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EXHIBIT 1.1
BANK MUTUAL CORPORATION
4,692,782 to 8,701,000 Shares
of Common Stock
(par value $.01 per share)
AGENCY AGREEMENT
September 8, 2000
Ryan, Beck & Co., Inc.
220 South Orange Avenue
Livingston, New Jersey 07039-5817
Ladies and Gentlemen:
Bank Mutual Corporation, a to-be-formed federal subsidiary holding
company (the "Company"), Mutual Savings Bank (the "Bank"), a Wisconsin mutual
savings bank that is converting into a federal stock savings bank (the "Charter
Conversion"), and Mutual Savings Bancorp, MHC (the "MHC") hereby confirm their
agreement with Ryan, Beck & Co., Inc. ("Ryan, Beck") (the "Selling Agent") for
Ryan, Beck to serve as agent of the Company to assist the Company in the sale of
the Company's common stock ("Common Stock") in a subscription offering, and if
necessary, a community offering and/or a syndicated community offering. The
Offering, as defined below, is part of and is being conducted in connection with
the Bank's restructuring into the mutual holding company form of organization.
Simultaneous with or immediately after the consummation of the
Offering, the Company will acquire First Northern Capital Corp. ("First Northern
Capital") in a merger transaction (the "Merger") pursuant to an Agreement and
Plan of Reorganization (the "Merger Agreement") dated as of February 21, 2000
(the "Merger Agreement"). First Northern Capital is the holding company of First
Northern Savings Bank, SA ("First Northern Savings"). The Merger will be
accomplished in accordance with the laws of the United States and the State of
Wisconsin and applicable regulations of the OTS and State of Wisconsin
Department of Financial Institutions (the "Wisconsin Department"), which laws
and the regulations are collectively referred to herein as the "Merger
Regulations." Pursuant to the terms of the Merger Agreement, upon consummation
of the Merger each outstanding share of common stock of First Northern Capital
("First Northern Common Stock") will be converted into either $15.00 in cash or
1.5 shares of Common Stock. The percent of First Northern Common Stock converted
into Common Stock will be between 40% and 70% of the outstanding shares of First
Northern Common Stock; the precise number will be chosen by the Bank. The
balance of the First Northern Common Stock will be converted into cash. At least
40% of the First Northern Common Stock must be converted into Common Stock. If
shares of Common Stock are available after all orders have been filled in the
subscription offering, Bank Mutual may, at its option, issue any amount of such
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available shares to former First Northern shareholders, in lieu of cash. Under
no circumstances, however, will more than 70% of the consideration in the Merger
be paid in Common Stock. The Merger is expected to close simultaneously with or
immediately after consummation of the Reorganization. The Offering and the
Merger are separate, distinct transactions, but one will not occur without the
other. The Charter Conversion, the Offering and the Merger are sometimes
collectively referred to herein as the "Reorganization." The Company, the MHC,
the Bank, First Northern Capital and First Northern Savings are sometimes
hereinafter collectively referred to as the "Constituent Institutions." The
Company, the MHC and the Bank are sometimes hereinafter collectively referred to
as the "Primary Parties". The Company, the MHC, First Northern Capital, First
Northern Savings, and their respective subsidiaries are sometimes hereinafter
referred to as the "combined institution".
The following applications have been filed with the OTS: (i) Holding
Company Applications on Forms H-(e)1 and H-(e)3 (together, the "Holding Company
Application"); (ii) a Charter Conversion Application (the "Charter Conversion
Application"); (iii) a Form MHC-1 Notice of Mutual Holding Company
Reorganization (the "Form MHC-1 Notice"); and (iv) a Form MHC-2 Application for
Approval of a Minority Stock Issuance (the "Form MHC-2 Application"). All
amendments to the foregoing required to the date hereof have also been filed.
The Holding Company Application, the Charter Conversion Application, the Form
MHC-1 Notice and the Form MHC-2 Application are referred to herein collectively
as the "Reorganization Applications." The Reorganization Applications have been
filed pursuant to applicable laws of the United States and Wisconsin and
regulations of the OTS and Wisconsin Department (together with the Merger
Regulations, the "Reorganization Regulations").
The Company, in accordance with the Plan of Restructuring, is offering,
in a subscription offering by way of nontransferable subscription rights, shares
of Common Stock ("Shares") for a purchase price of $10.00 per share (the
"Purchase Price") in descending order of priority to (i) the Bank's Eligible
Account Holders (defined as holders of deposit accounts totaling $50 or more as
of January 31, 1999); (ii) the Bank's Employee Stock Ownership Plan (the "ESOP")
(for a total of up to 8% of the Shares issued in the Offering); (iii) the Bank's
Supplemental Eligible Account Holders (defined as holders of deposit accounts
totaling $50 or more as of June 30, 2000); (iv) depositors with accounts at the
Bank on August 31, 2000 who do not qualify as Eligible Account Holders or
Supplemental Eligible Account Holders; and (v) directors, officers and employees
of the Bank who are not Eligible Account Holders or Supplemental Eligible
Account Holders (the "Subscription Offering"). Shares not purchased in the
Subscription Offering may be offered to the general public in a community
offering with preference given to Wisconsin residents who reside in Wisconsin
counties in which the Bank or First Northern Savings have offices (the
"Community Offering"). It is acknowledged that the purchase of Shares in the
Subscription and Community Offering is subject to the maximum and minimum
purchase limitations described in the Plan of Restructuring, and that the
Company reserves the right, in its absolute discretion, to accept or reject, in
whole or in part, any or all orders in the Community Offering. Depending on
market conditions, shares not subscribed for in the Subscription Offering or
purchased in the Community Offering may be offered in a syndicated
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community offering (the "Syndicated Community Offering") to eligible members of
the general public on a best efforts basis by approved broker-dealer firms which
may include the Agent ("Assisting Brokers") which are members of the National
Association of Securities Dealers, Inc. ("NASD"). The Subscription Offering and
any Community Offering and/or Syndicated Community Offering are referred to
collectively herein as the "Offering." Except pursuant to qualified employee
benefit plans adopted by the Company or the Bank, generally no individual may
purchase in the Offering more than 80,000 Shares; provided that the Company may,
in its sole discretion and without further notice to or solicitation of
subscribers or other prospective purchasers, increase or decrease such maximum
purchase limitations.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-1 (File No. 333-39362) (the
"Registration Statement") containing a prospectus relating to the Offering for
the registration of the Shares under the Securities Act of 1933, as amended (the
"1933 Act"), and has filed such amendments thereto and such amended prospectuses
as may have been required to the date hereof. The prospectus, as amended, on
file with the Commission at the time the Registration Statement becomes
effective is hereinafter called the "Subscription Prospectus," except that if
the Prospectus filed by the Company pursuant to Rule 424(b) of the rules and
regulations of the Commission under the 1933 Act (the "1933 Act Regulations")
differs from the prospectus on file at the time the Registration Statement
becomes effective, the term "Subscription Prospectus" shall refer to the
prospectus filed pursuant to Rule 424(b) from and after the time such prospectus
is filed with or mailed to the Commission for filing.
SECTION 1. Appointment of the Selling Agent; Compensation to the
Selling Agent. Subject to the terms and conditions set forth below, and on the
basis of the representations, warranties and agreements hereinafter set forth,
the Company hereby appoints Ryan, Beck as its agent to consult with and advise
the Company and the Bank, and to solicit subscriptions and purchase orders for
Shares on behalf of the Company, in connection with the Company's offering of
Shares in the Subscription and Community Offerings. On the basis of the
representations, warranties and agreements herein contained, and subject to the
terms and conditions herein set forth, Ryan, Beck accepts such appointment and
agrees to consult with and advise the Company and the Bank as to the matters set
forth in Section 3 of the Engagement Letter between the Selling Agent and the
Bank dated as of February 3, 2000, and amended as of June 20, 2000, included as
Exhibit A attached hereto, and to use their best efforts to solicit
subscriptions and purchase orders for Shares in accordance with this Agreement;
provided, however, that the Selling Agent shall not be responsible for obtaining
subscriptions or purchase orders for any specific number of Shares, shall not be
required to purchase any Shares and shall not be obligated to take any action
which is inconsistent with any applicable law, regulation, decision or order.
If selected broker-dealers are used to assist in the sale of Shares in
the Syndicated Community Offering, the Primary Parties hereby, subject to the
terms and conditions of this Agreement, appoint the Agent to manage such
broker-dealers in this Syndicated Community
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Offering. On the basis of the representations and warranties of the Primary
Parties contained in, and subject to the terms and conditions of, this
Agreement, the Agent accepts such appointment and agrees to manage the selling
group of broker-dealers in any Syndicated Community Offering.
In addition to the reimbursement of the expenses specified in Sections
6, 7 and 8 hereof, the Selling Agent shall receive and the Primary Parties shall
pay (i) an advisory and administrative fee of $100,000 (the "Management Fee")
($50,000 of which has been paid) for the advisory, administrative and marketing
services described in Exhibit A and payable as set forth as Exhibit A), and (ii)
a fee of 1.5% of the dollar amount paid for the Shares sold in the Subscription
Offering and Community Offering (the "Marketing Fee"), excluding shares
purchased by officers, directors, employees (and immediate family thereof) of
the Primary Parties and employee benefit plans of the Primary Parties, and
excluding any shares that are issued in the Merger in exchange for between 40%
and 70% of the outstanding shares of First Northern Common Stock. For purposes
of the immediately preceding sentence, "immediate family" means a person's
spouse, siblings, parents and children who live in the same house with such
person. If other shares that are otherwise available to be sold in the Community
Offering are, at the Bank's option, used for distribution to First Northern
shareholders in connection with the Merger, the Primary Parties shall also pay
the Selling Agent a fee of 1.5% of the dollar amount of such shares, up to a
maximum of $100,000. In addition, the Primary Parties shall pay the Selling
Agent a fee equal to 1.5% of the aggregate Purchase Price of the Shares sold in
any Syndicated Community Offering. Assisting Brokers, which may include the
Selling Agent will also be paid for the shares that they sell, such that the
aggregate fee paid to the Selling Agent and the Assisting Brokers will be 5.5%
of the aggregate Purchase Price of the Shares sold by them in the Syndicated
Community Offering. Assisting Brokers will not be utilized without the prior
approval of the Primary Parties, and it is agreed that Agent will manage the
Assisting Brokers, if any, in the Syndicated Offering.
If (i) the Reorganization is abandoned or terminated by the Company;
(ii) the Offering is not consummated by March 31, 2001; (iii) the Selling Agent
terminates this Agreement because there has been a material adverse change in
the financial condition or operations of the Bank since December 31, 1999; or
(iv) immediately prior to the commencement of the Offering, the Selling Agent
terminates this Agreement because, in its reasonable judgment, formed in good
faith after reasonable determination and consideration of all relevant factors,
the Primary Parties have failed to satisfactorily disclose all relevant
information in the Registration Statement, the Subscription Prospectus and the
Reorganization Applications or the Selling Agent determines that market
conditions exist which might render the sale of the Shares by the Company
inadvisable, the Company will pay the Management Fee to the Selling Agent, such
fee to serve as compensation for its advisory and administrative services as set
forth in Exhibit A hereto, in addition to reimbursement of the Selling Agent's
reasonable out-of-pocket expenses as set forth in Section 6 hereof. If there is
a resolicitation of subscriptions for any reason, and the Selling Agent is
required to provide significant additional services or expend significant
additional time, the parties shall mutually agree to the dollar amount of the
additional compensation due,
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including additional expenses incurred in connection therewith, including
attorneys' fees and expenses.
The compensation specified above shall be payable (to the extent not
already paid) to the Selling Agent in next day clearinghouse funds on the
earlier of the Closing Date (as hereinafter defined), a determination by the
Primary Parties to terminate or abandon the Reorganization or the termination of
this Agreement by the Selling Agent or the Primary Parties in accordance with
the preceding paragraph. The Bank and the Company agree to reimburse the Selling
Agent from time to time for the costs and expenses specified in Section 6
hereof, to the extent such costs and expenses are reasonably incurred by the
Selling Agent, promptly upon receiving a reasonable accounting of such costs and
expenses.
Section 2. Closing Date; Release of Funds and Delivery of Certificates.
