the Subscription and Community Offering will be offered to certain
members of the general public on a best efforts basis through a selected dealers
arrangement (the "Public Offering") (the Subscription Offering, Community
Offering and Public Offering are collectively referred to as the "Offering"). It
is acknowledged that the purchase of Shares in the Offering is subject to the
maximum and minimum purchase limitations as described in the Plan and that the
Company and the Bank may reject, in whole or in part, any orders received in the
Community Offering or Public Offering. The Company will issue the Shares at a
purchase price of $10.00 per share (the "Purchase Price").
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form SB-2 (File No. 333-_______) (the
"Registration Statement") containing a prospectus relating to the Offering for
the registration of the Shares under the Securities Act of 1933 (the "1933
Act"), and has filed such amendments thereof and such amended prospectuses as
may have been required to the date hereof. The term "Registration Statement"
shall include all exhibits thereto, as amended, including post-effective
amendments. The prospectus, as amended, on file with the Commission at the time
the Registration Statement initially became effective is hereinafter called the
"Prospectus," except that if any Prospectus is filed by the Company pursuant to
Rule 424(b) or (c) of the rules and regulations of the Commission under the 1933
Act (the "1933 Act Regulations") differing from the prospectus on file at the
time the Registration Statement initially becomes effective, the term
"Prospectus" shall refer to the prospectus filed pursuant to Rule 424(b) or (c)
from and after the time said prospectus is filed with the Commission.
The Bank and the Company have filed with the State of Illinois' Office
of Banks and Real Estate ("OBRE") and the Federal Deposit Insurance Corporation
(the "FDIC") an Application for Conversion of the Bank with respect to the stock
issuance (the "Conversion Application"), including the Prospectus and the
Valuation Appraisal Report prepared by RP Financial LC (the "Appraisal") and has
filed such amendments thereto as may have been required by the OBRE and the
FDIC. The Company has filed an Application to become a bank holding company (the
"Holding Company Application") pursuant to the Bank Holding Company Act of 1956,
as amended (the "BHC Act") with the Board of Governors of the Federal Reserve
System ("FRB"). The Conversion Application and Holding Company Application have
each been approved by their respective agencies and the related Prospectus has
been authorized for use. The OBRE, FDIC and FRB are sometimes referred to herein
as the "Agencies."
SECTION 2. RETENTION OF AGENT; COMPENSATION; SALE AND DELIVERY OF THE
SHARES. Subject to the terms and conditions herein set forth, the Company and
the Bank have retained the Agent to consult with and to advise the Bank and the
Company, and to assist the Company, on a best efforts basis, in the distribution
of the shares of Common Stock in the Offering. The services that the Agent will
provide include, but are not limited to (i) training the employees of the Bank
who will perform certain ministerial functions in the Subscription and Community
Offering regarding the mechanics and regulatory requirements of the stock
offering process, (ii) managing the Stock Information Center by assisting
interested stock subscribers and by keeping records of all stock orders and
(iii) preparing marketing materials.
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On the basis of the representations, warranties, and agreements herein
contained, but subject to the terms and conditions herein set forth, the Agent
accepts such appointment and agrees to consult with and advise the Company and
the Bank as to the matters set forth in the letter agreement ("Letter
Agreement"), dated March 6, 2000 between the Bank and the Agent (a copy of which
is attached hereto as Exhibit A). It is acknowledged by the Company and the Bank
that the Agent shall not be required to take or purchase any Shares or be
obligated to take any action which is inconsistent with all applicable laws,
regulations, decisions or orders. In the event of a Public Offering, the Agents
will assemble and manage a selling group of broker-dealers which are members of
the National Association of Securities Dealers, Inc. (the "NASD") to participate
in the solicitation of purchase orders for shares under a selected dealers'
agreement ("Selected Dealers' Agreement"), the form of which is set forth as a
Exhibit B to this Agreement.
Agent also agrees to provide financial advisory assistance to the Bank
and the Company at no charge for a period of one year following the completion
of the Offering including general advice on the market for bank stocks and the
stock of the Company, shareholder enhancement methods and other related matters.
Thereafter, if the parties wish to continue the relationship, a fee will be
negotiated and an agreement with respect to specific advisory services will be
entered into at that time.
The obligations of the Agent pursuant to this Agreement (other than
those set forth in Sections 9 and 10 hereof) shall terminate upon the completion
or termination or abandonment of the Plan by the Company or upon termination of
the Offering, but in no event later than the date (the "End Date") which is 45
days after the Closing Date (as hereinafter defined). All fees or expenses due
to the Agent but unpaid will be payable to the Agent in next day funds at the
earlier of the Closing Date (as hereinafter defined) or the End Date. In the
event the Offering is extended beyond the End Date, the Company, the Bank and
the Agent may agree to renew this Agreement under mutually acceptable terms.
In the event the Company is unable to sell a minimum of 459,000 Shares
within the period herein provided, this Agreement shall terminate and the
Company shall refund to any persons who have subscribed for any of the Shares,
the full amount which it may have received from them plus accrued interest as
set forth in the Prospectus; and none of the parties to this Agreement shall
have any obligation to the other parties hereunder, except as set forth in this
Section 2 and in Sections 7, 9 and 10 hereof.
In the event the Offering is terminated, the Agent shall be paid the
fees due to the date of such termination pursuant to subparagraphs (a) and (d)
below.
If all conditions precedent to the consummation of the Conversion,
including, without limitation, the sale of all Shares required by the Plan to be
sold, are satisfied, the Company agrees to issue, or have issued, the Shares
sold in the Offering and to release for delivery certificates for such Shares on
the Closing Date (as hereinafter defined) against payment to the Company by any
means authorized by the Plan; provided, however, that no funds shall be released
to the Company until the conditions specified in Section 8 hereof shall have
been complied with to the reasonable satisfaction of the Agent and their
counsel. The release of Shares against payment therefor shall be
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made on a date and at a place acceptable to the Company, the Bank and the Agent.
Certificates for shares shall be delivered directly to the purchasers in
accordance with their directions. The date upon which the Company shall release
or deliver the Shares sold in the Offering, in accordance with the terms herein,
is called the "Closing Date."
The Agent shall receive the following compensation for its services
hereunder:
(a) A management fee of $20,000, payable in four consecutive
monthly installments of $5,000 commencing on March 6, 2000.
All installments have been paid as of the date hereof. Should
the Offering be terminated for any reason not attributable to
the action or inaction of the Agent, the Agent shall have
earned and be entitled to be paid fees accruing through the
stage at which the termination occurred.
(b) A Success Fee of $80,000.
(c) If any of the shares remain available after the Subscription
and Community Offerings, at the request of the Company, the
Agent will seek to form a syndicate of registered
broker-dealers to assist in the sale of such Common Stock on
a best efforts basis, subject to the terms and conditions
set forth in the selected dealers agreement. the Agent will
endeavor to distribute the Common Stock among dealers in a
fashion which best meets the distribution objectives of the
Company and the Plan. The Agent will be paid a fee not to
exceed 5.5% of the aggregate Purchase Price of the Shares
sold by them. The Agent will pass onto selected
broker-dealers, who assist in the Public Offering, an amount
competitive with gross underwriting discounts charged at
such time for comparable amounts of stock sold at a
comparable price per share in a similar market environment.
Fees with respect to purchases affected with the assistance
of a broker/dealer other than the Agent shall be transmitted
by the Agent to such broker/dealer. The decision to utilize
selected broker-dealers will be made by the Company upon
consultation with the Agent. In the event, with respect to
any purchases of Shares, fees are paid pursuant to this
subparagraph 2(c), such fees shall credited be against the
payments made pursuant to subparagraph 2(a) and 2(b).
(d) The Company will bear those expenses of the proposed
offering customarily borne by issuers, including, without
limitation, regulatory filing fees, "Blue Sky," and NASD
filing and registration fees; the fees of the Company's
accountants, attorneys, appraiser, transfer agent and
registrar, printing, mailing and marketing and syndicate
expenses associated with the Offering; and fees for "Blue
Sky" legal work. If the Agent incurs expenses on behalf of
the Company, the Company will reimburse the Agent for such
expenses. The Agent shall be reimbursed for reasonable
out-of-pocket expenses, including costs of travel, meals and
lodging, photocopying, telephone, facsimile and couriers.
The Agent shall also be reimbursed for its fees of
underwriter's counsel (such fees of counsel will not be
incurred without the prior approval of the Company) not to
exceed $30,000. The selection of such counsel will be done
by the Agent, after consultation with the Company.
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SECTION 3. PROSPECTUS; OFFERING. The Shares are to be initially offered
in the Offering at the Purchase Price as defined and set forth on the cover page
of the Prospectus. The Purchase Price may be changed by the Company after
consultation with the Agent, subject to such approval of the OBRE and FDIC and
declaration of effectiveness of an amendment to the Prospectus by the Commission
as may be required. The parties hereto hereby acknowledge that, without the
prior written consent of the OBRE and FDIC, the Conversion will not be
consummated until the Company has received subscriptions for at least the
minimum range of the pro forma market value of the Company.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE BANK.
The Company and the Bank jointly and severally represent and warrant to and
agree with the Agent as follows:
(a) The Registration Statement which was prepared by the
Company and the Bank and filed with the Commission was
declared effective by the Commission on _______ __, 2001. At
the time the Registration Statement, including the
Prospectus contained therein (including any amendment or
supplement), became effective, the Registration Statement
contained all statements that were required to be stated
therein in accordance with the 1933 Act and the 1933 Act
Regulations, complied in all material respects with the
requirements of the 1933 Act and the 1933 Act Regulations
and the Registration Statement, including the Prospectus
contained therein (including any amendment or supplement
thereto), and any information regarding the Company or the
Bank contained in Sales Information (as such term is defined
in Section 9 hereof) authorized by the Company or the Bank
for use in connection with the Offering, did not contain an
untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances
under which they were made, not misleading, and at the time
any Rule 424(b) or (c) Prospectus was filed with the
Commission and at the Closing Date referred to in Section 2,
the Registration Statement, including the Prospectus
contained therein (including any amendment or supplement
thereto), and any information regarding the Company or the
Bank contained in Sales Information authorized by the
Company or the Bank for use in connection with the Offering
will contain all statements that are required to be stated
therein in accordance with the 1933 Act and the 1933 Act
Regulations and will not contain an untrue statement of a
material fact or omit to state a material fact necessary in
order to make the statements therein, in light of the
circumstances under which they were made, not misleading;
provided, however, that the representations and warranties
in this Section 4(a) shall not apply to statements or
omissions made in reliance upon and in conformity with
written information furnished to the Company or the Bank by
the Agent or its counsel expressly regarding the Agent for
use in the Prospectus or statements in or omissions from any
Sales Information or information filed pursuant to state
securities or blue sky laws or regulations regarding the
Agent.
(b) The Conversion Application which was prepared by the
Company and the Bank and filed with the OBRE and the FDIC
was approved by the OBRE on ______________,
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2001 and the FDIC on _________________, 2001, and the related
Prospectus has been authorized for use by the OBRE and the
FDIC. At the time of the approval of the Conversion
Application, including the Prospectus (including any
amendment or supplement thereto), by the OBRE and FDIC and
at all times subsequent thereto until the Closing Date, the
Conversion Application, including the Prospectus (including
any amendment or supplement thereto), will comply in all
material respects with the rules and regulations of the OBRE
and the FDIC ("Conversion Regulations"), except to the
extent waived in writing by the OBRE or FDIC, as
appropriate. The Conversion Application, including the
Prospectus (including any amendment or supplement thereto),
does not include any untrue statement of a material fact or
omit to state a material fact required to be stated therein
or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading;
provided, however, that the representations and warranties
in this Section 4(b) shall not apply to statements or
omissions made in reliance upon and in conformity with
written information furnished to the Company or the Bank by
the Agent or its counsel expressly regarding the Agent for
use in the Prospectus contained in the Conversion
Application or statements in or omissions from any Sales
Information.