If all conditions precedent to the consummation of the Reorganization and the
Offering are satisfied, the Company agrees to issue or have issued the Shares
sold in the Offering and to release for delivery certificates evidencing such
Shares on the Closing Date against payment therefor by release of funds from the
special, interest-bearing account referred to in Section 5(p) hereof and by the
authorized withdrawal of funds from deposit accounts at the Bank in accordance
with the Plan; provided, however, that no such funds shall be released to the
Company or withdrawn until the conditions specified in Section 9 hereof shall
have been complied with to the reasonable satisfaction of the Selling Agent and
its counsel. Such release, withdrawal and payment shall be made on the Closing
Date, on a business day and at a time and place selected by the Selling Agent,
which date and place shall be acceptable to the Bank and the Company, on at
least two business days prior notice to the Bank and the Company (it being
understood that such business day shall not be more than ten business days after
the termination of the Offering), or such other time or place as shall be agreed
upon by the Selling Agent, the Bank and the Company. Certificates evidencing the
Shares sold in the Offering shall be delivered directly to the purchasers
thereof or in accordance with their directions. The hour and date upon which the
Company shall release or deliver the Shares sold in the Offering in accordance
with the terms hereof are called the "Closing Date."
SECTION 3. Prospectus; Offering. The Shares are to be offered in the
Offering at $10.00 per share, as set forth on the cover page of the Prospectus.
There will be a maximum and minimum number of Shares offered. The number of
Shares offered may be changed by the Company after consultation with the Selling
Agent, subject to the provisions of the Reorganization, depending on market and
financial conditions.
SECTION 4A. Representations and Warranties; Certain Covenants of the
Primary Parties. The Primary Parties jointly and severally represent and warrant
to and covenant with the Selling Agent as follows:
a. The Registration Statement was declared effective by the
Commission on September 8, 2000. At the time the Registration Statement,
including the Prospectus contained
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therein, became effective, the Registration Statement complied in all material
respects with the requirements of the 1933 Act and the 1933 Act Regulations and
the Registration Statement, any preliminary or final Prospectus or any Sales
Information (as defined in Section 7 hereof) authorized by any Primary Party 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) Prospectus
is filed with the Commission and at the Closing Date referred to in Section 2,
the Registration Statement, any preliminary or final Prospectus or any Sales
Information authorized by any Primary Party for use in connection with the
Offering 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 in or omissions from the Registration Statement, any
preliminary or final Prospectus or any Sales Information made in reliance upon
and in conformity with information furnished in writing to the Primary Parties
by the Selling Agent expressly regarding the Selling Agent for use under the
captions "The Reorganization and Stock Offering--Marketing Arrangements in the
Subscription and Community Offering" and "The Reorganization and Stock
Offering--Public Offering" in the Prospectus.
b. The Company has filed with the OTS the Reorganization
Applications, the Registration Statement and the Prospectus, each of which
included exhibits and supplemental material, and has filed an amendment or
amendments thereto, as required, and has published notice of such filings, as
required. The Reorganization Applications have been or prior to the Closing Date
will be approved by the OTS; and the Reorganization has been approved by the
Board of Directors of the Bank, and prior to the completion of the
Reorganization, the Company, the MHC, and members of the Bank.
c. At the Closing Date, (i) the Charter Conversion will have been
effected in accordance with the laws of the United States and Wisconsin, and
regulations of the OTS and Wisconsin Department and all other applicable
material laws, regulations, decisions and orders, including in compliance with
all terms, conditions, requirements and provisions precedent to the Charter
Conversion imposed upon the Primary Parties by the OTS, any state regulatory
authority or any other regulatory authority; (ii) the Reorganization and the
Offering will have been effected in the manner described in the Prospectus and
in accordance with the Plan, the Reorganization Regulations and all other
applicable material laws, regulations, decisions and orders, including in
compliance with all terms, conditions, requirements and provisions precedent to
the Reorganization and the Offering imposed upon the Primary Parties by the
Commission, the OTS, any state regulatory authority or any other regulatory
authority, and (iii) the Constituent Institutions will have completed the
conditions precedent to the Merger in accordance with the Merger Agreement, and
all applicable laws, regulations, decisions and orders, including all material
terms, conditions, requirements and provisions precedent to the Merger imposed
upon the Constituent Institutions by the OTS or any other regulatory authority,
other than those which
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the regulatory authority permits to be completed after the effective time of the
Merger ("Effective Time").
d. No order has been issued by the OTS or any state regulatory
authority preventing or suspending the use of the Prospectus, and no action by
or before any such governmental entity to revoke any approval, authorization or
order of effectiveness related to the Reorganization or the Offering is pending
or threatened.
e. At the time of the approval of the Reorganization Applications
by the applicable regulatory authorities (including any amendment or supplement
thereto) and at all times subsequent thereto until the Closing Date, the
Reorganization Applications complied and will comply in all material respects
with the Reorganization Regulations. The Prospectus contained in the
Reorganization Applications (including any amendment or supplement thereto), at
the time of the approval of the Reorganization Applications by the OTS and at
all times subsequent thereto until the Closing Date and the Effective Time,
complied and will comply in all material respects with the Reorganization
Regulations.
f. RP Financial, LC. ("RP Financial"), which prepared the
Independent Valuation dated as of June 9, 2000 and updated as of August 25,
2000, described in the Prospectus, is independent with respect to the Primary
Parties within the meaning of the Plan and the Reorganization Regulations and is
believed by the Primary Parties to be experienced and expert in the valuation
and the appraisal of business entities, including savings institutions, and the
Primary Parties believe that RP Financial has prepared the pricing information
set forth in the Prospectus in accordance with the requirements of the
Reorganization Regulations.
g. Ernst & Young LLP ("Ernst & Young"), the firm which certified
the financial statements of the Bank filed as part of the Registration
Statement, is, with respect to the Primary Parties, an independent certified
public accountant as required by the 1933 Act and the 1933 Act Regulations.
Wipfli Ullrich Bertelsen LLP ("Wipfli"), the firm which certified the financial
statements of First Northern Capital filed as part of the Registration
Statement, is, with respect to First Northern Capital and First Northern
Savings, an independent certified public accountant as required by the 1933 Act
and the 1933 Act Regulations.
h. The consolidated financial statements, together with the
related schedules and notes thereto, included in the Registration Statement and
which are part of the Prospectus present fairly the financial condition, results
of operations, changes in retained earnings and cash flows of (i) the Bank and
its consolidated subsidiaries and (ii) to the best knowledge of the Primary
Parties, First Northern Capital and its consolidated subsidiaries, at and for
the dates indicated and the periods specified and comply as to form in all
material respects with the applicable accounting requirements of the 1933 Act
Regulations. The Bank's and, to the best knowledge of the Primary Parties, First
Northern Capital's financial statements have been prepared in conformity with
generally accepted accounting principles applied on a consistent basis during
the periods involved, present fairly in all material respects the information
required to be stated
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therein and are consistent with financial statements and other reports filed by
each of them with the OTS, the FDIC or the Wisconsin Department except to the
extent that accounting principles employed in such filings conform to the
requirements of such authorities and not necessarily to generally accepted
accounting principles. The Bank's and, to the best knowledge of the Primary
Parties, First Northern Capital's other financial, statistical and pro forma
information and related notes thereto included in the Prospectus present fairly
the information shown therein on a basis consistent with the audited financial
statements of the Bank and/or First Northern Capital included in the
Registration Statement and which are part of the Prospectus, and as to the pro
forma adjustments, such adjustments have been properly applied on the basis
described therein.
i. With respect to the Primary Parties or their subsidiaries, and
to the best knowledge of the Primary Parties, with respect to First Northern
Capital, First Northern Savings or their subsidiaries, since the respective
dates as of which information is given in the Registration Statement and
Prospectus, except as may otherwise be stated therein: (i) there has not been
any material adverse change in the financial condition, net income, capital,
properties, affairs or prospects of the Primary Parties, First Northern Capital,
First Northern Savings, or their respective subsidiaries (the "combined
institution"), taken as a whole, 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 combined institution, taken as a whole, nor have the Primary Parties,
First Northern Capital, First Northern Savings or their respective subsidiaries
issued any securities or incurred any liability or obligations for borrowing
other than in the ordinary course of business, (iii) there have not been any
material transactions entered into by the Primary Parties, First Northern
Capital, First Northern Savings or their respective subsidiaries, except those
transactions entered into in the ordinary course of business and those
specifically described in or contemplated by the Prospectus, including the
execution of loan documents pertaining to the ESOP, and (iv) the capitalization,
liabilities, assets, properties and business of the Primary Parties, First
Northern Capital, First Northern Savings and their respective subsidiaries
conform in all material respects to the descriptions thereof contained in the
Prospectus. The Primary Parties, First Northern Capital, First Northern Savings
and their subsidiaries have no material liability of any kind, contingent or
otherwise, except as reflected in the financial statements filed as part of the
Registration Statement or otherwise set forth in the Prospectus.
j. The Company will be formed as a federal subsidiary holding
company, and the MHC will be formed as a federal mutual holding company, both
will be duly organized and validly existing and in good standing under the laws
of the United States and regulations of the OTS with the corporate power and
authority to conduct their business and own their property as described in the
Registration Statement and Prospectus, as of the Closing Date.
k. The Bank is a Wisconsin savings bank, duly organized and
validly existing and in good standing or active status under the laws of the
State of Wisconsin with the corporate power and authority to conduct its
business and own its property as described in the Registration Statement and
Prospectus under Wisconsin law. Upon completion of the Charter Conversion, the
Bank will be a duly organized and validly existing federally chartered savings
bank and after
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the Reorganization will continue as such, and will have the corporate power and
authority to conduct its business and own its property as described in the
Registration Statement and Prospectus under the Home Owners' Loan Act ("HOLA")
and the regulations thereunder.
l. First Northern Capital is a Wisconsin corporation, validly
existing and in active status under the laws of the State of Wisconsin with the
corporate power and authority to conduct its business and own its property as
described in the Registration Statement and Prospectus. First Northern Savings
is a Wisconsin-chartered savings and loan association, validly existing under
the laws of the State of Wisconsin with the corporate power and authority to
conduct its business and own its property as described in the Registration
Statement and Prospectus.
m. The Primary Parties and their subsidiaries, and, to the best
knowledge of the Primary Parties, First Northern Capital, First Northern Savings
and their subsidiaries, have obtained all material licenses, permits and other
governmental authorizations currently required for the conduct of their
respective businesses; all such licenses, permits and governmental
authorizations are in full force and effect. The Primary Parties and their
subsidiaries and, to the best knowledge of the Primary Parties, First Northern
Capital, First Northern Savings and their subsidiaries, are in all material
respects complying with all laws, rules, regulations and orders applicable to
the operation of their respective businesses; and none of the Primary Parties,
and to the best knowledge of the Primary Parties, First Northern Capital, First
Northern Savings or their subsidiaries has received notice of any proceeding or
action relating to the revocation or modification of any such license, permit or
governmental authorization which, alone or in the aggregate, if subject to an
unfavorable decision, ruling or finding, might materially and adversely affect
the conduct of the business, the financial condition or the net income, affairs
or prospects of the combined institution taken as a whole.
n. The articles of incorporation, charter or similar instruments
of the Primary Parties and, to the best knowledge of the Primary Parties, First
Northern Capital and First Northern Savings are in full force and effect; no
conservator or receiver has been appointed for any of the Primary Parties, or,
to the best knowledge of the Primary Parties, for First Northern Capital or
First Northern Savings; and the Bank and First Northern Savings are each
operating as an insured depository institution. Each of the Primary Parties,
and, to the best knowledge of the Primary Parties, each of First Northern
Capital and First Northern Savings is duly qualified to transact business and is
in good standing or active status in each jurisdiction in which its ownership or
leasing of property or the conduct of its business (currently and as
contemplated following the Reorganization) requires such qualification unless
the failure to be so qualified in one or more of such jurisdictions would not
have a material adverse effect on the financial condition or the business,
operations, net income or prospects of the combined institution, taken as a
whole.
o. Upon consummation of the Reorganization, all of the
outstanding capital stock of the Bank will be duly authorized and validly issued
and fully paid and nonassessable; and all such stock will be owned directly by
the Company, free and clear of all liens, encumbrances, claims or other
restrictions. Each of the Primary Parties, and, to the best knowledge of the
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Primary Parties, First Northern Capital, and First Northern Savings do not own
equity securities or any equity interest in any other business enterprise except
as described in the Prospectus; each of the subsidiaries of the Primary Parties
and, to the best knowledge of the Primary Parties, of First Northern Capital and
First Northern Savings, has been duly organized and is validly existing and in
good standing or active status under the laws of its jurisdiction of
organization with the authority to conduct its business and own its property as
described in the Registration Statement and the Prospectus; all of the
outstanding stock of each subsidiary has been duly authorized and validly issued
and is fully paid and nonassessable except as provided pursuant to Wis. Stat.
ss.180.0622(2)(b); all such stock is owned directly by the Company, First
Northern Capital or First Northern Savings, as the case may be, free and clear
of all liens, encumbrances, claims or other restrictions; and each of the
subsidiaries is duly qualified to transact business and is in good standing or
active status in each jurisdiction in which its ownership or leasing of property
or the conduct of its business requires such qualification, unless the failure
to be so qualified would not have a material adverse effect on the operations of
the combined institution, taken as a whole. The activities of the Bank's
subsidiaries are permitted to subsidiaries of Wisconsin-chartered and federally
chartered savings banks, and to the best knowledge of the Primary Parties, the
activities of the First Northern Savings' subsidiaries are permitted to
subsidiaries of a Wisconsin-chartered savings and loan associations, in each
case by the rules, regulations, policies and practices of the Wisconsin
Department (in the case of the Bank's and First Northern Savings' subsidiaries),
the OTS (in the case of subsidiaries of the Bank), and any other state or
federal authority having jurisdiction over such matters.
p. The deposit accounts of the Bank and, to the best knowledge of
the Primary Parties, First Northern Savings are, and following the Closing Date
of the Reorganization the deposit accounts of the Bank will be, insured by the
FDIC, up to the maximum amounts allowed by law. Upon consummation of the
Reorganization, the liquidation account for the benefit of Eligible Account
Holders and Supplemental Eligible Account Holders ("Liquidation Account") will
be duly established in accordance with the requirements of the Reorganization
Regulations.
q. Upon consummation of the Reorganization, the authorized equity
capital of the Company will consist of 100,000,000 shares of Common Stock and
10,000,000 shares of preferred stock, and the issued and outstanding equity
capital of the Company will be consistent with that set forth in the Prospectus
under the caption "Pro Forma Capitalization"; no shares of Common Stock, or
securities exercisable into or exchangeable for shares of the Common Stock, will
have been issued prior to the Closing Date (other than shares received by the
Bank in the formation of the Company, which shares will be cancelled upon
consummation of the Reorganization or the shares received by the MHC); the
Shares will have been duly and validly authorized for issuance and, when issued
and delivered by the Company pursuant to the Plan, will be duly and validly
issued and fully paid and nonassessable, the issuance of the Shares is not
subject to any preemptive rights; and the terms and provisions of the Common
Stock will conform in all material respects to the description thereof contained
in the Prospectus. Upon the issuance of the Shares, good title to the Shares
will be transferred from the Company to the
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purchasers thereof against payment therefor, subject to such claims as may be
asserted against the purchasers thereof by third-party claimants.
r. As of the date hereof and as of the Closing Date, none of the
Primary Parties or any subsidiary, or, to the best knowledge of the Primary
Parties, First Northern Capital, First Northern Savings, or any subsidiary is or
will be in violation of its charter or By- Laws or 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 Reorganization, 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 Primary Parties, and this Agreement has been validly
executed and delivered by the Primary Parties and is the valid, legal and
binding obligation of the Primary Parties, enforceable in accordance with its
terms, except to the extent that rights to indemnity hereunder may be limited
under applicable law and subject to bankruptcy, insolvency, reorganization or
other laws related to or affecting the enforcement of creditors' rights
generally and equitable principles limiting the right to obtain specific
enforcement or similar equitable relief. The execution and delivery of this
Agreement, the fulfillment of the terms herein set forth and the consummation of
the transactions herein contemplated will not (i) conflict with or constitute a
breach of, or default (or an event which, with notice or lapse of time, or both,
would constitute a default) under, the charter or By-Laws of the Primary
Parties, First Northern Capital, First Northern Savings, or any subsidiary, or
any material contract, lease or other instrument to which the Primary Parties,
or, to the best knowledge of the Primary Parties, First Northern Capital, First
Northern Savings, or any subsidiary is a party or in which the Primary Parties,
or, to the best knowledge of the Primary Parties, First Northern Capital, First
Northern Savings, or any subsidiary has a beneficial interest, or any applicable
law, rule, regulation or order; (ii) violate any authorization, approval,
judgment, decree, order, statute, rule or regulation applicable to the Primary
Parties, or to the best knowledge of the Primary Parties, First Northern
Capital, First Northern Savings, or any subsidiary; or (iii) result in the
creation of any lien, charge or encumbrance upon any property of the Primary
Parties, or, to the best knowledge of the Primary Parties, First Northern
Capital, First Northern Savings, or any subsidiary.
s. The Primary Parties have all such power, authority,
authorizations, approvals and orders as may be required to enter into this
Agreement and to carry out the provisions and conditions hereof, and the Company
has all such power, authority, authorizations and orders as may be required to
issue and sell the Shares as provided in the Plan and described in the
Prospectus, subject to the approval of the applicable regulatory authorities and
the satisfaction of any conditions of such approval.
t. The Primary Parties and, to the best knowledge of the Primary
Parties, First Northern Capital, First Northern Savings, and their respective
subsidiaries have good and marketable title to all properties and assets which
are material to the business of the combined
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institution taken as a whole, including those properties and assets described in
the Prospectus as owned by them, free and clear of all liens, except such liens
as are described in the Prospectus or are not materially significant or
important in relation to the business of the combined institution and its
subsidiaries on a consolidated basis; and all leases and subleases which are
material to the business of the combined institution taken as a whole under
which the Primary Parties, First Northern Capital, First Northern Savings, or
any subsidiary holds properties, including those leases and subleases described
in the Prospectus, are in full force and effect.
u. As of the date hereof and as of the Closing Date and the
Effective Date, the Primary Parties and, to the best knowledge of the Primary
Parties, First Northern Capital, and First Northern Savings, are not and will
not be in violation of any directive from the Commission, the OTS, the FDIC, the
Board of Governors of the Federal Reserve System ("FRB"), the Wisconsin
Department or any other agency to make any material change in the method of
conducting their respective businesses so as to comply in all material respects
with all applicable statutes and regulations (including, without limitation,
regulations, decisions, directives and orders of such governmental agencies),
and no suit or proceeding, charge, investigation or action before or by any
court, regulatory authority or governmental agency or body is or will be pending
or, to the knowledge of the Primary Parties, threatened, which might materially
and adversely affect the Reorganization or the Merger, the performance of this
Agreement or the consummation of the transactions contemplated in the Plan and
as described in the Prospectus, or which might result in any material adverse
change in the financial condition, net income, capital, properties, affairs or
prospects of the combined institution taken as a whole, or which would
materially affect its respective properties and assets.
v. The Primary Parties have received an opinion of their counsel,
Quarles & Brady LLP, Milwaukee, Wisconsin, with respect to the federal and
Wisconsin state income tax consequences of the Reorganization; the tax opinion
of Quarles & Brady LLP, is accurately summarized in the Reorganization
Applications and the Prospectus. The facts and representations upon which such
opinions are based are truthful, accurate and complete, and no Primary Party
will take any action inconsistent therewith.
w. 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 any
Primary Party or any subsidiary 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 any
Primary Party or subsidiary thereof is a party or by which any of them or any of
their respective property is bound or affected which, in any such case, is
material to the Primary Parties and their subsidiaries taken as a whole; such
agreements are in full force and effect and no other party to any such agreement
has instituted or, to the knowledge of the Primary Parties, threatened any
action or proceeding wherein the Primary Parties or any subsidiary would or
might be alleged to be in default thereunder. To the best knowledge of the
Primary Parties, 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 First
Northern Capital, First Northern Savings or any subsidiary in the due
performance
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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 First Northern Capital, First Northern Savings or any
subsidiary is a party or by which any of them or any of their respective
property is bound or affected which, in any such case, is material to First
Northern Capital, First Northern Savings and its subsidiaries, taken as a whole;
such agreements are in full force and effect and no other party to any such
agreement has instituted or, to the best knowledge of the Primary Parties,
threatened any action or proceeding wherein First Northern Capital, First
Northern Savings or any subsidiary would or might be alleged to be in default
thereunder.
x. 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, none of the Primary Parties or any
subsidiary has or 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 Primary Parties taken as a whole.
y. The Primary Parties and, to the best knowledge of the Primary
Parties, First Northern Capital, First Northern Savings and their subsidiaries
have filed all federal, state and local tax returns required to be filed and
have made timely payment of all taxes due and payable in respect of such returns
and no deficiency has been asserted with respect thereto by any taxing
authority.
z. Except as disclosed in the Prospectus with respect to the
ESOP, none of the Primary Parties and, to the best knowledge of the Primary
Parties, First Northern Capital, First Northern Savings or any subsidiary has
made any payment of funds of the Primary Parties, First Northern Capital, First
Northern Savings or any subsidiary 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 Reorganization, the Bank is not authorized to
issue capital stock. Prior to the completion of the Reorganization none of the
Primary Parties will have: (i) other than as described in the Prospectus issued
any securities within the last 18 months (except for notes to evidence other
bank loans and reverse repurchase agreements); (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 Offering and the Merger and routine purchases and sales
of securities for or from its portfolio; (iii) entered into a financial or
management consulting agreement relating to the sale of stock, except as
contemplated hereunder and in connection with the Merger; or (iv) engaged any
intermediary between the Selling Agent and any Primary Party in connection with
any offering of shares of its capital stock, and no person is being compensated
in any manner for such service.
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bb. Neither the Primary Parties, nor to the best knowledge of the
Primary Parties, First Northern Capital, or First Northern Savings is required
to be registered under the Investment Company Act of 1940, as amended.
cc. To the knowledge of the Primary Parties, the Company has taken
all necessary action to make such filings and/or to qualify or register or
obtain an exemption from registration for the Shares for offer and sale in the
Offering and the Merger under the securities or Blue Sky laws of all
jurisdictions wherein such Shares will be offered which require such filings
and/or qualification or registration or exemption from registration.
dd. All Sales Information used by the Company in connection with
the Offering that is required by the Reorganization Regulations to be filed has
been filed with and approved by the applicable regulatory authority.
ee. Except for information provided in writing to the Primary
Parties by the Selling Agent for use in the Prospectus, the Primary Parties have
not relied upon the Selling Agent or its legal or other advisors for any legal,
tax or accounting advice in connection with the Reorganization.
ff. To the best knowledge of the Primary Parties, each of the
Primary Parties, First Northern Capital, First Northern Savings and their
respective subsidiaries is in compliance with all laws, rules and regulations
relating to environmental protection, except where such failure would not have a
material adverse effect on the financial condition of the combined institution
taken as a whole, and none of the Primary Parties, or, to the best knowledge of
the Primary Parties, First Northern Capital, First Northern Savings or any
subsidiary has been notified or is otherwise aware that any of them is
potentially liable, or is considered potentially liable, under the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended, or
any similar state law. No actions, suits, regulatory investigations or other
proceedings are pending, or, to the knowledge of the Primary Parties, threatened
against any Primary Party, or, to the best knowledge of the Primary Parties,
against First Northern Capital, First Northern Savings or any subsidiary
relating to environmental protection, nor does any Primary Party have any
knowledge upon which to believe any such proceedings may be brought against any
of such entities. To the best knowledge of the Primary Parties, no disposal,
release or discharge of hazardous or toxic substances, pollutants or
contaminants, including petroleum and gas products, as any of such terms may be
defined under federal, state or local law, has occurred on, in, at or about any
of the facilities or properties owned, operated or leased by, or pledged to, any
Primary Party, First Northern Capital, First Northern Savings or any subsidiary,
except such disposal, release or discharge which would not have a material
adverse effect on the combined institution taken as a whole.
gg. No labor dispute with the employees of any Primary Party, or,
to the best knowledge of the Primary Parties, First Northern Capital, First
Northern Savings or any subsidiary exists or, to the knowledge of the Primary
Parties, is imminent.
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hh. All of the loans represented as assets on the most recent
financial statements or selected financial information of the Bank and, to the
best knowledge of the Primary Parties, First Northern Capital included in the
Prospectus meet or are exempt from all requirements of federal, state and local
law pertaining to lending, including, without limitation, truth in lending
(including the requirements of Regulation Z and 12 C.F.R. Part 226), real estate
settlement procedures, consumer credit protection, equal credit opportunity and
all disclosure laws applicable to such loans, except for violations which, if
asserted, would not result in a material adverse effect on the financial
condition, results of operations or business of the combined institution taken
as a whole.
ii. Any certificate signed by an officer of any Primary Party and
delivered to the Selling Agent or their counsel that refers to this Agreement
shall be deemed to be a representation and warranty by such Primary Party to the
Selling Agent as to the matters covered thereby with the same effect as if such
representation and warranty were set forth herein.