(c) As of the Closing Date, the Bank and the Company will have
satisfied the conditions precedent to their consummation of
the Conversion in all material respects in accordance with
the Plan, and shall have complied in all material respects
with the BHC Act and all other applicable laws, regulations,
decisions and orders, including all terms, conditions,
requirements, and provisions precedent to the Conversion
imposed upon each of them by the Agencies. The Plan has been
duly and validly adopted by the Board of Directors of each
of the Bank and the Company. The filing of the Holding
Company Application has been approved by the Board of
Directors of the Company. The Agencies have approved the
Plan and authorized the use of the Prospectus and such
approvals and authorization remain in full force and effect.
(d) The Company is a bank holding company under the BHC Act. The
Holding Company Application which was prepared by the
Company and the Bank and filed with the FRB was approved by
the FRB on ______________, 2001. At the time of the approval
of the Holding Company Application, including the Prospectus
(including any amendment or supplement thereto), by the FRB
and at all times subsequent thereto until the Closing Date,
the Holding Company Application, including the Prospectus
(including any amendment or supplement thereto), will comply
in all material respects with the BHC Act and related
regulations, except to the extent waived in writing by the
FRB. The Holding Company Application, including the
Prospectus (including any amendment or supplement thereto),
does not include any untrue statement of a material fact or
omit to state a material fact required to be stated therein
or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading;
provided, however, that the representations and warranties
in this Section 4(d) shall not apply to statements or
omissions made in reliance upon and in conformity with
written
6
information furnished to the Company or the Bank by the
Agent or its counsel expressly regarding the Agent for use
in the Prospectus contained in the Holding Company
Application or statements in or omissions from any Sales
Information.
(e) No order has been issued by the Agencies (hereinafter any
reference to the Agencies or the FDIC shall include the BIF)
preventing or suspending the use of the Prospectus, and no
action by or before any such government entity to revoke any
approval, authorization or order of effectiveness related to
the Offering is, to the best knowledge of the Company or the
Bank, pending or threatened.
(f) The Company does not own any equity securities or any
equity interest in any business enterprise except as
described in the Prospectus.
(g) The Plan has been adopted by the Boards of Directors of
the Company and the Bank and at the Closing Date will have
been approved by the members of the Bank, and the offer and
sale of the Shares will have been conducted in all material
respects in accordance with the Plan, the Conversion
Regulations, and all other applicable laws, regulations,
decisions and orders, including all terms, conditions,
requirements and provisions precedent to the Offering
imposed upon the Company or the Bank by the Agencies, the
Commission, or any other regulatory authority and in the
manner described in the Prospectus. To the best knowledge of
the Company, no person has sought to obtain review of the
final action of the Agencies in approving the Plan, or in
approving the Conversion or the Conversion Application or
the Holding Company Application pursuant to any applicable
state or federal statute or regulation.
(h) The Bank has been organized and is a validly existing Illinois
chartered savings bank in mutual form of organization, and
on the Closing Date will become a duly organized and validly
existing Illinois chartered savings bank in capital stock
form of organization, in both instances, duly authorized to
conduct its business and own its property as described in
the Registration Statement and the Prospectus; the Bank has
obtained all material licenses, permits and other
governmental authorizations currently required for the
conduct of its business; all such licenses, permits and
governmental authorizations are in full force and effect,
and the Bank is in all material respects complying with all
laws, rules, regulations and orders applicable to the
operation of its business; the Bank is existing under the
laws of the State of Illinois and is duly qualified as a
foreign corporation to transact business and is in good
standing in each jurisdiction in which its ownership of
property or leasing of property or the conduct of its
business requires such qualification, unless the failure to
be so qualified in one or more of such jurisdictions would
not individually or in the aggregate have a material adverse
effect on the condition, financial or otherwise, or the
business, operations or income of the Bank. The Bank does
not own equity securities or any equity interest in any
other business enterprise except as described in the
Prospectus or as would not be material to the operations of
the Bank. Upon sale by the Company of the Shares
contemplated by the Prospectus, (i) all of the issued and
outstanding capital stock of the Bank will be owned by the
Company and
7
(ii) the Company will have no direct subsidiaries other than
the Bank. At the Closing Date, the Conversion will have been
effected in all material respects in accordance with all
applicable statutes, regulations, decisions and orders; and,
except with respect to the filing of certain post-sale,
post-Conversion reports, and documents in compliance with
the 1933 Act Regulations, the Agencies' resolutions or
letters of approval, all terms, conditions, requirements and
provisions with respect to the Conversion imposed by the
Commission and the Agencies, if any, will have been complied
with by the Company and the Bank in all material respects or
appropriate waivers will have been obtained and all material
notice and waiting periods will have been satisfied, waived
or elapsed.
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of
the State of Maryland with corporate power and authority to
own, lease and operate its properties and to conduct its
business as described in the Registration Statement and the
Prospectus, and at the Closing Date the Company will be
qualified to do business as a foreign corporation in
Illinois and in each jurisdiction in which the conduct of
its business requires such qualification, except where the
failure to so qualify would not individually or in the
aggregate have a material adverse effect on the condition,
financial or otherwise, or the business, operations or
income of the Company. The Company has obtained all material
licenses, permits and other governmental authorizations
currently required for the conduct of its business; all such
licenses, permits and governmental authorizations are in
full force and effect, and the Company is in all material
respects complying with all laws, rules, regulations and
orders applicable to the operation of its business.
(j) The Bank is a member of the Federal Home Loan Bank of Chicago
("FHLB-Chicago"). The deposit accounts of the Bank are insured
by the FDIC up to the applicable limits; and no proceedings
for the termination or revocation of such insurance are
pending or, to the best knowledge of the Company or the Bank,
threatened.
(k) Upon consummation of the Conversion, the liquidation account
for the benefit of Eligible Account Holders and Supplemental
Eligible Account Holders will be duly established in
accordance with the requirements of the Conversion Regulations
and the Plan.
(l) The Company and the Bank have good and marketable title to
all real property and good title to all other assets
material to the business of the Company and the Bank, taken
as a whole, and to those properties and assets described in
the Registration Statement and Prospectus as owned by them,
free and clear of all liens, charges, encumbrances or
restrictions, except such as are described in the
Registration Statement and Prospectus, or are not material
to the business of the Company and the Bank, taken as a
whole; and all of the leases and subleases material to the
business of the Company and the Bank, taken as a whole,
under which the Company or the
8
Bank hold properties, including those described in the
Registration Statement and Prospectus, are in full force and
effect.
(m) The Company and the Bank have received an opinion of their
special counsel, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ with respect to the
federal income tax consequences of the Conversion, the
acquisition of the capital stock of the Bank by the Company
and the sale of the Shares as described in the Registration
Statement and the Prospectus, and an opinion from ▇▇▇▇▇,
▇▇▇▇▇▇ and Company LLP ("▇▇▇▇▇ ▇▇▇▇▇▇") with respect to the
Illinois state income tax consequences of the proposed
Conversion, acquisition of the capital stock of the Bank by
the Company and the sale of the Shares as described in the
Registration Statement and the Prospectus; all material
aspects of the opinions of ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇
▇▇▇▇▇▇ are accurately summarized in the Prospectus; and the
facts and representations upon which such opinions are based
are truthful, accurate and complete.
(n) The Company and the Bank have all such power, authority,
authorizations, approvals and orders as may be required to
enter into this Agreement, to carry out the provisions and
conditions hereof and to issue and sell the Shares to be
sold by the Company, as provided herein and as described in
the Prospectus except approval or confirmation by the OBRE
and the FDIC of the final appraisal of the Company. The
consummation of the Offering, the execution, delivery and
performance of this Agreement and the consummation of the
transactions herein contemplated have been duly and validly
authorized by all necessary corporate action on the part of
the Company and the Bank and this Agreement has been validly
executed and delivered by the Company and the Bank and is
the valid, legal and binding agreement of the Company and
the Bank enforceable in accordance with its terms (except as
the enforceability thereof may be limited by bankruptcy,
insolvency, moratorium, reorganization or similar laws
relating to or affecting the enforcement of creditors'
rights generally or the rights of creditors of Illinois
savings banks and bank holding companies, the accounts of
whose subsidiaries are insured by the FDIC or by general
equity principles regardless of whether such enforceability
is considered in a proceeding in equity or at law, and
except to the extent if any, that the provisions of Sections
9 and 10 hereof may be unenforceable as against public
policy).
(o) The Company and the Bank are not in violation of any directive
received from the Agencies, the State of Maryland or any
other agency to make any material change in the method of
conducting their businesses so as to comply with all
applicable statutes and regulations (including, without
limitation, regulations, decisions, directives and orders of
the OBRE, FDIC and the FRB) and, except as may be set forth
in the Registration Statement and the Prospectus, there is
no suit or proceeding or charge or action before or by any
court, regulatory authority or governmental agency or body,
pending or, to the knowledge of the Company or the Bank,
threatened, which might materially and adversely affect the
Offering, the performance of this Agreement or the
consummation of the transactions contemplated in the Plan
and as described in the Registration Statement and the
Prospectus, or which might result in
9
any material adverse change in the condition (financial or
otherwise), earnings, capital or properties of the Company
and the Bank, or which would materially affect their
properties and assets.
(p) The financial statements, schedules and notes related
thereto which are included in the Prospectus fairly present
the consolidated balance sheet, income statement, statement
of changes in equity and cash flows of the Company at the
respective dates indicated and for the respective periods
covered thereby and comply as to form in all material
respects with the applicable accounting requirements of the
Agencies, regulation S-X of the Commission, and generally
accepted accounting principles (including those requiring
the recording of certain assets at their current market
value). Such financial statements, schedules and notes
related thereto have been prepared in accordance with
generally accepted accounting principles consistently
applied through the periods involved, present fairly in all
material respects the information required to be stated
therein and are consistent with the most recent financial
statements and other reports filed by the Company and the
Bank with the Agencies. The other financial, statistical and
pro forma information and related notes included in the
Prospectus present fairly the information shown therein on a
basis consistent with the audited and unaudited financial
statements of the Company included in the Prospectus, and as
to the pro forma adjustments, the adjustments described
therein have been properly applied on the basis described
therein.
(q) Since the respective dates as of which information is
given in the Registration Statement including the
Prospectus: (i) there has not been any material adverse
change, financial or otherwise, in the condition of the
Company or the Bank considered as one enterprise, or in the
earnings, capital or properties of the Company or the Bank,
whether or not arising in the ordinary course of business;
(ii) there has not been any material increase in the
long-term debt of the Bank or in the principal amount of the
Bank's assets which are classified by the Bank as
substandard, doubtful or loss or in loans past due 90 days
or more or real estate acquired by foreclosure, by
deed-in-lieu of foreclosure or deemed in-substance
foreclosure or any material decrease in retained earnings or
total assets of the Bank nor has the Company or the Bank
issued any securities (other than in connection with the
incorporation of the Company) or incurred any liability or
obligation for borrowing other than in the ordinary course
of business; (iii) there have not been any material
transactions entered into by the Company or the Bank; (iv)
there has not been any material adverse change in the
aggregate dollar amount of the Bank's deposits or its
consolidated net worth; (v) there has been no material
adverse change in the Company's or the Bank's relationship
with its insurance carriers, including, without limitation,
cancellation or other termination of the Company's or the
Bank's fidelity bond or any other type of insurance
coverage; (vi) except as disclosed in the Prospectus there
has been no material change in management of the Company or
the Bank, neither of which has any material undisclosed
liability of any kind, contingent or otherwise; (vii) the
Company or the Bank has not sustained any material loss or
interference with its respective business or properties from
fire, flood, windstorm,
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earthquake, accident or other calamity, whether or not
covered by insurance; (viii) the Company or the Bank is not
in default in the payment of principal or interest on any
outstanding debt obligations; (ix) the capitalization,
liabilities, assets, properties and business of the Company
and the Bank conform in all material respects to the
descriptions thereof contained in the Prospectus; and (x)
neither the Company nor the Bank has any material contingent
liabilities, except as set forth in the Prospectus. All
documents made available to or delivered or to be made
available to or delivered by the Bank or the Company or
their representatives in connection with the issuance and
sale of the Shares, including records of account holders,
depositors, borrowers and other members of the Bank, or in
connection with the Agent's exercise of due diligence, were
on the dates on which they were delivered, or will be on the
dates on which they are to be delivered, true, complete and
correct in all material respects.