SECTION 4B. Representations and Warranties; Certain Covenants of the Selling
Agent. The Selling Agent represents and warrants to the Primary Parties as
follows:
a. The Selling Agent is registered as a broker-dealer with the
Commission and the NASD, and no withdrawal of its registration is pending, or,
to the knowledge of the Selling Agent, threatened. The Selling Agent is in good
standing with the SEC and the NASD.
b. The Selling Agent is validly existing and in good standing as
a corporation under the laws of the State of New Jersey and has all of the
necessary corporate power and authority to provide the services to be furnished
to the Primary Parties hereunder.
c. The execution and delivery 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 Selling Agent,
and this Agreement is a legal, valid and binding obligation of the Selling
Agent, enforceable in accordance with its terms, except to the extent that
rights to indemnity hereunder may be limited under applicable law and subject to
bankruptcy, insolvency, reorganization or other laws related to or affecting the
enforcement of creditors' rights generally and equitable principles limiting the
right to obtain specific enforcement or similar equitable relief. The Selling
Agent has all corporate power and authority necessary to perform all of its
obligations under this Agreement.
d. The Selling Agent and, to the Selling Agent's knowledge, its
employees, agents and representatives who shall perform any of the services
required hereunder to be performed by the Selling Agent shall be duly authorized
and shall have all licenses, approvals and permits necessary to perform the
services to be rendered pursuant to this Agreement, and Ryan, Beck is a
registered selling agent in all U.S. jurisdictions, and will remain registered
in such jurisdictions in which the Company is relying on such registration for
the sale of the Shares, until the Reorganization is consummated or terminated.
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e. The execution and delivery of this Agreement by the Selling
Agent, the fulfillment of the terms set forth herein and the consummation of the
transactions herein contemplated shall not violate or conflict with the
corporate charter or By-Laws of the Selling Agent or violate, conflict with or
constitute a breach of, or default (or an event which, with notice or lapse of
time, or both, would constitute a default) under, any material agreement,
indenture or other instrument by which the Selling Agent is bound or under any
governmental license or permit or any law, administrative regulation,
authorization, approval or order or court decree, injunction or order applicable
to it.
f. Any funds received by the Selling Agent to purchase Shares
will be handled in accordance with Rule 15c2-4 under the Securities Exchange Act
of 1934 (the "1934 Act").
g. There is not now pending or, to the Selling Agent's knowledge,
threatened against the Selling Agent any material action or proceeding before
the Commission, the NASD, any state securities commission or any state or
federal court concerning the Selling Agent's activities as a broker-dealer.
h. No action, suit, charge or proceeding is pending, or to the
knowledge of the Selling Agent, threatened, against the Selling Agent, which, if
determined adversely to the Selling Agent, would have a material adverse effect
upon the ability of the Selling Agent to perform its obligations under this
Agreement.
i. The NASD, upon review of the terms of this Agreement, shall
not have objected to the Selling Agent's performance of its obligations
hereunder or the terms herein set forth.
SECTION 5: Additional Covenants of the Primary Parties. The Primary
Parties hereby jointly and severally covenant with the Selling Agent as follows:
a. The Primary Parties will not file any amendment or supplement
to the Registration Statement or any Reorganization Application without
notifying the Selling Agent of its intention to do so and providing the Selling
Agent and its counsel an opportunity to review such amendment or supplement, nor
will any Primary Party file any such amendment or supplement to which the
Selling Agent or its counsel shall reasonably object.
b. The Primary Parties will use their best efforts to cause each
Reorganization Application not heretofore approved to be approved by the
applicable regulatory authority and will promptly upon receipt of any
information concerning the events listed below notify the Selling Agent: (i) of
the approval of any Reorganization Application not heretofore approved; (ii) of
the receipt of any comments from the OTS or any other governmental entity with
respect to the Charter Conversion, the Reorganization, the Merger or the
transactions contemplated by this Agreement; (iii) of the request by the OTS or
any other governmental entity for any amendment or supplement to the
Registration Statement, the Prospectus or any Reorganization Application or for
additional information; (iv) of the issuance by the Commission, the OTS or
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<PAGE> 17
any other governmental entity of any order or other action suspending the
Charter Conversion, the Reorganization or the Merger or the use of the
Registration Statement or the Prospectus or any other filing of the Primary
Parties under the Reorganization Regulations, the 1933 Act, 1933 Act Regulations
or other applicable law, or the threat of any such action; (v) of the issuance
by the Commission, the OTS or any other state governmental authority of any stop
order suspending the effectiveness of the Registration Statement or any
Reorganization Application or of the initiation or threat of any proceedings for
such purpose; or (vi) of the occurrence of any event mentioned in paragraph (f)
below. The Primary Parties will make every reasonable effort to prevent the
issuance by the Commission, the OTS or any other governmental authority of any
such order and, if any such order shall at any time be issued, to obtain the
lifting thereof at the earliest possible time. The Primary Parties will provide
copies of the foregoing comments, requests and orders to the Selling Agent upon
receipt of such items.
c. The Primary Parties will deliver to the Selling Agent and to
its counsel two conformed copies of each of the following documents, with all
exhibits: each Reorganization Application as originally filed and each amendment
or supplement thereto and the Registration Statement as originally filed and
each amendment thereto. In addition, the Primary Parties will also deliver to
the Selling Agent such number of copies of the closing documents with respect to
the Reorganization and the Offering as the Selling Agent may reasonably request.
d. The Primary Parties will furnish to the Selling Agent, from
time to time during the period when the Prospectus is required to be delivered
under federal or state securities laws or regulations or the applicable rules
and regulations of any other governmental entity, such number of copies of the
Prospectus (as amended or supplemented) as the Selling Agent may reasonably
request for the purposes contemplated by such federal or state securities laws
or regulations or the applicable rules and regulations of any other governmental
entity. The Company authorizes the Selling Agent to use the Prospectus (as
amended or supplemented) for any lawful manner in connection with the sale of
the Shares.
e. The Primary Parties will comply with any and all terms,
conditions, requirements and provisions with respect to the Reorganization and
the transactions contemplated thereby imposed by the Commission, the OTS, any
state regulatory authority or any other governmental entity, including the
terms, conditions, requirements and provisions contained in the Reorganization
Regulations, the 1933 Act, the 1933 Act Regulations, the 1934 Act and the rules
and regulations of the Commission promulgated under the 1934 Act (the "1934 Act
Regulations").
f. If, at any time during the period when the Prospectus is
required to be delivered, any event relating to or affecting any Primary Party
shall occur, as a result of which it is necessary or appropriate, in the opinion
of counsel for the Primary Parties, to amend or supplement the Registration
Statement or the Prospectus in order to make the Registration Statement or
Prospectus not misleading in light of the circumstances existing at the time it
is delivered to a purchaser, the Primary Parties will, at their expense,
forthwith prepare, file with
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<PAGE> 18
the Commission and furnish to the Selling 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 Selling Agent and its counsel after a reasonable time for
review) which will amend or supplement the Registration Statement or Prospectus
so that as amended or supplemented it will not contain an untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein, in light of the circumstances existing at the time the
Prospectus is delivered to a purchaser, not misleading.
g. The Primary Parties will take all necessary actions, in
cooperation with the Selling Agent, and furnish to whomever the Selling Agent
may direct such information as may be required to qualify or register or exempt
from registration the Shares for the Offering and sale by the Company under the
applicable securities or Blue Sky laws of such jurisdictions as the Selling
Agent may reasonably designate; provided, however, that the Company shall not be
obligated to file any general consent to service of process or to qualify to do
business in any jurisdiction in which it is not otherwise required to be so
qualified. In each jurisdiction where any of the Shares shall have been so
qualified or registered, or exempted from registration, the Company will make
and file such statements and reports as are or may be required by the laws of
such jurisdiction.
h. The Company will not sell or issue, contract to sell or
otherwise dispose of, for a period of 180 days after the Closing Date, without
the prior written consent of the Selling Agent, any shares of, or any securities
convertible into or exercisable for shares of, Common Stock other than in
connection with the Merger or any other plan or arrangement, including but not
limited to a stock option plan and a management recognition plan, described in
the Prospectus.
i. During the period in which the Company's Common Stock is
registered under the 1934 Act, the Company will furnish to its stockholders as
soon as practicable after the end of each fiscal year an annual report
(including a consolidated balance sheet and consolidated statements of income,
stockholders' equity and cash flows of the Primary Parties as at the end of and
for such year, certified by independent public accountants in accordance with
Regulation S-X under the 1934 Act) and make available as soon as practicable
after the end of each of the first three quarters of each fiscal year (beginning
with the first fiscal quarter ending after the Closing Date) financial
information of the Primary Parties for such quarter in reasonable detail.
j. During the period of three years from the date hereof, the
Company will furnish to the Selling Agent: (i) promptly after it becomes
available, a copy of each report of the Company furnished generally to
stockholders of the Company or 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 of Forms 10-K, 10-Q and 8-K and all proxy statements and annual reports
to stockholders), a copy of each other report of the Company mailed to its
stockholders or filed with the Commission 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 and each press release and
material news item and
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article released by the Company or the Bank, and (ii) from time to time, such
other public information concerning the Primary Parties as the Selling Agent may
reasonably request.
k. The Primary Parties will use the net proceeds from the sale of
the Shares substantially in the manner set forth in the Prospectus under the
caption "Use of Proceeds."
l. Other than as permitted by the Reorganization Regulations, the
HOLA, the 1933 Act, the 1933 Act Regulations and the laws of any jurisdiction in
which the Shares are qualified for sale, neither the Company nor the Bank will
distribute any Prospectus or other Sales Information in connection with the
offer and sale of the Shares.
m. The Company will make generally available to its security
holders as soon as practicable, but not later than 60 days after the close of
the period covered thereby, an earnings statement (in form complying with the
provisions of Rule 158 of the 1933 Act Regulations) covering a twelve-month
period beginning not later than the first day of the Company's fiscal quarter
next following the effective date (as defined in such Rule 158) of the
Registration Statement.
n. The Company will register the Common Stock under Section 12(g)
of the 1934 Act effective on or prior to the Closing Date.
o. The Company will use its best efforts to obtain approval for,
effective on or prior to the Closing Date, and maintain quotation of the Common
Stock on the Nasdaq National Market System.
p. The Primary Parties will maintain appropriate arrangements for
depositing all funds received from persons delivering orders to purchase Shares
in the Subscription and Community Offerings on an interest-bearing basis at the
rate described in the Prospectus until the Closing Date or until the Offering is
terminated in accordance with the Plan and as described in the Prospectus. The
Primary Parties will maintain such records of all funds received to permit the
funds of each subscriber to be separately insured by the FDIC and to enable the
Company to make appropriate refunds of such funds in the event that such refunds
are required to be made in accordance with the Plan and as described in the
Prospectus.
q. The Primary Parties will take such actions and furnish such
information as are reasonably requested by the Selling Agent in order for the
Selling Agent to ensure compliance with Article III, Section 1, of the NASD's
Rules of Fair Practice and the NASD's "Interpretation to Free Riding and
Withholding."
r. The Primary Parties will conduct their respective businesses
in compliance in all material respects with all applicable federal and state
laws, rules, regulations, decisions, directives and orders including, all
decisions, directives and orders of the OTS.
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<PAGE> 20
s. The Primary Parties will not amend the Plan without the
Selling Agent's prior written consent in any manner that, in the opinion of the
Selling Agent, would affect the sale of the Shares or the terms of this
Agreement, which approval shall not be unreasonably withheld.
t. The Primary Parties will use all reasonable efforts to comply
with, or cause to be complied with, the conditions precedent to the several
obligations of the Selling Agent specified in Section 9 hereof.
u. Prior to the Closing Date, the Primary Parties shall have
received approval of each Reorganization Application required to consummate the
Merger, and all applicable waiting periods shall have expired.
SECTION 6. Payment of Expenses. Whether or not the Reorganization is
completed or the sale of the Shares by the Company is consummated, the Primary
Parties jointly and severally agree to pay all expenses incident to the
performance of the obligations of any Primary Party under this Agreement,
including the following: (i) the preparation, printing, issuance and delivery of
the certificates evidencing the Shares sold to the purchasers in the Offering
and the printing and delivery of all other documents applicable to the
Reorganization and the Merger; (ii) the fees and disbursements of the Primary
Parties' counsel, accountants and other advisors; (iii) the qualification, or
registration or exemption from registration of the Shares under all applicable
securities or Blue Sky laws, including filing fees and the reasonable fees and
disbursements of counsel in connection therewith and in connection with the
preparation of a Blue Sky Survey concerning such jurisdictions as the Selling
Agent may reasonably designate; (iv) the printing and delivery to the Selling
Agent in such quantities as the Selling Agent shall reasonably request of copies
of the Registration Statement, the Prospectus and the Reorganization
Applications as originally filed and as amended or supplemented and all other
documents in connection with the Reorganization and this Agreement; (v) the
filing fees incurred in connection with the review of the Registration
Statement, the Reorganization Applications and any other application, form or
filing by the Commission and the OTS; (vi) the filing fees and the fees and
disbursements of counsel (subject to the limitations stated below) incurred in
connection with the review of the Offering by the NASD; (vii) the fees for
listing the Shares on the Nasdaq National Market System; (viii) the fees and
expenses relating to the Independent Valuation; (ix) the fees and expenses
relating to advertising expenses, temporary personnel expenses, expenses related
to the Stock Information Center to be established, investor meeting expenses and
other miscellaneous expenses relating to the marketing of the Shares; and (x)
the fees and charges of any transfer agent, registrar or other agent. In the
event that the Selling Agent incurs any such expenses on behalf of the Primary
Parties, the Primary Parties will pay or reimburse the Selling Agent for such
expenses regardless of whether the Reorganization is successfully completed, and
such reimbursements will not be included in the expense limitations set forth in
the following paragraph. The Selling Agent will not incur any single expense of
more than $5,000 pursuant to this paragraph without the prior approval of the
Company or the Bank.
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The Primary Parties also agree to reimburse Ryan, Beck for reasonable
out-of-pocket expenses, including legal fees and expenses, incurred by Ryan,
Beck in connection with the services contemplated hereunder. Ryan, Beck will not
incur legal fees (excluding the out-of-pocket expenses of counsel) in excess of
$75,000 without the approval of the Primary Parties. The parties acknowledge,
however, that the legal fee cap may be increased by the mutual consent of the
Primary Parties and Ryan, Beck in the event of any circumstances which result in
material additional work on the part of Ryan, Beck's counsel. Other
out-of-pocket expenses of Ryan, Beck will not exceed $35,000 unless mutually
agreed to by parties hereto based upon delay or unforeseen circumstances. Not
later than two days before the Closing Date, Ryan, Beck will provide the Primary
Parties with a detailed accounting of reimbursable expenses to be paid on the
Closing Date.
Section 7. Indemnification.
a. The Primary Parties jointly and severally agree to indemnify
and hold harmless the Selling Agent, its officers, directors, agents and
employees and each person, if any, who controls the Selling 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, subject to the limitation in the last
sentence of paragraph (c) below), joint or several, that the Selling Agent or
any of such persons may suffer or to which the Selling Agent or any such persons
may become subject under all applicable federal and state laws or otherwise, and
to promptly reimburse the Selling Agent and any of such persons upon written
demand for any expenses (including reasonable fees and disbursements of counsel)
reasonably incurred by the Selling Agent or any of such persons in connection
with investigating, preparing or defending any actions, proceedings or claims
(whether commenced or threatened) to the extent such losses, claims, damages,
liabilities or actions: (i) arise out of or are based upon any untrue statement,
or alleged untrue statement, of any material fact contained in any
Reorganization Application (or any amendment or supplement thereto), the
Registration Statement (or any amendment or supplement thereto), the Prospectus
(or any amendment or supplement thereto), or any application or other document,
advertisement or communication prepared, made or executed by or on behalf of any
Primary Party or based upon written information or statements furnished or made
by any Primary Party or its representatives (including counsel) whether or not
filed in any jurisdiction in order to register or qualify any or all of the
Shares under the securities law thereof (the "Sales Information"); (ii) arise
out of or are based upon the omission or alleged omission to state in any of the
foregoing documents or information a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading; or (iii) arise from any theory of
liability whatsoever relating to or arising from or based upon any
Reorganization Application (or any amendment or supplement thereto), the
Registration Statement (or any amendment or supplement thereto), the Prospectus
(or any amendment or supplement thereto), the Sales Information or other
documentation prepared by a Primary Party and distributed in connection with the
Offering; except to the extent such losses, claims, damages, liabilities or
actions arise out of or are based upon any untrue statement or alleged
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<PAGE> 22
untrue statement of a material fact in, or omission or alleged omission of a
material fact from, any Reorganization Application (or any amendment or
supplement thereto), the Registration Statement (or any amendment or supplement
thereto), the Prospectus (or any amendment or supplement thereto), the Sales
Information or other documentation prepared by any Primary Party and distributed
in connection with the Offering made in reliance upon and in conformity with
information furnished in writing to any Primary Party by the Selling Agent or
their representatives (including counsel) regarding the Selling Agent expressly
for use in the Prospectus, which the Primary Parties acknowledge includes only
the information contained in the Prospectus under the caption "The Restructuring
and the Offering--Marketing Arrangements"; nor shall indemnification be required
for material oral misstatements to a purchaser of Shares made by the Selling
Agent which are not based upon information provided by any Primary Party in
writing or based upon information contained in any Reorganization Application
(or any amendment or supplement thereto), the Registration Statement (or any
amendment or supplement thereto), the Prospectus (or any amendment or supplement
thereto), or the Sales Information or other documentation prepared by a Primary
Party and distributed in connection with the Reorganization. In addition, no
Primary Party will be liable under the foregoing indemnification provisions to
the extent that any loss, claim, damage, liability or action is found in a final
judgment by a court to have resulted from the Selling Agent's bad faith,
misconduct or negligence in performing the services to be performed by the
Selling Agent under this Agreement. Notwithstanding the foregoing, the
indemnification provided for in this paragraph (a) shall not apply to the Bank
to the extent that such indemnification by the Bank would constitute a covered
transaction under Section 23A of the Federal Reserve Act. For purposes of this
Section 7, the term "expense" shall include, but not be limited to, counsel fees
and costs, court costs and out-of-pocket costs. The foregoing agreement to
indemnify shall be in addition to any liability any Primary Party may otherwise
have to the Selling Agent or the persons entitled to the benefit of these
indemnification provisions.
b. The Selling Agent agrees to indemnify and hold harmless the Primary
Parties, their respective officers, directors, agents and employees and each
person, if any, who controls a Primary Party 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, subject to the limitation in the last sentence of paragraph
(c) below), joint or several, that they or any of such persons may suffer or to
which they or any such persons may become subject under all applicable federal
and state laws or otherwise, and to promptly reimburse the Primary Parties and
any of such persons upon written demand for any expenses (including reasonable
fees and disbursements of counsel) reasonably incurred by them or any of such
persons in connection with investigating, preparing or defending any actions,
proceedings or claims (whether commenced or threatened) to the extent such
losses, claims, damages, liabilities or actions: (i) arise out of or are based
upon any untrue statement, or alleged untrue statement, of a material fact
contained in any Reorganization Application (or any amendment or supplement
thereto), the Registration Statement (or any amendment or supplement thereto),
the Prospectus (or any amendment or supplement thereto), the Sales Information
or other documentation prepared by any Primary Party and distributed in
connection with the Offering; or
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<PAGE> 23
(ii) arise out of or which 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; provided, however,
that obligations of the Selling Agent under this paragraph shall exist only if
and to the extent that such untrue statement or alleged untrue statement was
made in, or such omission or alleged omission was from, any Reorganization
Application (or any amendment or supplement thereto), the Registration Statement
(or any amendment or supplement thereto), the Prospectus (or any amendment or
supplement thereto), the Sales Information or other documentation prepared by
any Primary Party and distributed in connection with the Offering in reliance
upon and in conformity with information furnished in writing to any Primary
Party by the Selling Agent or its representatives (including counsel) regarding
the Selling Agent expressly for use in the Prospectus, which the Primary Parties
acknowledge includes only the information contained in the Prospectus under the
caption "The Restructuring and the Offering--Marketing Arrangements." In
addition, the Selling Agent will not be liable under the foregoing
indemnification provisions to the extent that any loss, claim, damage, liability
or action is found in a final judgment by a court to have resulted from any
Primary Party's bad faith, misconduct or negligence. The foregoing agreement to
indemnify shall be in addition to any liability the Selling Agent may otherwise
have to the Primary Parties or the persons entitled to the benefit of these
indemnification provisions.
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 7 and
Section 8 herein. 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 the defense of such
action with counsel chosen by it and reasonably acceptable to 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 firm of attorneys for the indemnified parties
(unless an indemnified party or parties shall have reasonably concluded that
there may be defenses available to it or them which are different from or
additional to those of the other indemnified parties) 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. No indemnifying party shall be liable for any
settlement of any action, proceeding or suit effected without its prior written
consent.
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<PAGE> 24
d. The agreement contained in this Section 7 and in Section 8 hereof
and the representations and warranties of the Primary Parties 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 the Selling Agent or its directors,
officers, agents, employees or controlling persons or by or on behalf of the
Primary Parties or their respective directors, officers, agents, employees or
controlling persons; (ii) delivery of and payment hereunder for the Shares; or
(iii) any termination of this Agreement.
Section 8. Contribution. If the indemnification of an indemnified party
provided for in Section 7 of this Agreement is for any reason held
unenforceable, the Primary Parties, on the one hand, and the Selling Agent, on
the other, agree to contribute to the losses, liabilities, claims, damages and
expenses for which such indemnification is held unenforceable: (i) in such
proportion as is appropriate to reflect the relative benefits to the Primary
Parties, on the one hand, and the Selling Agent, on the other, of the
Reorganization as contemplated (whether or not the Reorganization is
consummated), or (ii) if the application provided for in clause (i) is for any
reason held unenforceable, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) but also the relative fault
of the Primary Parties, on the one hand, and the Selling Agent, on the other, as
well as other equitable considerations. The Primary Parties agree that for the
purposes of this Section 8, the relative benefits to the Primary Parties and the
Selling Agent of the Reorganization as contemplated shall be deemed to be in the
same proportion that the total net proceeds from the Reorganization and the
Offering received by the Bank and the Company in connection with the
Reorganization bear to the total fees paid or to be paid to the Selling Agent
under 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. For purposes of this Section 8, each of the Selling Agent's
officers and directors and each person, if any, who controls the Selling Agent
within the meaning of the 1933 Act and the 1934 Act shall have the same rights
to contribution as the Selling Agent, and each of the Primary Parties' officers
and directors and each person, if any, who controls the Primary Parties within
the meaning of the 1933 Act and the 1934 Act shall have the same rights to
contribution as the Primary Parties. Any party entitled to contribution shall,
promptly after receipt of notice of commencement of any action, suit, claim or
proceeding against such party in respect to which a claim for contribution may
be made against another party, notify such other party, 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 8. The Primary Parties and the Selling Agent agree that it would
not be just and equitable if contribution pursuant to this Section 8 were
determined by pro rata allocation or by other method of allocation that does not
take into account the equitable considerations referred to in this Section 8.
Section 9. Conditions of the Selling Agent's Obligations. The
obligations of the Selling Agent hereunder as to the Shares to be delivered at
the Closing Date are subject to the condition that all representations and
warranties and other statements of the Primary Parties herein are, at
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<PAGE> 25
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 Primary
Parties shall have performed in all material respects all of their respective
obligations hereunder to be performed on or before such dates and to the
following conditions, unless waived in writing by the Selling Agent:
a. The Registration Statement shall have been declared effective by the
Commission not later than 5:30 p.m. on the date of this Agreement, or with the
consent of the Selling Agent at a later time and date; and at the Closing Date
no stop order suspending the effectiveness of the Registration Statement or the
consummation of the Reorganization shall have been issued under the 1933 Act or
proceedings therefor initiated or threatened by the Commission or any state
securities or Blue Sky authority, and no order or other action suspending the
effectiveness of the Prospectus or the consummation of the Reorganization shall
have been issued or proceedings therefore initiated or threatened by the OTS,
and the NASD shall not have objected to the fairness of the Selling Agent's
compensation for the services to be performed hereunder.
b. At the Closing Date, the Selling Agent shall have received the
favorable opinion, dated as of the Closing Date addressed to the Selling Agent
and for their and their counsel's benefit, of Quarles & Brady LLP as to issues
of federal and Wisconsin law set forth below. Such opinion may rely upon
certificates of officers or directors of the Primary Parties delivered pursuant
hereto or as such counsel may reasonably request. The opinion of Quarles & Brady
LLP shall be in form and substance to the effect that:
1. Prior to the Charter Conversion, the Bank was validly existing
and in good standing or active status under the laws of
Wisconsin as a mutual savings bank, and had the full power and
authority to own its properties and to conduct its business as
described in the Prospectus and to enter into this Agreement and
perform its obligations hereunder, and the activities of the
Bank as described in the Prospectus are permitted by the rules,
regulations and practices of the FDIC and the Wisconsin
Department; following the Charter Conversion, the Bank was duly
organized and validly existing under the laws of the United
States as a capital stock savings bank, and had the full power
and authority to own its properties and to conduct its business
as described in the Prospectus and to enter into this Agreement
and perform its obligations hereunder, and the activities of the
Bank as described in the Prospectus are permitted by the rules,
regulations and practices of the OTS; the issuance and sale of
the capital stock of the Bank to the Company in the
Reorganization has been duly and validly authorized by all
necessary corporate action on the part of the Company and the
Bank and, upon payment therefor in accordance with the terms of
the Plan, will be validly issued, fully paid and nonassessable,
and will be owned of record and beneficially by the Company,
free and clear of any mortgage, pledge, lien, encumbrance, claim
or restriction.