(r) As of the date hereof and as of the Closing Date, neither
the Company nor the Bank is (i) in violation of its charter
or bylaws, respectively, or (ii) in default in the
performance or observance of any material obligation,
agreement, covenant, or condition contained in any material
contract, lease, loan agreement, indenture or other
instrument to which it is a party or by which it or any of
its property may be bound. The consummation of the
transactions herein contemplated will not: (i) conflict with
or constitute a breach of, or default under, or result in
the creation of any material lien, charge or encumbrance
(with the exception of the liquidation account established
in the Conversion) upon any of the assets of the Company or
the Bank pursuant to the articles of incorporation, charter
and bylaws of the Company and the Bank, or any material
contract, lease or other instrument to which the Company or
the Bank has a beneficial interest, or any applicable law,
rule, regulation or order; (ii) violate any authorization,
approval, judgement, decree, order, statute, rule or
regulation applicable to the Company or the Bank, except for
such violations which would not have a material adverse
effect on the financial condition and results of operations
of the Company and the Bank on a consolidated basis; or
(iii) with the exception of the liquidation account
established in the Conversion, result in the creation of any
material lien, charge or encumbrance upon any property of
the Company or the Bank.
(s) No default exists, and no event has occurred which with
notice or lapse of time, or both, would constitute a
default, on the part of the Company or the Bank in the due
performance and observance of any term, covenant or
condition of any indenture, mortgage, deed of trust, note,
bank loan or credit agreement or any other instrument or
agreement to which the Company or the Bank is a party or by
which any of them or any of their property is bound or
affected, except such defaults which would not have a
material adverse affect on the financial condition or
results of operations of the Company and the Bank on a
consolidated basis; such agreements are in full force and
effect; and no other party to any such agreements has
instituted or, to the best knowledge of the Company and the
Bank, threatened any action or proceeding wherein the
Company or the Bank would or might be alleged to be in
default thereunder.
11
(t) Upon consummation of the Offering, the authorized, issued
and outstanding equity capital of the Company will be within
the range set forth in the Prospectus under the caption
"Capitalization," and no Shares have been or will be issued
and outstanding prior to the Closing Date (other than Shares
issued to the Company); the Shares will have been duly and
validly authorized for issuance and, when issued and
delivered by the Company pursuant to the Plan against
payment of the consideration calculated as set forth in the
Plan and in the Prospectus, will be duly and validly issued,
fully paid and non-assessable; except to the extent that
subscription rights and priorities pursuant thereto exist
pursuant to the Plan, no preemptive rights exist with
respect to the Shares; and the terms and provisions of the
Shares will conform in all material respects to the
description thereof contained in the Registration Statement
and the Prospectus. To the best knowledge of the Company and
the Bank, upon the issuance of the Shares, good title to the
Shares will be transferred from the Company to the
purchasers thereof against payment therefor, subject to such
claims as may be asserted against the purchasers thereof by
third-party claimants.
(u) No consent, approval, authorization or any other order of any
court, regulatory, administrative or supervisory or other
public authority is required in connection with the execution
and delivery of this Agreement or the issuance of the Shares,
except for the approval of the Commission, the Agencies and
any necessary qualification, notification, registration or
exemption under the securities or blue sky laws of the various
states in which the Shares are to be offered, and except as
may be required under the rules and regulations of the NASD.
(v) Crowe, Chizek, which has certified the consolidated audited
financial statements and schedules of the Bank included in the
Prospectus, has advised the Company and the Bank in writing
that they are, with respect to the Company and the Bank,
independent public accountants within the meaning of the Code
of Professional Ethics of the American Institute of Certified
Public Accountants and the Conversion Regulations.
(w) RP Financial LC, which has prepared the Valuation Appraisal
Report as of _________, 2001 (as amended or supplemented, if
so amended or supplemented) (the "Appraisal"), has advised the
Company in writing that it is independent of the Company and
the Bank within the meaning of the Conversion Regulations.
(x) The Company and the Bank have timely filed all required
federal, state and local tax returns; the Company and the Bank
have paid all taxes that have become due and payable in
respect of such returns, except where permitted to be
extended, have made adequate reserves for similar future tax
liabilities and no deficiency has been asserted with respect
thereto by any taxing authority.
(y) The Company and the Bank are in compliance in all material
respects with the applicable financial record-keeping and
reporting requirements of the Currency and
12
Foreign Transactions Reporting Act of 1970, as amended, and
the regulations and rules thereunder.
(z) To the knowledge of the Company and the Bank, neither the
Company, the Bank nor employees of the Company or the Bank
have made any payment of funds of the Company or the Bank as a
loan for the purchase of the Shares or made any other payment
of funds prohibited by law, and no funds have been set aside
to be used for any payment prohibited by law.
(aa) Prior to the Offering, neither the 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 in the ordinary
course of business or as described in the Prospectus, shares
of the Bank issued to the Company); (ii) had any material
dealings within the 12 months prior to the date hereof with
any member of the NASD, or any person related to or
associated with such member, other than discussions and
meetings relating to the proposed Offering and routine
purchases and sales of United States government and agency
securities; (iii) entered into a financial or management
consulting agreement except as contemplated hereunder; and
(iv) engaged any intermediary between the Agent and the
Company and the Bank in connection with the offering of the
Shares, and no person is being compensated in any manner for
such service. Appropriate arrangements have been made for
placing the funds received from subscriptions for Shares in
a special interest-bearing account with the Bank until all
Shares are sold and paid for, with provision for refund to
the purchasers in the event that the Offering is not
completed for whatever reason or for delivery to the Company
if all Shares are sold.
(bb) The Company and the Bank have not relied upon the Agent or its
legal counsel or other advisors for any legal, tax or
accounting advice in connection with the Offering.
(cc) The Company is not required to be registered under the
Investment Company Act of 1940, as amended.
(dd) Any certificates signed by an officer of the Company or the
Bank pursuant to the conditions of this Agreement and
delivered to the Agent or their counsel that refers to this
Agreement shall be deemed to be a representation and warranty
by the Company or the Bank to the Agent as to the matters
covered thereby with the same effect as if such representation
and warranty were set forth herein.
(ee) The Bank and the Company have complied or will comply in all
material respects with each and every undertaking or
commitment made by them under the blue sky laws, including,
without limitation, each and every undertaking or commitment
made in connection with the Subscription and Community
Offering.
13
(ff) Appropriate arrangements have been made for placing the funds
received from subscriptions for Shares in special
interest-bearing accounts with the Bank until all Shares are
sold and paid for, with provision for refund to the purchasers
in the event that the Conversion is not completed for whatever
reason or for delivery to the Company if all shares are sold.
SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE AGENT.
-------------------------------------------
The Agent represents and warrants to the Company and the Bank that:
(a) it is a corporation and is validly existing in good standing
under the laws of the State of New York and licensed to
conduct business in the State of New York and it has the full
power and authority to provide the services to be furnished to
the Bank and the Company hereunder.
(b) The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have
been duly and validly authorized by all necessary action on
the part of the Agent, and this Agreement has been duly and
validly executed and delivered by the Agent and is a legal,
valid and binding agreement of the Agent, enforceable in
accordance with its terms (except as the enforceability
thereof may be limited by bankruptcy, insolvency,
moratorium, reorganization or similar laws relating to or
affecting the enforcement of creditors' rights generally, or
by general equity principles regardless of whether such
enforceability is considered in a proceeding in equity or at
law, and except to the extent if any, that the provisions of
Sections 9 and 10 hereof may be unenforceable as against
public policy).
(c) Each of the Agent and its employees, agents and
representatives who shall perform any of the services
hereunder shall be duly authorized and empowered, and shall
have all licenses, approvals and permits necessary to perform
such services.
(d) All funds received by the Agent, and the Agent's employees,
agents and representatives from the sale of Shares in the
offering will be transmitted to a segregated, interest-bearing
account with the Bank by noon of the next business day
following receipt of the funds.
(e) The execution and delivery of this Agreement by the Agent, the
consummation of the transactions contemplated hereby and
compliance with the terms and provisions hereof will not
conflict with, or result in a breach of, any of the terms,
provisions or conditions of, or constitute a default (or an
event which with notice or lapse of time or both would
constitute a default) under, the articles of incorporation of
the Agent or any material agreement, indenture or other
instrument to which the Agent is a party or by which it or its
property is bound.
(f) No approval of any regulatory or supervisory or other public
authority is required in connection with the Agent's execution
and delivery of this Agreement, except as may have been
received.
(g) There is no suit or proceeding or charge or action before or
by any court, regulatory authority or government agency or
body or, to the knowledge of the Agent, pending
14
or threatened, which might materially adversely affect the
Agent's performance of this Agreement.
SECTION 6. COVENANTS OF THE COMPANY AND THE BANK. The Company and the Bank
hereby jointly and severally covenant with the Agent as follows:
(a) The Company will not, at any time after the date the
Registration Statement is declared effective, file any
amendment or supplement to the Registration Statement without
providing the Agent and its counsel an opportunity to review
such amendment or supplement or file any amendment or
supplement to which amendment or supplement the Agent or its
counsel shall reasonably object.
(b) Neither the Bank nor the Company will, at any time after the
Conversion Application and Holding Company Application are
approved by the Agencies, file any amendment or supplement to
such Applications without providing the Agent and its counsel
an opportunity to review such amendment or supplement or file
any amendment or supplement to which amendment or supplement
the Agent or its counsel shall reasonably object.
(c) The Company and the Bank will use their best efforts to cause
any post-effective amendment to the Registration Statement
to be declared effective by the Commission and any
post-approval amendment to the Conversion Application and
Holding Company Application to be approved by the Agencies
and will immediately upon receipt of any information
concerning the events listed below notify the Agent: (i)
when the Registration Statement, as amended, has become
effective; (ii) when the Conversion Application and Holding
Company Application, as amended have been approved by the
Agencies; (iii) any comments from the Commission, the
Agencies or any other governmental entity with respect to
the Offering or the transactions contemplated by this
Agreement; (iv) of the request by the Commission, the
Agencies or any other governmental entity for any amendment
or supplement to the Registration Statement, the Conversion
Application and the Holding Company Application or for
additional information; (v) of the issuance by the
Commission, the Agencies or any other governmental entity of
any order or other action suspending the Offering or the use
of the Registration Statement or the Prospectus or any other
filing of the Company or the Bank under the Conversion
Regulations, BHC Act or other applicable law, or the threat
of any such action; (vi) the issuance by the Commission, the
Agencies or any authority of any stop order suspending the
effectiveness of the Registration Statement or of the
initiation or threat of initiation or threat of any
proceedings for that purpose; or (vii) of the occurrence of
any event mentioned in paragraph (g) below. The Company and
the Bank will make every reasonable effort (i) to prevent
the issuance by the Commission, the Agencies or any state
authority of any such order and, if any such order shall at
any time be issued and (ii) to obtain the lifting thereof at
the earliest possible time.
15
(d) The Company and the Bank will deliver to the Agent and to its
counsel two conformed copies of the Registration Statement,
the Conversion Application and the Holding Company
Application, as originally filed, and of each amendment or
supplement thereto, including all exhibits. Further, the
Company and the Bank will deliver such additional copies of
the foregoing documents to counsel to the Agent as may be
required for any NASD and "blue sky" filings.
(e) The Company and the Bank will furnish to the Agent, from
time to time during the period when the Prospectus (or any
later prospectus related to this offering) is required to be
delivered under the 1933 Act or the Securities Exchange Act
of 1934 (the "1934 Act"), such number of copies of such
Prospectus (as amended or supplemented) as the Agent may
reasonably request for the purposes contemplated by the 1933
Act, the 1933 Act Regulations, the 1934 Act or the rules and
regulations promulgated under the 1934 Act (the "1934 Act
Regulations"). The Company authorizes the Agent to use the
Prospectus (as amended or supplemented, if amended or
supplemented) in any lawful manner contemplated by the Plan
in connection with the sale of the Shares by the Agent.
(f) The Company and the Bank will comply with any and all material
terms, conditions, requirements and provisions with respect
to the Offering, and the transactions contemplated thereby,
imposed by the Commission, the Agencies or the Conversion
Regulations or the BHC Act, and by the 1933 Act, the 1933
Act Regulations, the 1934 Act and the 1934 Act Regulations
to be complied with prior to or subsequent to the Closing
Date and when the Prospectus is required to be delivered,
and during such time period the Company and the Bank will
comply, at their own expense, with all material requirements
imposed upon them by the Commission, the Agencies or the
Conversion Regulations, the BHC Act and by the 1933 Act, the
1933 Act Regulations, the 1934 Act and the 1934 Act
Regulations, including, without limitation, Rule 10b-5 under
the 1934 Act, in each case as from time to time in force, so
far as necessary to permit the continuance of sales or
dealing in the Common Stock during such period in accordance
with the provisions hereof and the Prospectus.
(g) If, at any time during the period when the Prospectus
relating to the Shares is required to be delivered, any
event relating to or affecting the Company or the Bank shall
occur, as a result of which it is necessary or appropriate,
in the opinion of counsel for the Company and the Bank or in
the reasonable opinion of the Agent's counsel, to amend or
supplement the Registration Statement or Prospectus in order
to make the Registration Statement or Prospectus not
misleading in light of the circumstances existing at the
time the Prospectus is delivered to a purchaser, the Company
and the Bank will immediately so inform the Agent and
prepare and file, at their own expense, with the Commission
and the Agencies and furnish to the Agent a reasonable
number of copies of an amendment or amendments of, or a
supplement or supplements to, the Registration Statement or
Prospectus (in form and substance reasonably satisfactory to
the Agent and its counsel after a reasonable time
16
for review) which will amend or supplement the Registration
Statement or Prospectus so that as amended or supplemented
it will not contain an untrue statement of a material fact
or omit to state a material fact necessary in order to make
the statements therein, in light of the circumstances
existing at the time the Prospectus is delivered to a
purchaser, not misleading. For the purpose of this
Agreement, the Company and the Bank each will timely furnish
to the Agent such information with respect to itself as the
Agent may from time to time reasonably request.
(h) The Company and the Bank will take all necessary actions, in
cooperating with the Agent, and furnish to whomever the
Agent may direct, such information as may be required to
qualify or register the Shares for offering and sale by the
Company or to exempt such Shares from registration, or to
exempt the Company as a broker-dealer and its officers,
directors and employees as broker-dealers or agents under
the applicable securities or blue sky laws of such
jurisdictions in which the Shares are required under the
Conversion Regulations to be sold or as the Agent and the
Company and the Bank may reasonably agree upon; provided,
however, that the Company shall not be obligated to file any
general consent to service of process, to qualify to do
business in any jurisdiction in which it is not so
qualified, or to register its directors or officers as
brokers, dealers, salesmen or agents in any jurisdiction. In
each jurisdiction where any of the Shares shall have been
qualified or registered as above provided, the Company will
make and file such statements and reports in each fiscal
period as are or may be required by the laws of such
jurisdiction.
(i) The Bank shall duly establish and maintain the liquidation
account for the benefit of Eligible Account Holders and
Supplemental Eligible Account Holders in accordance with the
requirements of the Conversion Regulations, and such Eligible
Account Holders and Supplemental Eligible Account Holders who
continue to maintain their savings accounts in the Bank will
have an inchoate interest in their pro rata portion of the
liquidation account, which shall have a priority superior to
that of the holders of the Shares in the event of a complete
liquidation of the Bank.
(j) The Company and the Bank will not sell or issue, contract to
sell or otherwise dispose of, for a period of 180 days after
the Closing Date, without the Agent's prior written consent,
any Common Stock other than the Shares or other than in
connection with any plan or arrangement described in the
Prospectus, including existing stock benefit plans.
(k) The Company shall register its Common Stock under Section
12(g) of the 1934 Act on or prior to the Closing Date pursuant
to the Plan and shall request that such registration be
effective prior to or upon completion of the Offering. The
Company shall maintain the effectiveness of such registration
for not less than three years or such shorter period as may be
required by the Agencies.
17
(l) During the period during which the Company's Common Stock is
registered under the 1934 Act or for three years from the date
hereof, whichever period is greater, the Company will furnish
to its shareholders as soon as practicable after the end of
each fiscal year an annual report of the Company (including a
consolidated balance sheet and statements of consolidated
income, shareholders' equity and cash flows of the Company and
its subsidiaries as at the end of and for such year, certified
by independent public accountants in accordance with
Regulation S-X under the 1933 Act and the 1934 Act).
(m) During the period of three years from the date hereof, the
Company will furnish to the Agent: (i) as soon as
practicable after such information is publicly available, a
copy of each report of the Company furnished to or filed
with the Commission under the 1934 Act or any national
securities exchange or system on which any class of
securities of the Company is listed or quoted (including,
but not limited to, reports on Forms 10-KSB, 10-QSB and 8-K
and all proxy statements and annual reports to
stockholders), (ii) a copy of each other non-confidential
report of the Company mailed to its stockholders or filed
with the Commission, the Agencies or any other supervisory
or regulatory authority or any national securities exchange
or system on which any class of securities of the Company is
listed or quoted, each press release and material news items
and additional documents and information with respect to the
Company or the Bank as the Agent may reasonably request; and
(iii) from time to time, such other nonconfidential
information concerning the Company or the Bank as the Agent
may reasonably request.
(n) The Company and the Bank will use the net proceeds from the
sale of the Shares in the manner set forth in the Prospectus
under the caption "How We Intend to Use the Proceeds."
(o) Other than as permitted by the Conversion Regulations, the BHC
Act, the 1933 Act, the 1933 Act Regulations, and the laws of
any state in which the Shares are registered or qualified for
sale or exempt from registration, neither the Company nor the
Bank will distribute any prospectus, offering circular or
other offering material in connection with the offer and sale
of the Shares.
(p) The Company will use its best efforts to (i) encourage and
assist a market maker to establish and maintain a market for
the Shares and (ii) list and maintain quotation of the Shares
on the OTC Bulletin Board effective on or prior to the Closing
Date.
(q) The Bank will maintain appropriate arrangements for depositing
all funds received from persons mailing subscriptions for or
orders to purchase Shares in the Offering on an
interest-bearing basis at the rate described in the
Prospectus until the Closing Date and satisfaction of all
conditions precedent to the release of the Bank's obligation
to refund payments received from persons subscribing for or
ordering Shares in the Offering in accordance with the Plan
and as described in the Prospectus or until refunds of such
funds have been made to the persons entitled thereto or
18
withdrawal authorizations canceled in accordance with the
Plan and as described in the Prospectus. The Bank will
maintain such records of all funds received to permit the
funds of each subscriber to be separately insured by the
FDIC (to the maximum extent allowable) and to enable the
Bank to make the appropriate refunds of such funds in the
event that such refunds are required to be made in
accordance with the Plan and as described in the Prospectus.
(r) The Company and the Bank will take such actions and furnish
such information as are reasonably requested by the Agent in
order for the Agent to ensure compliance with the NASD's
"Interpretation Relating to Free Riding and Withholding."
(s) Neither the Company nor the Bank will amend the Plan without
notifying the Agent prior thereto.
(t) The Company shall assist the Agent, if necessary, in
connection with the allocation of the Shares in the event of
an oversubscription and shall provide the Agent with any
information necessary to assist the Company in allocating the
Shares in such event and such information shall be accurate
and reliable in all material respects.
(u) Prior to the Closing Date, the Company and the Bank will
inform the Agent of any event or circumstances of which it is
aware as a result of which the Registration Statement and/or
Prospectus, as then amended or supplemented, would contain an
untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements
therein not misleading.
(v) Subsequent to the date the Registration Statement is declared
effective by the Commission and prior to the Closing Date,
except as otherwise may be indicated or contemplated therein
or set forth in an amendment or supplement thereto, neither
the Company nor the Bank will have: (i) issued any securities
or incurred any liability or obligation, direct or contingent,
for borrowed money, except borrowings from the same or similar
sources indicated in the Prospectus in the ordinary course of
its business, or (ii) entered into any transaction which is
material in light of the business and properties of the
Company and the Bank, taken as a whole.
(w) The Company will promptly take all necessary action to
register as a bank holding company under the BHC Act.
(x) The facts and representations provided to Jenkens & ▇▇▇▇▇▇▇▇▇
by the Bank and the Company and upon which ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
will base its opinion under Section 8(c)(1) are and will be
truthful, accurate and complete.
SECTION 7. PAYMENT OF EXPENSES. Whether or not the Offering is
completed or the sale of the Shares by the Company is consummated, the Company
and the Bank jointly and severally agree to pay or reimburse the Agent for the
Company and the Bank have agreed to reimburse the Agent for its out-of-pocket
expenses, and its legal fees (as specified in Section 2) and to indemnify the
19
Agent against certain claims or liabilities, including certain liabilities under
the Securities Act, and will contribute to payments the Agent may be required to
make in connection with any such claims or liabilities. In the event the Company
is unable to sell a minimum of 459,000 Shares, the Company and the Bank shall
promptly reimburse the Agent in accordance with Section 2 hereof.
SECTION 8. CONDITIONS TO THE AGENT'S OBLIGATIONS. The obligations of
the Agent hereunder, as to the Shares to be delivered at the Closing Date, are
subject, to the extent not waived in writing by the Agent, to the condition that
all representations and warranties of the Company and the Bank herein are, at
and as of the commencement of the Offering and at and as of the Closing Date,
true and correct in all material respects, the condition that the Company and
the Bank shall have performed all of their obligations hereunder to be performed
on or before such dates, and to the following further conditions:
(a) At the Closing Date, the Company and the Bank shall have
conducted the Conversion, including the Offering, in all
material respects in accordance with the Plan, the Conversion
Regulations, the BHC Act and all other applicable laws,
regulations, decisions and orders, including all terms,
conditions, requirements and provisions precedent to the
Conversion and the Offering imposed upon them by the Agencies.
(b) The Registration Statement shall have been declared
effective by the Commission and the Conversion Application
and the Holding Company Application shall be approved by the
Agencies not later than 5:30 p.m. on the date of this
Agreement, or with the Agent's consent at a later time and
date; and at the Closing Date, no stop order suspending the
effectiveness of the Registration Statement shall have been
issued under the 1933 Act or proceedings therefor initiated
or threatened by the Commission or any state authority, and
no order or other action suspending the authorization of the
Prospectus or the consummation of the Conversion shall have
been issued or proceedings therefor initiated or, to the
Company's or the Bank's knowledge, threatened by the
Commission, the Agencies or any state authority.
(c) At the Closing Date, the Agent shall have received:
(1) The favorable opinion, dated as of the Closing Date
and addressed to the Agent and for its benefit, of
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, special counsel for the Company
and the Bank, in form and substance to the effect
that:
(i) The Company has been duly incorporated and
is validly existing in good standing as a
corporation under the laws of the State of
Maryland; the Company is qualified to do
business as a foreign corporation in
Illinois and in each jurisdiction in which
the conduct of its business requires such
qualification.
20
(ii) The Company has corporate power and
authority to own, lease and operate its
properties and to conduct its business as
described in the Registration Statement and
the Prospectus.
(iii) The Bank has been organized and is a validly
existing Illinois savings bank in capital
stock form of organization, authorized to
conduct its business and own its property as
described in the Registration Statement and
the Prospectus. All of the outstanding
capital stock has been duly authorized, and
is validly issued, fully paid and
non-assessable and is owned by the Company,
free and clear of any liens, encumbrances,
claims or other restrictions.
(iv) The Bank is a member of the FHLB-Chicago.
The deposit accounts of the Bank are insured
by the FDIC up to the maximum amount allowed
under law and no proceedings for the
termination or revocation of such insurance
are pending or, to such counsel's Actual
Knowledge, threatened; the description of
the liquidation account as set forth in the
Prospectus under the caption "Allied First
Bank's Conversion - Effects of the
Conversion - Depositor's Rights if We
Liquidate," to the extent that such
information constitutes matters of law and
legal conclusions, has been reviewed by such
counsel and is accurately described in all
material respects.