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2. Upon consummation of the Reorganization, the Company will be a
corporation duly organized and validly existing and in good
standing under the federal laws of the United States of America,
with corporate power and authority to own its properties and to
conduct its business as described in the Prospectus, and is duly
qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business requires such
qualification and in which the failure to qualify would have a
material adverse effect on the financial condition, earnings,
capital, properties or business affairs of the Primary Parties.
3. Upon consummation of the Reorganization, the MHC will have been
duly organized and will be validly existing as a federally
chartered mutual holding company, duly authorized to conduct its
business and own its properties as described in the Registration
Statement and Prospectus.
4. Each of the Primary Parties and their subsidiaries is duly
qualified as a foreign corporation to transact business and is
in good standing or active status in each jurisdiction in which
such qualification is and, following consummation of the
Reorganization, will be required, unless the failure to be so
qualified in one or more of such jurisdictions would not have a
material adverse effect on the financial condition or the
business, operations, net income or prospects of the Primary
Parties taken as a whole.
5. Each of the Bank's subsidiaries is validly existing and in good
standing or active status under the laws of its jurisdiction of
organization, and each has the corporate power and authority to
own, lease and operate its properties and to conduct its
business as described in the Registration Statement and
Prospectus; the activities of each subsidiary of the Bank as
described in the Registration Statement and Prospectus are
permitted (i) to subsidiaries of a Wisconsin chartered savings
bank by the rules, regulations, policies and practices of the
Wisconsin Department, the FDIC, and any other federal or state
authority having jurisdiction over such matters, and (ii) to
subsidiaries of a federally-chartered savings bank and savings
and loan holding company by the rules, regulations, policies and
practices of the OTS and any other federal or state authority
having jurisdiction over such matters; all of the outstanding
stock of each subsidiary of the Bank has been duly authorized
and validly issued and is fully paid and nonassessable except as
provided in Wis. Stat. ss.180.0622(2)(b); and upon consummation
of the Reorganization all such stock will be owned of record and
beneficially by the Bank, free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity.
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<PAGE> 27
6. Upon consummation of the Reorganization, the authorized equity
capital of the Company will consist of 100,000,000 shares of
common stock and 10,000,000 shares of preferred stock, and the
issued and outstanding equity capital of the Company will be
consistent with that set forth in the Registration Statement and
the Prospectus under the caption "Capitalization"; no shares of
the Company's common stock, or securities exercisable into or
exchangeable for common stock, will have been issued prior to
the Closing Date (other than shares issued to the MHC and the
Bank in connection with the formation of the Company); at the
time of the Reorganization the Shares will have been duly and
validly authorized for issuance, and when issued and delivered
by the Company pursuant to the Plan, will be duly authorized and
validly issued and fully paid and nonassessable except as
provided in Wis. Stat. ss.180.0622(2)(b); the issuance of the
Shares is not subject to any preemptive rights. Upon the
issuance of the Shares, against payment therefor in accordance
with the Prospectus, the purchasers will have full legal title
to the shares, subject to such claims as may be asserted against
the purchasers thereof by third-party claimants.
7. Each Reorganization Application has been approved by the
applicable regulatory authority pursuant to the Reorganization
Regulations and the Prospectus has been authorized for use by
the OTS, and, to such counsel's knowledge, no action has been
taken or is pending or threatened to revoke any such
authorization or approval.
8. Each Reorganization Application, as amended or supplemented, if
amended or supplemented, as filed with the applicable regulatory
authority complied as to form in all material respects with the
requirements of the Reorganization Regulations.
9. The OTS's approval of the Plan remains in full force and effect;
the Primary Parties have conducted the Reorganization in all
material respects in accordance with the requirements of the
Reorganization Regulations, federal law, all other applicable
regulations, decisions and orders and the Plan, including all
material applicable terms, conditions, requirements and
conditions precedent to the Reorganization imposed by the OTS;
no order has been issued by the OTS to suspend the Charter
Conversion, the Reorganization or the Merger and no action for
such purpose has been instituted or, to such counsel's
knowledge, threatened by the OTS; and, to such counsel's
knowledge, no person has sought to obtain review of the final
action of the OTS in approving any Reorganization Application or
the Plan.
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10. This Agreement and the Merger Agreement have been duly
authorized, executed and delivered by each of the Primary
Parties and is the legal, valid and binding agreement of the
Bank, the Company, and the MHC, subject, as to enforceability,
to bankruptcy, insolvency, reorganization, moratorium,
conservatorship, receivership and other laws of general
applicability relating to or affecting creditors' rights or the
rights of creditors of depository institutions the deposits of
which are insured by the FDIC, to general principles of equity
(whether considered in an action at law or in equity) and to the
extent that rights to indemnity and contribution thereunder may
be limited under applicable laws or under considerations of
public policy.
11. The Registration Statement is effective under the 1933 Act and
no stop order suspending effectiveness has been issued under the
1933 Act and, to such counsel's knowledge, no proceedings
therefor have been initiated or threatened by the Commission or
any state securities or Blue Sky authority.
12. All conditions imposed by the OTS in connection with its
approvals of the Reorganization Applications have been
satisfied, and no further approval, authorization, consent or
other order of any federal or state board or body is required in
connection with the execution and delivery of this Agreement,
the issuance of the Shares and the consummation of the
Reorganization.
13. At the time the Registration Statement became effective, (i) the
Registration Statement (as amended or supplemented, if so
amended or supplemented) (other than the financial statements,
stock valuation information and other financial and statistical
data included therein, as to which no opinion need be rendered),
complied as to form in all material respects with the
requirements of the 1933 Act and the 1933 Act Regulations and
(ii) the Prospectus (other than the financial statements, stock
valuation information and other financial and statistical data
included therein, as to which no opinion need be rendered)
complied as to form in all material respects with the
requirements of the Reorganization Regulations.
14. The information in the Registration Statement and Prospectus
under the captions "Restrictions on Acquisition of Bank Mutual"
and "Description of Capital Stock of Bank Mutual," to the extent
that it 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.
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<PAGE> 29
15. The terms and provisions of the Common Stock conform in all
material respects to the description thereof contained in the
Prospectus, and the form of certificate used to evidence the
Shares is in due and proper form.
16. To such counsel's knowledge, there are no legal or governmental
proceedings pending or threatened against any Primary Party or
any subsidiary which are required to be disclosed in the
Registration Statement and Prospectus other than those disclosed
therein, and all pending legal and governmental proceedings to
which any Primary Party or any subsidiary is the subject which
are not disclosed in the Registration Statement, including
ordinary routine litigation, are, considered in the aggregate,
not material.
17. To such counsel's knowledge, there are no material contracts,
indentures, mortgages, loan agreements, notes, leases or other
instruments required to be described or referred to in the
Registration Statement and Prospectus or to be filed as exhibits
thereto other than those described or referred to therein or
filed as exhibits thereto, and the description thereof or
references thereto are correct in all material respects.
18. To such counsel's knowledge, the Bank and its subsidiaries, and
the Company and the MHC have obtained all material licenses,
permits and other governmental authorizations currently required
for the conduct of their respective businesses, taken as a
whole, as described in the Registration Statement and
Prospectus; all such licenses, permits and other governmental
authorizations are in full force and effect; and the Bank and
its subsidiaries, the Company, and the MHC are in all material
respects complying therewith.
19. The Plan has been duly adopted by the required votes of the
Board of Directors of the Bank, the Company, the MHC, and the
Bank's members.
20. The Bank's Charter and bylaws prior to the Reorganization comply
in all material respects with Wisconsin law and, after the
Reorganization, will comply with federal law and regulations of
the OTS. The Bank is not in violation of its Charter or bylaws.
The execution and delivery of this Agreement, the incurrence of
the obligations herein set forth and the consummation of the
transactions contemplated herein will not result in any
violation of the provisions of the Charter or Bylaws of the
Company.
21. The charters and by-laws of the Company and the MHC, and
following the Charter Conversion, the Bank, comply in all
material respects with the
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<PAGE> 30
HOLA and the rules and regulations of the OTS. None of the Bank,
the Company or the MHC is in violation of its charter or
by-laws; the execution and delivery of this Agreement, the
incurrence of the obligations herein set forth and the
consummation of the transactions contemplated herein will not
result in any violation of the provisions of the Charter or
Bylaws of the Bank, the Company or the MHC.
22. To such counsel's knowledge, none of the Bank's subsidiaries are
in violation of their charter or by-laws; to such counsel's
knowledge, the execution and delivery of this Agreement, the
incurrence of the obligations herein set forth and the
consummation of the transactions contemplated herein will not
result in any violation of the provisions of the charter or
by-laws of such subsidiary.
23. To such counsel's knowledge, none of the Primary Parties is in
violation of any directive from the Wisconsin Department, the
OTS or the FDIC to make any material change in the method of
conducting its business, and the Primary Parties have conducted
and are conducting their respective businesses so as to comply
in all material respects with all applicable statutes and
regulations (including, without limitation, regulations,
decisions, directives and orders of the Wisconsin Department,
the FDIC, and the OTS).
24. Neither the Bank, the Company nor the MHC is required to be
registered as an investment company under the Investment Company
Act of 1940.
25. The Primary Parties have the power and authority to consummate
the transactions contemplated by the Merger Agreement.
26. To such counsel's knowledge, all corporate acts and other
proceedings required to be taken by or on the part of the
Primary Parties to consummate the Merger have been properly
taken; neither the execution and delivery of the Merger
Agreement, nor the consummation of the transactions contemplated
thereby, with and without the giving of notice or the lapse of
time, or both, will violate any provision of the Articles,
Charter or Bylaws of any Primary Party.
27. Except as disclosed in such opinion, to such counsel's
knowledge, there are no actions, suits, proceedings or
investigations (public or private) of any nature pending or
threatened that challenge the validity or propriety of the
transactions contemplated by the Merger Agreement or which seek
or threaten to restrain, enjoin or prohibit or to obtain
substantial damages in connection with the consummation of such
transactions.
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28. All regulatory and governmental approvals and consents which are
necessary to be obtained by the Primary Parties and their
subsidiaries to permit the execution, delivery and performance
of the Merger Agreement have been obtained.
29. All conditions precedent to consummation of the Merger have been
satisfied or waived, including but not limited to those
referenced in the Merger Agreement, and all statutory waiting
periods with respect to all regulatory and governmental
approvals of the Merger have expired.
Counsel may expressly exclude any opinions as to choice of law and
anti-trust matters and may add other qualifications and explanations of the
basis of its opinions as are consistent with the Legal Opinion Accord prepared
by the Section of Business Law of the American Bar Association.
c. At the Closing Date, the Selling Agent shall have received the
favorable opinion, dated as of the Closing Date addressed to the Selling Agent
and for their and their counsel's benefit, of Schiff Hardin & Waite, counsel to
First Northern Capital and First Northern Savings, concerning the following
matters:
1. First Northern Capital is a corporation duly organized, validly
existing and in active status under the laws of the State of
Wisconsin, and First Northern Savings is a federally chartered
savings bank duly organized in stock form, validly existing and
in good standing under the laws of the United States.
2. First Northern Capital and First Northern Savings have the
corporate power and authority to carry on their respective
businesses as such businesses are described in the Prospectus
and, and First Northern Capital has the corporate power and
authority to consummate the Merger.
3. The Merger Agreement has been duly authorized and approved by
the Boards of Directors of First Northern Capital and First
Northern Savings, the Merger Agreement and the Merger have been
approved by the requisite vote of First Northern Capital's
shareholders, the Merger Agreement has been duly executed and
delivered by First Northern Capital and First Northern Savings
and the Merger Agreement constitutes the valid and binding
obligation of First Northern Capital and First Northern Savings,
enforceable in accordance with its terms subject to applicable
bankruptcy, insolvency and similar laws affecting creditors'
rights and remedies generally and subject, as to enforceability,
to general principles of equity, whether applied in a court of
law or a court of equity. To such counsel's actual knowledge, no
other corporate acts or proceedings, other
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than as specifically contemplated by the Merger Agreement, are
required to be taken by First Northern Capital or First Northern
Savings in order to consummate the Merger.