(v) Upon consummation of the Offering, the
authorized, issued and outstanding capital
stock of the Company will be within the
range set forth in the Prospectus under
the caption "Capitalization," no shares of
Common Stock have been issued prior to the
Closing Date; at the time of the Offering,
the Shares subscribed for pursuant to the
Offering will have been duly and validly
authorized for issuance, and when issued
and delivered by the Company pursuant to the
Plan against payment of the consideration
calculated as set forth in the Plan and
Prospectus, will be duly and validly
issued and fully paid and non-assessable;
the issuance of the Shares is not subject to
preemptive rights and the terms and
provisions of the Shares conform in all
material respects to the description
thereof contained in the Prospectus. To such
counsel's Actual Knowledge, upon the
issuance of the Shares, good title to the
Shares will be transferred by the Company to
the purchasers thereof against payment
therefor, subject to such claims as may be
asserted against the purchasers thereof
by third-party claimants.
(vi) The Bank and the Company have full corporate
power and authority to enter into this
Agreement and to consummate the transactions
contemplated hereby and by the Plan. The
execution and delivery of this Agreement
and the consummation of the transactions
21
contemplated hereby, have been duly and
validly authorized by all necessary action
on the part of the Company and the Bank;
and this Agreement is a valid and binding
obligation of the Company and the Bank,
enforceable against the Company and the
Bank in accordance with its terms, except
as the enforceability thereof may be
limited by (i) bankruptcy, insolvency,
reorganization, moratorium, conservatorship
receivership or other similar laws now or
hereafter in effect relating to or
affecting the enforcement of creditors'
rights generally or the rights of
creditors of savings institutions, the
deposits of which are insured by the FDIC
and bank holding companies, (ii) general
equitable principles, (iii) laws relating
to the safety and soundness of insured
depository institutions and their holding
companies, and (iv) applicable law or
public policy with respect to the
indemnification and/or contribution
provisions contained herein, including
without limitation the provisions of
Sections 23A and 23B of the Federal
Reserve Act and except that no opinion need
be expressed as to the effect or
availability of equitable remedies or
injunctive relief (regardless of whether
such enforceability is considered in a
proceeding in equity or at law).
(vii) The Conversion Application has been approved
by the OBRE and the FDIC and the Prospectus
has been authorized for use by the Agencies,
and no action has been taken, and to such
counsel's Actual Knowledge none is pending
or threatened, to revoke any such
authorization or approval. The Holding
Company Application has been approved by the
FRB and no action has been taken, and to
such counsel's Actual Knowledge none is
pending or threatened, to revoke any such
authorization or approval.
(viii) The Plan has been duly adopted by the
required vote of the directors of the
Company and the Bank.
(ix) Subject to the satisfaction of the
conditions to the Agencies' approval of the
Offering, no further approval, registration,
authorization, consent or other order of
any federal regulatory agency is required
in connection with the execution and
delivery of this Agreement, the issuance
of the Shares and the consummation of the
Offering, except as may be required under
the securities or blue sky laws of various
jurisdictions (as to which no opinion
need be rendered) and except as may be
required under the rules and regulations
of the NASD (as to which no opinion need
be rendered). To such counsel's Actual
Knowledge, the Offering has been
consummated in all material respects in
accordance with Conversion Regulations and
the BHC Act, except that no opinion is
rendered with respect to (a) the
Conversion Application, the
22
Holding Company Application, the
Registration Statement or Prospectus, which
are covered by other clauses of this
opinion, (b) the satisfaction of the
post-Offering conditions in the
Conversion Regulations or in the Agency
approvals of the Conversion Application and
the Holding Company Application, (c) the
securities or "blue sky" laws of various
jurisdictions and (d) the rules and
regulations of the NASD.
(x) The Registration Statement is effective
under the 1933 Act, and no stop order
suspending the effectiveness has been issued
under the 1933 Act or proceedings therefor
initiated or, to such counsel's Actual
Knowledge, threatened by the Commission.
(xi) At the time the Conversion Application,
including the Prospectus contained therein,
was approved by the OBRE and the FDIC, the
Conversion Application, including the
Prospectus contained therein, complied as to
form in all material respects with the
requirements of the Conversion Regulations,
Illinois and federal law and all applicable
rules and regulations promulgated thereunder
(other than the financial statements, the
notes thereto, and other tabular, financial,
statistical and appraisal data included
therein, as to which no opinion need be
rendered). At the time the Holding Company
Application, including the Prospectus
contained therein, was approved by the FRB,
the Holding Company Application, including
the Prospectus contained therein, complied
as to form in all material respects with the
requirements of the Conversion Regulations,
Illinois and federal law and all applicable
rules and regulations promulgated thereunder
(other than the financial statements, the
notes thereto, and other tabular, financial,
statistical and appraisal data included
therein, as to which no opinion need be
rendered).
(xii) At the time that the Registration Statement
became effective, (i) the Registration
Statement (as amended or supplemented, if so
amended or supplemented) (other than the
financial statements, the notes thereto, and
other tabular, financial, statistical and
appraisal data included therein, as to which
no opinion need be rendered), complied as to
form in all material respects with the
requirements of the 1933 Act and the 1933
Act Regulations, and (ii) the Prospectus
(other than the financial statements, the
notes thereto, and other tabular, financial,
statistical and appraisal data included
therein, as to which no opinion need be
rendered) complied as to form in all
material respects with the requirements of
the 1933 Act, the 1933 Act Regulations, the
Conversion Regulations, the BHC Act and
federal law.
(xiii) The terms and provisions of the Shares of
the Company conform, in all material
respects, to the description thereof
contained in the Registration Statement and
Prospectus, and the form of certificate used
to evidence the Shares is in due and proper
form.
(xiv) To such counsel's Actual Knowledge, there
are no legal or governmental proceedings
pending or threatened which are required to
be disclosed in the Registration Statement
and Prospectus, other than those disclosed
therein, and to such counsel's Actual
Knowledge, all pending legal and
governmental proceedings to which the
Company or the Bank is a party or of which
any of their property is the subject, which
are not described in the Registration
Statement and the Prospectus, including
ordinary routine litigation incidental to
the Company's or the Bank's business, are,
considered in the aggregate, not material.
(xv) To such counsel's Actual Knowledge, there
are no material contracts, indentures,
mortgages, loan agreements, notes, leases or
other instruments required to be described
or referred to in the Conversion
Application, the Holding Company
Application, the Registration Statement or
the Prospectus or required to be filed as
exhibits thereto other than those described
or referred to therein or filed as exhibits
thereto in the Conversion Application, the
Holding Company Application, the
Registration Statement or the Prospectus.
The description in the Conversion
Application, the Holding Company
Application, the Registration Statement and
the Prospectus of such documents and
exhibits is accurate in all material
respects and fairly presents the information
required to be shown.
(xvi) To such counsel's Actual Knowledge, the
Company and the Bank have conducted the
Offering, in all material respects, in
accordance with all applicable requirements
of the Plan and applicable Illinois and
federal law. The Plan complies in all
material respects with all applicable
Illinois and federal laws, rules,
regulations, decisions and orders including,
but not limited to, the Conversion
Regulations; no order has been issued by the
OBRE, the Commission, the FDIC, or any state
authority to suspend the Offering or the use
of the Prospectus, and no action for such
purposes has been instituted or, to such
counsel's Actual Knowledge, threatened by
the OBRE, the Commission, the FDIC, or any
state authority and no person has sought to
obtain regulatory or judicial review of the
final action of the Agencies, approving the
Plan, the Conversion Application or the
Prospectus.
(xvii) To such counsel's Actual Knowledge, the
Company and the Bank have obtained all
material federal licenses, permits and other
federal governmental authorizations
currently required for the conduct of
24
their businesses and all such licenses,
permits and other governmental
authorizations are in full force and effect,
and the Company and the Bank are in all
material respects complying therewith.
(xviii) To such counsel's Actual Knowledge, neither
the Company nor the Bank is in violation of
its articles of incorporation, charter and
bylaws, as appropriate or, to such counsel's
Actual Knowledge, in default or violation of
any obligation, agreement, covenant or
condition contained in any contract,
indenture, mortgage, loan agreement, note,
lease or other instrument to which it is a
party or by which it or its property may be
bound, except for such defaults or
violations which would not have a material
adverse impact on the financial condition or
results of operations of the Company and the
Bank on a consolidated basis; to such
counsel's Actual Knowledge, the execution
and delivery of this Agreement, the
occurrence of the obligations herein set
forth and the consummation of the
transactions contemplated herein will not
conflict with or constitute a breach of, or
default under, or result in the creation or
imposition of any lien, charge or
encumbrance upon any property or assets of
the Company or the Bank pursuant to any
material contract, indenture, mortgage, loan
agreement, note, lease or other instrument
to which the Company or the Bank is a party
or by which any of them may be bound, or to
which any of the property or assets of the
Company or the Bank are subject (other than
the establishment of the liquidation
account); and, such action will not result
in any violation of the provisions of the
charter or bylaws of the Company or the Bank
or, result in any violation of any
applicable federal law, act, regulation
(except that no opinion with respect to the
securities and blue sky laws of various
jurisdictions or the rules or regulations of
the NASD need be rendered) or order or court
order, writ, injunction or decree.
(xix) The Company's articles of incorporation and
bylaws comply in all material respects with
the laws of the State of Maryland; the
Bank's charter and bylaws comply in all
material respects with the rules and
regulations of the Agencies.
(xx) To such counsel's Actual Knowledge, neither
the Company nor the Bank is in violation of
any directive from the OBRE, FRB or the FDIC
to make any material change in the method of
conducting its respective business.
(xxi) The information in the Prospectus under the
captions "Summary - The Stock Offering,"
"Summary - Terms of the Offering," "Summary -
Termination of the Offering," "Risk Factors"
(relating to takeover defensive provisions),
"Allied First Bank's Conversion," "How We
25
Are Regulated," "Restrictions on Acquisition
of Allied First Bancorp and Allied First
Bank" and "Description of Capital Stock of
Allied First Bancorp, Inc.," to the extent
that such information constitutes matters of
law, summaries of legal matters, documents or
proceedings, or legal conclusions, has been
reviewed by such counsel and is correct in
all material respects. The discussion of
statutes or regulations described or referred
to in the Prospectus are accurate summaries
and fairly present the information required
to be shown. The information under the
caption "Allied First Bank's Conversion -
Effects of the Conversion - Tax Effects of
the Conversion" has been reviewed by such
counsel and fairly describes the opinions
rendered by them to the Company and the Bank
with respect to such matters.
(xxii) The Company is in good standing as a bank
holding company under the BHC Act.
(xxiii) In addition, such counsel shall state that
during the preparation of the Conversion
Application, the Holding Company
Application, the Registration Statement and
the Prospectus, they participated in
conferences with certain officers of, the
independent public and internal accountants
for, and other representatives of the
Company and the Bank, at which conferences
the contents of the Conversion Application,
the Holding Company Application, the
Registration Statement and the Prospectus
and related matters were discussed and,
while such counsel have not confirmed the
accuracy or completeness of or otherwise
verified the information contained in the
Conversion Application, the Holding Company
Application, the Registration Statement or
the Prospectus, and do not assume any
responsibility for such information, based
upon such conferences and a review of
documents deemed relevant for the purpose of
rendering their view (relying as to
materiality as to factual matters on
certificates of officers and other factual
representations by the Company and the
Bank), nothing has come to their attention
that would lead them to believe that the
Conversion Application, the Holding Company
Application, the Registration Statement, the
Prospectus, or any amendment or supplement
thereto (other than the financial
statements, the notes thereto, and other
tabular, financial, statistical and
appraisal data included therein as to which
no view need be rendered) contained an
untrue statement of a material fact or
omitted to state a material fact required to
be stated therein or necessary to make the
statements therein, in light of the
circumstances under which they were made,
not misleading.
In giving such opinion, such counsel may rely as to
all matters of fact on certificates of officers or
directors of the Company and the Bank and
26
certificates of public officials. The opinion of
Jenkens & ▇▇▇▇▇▇▇▇▇ shall be limited to matters
governed by federal banking and securities laws and
by the laws of the State of Maryland and the State of
Illinois, and shall be governed by the Legal Opinion
Accord (the "Accord") of the American Bar Association
Section of Business Law (1991). The term "Actual
Knowledge" as used herein shall have the meaning set
forth in the Accord. For purposes of such opinion, no
proceedings shall be deemed to be pending, no order
or stop order shall be deemed to be issued, and no
action shall be deemed to be instituted unless, in
each case, a director or executive officer of the
Company or the Bank shall have received a copy of
such proceedings, order, stop order or action. In
addition, such opinion may be limited to present
statutes, regulations and judicial interpretations
and to facts as they presently exist; in rendering
such opinion, such counsel need assume no obligation
to revise or supplement it should the present laws be
changed by legislative or regulatory action, judicial
decision or otherwise; and such counsel need express
no view, opinion or belief with respect to whether
any proposed or pending legislation, if enacted, or
any proposed or pending regulations or policy
statements issued by any regulatory agency, whether
or not promulgated pursuant to any such legislation,
would affect the validity of the Offering or any
aspect thereof. Such counsel may assume that any
agreement is the valid and binding obligation of any
parties to such agreement other than the Company or
the Bank.
(d) At the Closing Date, the Agent shall have received the
favorable opinion, dated as of the Closing Date, of ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ & ▇▇▇▇, L.L.P., the Agent's counsel, with respect to
such matters as the Agent may reasonably require. Such opinion
may rely upon the opinions of counsel to the Company and the
Bank, and as to matters of fact, upon certificates of officers
and directors of the Company and the Bank delivered pursuant
hereto or as such counsel shall reasonably request.
(e) At the Closing Date, the Agent shall receive a certificate of
the Chief Executive Officer and the Principal Financial and/or
Accounting Officer of the Company and the Bank in form and
substance reasonably satisfactory to the Agent's Counsel,
dated as of such Closing Date, to the effect that: (i) they
have carefully reviewed the Prospectus and, in their opinion,
at the time the Prospectus became authorized for final use,
the Prospectus did not contain any untrue statement of a
material fact or omit to state a material fact necessary in
order to make the statements therein, in light of the
circumstances under which they were made, not misleading; (ii)
since the date the Prospectus became authorized for final use,
no event has occurred which should have been set forth in an
amendment or supplement to the Prospectus which has not been
so set forth, including specifically, but without limitation,
any material adverse change in the condition, financial or
otherwise, or in the earnings, capital, properties or business
of the Company or the Bank, and the conditions set forth in
this Section 8 have been satisfied; (iii) since the respective
dates as of which information is given in the Registration
Statement and the Prospectus, there has been no material
adverse
27
change in the condition, financial or otherwise, or in the
earnings, capital or properties of the Company or the Bank,
independently, or of the Company and the Bank, considered as
one enterprise, whether or not arising in the ordinary course
of business; (iv) the representations and warranties in
Section 4 are true and correct with the same force and effect
as though expressly made at and as of the Closing Date; (v)
the Company and the Bank have complied in all material
respects with all agreements and satisfied all conditions on
their part to be performed or satisfied at or prior to the
Closing Date and will comply in all material respects with all
obligations to be satisfied by them after the Offering; (vi)
no stop order suspending the effectiveness of the Registration
Statement has been initiated or, to the best knowledge of the
Company or the Bank, threatened by the Commission or any state
authority; (vii) no order suspending the Offering, the
Conversion, or the effectiveness of the Prospectus has been
issued and no proceedings for that purpose are pending or, to
the best knowledge of the Company or the Bank, threatened by
the OBRE, the Commission, the FDIC, the FRB or other
governmental entity or state authority; and (viii) to the best
knowledge of the Company or the Bank, no person has sought to
obtain review of the final action of the Agencies approving
the Plan.
(f) Prior to and at the Closing Date: (i) in the reasonable
opinion of the Agent, there shall have been no material
adverse change in the condition, financial or otherwise, or in
the earnings or business of the Company or the Bank
independently, or of the Company and the Bank, considered as
one enterprise, from that as of the latest dates as of which
such condition is set forth in the Prospectus other than
transactions referred to or contemplated therein; (ii) the
Company or the Bank shall not have received from the OBRE, FRB
or the FDIC any direction (oral or written) to make any
material change in the method of conducting their business
with which it has not complied (which direction, if any, shall
have been disclosed to the Agent) or which materially and
adversely would affect the business, operations or financial
condition or income of the Company and the Bank taken as a
whole; (iii) the Company and the Bank shall not have been in
default (nor shall an event have occurred which, with notice
or lapse of time or both, would constitute a default) under
any provision of any agreement or instrument relating to any
outstanding indebtedness; (iv) no action, suit or proceeding,
at law or in equity or before or by any federal or state
commission, board or other administrative agency, shall be
pending or, to the knowledge of the Company or the Bank,
threatened against the Company or the Bank or affecting any of
their properties wherein an unfavorable decision, ruling or
finding would materially and adversely affect the business,
operations, financial condition or income of the Company and
the Bank taken as a whole; and (v) the Shares have been
qualified or registered for offering and sale or exempted
therefrom under the securities or blue sky laws of the
jurisdictions as the Agent shall have reasonably requested and
as agreed to by the Company and the Bank.
(g) Concurrently with the execution of this Agreement, the Agent
shall receive a letter from ▇▇▇▇▇ ▇▇▇▇▇▇ dated as of the date
of the Prospectus and addressed to the Agent: (i) confirming
that ▇▇▇▇▇, ▇▇▇▇▇▇ and Company LLP is a firm of independent
28
public accounts within the meaning of Rule 101 of the Code of
Professional Ethics of the American Institute of Certified
Public Accountants and stating in effect that in its opinion
the consolidated financial statements, schedules and related
notes of the Company as of June 30, 2001 and 2000, and as are
included in the Prospectus and covered by their opinion
included therein, comply as to form in all material respects
with the applicable accounting requirements and related
published rules and regulations of the OBRE, FDIC and the 1933
Act; (ii) stating in effect that, on the basis of certain
agreed upon procedures (but not an audit in accordance with
generally accepted auditing standards) consisting of a reading
of the latest available unaudited interim consolidated
financial statements of the Company, a reading of the minutes
of the meetings of the Board of Directors and stockholders of
the Company and consultations with officers of the Company
responsible for financial and accounting matters, nothing came
to their attention which caused them to believe that: (a) the
unaudited financial statements included in the Prospectus are
not in conformity with the 1933 Act, applicable accounting
requirements of the OBRE, FDIC and generally accepted
accounting principles applied on a basis substantially
consistent with that of the audited financial statements
included in the Prospectus; or (b) during the period from the
date of the latest unaudited consolidated financial statements
included in the Prospectus to a specified date not more than
three business days prior to the date of the Prospectus,
except as has been described in the Prospectus, there was any
increase in borrowings, other than normal deposit
fluctuations, by the Bank; or (c) there was any decrease in
the consolidated net assets of the Company at the date of such
letter as compared with amounts shown in the latest unaudited
consolidated statement of condition included in the
Prospectus; and (iii) stating that, in addition to the audit
referred to in their opinion included in the Prospectus and
the performance of the procedures referred to in clause (ii)
of this subsection (f), they have compared with the general
accounting records of the Company, which are subject to the
internal controls of the Company, the accounting system and
other data prepared by the Company, directly from such
accounting records, to the extent specified in such letter,
such amounts and/or percentages set forth in the Prospectus as
the Agent may reasonably request; and they have reported on
the results of such comparisons.
(h) At the Closing Date, the Agent shall receive a letter dated
the Closing Date, addressed to the Agent, confirming the
statements made by ▇▇▇▇▇ ▇▇▇▇▇▇ in the letter delivered by it
pursuant to subsection (g) of this Section 8, the "specified
date" referred to in clause (ii) of subsection (g) thereof to
be a date specified in such letter, which shall not be more
than three business days prior to the Closing Date.
(i) At the Closing Date, the Agent shall receive a letter from RP
Financial LC, dated the date thereof and addressed to counsel
for the Agent (i) confirming that said firm is independent of
the Company and the Bank and is experienced and expert in the
area of corporate appraisals, (ii) stating in effect that the
Appraisal prepared by such firm complies in all material
respects with the applicable requirements of the Conversion
Regulations, and (iii) further stating that their opinion of
the aggregate pro forma
29
market value of the Company and the Bank expressed in their
Appraisal dated as of ____________, 2001, and most recently
updated, remains in effect.
(j) The Company and the Bank shall not have sustained since the
date of the latest financial statements included in the
Prospectus any material loss or interference with its business
from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set
forth or contemplated in the Registration Statement and
Prospectus and since the respective dates as of which
information is given in the Registration Statement and
Prospectus, there shall not have been any change in the
long-term debt of the Company or the Bank, or any change, or
any development involving a prospective change, in or
affecting the general affairs, management, financial position,
stockholders' equity or results of operations of the Company
or the Bank, otherwise than as set forth or contemplated in
the Registration Statement and Prospectus, the effect of
which, in any such case described above, is in the Agent's
reasonable judgment sufficiently material and adverse as to
make it impracticable or inadvisable to proceed with the
Subscription Offering or the delivery of the Shares on the
terms and in the manner contemplated in the Prospectus.
(k) At or prior to the Closing Date, the Agent shall receive: (i)
a copy of the letters from the OBRE and FDIC approving the
Conversion Application and authorizing the use of the
Prospectus; (ii) a copy of the order from the Commission
declaring the Registration Statement effective; (iii)
certificate of good standing from the State of Maryland
evidencing the good standing of the Company; (iv) a
certificate from the FDIC evidencing the Bank's insurance of
accounts; (v) a certificate of the FHLB-Chicago evidencing the
Bank's membership thereof; (vi) a certificate from the FRB
evidencing the Company's standing as a bank holding company;
(vii) a copy of the Bank's Illinois stock charter; and (viii)
a copy of the letters from the FRB approving the Holding
Company Application.
(l) Subsequent to the date hereof, there shall not have occurred
any of the following: (i) a suspension or limitation in
trading in securities generally on the New York Stock Exchange
or in the over-the-counter market, or quotations halted
generally on the Nasdaq, or minimum or maximum prices for
trading have been fixed, or maximum ranges for prices for
securities have been required by either of such exchanges or
the NASD or by order of the Commission or any other
governmental authority; (ii) a general moratorium on the
operations of commercial banks, federal savings institutions
or a general moratorium on the withdrawal of deposits from
commercial banks or federal savings institutions declared by
federal authorities; (iii) the engagement by the United States
in hostilities which have resulted in the declaration, on or
after the date hereof, of a national emergency or war; or (iv)
a material decline in the price of equity or debt securities
if the effect of such a declaration or decline, in the Agent's
reasonable judgment, makes it impracticable or inadvisable to
proceed with the Offering or the delivery of the shares on the
terms and in the manner contemplated in the Registration
Statement and the Prospectus.
30
(m) At or prior to the Closing Date, counsel to the Agent shall
have been furnished with such documents and opinions as they
may reasonably require for the purpose of enabling them to
pass upon the sale of the Shares as herein contemplated and
related proceedings or in order to evidence the occurrence or
completeness of any of the representations or warranties, or
the fulfillment of any of the conditions, herein contained;
and all proceedings taken by the Company or the Bank in
connection with the Offering and the sale of the Shares as
herein contemplated shall be satisfactory in form and
substance to the Agent and its counsel.
SECTION 9. INDEMNIFICATION.