4. To such counsel's actual knowledge, all federal and state
banking agency approvals, consents, authorizations or
notifications required to be received or made by First Northern
Capital or First Northern Savings prior to consummation of the
Merger have been properly obtained or made; neither the
execution and delivery of the Merger Agreement nor the
consummation of the Merger, with or without the giving of notice
or the lapse of time, or both, will (i) violate any provision of
the Articles of Incorporation, Charter or Bylaws of First
Northern Capital or First Northern Savings; or (ii) to the
actual knowledge of such counsel, violate any federal or state
banking statute, rule or regulation applicable to First Northern
Capital and First Northern Savings, which would have a material
adverse effect on the financial condition, assets, liabilities,
or business of First Northern Capital and First Northern
Savings; to the actual knowledge of such counsel, no consent,
approval, authorization, order, registration or qualification of
or with any court, federal or state banking regulatory authority
or other federal or state banking governmental body other than
as specifically contemplated by the Merger Agreement is required
for the consummation by First Northern Capital and First
Northern Savings of the Merger.
5. To such counsel's actual knowledge, there are no actions, suits,
proceedings, or investigations of any nature pending or
threatened that challenge the validity or legality of the Merger
or which seek or threaten to restrain, enjoin or prohibit (or
obtain substantial damages in connection with) the consummation
of the Merger.
6. To such counsel's actual knowledge, there is no litigation,
appraisal or other judicial or administrative proceeding or
governmental investigation pending or threatened against or
relating to the business or property of First Northern Capital
or First Northern Savings which would have a materially adverse
effect on the consolidated financial condition of First Northern
Capital, or any legal impediment to the continued operation of
the properties and business of First Northern Capital and First
Northern Savings in the ordinary course after the consummation
of the Merger.
Counsel may expressly exclude any opinions as to choice of law and
anti-trust matters and may add other qualifications and explanations of the
basis of its opinions as are
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consistent with the Legal Opinion Accord prepared by the Section of Business Law
of the American Bar Association.
d. At the Closing Date, the Selling Agent shall have received a letter
of Quarles & Brady LLP, addressed to the Selling Agent, dated the Closing Date,
in form and substance to the effect that during the preparation of the
Reorganization Applications, the Registration Statement and the Prospectus, such
counsel participated in conferences with management of and the independent
certified public accountants for the Primary Parties. Based upon such
conferences and such review of corporate records of the Primary Parties as such
counsel conducted in connection with the preparation of the Registration
Statement and Reorganization Applications, nothing has come to their attention
that would lead them to believe that any Reorganization Application, the
Registration Statement, the Prospectus or any amendment or supplement thereto
(other than financial statements, stock valuation information and other
financial and statistical data included therein, as to which such counsel need
express no view), 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.
e. At the Closing Date, the Selling Agent shall have received the
favorable opinion, dated as of the Closing Date, of Luse Lehman Gorman Pomerenk
& Schick, counsel for the Selling Agent, with respect to such matters as the
Selling Agent may reasonably require. Such opinion may rely upon certificates of
officers and directors of the Primary Parties delivered pursuant hereto or as
such counsel shall reasonably request.
f. At the Closing Date, the Selling Agent shall receive a certificate
of the Chief Executive Officer and the Chief Financial Officer of each of the
Primary Parties, dated the Closing Date, to the effect that: (i) since the
respective dates as of which information is given in the Registration Statement
and the Prospectus, there has been no material adverse change in the financial
condition or in the net income, capital, properties, affairs or prospects of the
Primary Parties taken as a whole, whether or not arising in the ordinary course
of business; (ii) the representations and warranties in Section 4 of this
Agreement are true and correct with the same force and effect as though
expressly made at and as of the Closing Date; (iii) the Primary Parties have
complied 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 with all
obligations to be satisfied by them after the Reorganization; (iv) no stop order
suspending the effectiveness of the Registration Statement has been issued and
no proceedings for that purpose have been initiated or threatened by the
Commission or any state securities or Blue Sky authority; and (v) no order
suspending the Offering, the Reorganization or the effectiveness of the
Prospectus has been issued and no proceedings for that purpose have been issued
and no proceedings for that purpose have been initiated or threatened by the
OTS.
g. Prior to and at the Closing Date: (i) there shall have been no
material adverse change in the financial condition or in the net income, affairs
or prospects of the Primary Parties
33
<PAGE> 34
taken as a whole since the respective dates as of which information is given in
the Prospectus, except as referred to therein; (ii) there shall have been no
material transaction entered into by any Primary Party since the latest dates as
of which the financial condition of the Primary Parties is set forth in the
Prospectus, other than transactions referred to or contemplated therein; (iii)
no Primary Party shall have received from the OTS or any other government agency
any direction (oral or written) to make any material change in the method of
conducting its business with which it has not complied (which direction, if any,
shall have been disclosed to the Selling Agent) or which would materially and
adversely affect its business, operations, financial condition or net income;
(iv) no Primary Party shall have been in default (nor shall an event have
occurred which, with notice or lapse of time or both, would constitute a
default) under any provision of any agreement or instrument relating to any
outstanding indebtedness; (v) no action, suit or proceeding, at law or in equity
or before or by any federal or state commission, board or other administrative
agency, shall be pending or, to the knowledge of any Primary Party, threatened
against any Primary Party or subsidiary or affecting any of their respective
properties wherein an unfavorable decision, ruling or finding would materially
and adversely affect the business, operations, financial condition or net income
of the Primary Parties taken as a whole; and (vi) the Shares shall have been
qualified or registered for offering and sale, or exempted from registration,
under the securities or Blue Sky laws of the jurisdictions set forth in the Blue
Sky Survey prepared by Luse Lehman Gorman Pomerenk & Schick, a Professional
Corporation.
h. Concurrently with the execution of this Agreement, the Selling Agent
and the Primary Parties shall receive a letter from Ernst & Young dated the date
hereof and addressed to the Selling Agent: (i) confirming that Ernst & Young is
a firm of independent certified public accountants with respect to the Bank
within the meaning of the 1933 Act and the 1933 Act Regulations and the Code of
Ethics of the American Institute of Certified Public Accountants and no
information concerning its relationship with or interests in any Primary Party
is required to be disclosed in the Prospectus, and stating in effect that in its
opinion the consolidated financial statements of the Bank included in the
Prospectus and covered by its opinion included therein comply as to form in all
material respects with the applicable accounting requirements of the 1933 Act,
the 1934 Act, the 1933 Act Regulations, the 1934 Act Regulations and generally
accepted accounting principles; (ii) stating in effect that, on the basis of
certain procedures (but not an examination in accordance with generally accepted
auditing standards) consisting of a reading of the latest available unaudited
interim consolidated financial statements of the Bank prepared by the Bank, a
reading of the minutes of the meetings of the Board of Directors and members of
the Bank and consultations with officers of the Bank responsible for financial
and accounting matters, nothing has come to its attention which causes it to
believe that: (A) the unaudited consolidated financial statements of the Bank
included in the Prospectus do not comply as to form in all material respects
with applicable accounting requirements; (B) such unaudited consolidated
financial statements are not in conformity with generally accepted accounting
principles applied on a basis substantially consistent with that of the audited
consolidated financial statements included in the Prospectus; (C) during the
period from the date of the latest consolidated financial statements included in
the Prospectus to a specified date not more than five business days prior to the
date hereof, there was any material increase in
34
<PAGE> 35
borrowings by the Bank; or (D) there was any material decrease in retained
earnings of the Bank at the date of such letter as compared with amounts shown
in the latest consolidated balance sheet included in the Prospectus or any
material decrease in net income or net interest income of the Bank for the
number of full months commencing immediately after the period covered by the
latest consolidated income statement included in the Prospectus and ended on the
latest month end of the most recently available financial report prepared by the
Bank as compared to the corresponding period in the preceding year; and (iii)
stating that, in addition to the examination referred to in its opinion included
in the Prospectus and the performance of the procedures referred to in clause
(ii) of this paragraph (e), it has compared with the general accounting records
of the Bank's accounting system and other data prepared by the Bank directly
from such accounting records, to the extent specified in such letter, such
amounts and/or percentages set forth in the Prospectus as the Selling Agent may
reasonably request; and they have found such amounts and percentages to be in
agreement therewith (subject to rounding).
i. Concurrently with the execution of this Agreement, the Selling
Agent, and the Primary Parties shall receive a letter from Wipfli dated the date
hereof and addressed to the Selling Agent: (i) confirming that Wipfli is a firm
of independent certified public accountants with respect to First Northern
Capital and First Northern Savings within the meaning of the 1933 Act and the
1933 Act Regulations and the Code of Ethics of the American Institute of
Certified Public Accountants and no information concerning its relationship with
or interests in First Northern Savings or First Northern Capital is required to
be disclosed in the Prospectus, and stating in effect that in its opinion the
consolidated financial statements of First Northern Capital included in the
Prospectus and covered by its opinion included therein comply as to form in all
material respects with the applicable accounting requirements of the 1933 Act,
the 1934 Act, the 1933 Act Regulations, the 1934 Act Regulations and generally
accepted accounting principles; (ii) stating in effect that, on the basis of
certain agreed upon procedures (but not an examination in accordance with
generally accepted auditing standards) consisting of a reading of the latest
available unaudited interim consolidated financial statements of First Northern
Capital prepared by First Northern Capital, a reading of the minutes of the
meetings of the Board of Directors and stockholders of First Northern Capital
and consultations with officers of First Northern Capital responsible for
financial and accounting matters, nothing has come to its attention which causes
it to believe that: (A) the unaudited consolidated financial statements of First
Northern Capital included in the Prospectus do not comply as to form in all
material respects with applicable accounting requirements; (B) such unaudited
consolidated financial statements are not in conformity with generally accepted
accounting principles applied on a basis substantially consistent with that of
the audited consolidated financial statements included in the Prospectus; (C)
during the period from the date of the latest consolidated financial statements
included in the Prospectus to a specified date not more than five business days
prior to the date hereof, there was any material increase in borrowings by First
Northern Capital or First Northern Savings; or (D) there was any material
decrease in stockholders' equity of First Northern Capital at the date of such
letter as compared with amounts shown in the latest consolidated balance sheet
included in the Prospectus or any material decrease in net income or net
interest income of First Northern Capital for the number of full months
commencing immediately after the period covered by the
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<PAGE> 36
latest consolidated income statement included in the Prospectus and ended on the
latest month end prior to the date of the Prospectus as compared to the
corresponding period in the preceding year; and (iii) stating that, in addition
to the examination referred to in its opinion included in the Prospectus and the
performance of the procedures referred to in clause (ii) of this paragraph (e),
it has compared with the general accounting records of First Northern Capital
and/or First Northern Savings, as applicable, accounting system and other data
prepared by First Northern Capital and/or First Northern Savings, as applicable,
directly from such accounting records, to the extent specified in such letter,
such amounts and/or percentages set forth in the Prospectus as the Selling Agent
may reasonably request; and they have found such amounts and percentages to be
in agreement therewith (subject to rounding).
j. At the Closing Date, the Selling Agent shall receive letters from
each of Ernst & Young and Wipfli, dated the Closing Date, addressed to the
Selling Agent, confirming the statements made by them in the letter delivered by
it pursuant to paragraph (e) of this Section 9, the "specified date" referred to
in clause (ii) (C) thereof to be a date specified in such letter, which shall
not be more than five business days prior to the Closing Date.
k. At the Closing Date, the Selling Agent shall have received a letter
from RP Financial, dated as of the Closing Date, confirming the Independent
Valuation.
l. At the Closing Date, counsel to the Selling 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 accuracy or
completeness of any of the representations and warranties, or the fulfillment of
any of the conditions, herein contained; and all proceedings taken by the
Primary Parties in connection with the Reorganization and the sale of the Shares
as herein contemplated shall be satisfactory in form and substance to the
Selling Agent and counsel to the Selling Agent.
m. The Primary Parties shall not have sustained since the date of the
latest audited consolidated financial statements included in the Registration
Statement and Prospectus any material loss or interference with its business
from fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action, order or
decree, other than as set forth or contemplated in the Registration Statement,
which is in the judgment of the Selling Agent sufficiently material and adverse
as to make 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
Prospectus.
n. 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 American Stock Exchange or in the
over-the-counter market, or quotations halted generally on the Nasdaq Stock
Market, or minimum or maximum prices for trading fixed, or maximum ranges for
prices for securities 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 operation of
36
<PAGE> 37
commercial banks, federal or state savings and loan associations or savings
banks in Wisconsin or a general moratorium on the withdrawal of deposits from
commercial banks, federal or state savings and loan associations or savings
banks in Wisconsin declared by either federal or Wisconsin authorities; (iii)
the engagement by the United States in hostilities which have resulted in the
declaration, on or after the date hereof, a national emergency or war; or (iv) a
material decline in the price of equity or debt securities, if the effect of
such a decline, in the judgment or the Selling Agent, 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 Prospectus.
o. If any of the conditions specified in this Section 9 shall not have
been fulfilled when and as required by this Agreement, this Agreement and all of
the Selling Agent's obligations hereunder may be canceled by the Selling Agent
by notifying 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 1, 6, 7 and 8 hereof. Notwithstanding the above, if this Agreement is
canceled pursuant to this paragraph, the Primary Parties jointly and severally
agree to reimburse the Selling Agent for all of the Selling Agent's
out-of-pocket expenses reasonably incurred by the Selling Agent, including any
legal fees (and out-of- pocket expenses) to be paid to the Selling Agent's
counsel, subject to the limits expressed in Section 6 hereof, and an advisory
and administrative services fee of $100,000, the Management Fee referred to in
Section 1.
p. 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, none of First Northern Capital, First
Northern Savings or any subsidiary has or 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 First
Northern Capital and First Northern Savings taken as a whole. For purposes of
this paragraph, obligations for borrowed money do not include deposits.