(a) The Company and the Bank jointly and severally agree to
indemnify and hold harmless the Agent, its respective officers
and directors, employees and agents, and each person, if any,
who controls the Agent within the meaning of Section 15 of the
1933 Act or Section 20(a) of the 1934 Act, against any and all
loss, liability, claim, damage or expense whatsoever
(including but not limited to settlement expenses), joint or
several, that the Agent or any of them may suffer or to which
the Agent and any such persons may become subject under all
applicable federal or state laws or otherwise, and to promptly
reimburse the Agent and any such persons upon written demand
for any expense (including reasonable fees and disbursements
of counsel) incurred by the Agent or any of them in connection
with investigating, preparing or defending any actions,
proceedings or claims (whether commenced or threatened) to the
extent such losses, claims, damages, liabilities or actions:
(i) arise out of or are related to the Conversion or any
action taken by the Agent where acting as agent of the Company
and the Bank, including without limitation, the denial or
reduction of a subscription or order to purchase Shares based
upon the deposit records of the Bank or otherwise; (ii) arise
out of or are based upon any untrue statement or alleged
untrue statement of a material fact contained in the
Registration Statement (or any amendment or supplement
thereto), preliminary or final Prospectus (or any amendment or
supplement thereto), the Conversion Application and Holding
Company Application (or any amendment or supplement thereto),
or any instrument or document executed by the Company or the
Bank or based upon written information supplied by the Company
or the Bank filed in any state or jurisdiction to register or
qualify any or all of the Shares or to claim an exemption
therefrom, or provided to any state or jurisdiction to exempt
the Company as a broker-dealer or its officers, directors and
employees as broker-dealers or agent, under the securities
laws thereof (collectively, the "Blue Sky Application"), or
any document, advertisement, oral statement or communication
("Sales Information") prepared, made or executed by or on
behalf of the Company or the Bank with their consent or based
upon written or oral information furnished by or on behalf of
the Company or the Bank, whether or not filed in any
jurisdiction, in order to qualify or register the Shares or to
claim an exemption therefrom under the securities laws
thereof; (iii) arise out of or are based upon the omission or
alleged omission to state in any of the foregoing documents or
information, a material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; or
(iv) arise from any theory of liability whatsoever relating
31
to or arising from or based upon the Registration Statement
(or any amendment or supplement thereto), preliminary or final
Prospectus (or any amendment or supplement thereto), the
Conversion Application and the Holding Company Application (or
any amendment or supplement thereto), any Blue Sky Application
or Sales Information or other documentation distributed in
connection with the Offering; provided, however, that no
indemnification is required under this paragraph (a) to the
extent such losses, claims, damages, liabilities or actions
arise out of or are based upon any untrue material statement
or alleged untrue material statement in, or material omission
or alleged material omission from, the Registration Statement
(or any amendment or supplement thereto), preliminary or final
Prospectus (or any amendment or supplement thereto), the
Conversion Application (or any amendment or supplement
thereto), any Blue Sky Application or Sales Information made
in reliance upon and in conformity with information furnished
in writing to the Company or the Bank by the Agent or its
counsel regarding the Agent provided, that it is agreed and
understood that the only information furnished in writing to
the Company or the Bank by the Agent regarding the Agent is
set forth in the Prospectus under the caption "Allied First
Bank's Conversion Marketing Arrangements;" and, PROVIDED
FURTHER, that such indemnification shall be to the extent
permitted by the Commissioner, the OBRE, the FDIC and the
Board of Governors of the Federal Reserve.
(b) The Agent agrees to indemnify and hold harmless the Company
and the Bank, their directors and officers and each person, if
any, who controls the Company or the Bank within the meaning
of Section 15 of the 1933 Act or Section 20(a) of the 1934 Act
against any and all loss, liability, claim, damage or expense
whatsoever (including but not limited to settlement expenses),
joint or several, which they, or any of them, may suffer or to
which they, or any of them may become subject under all
applicable federal and state laws or otherwise, and to
promptly reimburse the Company, the Bank, and any such persons
upon written demand for any expenses (including reasonable
fees and disbursements of counsel) incurred by them, or any of
them, in connection with investigating, preparing to defend or
defending any actions, proceedings or claims (whether
commenced or threatened) to the extent such losses, claims,
damages, liabilities or actions: (i) arise out of or are based
upon any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement (or any
amendment or supplement thereto), the Conversion Application,
the Holding Company Application (or any amendment or
supplement thereto), the preliminary or final Prospectus (or
any amendment or supplement thereto), any Blue Sky Application
or Sales Information, (ii) are based upon the omission or
alleged omission to state in any of the foregoing documents a
material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances
under which they were made, not misleading, or (iii) arise
from any theory of liability whatsoever relating to or arising
from or based upon the Registration Statement (or any
amendment or supplement thereto), preliminary or final
Prospectus (or any amendment or supplement thereto), the
Conversion Application, the Holding Company Application (or
any amendment or supplement thereto), or any Blue Sky
Application or Sales Information or other documentation
32
distributed in connection with the Offering; provided,
however, that the Agent's obligations under this Section 9(b)
shall exist only if and only to the extent (i) that such
untrue statement or alleged untrue statement was made in, or
such material fact or alleged material fact was omitted from,
the Registration Statement (or any amendment or supplement
thereto), the preliminary or final Prospectus (or any
amendment or supplement thereto), the Conversion Application,
the Holding Company Application (or any amendment or
supplement thereto), or any Blue Sky Application or Sales
Information in reliance upon and in conformity with
information furnished in writing to the Company or the Bank by
the Agent or its counsel regarding the Agent, provided, that
it is agreed and understood that the only information
furnished in writing to the Company or the Bank by the Agent
regarding the Agent is set forth in the Prospectus under the
caption "Allied First Bank's Conversion - Marketing
Arrangements."
(c) Each indemnified party shall give prompt written notice to
each indemnifying party of any action, proceeding, claim
(whether commenced or threatened), or suit instituted against
it in respect of which indemnity may be sought hereunder, but
failure to so notify an indemnifying party shall not relieve
it from any liability which it may have on account of this
Section 9 or otherwise. An indemnifying party may participate
at its own expense in the defense of such action. In addition,
if it so elects within a reasonable time after receipt of such
notice, an indemnifying party, jointly with any other
indemnifying parties receiving such notice, may assume defense
of such action with counsel chosen by it and approved by the
indemnified parties that are defendants in such action, unless
such indemnified parties reasonably object to such assumption
on the ground that there may be legal defenses available to
them that are different from or in addition to those available
to such indemnifying party. If an indemnifying party assumes
the defense of such action, the indemnifying parties shall not
be liable for any fees and expenses of counsel for the
indemnified parties incurred thereafter in connection with
such action, proceeding or claim, other than reasonable costs
of investigation. In no event shall the indemnifying parties
be liable for the fees and expenses of more than one separate
firm of attorneys (and any special counsel that said firm may
retain) for each indemnified party in connection with any one
action, proceeding or claim or separate but similar or related
actions, proceedings or claims in the same jurisdiction
arising out of the same general allegations or circumstances.
(d) The agreements contained in this Section 9 and in Section 10
hereof and the representations and warranties of the Company
and the Bank set forth in this Agreement shall remain
operative and in full force and effect regardless of: (i) any
investigation made by or on behalf of agent or their officers,
directors or controlling persons, agent or employees or by or
on behalf of the Company or the Bank or any officers,
directors or controlling persons, agent or employees of the
Company or the Bank; (ii) delivery of and payment hereunder
for the Shares; or (iii) any termination of this Agreement.
SECTION 10. CONTRIBUTION. In order to provide for just and equitable
contribution in
33
circumstances in which the indemnification provided for in Section 9 is due in
accordance with its terms but is for any reason held by a court to be
unavailable from the Company, the Bank or the Agent, the Company, the Bank and
the Agent (provided, in the case of the Bank, that such contribution is in
compliance with the requirements of Section 23A of the Federal Reserve Act and
is consistent with any written interpretations regarding Section 23A of the
Federal Reserve Act issued by regulatory agencies having jurisdiction with
respect to such section generally or the Bank in particular, including without
limitation, any opinion issued by the FRB in response to a request for
interpretive advice submitted by counsel to the Bank) shall contribute to the
aggregate losses, claims, damages and liabilities (including any investigation,
legal and other expenses incurred in connection with, and any amount paid in
settlement of, any action, suit or proceeding of any claims asserted, but after
deducting any contribution received by the Company, the Bank or the Agent from
persons other than the other party thereto, who may also be liable for
contribution) in such proportion so that the Agent is responsible for that
portion represented by the percentage that the fees paid to the Agent pursuant
to Section 2 of this Agreement (not including expenses) bears to the gross
proceeds received by the Company from the sale of the Shares in the Offering,
and the Company and the Bank shall be responsible for the balance. If, however,
the allocation provided above is not permitted by applicable law or if the
indemnified party failed to give the notice required under Section 9 above, then
each indemnifying party shall contribute to such amount paid or payable by such
indemnified party in such proportion as is appropriate to reflect not only such
relative fault of the Company and the Bank on the one hand and the Agent on the
other in connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities (or actions, proceedings or claims in
respect thereto), but also the relative benefits received by the Company and the
Bank on the one hand and the Agent on the other from the Offering (before
deducting expenses). The relative fault shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Company and/or the Bank on the one hand or the Agent
on the other and the parties' relative intent, good faith, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company, the Bank and the Agent agree that it would not be just and
equitable if contribution pursuant to this Section 10 were determined by
pro-rata allocation or by any other method of allocation which does not take
into account the equitable considerations referred to above in this Section 10.
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions, proceedings or claims in respect
thereof) referred to above in this Section 10 shall be deemed to include any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action, proceeding or claim.
It is expressly agreed that the Agent shall not be liable for any loss,
liability, claim, damage or expense or be required to contribute any amount
which in the aggregate exceeds the amount paid (excluding reimbursable expenses)
to the Agent under this Agreement. It is understood that the above stated
limitation on the Agent's liability is essential to the Agent and that the Agent
would not have entered into this Agreement if such limitation had not been
agreed to by the parties to this Agreement. No person found guilty of any
fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933
Act) shall be entitled to contribution from any person who was not found guilty
of such fraudulent misrepresentation. The obligations of the Company and the
Bank under this Section 10 and under Section 9 shall be in addition to any
liability which the Company and the Bank may otherwise have. For purposes of
this Section 10, each of the Agent's, the Company's or the Bank's officers and
directors and each person, if any, who controls the Agent or the Company or the
Bank within the
34
meaning of the 1933 Act and the 1934 Act shall have the same rights to
contribution as the Agent, the Company or the Bank. Any party entitled to
contribution, promptly after receipt of notice of commencement of any action,
suit, claim or proceeding against such party in respect of which a claim for
contribution may be made against another party under this Section 10, will
notify such party from whom contribution may be sought, but the omission to so
notify such party shall not relieve the party from whom contribution may be
sought from any other obligation it may have hereunder or otherwise than under
this Section 10.
SECTION 11. SURVIVAL OF AGREEMENTS, REPRESENTATIONS AND INDEMNITIES.
The respective indemnities of the Company, the Bank and the Agent and the
representations and warranties and other statements of the Company, the Bank and
the Agent set forth in or made pursuant to this Agreement shall remain in full
force and effect, regardless of any termination or cancellation of this
Agreement or any investigation made by or on behalf of the Agent, the Company,
the Bank or any controlling person referred to in Section 9 hereof, and shall
survive the issuance of the Shares, and any successor or assign of the Agent,
the Company, the Bank, and any such controlling person shall be entitled to the
benefit of the respective agreements, indemnities, warranties and
representations.
SECTION 12. TERMINATION. The Agent may terminate this Agreement by
giving the notice indicated below in this Section 12 at any time after this
Agreement becomes effective as follows:
(a) In the event the Company fails to sell the required minimum
number of the Shares by January 31, 2002, and in accordance
with the provisions of the Plan or as required by the
Conversion Regulations, and applicable law, this Agreement
shall terminate upon refund by the Company to each person who
has subscribed for or ordered any of the Shares the full
amount which it may have received from such person, together
with interest as provided in the Prospectus, and no party to
this Agreement shall have any obligation to the other
hereunder, except for payment by the Company and/or the Bank
as set forth in Sections 2(a), 7, 9 and 10 hereof.
(b) If any of the conditions specified in Section 8 shall not have
been fulfilled when and as required by this Agreement unless
waived in writing, or by the Closing Date, this Agreement and
all of the Agent's obligations hereunder may be cancelled by
the Agent by notifying the Company and the Bank of such
cancellation in writing or by telegram at any time at or prior
to the Closing Date, and any such cancellation shall be
without liability of any party to any other party except as
otherwise provided in Sections 2(a), 7, 9 and 10 hereof.
(c) If the Agent elects to terminate this Agreement as provided in
this Section, the Company and the Bank shall be notified
promptly by telephone or telegram, confirmed by letter.
The Company and the Bank may terminate this Agreement in the event the
Agent is in material breach of the representations and warranties or covenants
contained in Section 5 and such breach has not been cured within a reasonable
period of time after the Company and the Bank have provided the Agent with
notice of such breach.
35
This Agreement may also be terminated by mutual written consent of the
parties hereto.
SECTION 13. NOTICES. All communications hereunder, except as herein
otherwise specifically provided, shall be mailed in writing and if sent to the
Agent shall be mailed, delivered or telegraphed and confirmed to ▇▇▇▇▇, ▇▇▇▇▇▇▇▇
& ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
Managing Director (with a copy to Silver, ▇▇▇▇▇▇▇▇ & ▇▇▇▇, L.L.P., Attention:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, P.C.) and, if sent to the Company and the Bank, shall be
mailed, delivered or telegraphed and confirmed to the Company and the Bank at
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇, President (with a copy to ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇▇▇).
SECTION 14. PARTIES. The Company and the Bank shall be entitled to act
and rely on any request, notice, consent, waiver or agreement purportedly given
on behalf of the Agent when the same shall have been given by the undersigned.
The Agent shall be entitled to act and rely on any request, notice, consent,
waiver or agreement purportedly given on behalf of the Company or the Bank, when
the same shall have been given by the undersigned or any other officer of the
Company or the Bank. This Agreement shall inure solely to the benefit of, and
shall be binding upon, the Agent, the Company, the Bank, and their respective
successors and assigns, and no other person shall have or be construed to have
any legal or equitable right, remedy or claim under or in respect of or by
virtue of this Agreement or any provision herein contained. It is understood and
agreed that this Agreement is the exclusive agreement among the parties hereto,
and supersedes any prior agreement among the parties and may not be varied
except in writing signed by all the parties.
SECTION 15. CLOSING. The closing for the sale of the Shares shall take
place on the Closing Date at such location as mutually agreed upon by the Agent
and the Company and the Bank. At the closing, the Company and the Bank shall
deliver to the Agent in next day funds the commissions, fees and expenses due
and owing to the Agent as set forth in Sections 2 and 7 hereof and the opinions
and certificates required hereby and other documents deemed reasonably necessary
by the Agent shall be executed and delivered to effect the sale of the Shares as
contemplated hereby and pursuant to the terms of the Prospectus.
SECTION 16. PARTIAL INVALIDITY. In the event that any term, provision
or covenant herein or the application thereof to any circumstance or situation
shall be invalid or unenforceable, in whole or in part, the remainder hereof and
the application of said term, provision or covenant to any other circumstances
or situation shall not be affected thereby, and each term, provision or covenant
herein shall be valid and enforceable to the full extent permitted by law.
SECTION 17. COUNTERPARTS. This Agreement may be executed in separate
counterparts, each of which so executed and delivered shall be an original, but
all of which together shall constitute but one and the same instrument.
If the foregoing correctly sets forth the arrangement among the
Company, the Bank and the Agent, please indicate acceptance thereof in the space
provided below for that purpose, whereupon this letter and the Agent's
acceptance shall constitute a binding agreement.
36
SECTION 18. ENTIRE AGREEMENT. This Agreement, including schedules and
exhibits hereto, which are integral parts hereof and incorporated as though set
forth in full, constitutes the entire agreement between the parties pertaining
to the subject matter hereof superseding any and all prior or contemporaneous
oral or prior written agreements, proposals, letters of intent and
understandings, and cannot be modified, changed, waived or terminated except by
a writing which expressly states that it is an amendment, modification or
waiver, refers to this Agreement and is signed by the party to be charged. No
course of conduct or dealing shall be construed to modify, amend or otherwise
affect any of the provisions hereof.
SECTION 19. HEADINGS. Headings on the Sections in this Agreement are
for reference purposes only and shall not be deemed to have any substantive
effect.
SECTION 20. DELIVERY BY TELECOPIER. This Agreement shall become
effective upon execution and delivery hereof by all the parties hereto; delivery
of this Agreement may be made by telecopier to the parties with original copies
promptly to follow by overnight courier.
SECTION 21. CONSTRUCTION. This Agreement has been negotiated by the
parties and their respective counsel. This Agreement will be fairly interpreted
in accordance with its terms and without any strict construction in favor of or
against either party. This Agreement shall be construed in accordance with the
laws of the State of New York.
SECTION 22. EXHIBITS. Each and all of the Exhibits referred to herein
and attached hereto are hereby incorporated into this Agreement for all purposes
as fully as if set forth herein.
SECTION 23. ARBITRATION. Any disputes, controversies or claims arising
out of or relating to the negotiations, execution, delivery, performance or
breach of this Agreement shall be settled by arbitration in accordance with the
Commercial Arbitration Rules of the American Arbitration Association. The place
of arbitration shall be New York City, New York. Judgment upon the award
rendered by the arbitrator(s) may be entered in any court having jurisdiction
thereof. If the amount claimed or disputed in such arbitration is $100,000 or
more, the arbitration shall be conducted before a panel of three arbitrators. In
any arbitration proceeding hereunder or any action to enforce its rights
hereunder, the prevailing party shall be awarded the costs (including reasonable
attorneys' fees) incurred by it related to such proceeding or action. The
arbitrator(s) shall have power to enter such orders by way of interim awards,
and they shall be enforceable in court.
37
Very truly yours,
ALLIED FIRST BANCORP ALLIED FIRST BANK, SB
By Its Authorized By Its Authorized
Representative: Representative:
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------- -------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
President and Chief Executive Officer President and Chief Executive Officer
Accepted as of the date first above written
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, INC.
By Its Authorized
Representative:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Managing Director
38
EXHIBIT B
ALLIED FIRST BANCORP, INC.
Up to ________ Shares (Anticipated Maximum)
(Par Value $0.01 Per Share)
SELECTED DEALERS' AGREEMENT
__________, 2001
Gentlemen:
We have agreed to assist Allied First Bank, sb (the "Bank"), an
Illinois chartered mutual savings bank, in connection with the offer and sale of
up to ________ shares of the conversion common stock, par value $0.01 per share
(the "Common Stock") of Allied First Bancorp, Inc. (the "Company"), a Maryland
corporation, to be issued in connection with the conversion of the Bank. The
total number of shares of Common Stock to be offered may be decreased to a
minimum of shares. The price per share has been fixed at $10.00. The Common
Stock, the number of shares to be issued, and certain of the terms on which they
are being offered, are more fully described in the enclosed Prospectus dated
_________________, 2001 (the "Prospectus"). In connection with the Conversion,
the Company, on a best efforts basis is offering for sale between $___________
of shares and $____________ of shares (the "Shares") of the Common Stock, in a
Subscription Offering. Any Shares not sold in the Subscription Offering will be
offered to the general public in a community offering (the "Community
Offering").
The Subscription and Community Offerings are being conducted under a
Plan of Conversion (the "Plan") adopted by the Bank pursuant to which the Bank
intends to convert from an Illinois chartered mutual savings bank to an Illinois
chartered stock savings bank and concurrent formation of a Maryland holding
company (the "Company") (the "Conversion"). As part of the Conversion, the Bank
will amend its Illinois mutual savings bank charter to read in the form of an
Illinois stock savings bank charter, sell all its to-be-issued common stock to
the Company which in turn will sell the Common Stock to the public as provided
for in the Plan. The Subscription and Community Offerings are further being
conducted in accordance with the regulations of the State of Illinois' Office of
Banks and Real Estate and the Federal Deposit Insurance Corporation subject to
the restrictions contained in the Plan.
1
The Common Stock is also being offered in accordance with the Plan by
broker/dealers licensed by the National Association of Securities Dealers, Inc.
("NASD") which have been approved by the Bank ("Approved Brokers").
We are offering the selected dealers (of which you are one) the
opportunity to participate in the solicitation of offers to buy the Common Stock
and we will pay you a fee in the amount of ___ percent (__ %) of the dollar
amount of the Common Stock sold on behalf of the Company by you, as evidenced by
the authorized designation of your firm on the order form or forms for payment
therefor to the special account established by the Bank for the purpose of
holding such funds. It is understood, of course, that payment of your fee will
be made only out of compensation received by us for the Common Stock sold on
behalf of the Company by you, as evidenced in accordance with the preceding
sentence. As soon as practicable after the closing date of the offering, we will
remit to you, only out of our compensation as provided above, the fees to which
you are entitled hereunder.
Each order form for the purchase of Common Stock MUST set forth the
IDENTITY and ADDRESS of each person to whom the certificates for such Common
Stock should be issued and delivered. Such order form also must clearly identify
your firm in order for you to receive compensation. You shall instruct any
subscriber who elects to send his order form to you to make any accompanying
check payable to "Allied First Bancorp, Inc."
This offer is made subject to the terms and conditions herein set forth
and is made only to selected dealers who are members in good standing of the
NASD who are to comply with all applicable rules of the NASD, including, without
limitation, the NASD's Interpretation With Respect to Free-Riding and
Withholding and Section 24 of Article III of the NASD's Rules of Fair Practice.
Orders for Common Stock will be subject to confirmation and we, acting
on behalf of the Company and the Bank, reserve the right in our unfettered
discretion to reject any order in whole or in part, to accept or reject orders
in the order of their receipt or otherwise, and to allot. Neither you nor any
other person is authorized by the Company and the Bank, or by us to give any
information or make any representations other than those contained in the
Prospectus in connection with the sale of any of the Common Stock. No selected
dealer is authorized to act as agent for us when soliciting offers to buy the
Common Stock from the public or otherwise. No selected dealer shall engage in
any stabilizing (as defined in Rule 10b-7 promulgated under the Securities
Exchange Act of 1934) with respect to the Company's Common Stock during the
offering.
We and each selected dealer assisting in selling Common Stock pursuant
hereto agree to comply with the applicable requirements of the Securities
Exchange Act of 1934 and applicable state
2
rules and regulations. Each customer-carrying selected dealer that is not a
$250,000 net capital reporting broker/dealer agrees that it will not use a sweep
arrangement and that it will transmit all customer checks by noon of the next
business day after receipt thereof. In addition, we and each selected dealer
confirm that the Securities and Exchange Commission interprets Rule 15c2-8
promulgated under the Securities Exchange Act of 1934 as requiring that a
Prospectus be supplied to each person who is expected to receive a confirmation
of sale 48 hours prior to delivery of such person's order form.
We and each selected dealer further agree that to the extent that your
customers desire to pay for shares with funds held by or to be deposited with
us, in accordance with the interpretations of the Securities and Exchange
Commission of Rule 15c2-4 promulgated under the Securities Exchange Act of 1934,
either (a) upon receipt of an executed order form or direction to execute an
order form on behalf of a customer to forward the offering price of the Common
Stock ordered on or before twelve noon Missouri time of the next business day
following receipt or execution of an order form by us to the Company for deposit
in a segregated account or (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 the order form on the customer's behalf, (ii) we will
mail acknowledgments of receipt of orders 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 Date") following receipt of
the confirmation referred to in (i), and (iv) we will forward complete order
forms together with such funds to the Company on or before twelve noon on the
next business day and each selected dealer acknowledges that if the procedure in
(b) is adopted, our customers' funds are not required to be in their accounts
until the Debit Date.
Unless earlier terminated by us, this Agreement shall terminate upon
the closing date of the Conversion. We may terminate this Agreement or any
provisions hereof any time by written or telegraphic notice to you. Of course,
our obligations hereunder are subject to the successful completion of the
Conversion.
You agree that at any time or times prior to the termination of this
Agreement you will, upon our request, report to us the number of shares of
Common Stock sold on behalf of the Company by you under this Agreement.
We shall have full authority to take such actions as we may deem
advisable in respect of all matters pertaining to the offering. We shall be
under no liability to you except for lack of good faith and for obligations
expressly assumed by us in this Agreement.
Upon application to us, we will inform you as to the states in which we
believe the Common Stock has been qualified for sale under, or are exempt from
the requirements of, the respective blue
3
sky laws of such states, but we assume no responsibility or obligation as to
your rights to sell Common Stock in any state.
Additional copies of the Prospectus and any supplements thereto will be
supplied in reasonable quantities upon request.
Any notice from us to you shall be deemed to have been duly given if
mailed, telephoned, or telegraphed to you at the address to which this Agreement
is mailed.
This Agreement shall be construed in accordance with the laws of the
State of Ohio.
Please confirm your agreement hereto by signing and returning the
confirmations accompanying this letter at once to us at ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇,
Inc., ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇. The enclosed duplicate copy will
evidence the agreement between us.
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, INC.
By:
------------------------------------------- -----------------
Name:
--------------------------------------
Its:
--------------------------------------
CONFIRMED AS OF:
, 2001
-----------------------------------
-----------------------------------------
(Name of Dealer)
By:
--------------------------------------------
Its:
-------------------------------------------
4