SECTION 10. Termination.
a. In the event the Company fails to sell the minimum number of Shares
in the Offering as set forth in the Prospectus and does not modify the Offering
within the period specified in, and in accordance with the provisions of, the
Plan or as required by the Reorganization Regulations, 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 Primary Parties as set forth in Sections 1, 6, 7 and 8 hereof.
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<PAGE> 38
b. This Agreement may be terminated by the Selling Agent, with respect
to the Selling Agent's obligations hereunder, by notifying the Company at any
time or prior to the Closing Date, if any of the conditions specified in Section
9 hereof shall not have been fulfilled when and as required by this Agreement or
if the Reorganization has not been completed by March 31, 2001.
SECTION 11. Survival. The respective indemnities, agreements,
representations, warranties and other statements of the Primary Parties and the
Selling Agent, as set forth in this Agreement, shall remain in full force and
effect, regardless of any investigation (or any statement as to the results
thereof) made by or on behalf of the Selling Agent or any of the Selling Agent's
officers or directors or any person controlling the Selling Agent, or the
Primary Parties, or any of their respective officers or directors or any person
controlling the Primary Parties, and shall survive termination of this Agreement
and receipt or delivery of any payment for the Shares.
SECTION 12. Miscellaneous. Notices hereunder, except as otherwise
provided herein, shall be given in writing or by telegraph, addressed (a) to
Ryan, Beck at 401 City Avenue, Suite 902, Bala Cynwyd, Pennsylvania 19004
(Attention: Michelle Darcey, First Vice President), with a copy to Luse Lehman
Gorman Pomerenk & Schick, 5335 Wisconsin Avenue, NW., Washington, D.C. 20015
(Attention: Robert B. Pomerenk, Esq.) and (b) to the Primary Parties at the
Bank's principal office (Attention: Michael T. Crowley, Jr., President and Chief
Executive Officer), with a copy to Quarles & Brady LLP 411 E. Wisconsin Avenue,
Milwaukee, Wisconsin 53202-4492 (Attention: James D. Friedman, Esq.).
This Agreement is made solely for the benefit of and will be binding
upon the parties hereto and their respective successors and the directors,
officers and controlling persons referred to in Section 7 hereof, and no other
person will have any right or obligation hereunder. The term "successors" shall
not include any purchaser of any of the Shares merely by reason of such
purchase.
This Agreement shall be governed by and construed in accordance with
the laws of the State of Wisconsin.
Time shall be of the essence of this Agreement.
This Agreement may be signed in various counterparts which together
will constitute one agreement.
This Agreement shall become effective immediately.
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<PAGE> 39
If the foregoing correctly sets forth the arrangement among the
Company, the Bank and the Selling Agent, please indicate acceptance thereof in
the space provided below for that purpose, whereupon this letter shall
constitute a binding agreement.
<TABLE>
<CAPTION>
<S><C>
MUTUAL SAVINGS BANK BANK MUTUAL CORPORATION
By: /s/ By: /s/
--------------------------------------- ----------------------------------------
Michael T. Crowley, Jr., President and Michael T. Crowley, Jr., Chairman and
Chief Executive Officer Chief Executive Officer
MUTUAL SAVINGS BANCORP, MHC
By: /s/
---------------------------------------
Michael T. Crowley, Jr., President and
Chief Executive Officer
RYAN, BECK & CO.
By: /s/
---------------------------------------
Michelle Darcey, First Vice President
</TABLE>
39
<PAGE> 40
EXHIBIT A
Engagement Letter
and Amendment
<PAGE> 41
EXHIBIT B
Selected Dealers' Agreement
<PAGE> 42
MASTER SELECTED DEALER AGREEMENT
September ___, 2000
Ryan Beck & Co., Inc.
220 South Orange Avenue
Livingston, New Jersey 07039
Gentlemen:
(1) General. We understand that Ryan Beck & Co., Inc. ("Ryan Beck") is
entering into this Agreement with us and other firms who may be offered the
right to purchase as principal a portion of securities being distributed to the
public. The terms and conditions of this Agreement shall be applicable to any
public offering of securities ("Securities") pursuant to a registration
statement filed under the Securities Act of 1933 (the "Securities Act") wherein
Ryan Beck (acting for its own account or for the account of any underwriting or
similar group or syndicate) is responsible for managing or otherwise
implementing the sale of the Securities to selected dealers ("Selected Dealers")
and has informed us that such terms and conditions shall be applicable. Any such
offering of Securities to us as a Selected Dealer is hereinafter called an
"Offering." In the case of any Offering in which you are acting for the account
of any underwriting or similar group or syndicate ("Underwriters"), the terms
and conditions of this Agreement shall be for the benefit of, and binding upon,
such Underwriters, including, in the case of any Offering in which you are
acting with others as representatives of Underwriters, such other
representatives. The term "preliminary prospectus" means any preliminary
prospectus relating to an Offering of Securities or any preliminary prospectus
supplement together with a prospectus relating to an Offering of Securities; the
term "Prospectus" means the prospectus, together with the final prospectus
supplement, if any, relating to an Offering of Securities, filed pursuant to
Rule 424(b) or Rule 424(c) under the Securities Act or any successor or similar
rules.
(2) Conditions of Offering, Acceptance and Purchase. Any Offering will
be subject to delivery of the Securities and their acceptance by you and any
other Underwriters, may be subject to the approval of all legal matters by
counsel and the satisfaction of other conditions, and may be made on the basis
of reservation of Securities or an allotment against subscription. You will
advise us by telegram, telex, facsimile, e-mail, or other form of written
communication ("Written Communication") of the particular method and
supplementary terms and conditions (including, without limitation, the
information as to prices and offering date referred to in Section 3(b)) of any
Offering in which we are invited to participate. To the extent such
supplementary terms and conditions are inconsistent with any provision herein,
such terms and conditions shall supersede any such provision. Unless otherwise
indicated in any such Written
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<PAGE> 43
Communication, acceptances, and other communications by us with respect to any
Offering should be sent to Ryan Beck. You reserve the right to reject any
acceptance in whole or in part. Payment for Securities purchased by us is to be
made at such office as you may designate, at the public offering price, or, if
you shall so advise us, at such price less the concession to dealers or at the
price set forth or indicated in a Written Communication, on such date as you
shall determine, on one day's prior notice to us, by wire transfer to a Ryan
Beck account, against delivery of certificates or other forms evidencing such
Securities. If payment is made for Securities purchased by us at the public
offering price, the concession to which we shall be entitled will be paid to us
upon termination of the provisions of Section 3(b) with respect to such
Securities.
Unless we promptly give you written instructions otherwise, if
transactions in the Securities may be settled through the facilities of The
Depository Trust Company, delivery of Securities purchased by us will be made
through such facilities if we are a member, or if we are not a member,
settlement may be made through our ordinary correspondent who is a member.
(3) Representations, Warranties and Agreements.
(a) Prospectuses. You shall provide us with such number of
copies of each preliminary prospectus, the Prospectus and any supplement thereto
relating to each Offering as we may reasonably request for the purposes
contemplated by the Securities Act and the Securities Exchange Act of 1934
(Exchange Act) and the applicable Rules and regulations of the Securities and
Exchange Commission thereunder. We represent that we are familiar with Rule
15c2-8 under the Exchange Act relating to the distribution of preliminary and
final prospectuses and agree that we will comply therewith. We agree to keep an
accurate record of our distribution (including dates, number of copies, and
persons to whom sent) of copies of the Prospectus or any preliminary prospectus
(or any amendment or supplement to any thereof), and promptly upon request by
you, to bring all subsequent changes to the attention of anyone to whom such
material shall have been furnished. We agree to furnish to persons who receive a
confirmation of sale a copy of the Prospectus filed pursuant to Rule 424(b) or
Rule 424(c) under the Securities Act. We agree that in purchasing Securities in
an Offering we will rely upon no statements whatsoever, written or oral, other
than the statements in the Prospectus delivered to us by you. We will not be
authorized by the issuer or other seller of Securities offered pursuant to a
Prospectus or by any Underwriters to give any information or to make any
representation not contained in the Prospectus in connection with the sale of
such Securities.
(b) Offer and Sale to the Public. With respect to any Offering
of Securities, you will inform us by a Written Communication of the public
offering price, the selling concession, the reallowance (if any) to dealers, and
the time when we may commence selling Securities to the public. After such
public offering has commenced, you may change the public offering price, the
selling concession, and the reallowance to dealers. With respect to each
Offering of Securities, until the provisions of this Section 3(b) shall be
terminated pursuant to Section 4, we agree to offer Securities to the public
only at the public offering price not in excess
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<PAGE> 44
of such reallowance may be allowed as consideration for services rendered in
distribution to dealers who are actually engaged in the investment banking or
securities business, who execute the written agreement prescribed in the
investment banking or securities business, who execute the written agreement
prescribed by Rule 2740 of the Rules of Conduct of the National Association of
Securities Dealers, inc. (the "NASD") and who are either members in good
standing of the NASD or foreign brokers or dealers not eligible for membership
in the NASD who represent to us that they will promptly reoffer such Securities
at the public offering price and will abide by the conditions with respect to
foreign brokers and dealers set forth in Section 3(e).
(c) Stabilization and Overallotment. You may, with respect to
any Offering, be authorized to over-allot in arranging sales to Selected
Dealers, to purchase and sell Securities, any other securities of the issuer of
the Securities of the same class and series and any other securities of such
issuer that may designate for long or short account, and to stabilize or
maintain the market price of the Securities. We agree to advise you from time to
time upon request, prior to the termination of the provisions of Section 3(b)
with respect to any Offering, of the amount of Securities purchased by us
hereunder remaining unsold and we will, upon your request, sell to you, for the
accounts of the Underwriters, such amount of Securities as you may designate, at
the public offering price thereof less an amount to be determined by you not in
excess of the concession to dealers. In the event that prior to the later of (i)
the termination of the provisions of Section 3(b) with respect to any Offering,
or (ii) the covering by you of any short position created by you in connection
with such Offering for your account or the account of one or more Underwriters,
you purchase or contract to purchase for the account of any of the Underwriters,
in the open market or otherwise, any Securities theretofore delivered to us, you
reserve the right to withhold the above-mentioned concession to dealers on such
Securities if sold to us at the public offering price, or if such concession has
been allowed to us through our purchase at a net price, we agree to repay such
concession upon your demand, plus in each case any taxes on redelivery,
commissions, accrued interest, and dividends paid in connection with such
purchase or contract to purchase.
(d) Open Market Transactions. We agree to abide by Regulation
M under the Exchange Act and we agree not to bid for, purchase, attempt to
purchase, or sell, directly or indirectly, any Securities, any other Reference
Securities (as defined in Regulation M) of the issuer, or any other securities
of such issuer as you may designate, except as brokers pursuant to unsolicited
orders and as otherwise provided in this Agreement. If the Securities are common
stock or securities convertible into common stock, we agree not to effect, or
attempt to induce others to effect, directly or indirectly, any transactions in
or relating to any stock of such issuer, except to the extent permitted by Rule
101 of Regulation M under the Exchange Act.
(e) NASD. We represent that we are actually engaged in the
investment banking or securities business and we are either a member in good
standing of the NASD, or, if not such a member, a foreign dealer not eligible
for membership. If we are such a member we agree that in making sales of the
Securities we will comply with all applicable Rules of the
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<PAGE> 45
NASD, including, without limitation, the NASD's Interpretation with Respect to
Free-Riding and Withholding and Rule 274 of the Conduct Rules. If we are such a
foreign dealer, we agree not to offer or sell any Securities in the United
States of America we agree to comply as though we were a member with such
Interpretation and Rule 2730, 2740 and 2750 of the Conduct Rules of the NASD and
to comply with Rule 2420 of the Conduct Rules of the NASD as it applies to a
nonmember broker or dealer in a foreign country.
(f) Relationship among Underwriters and Selected Dealers. You
may buy Securities from or sell Securities to any Underwriter or Selected Dealer
and, with your consent, the Underwriters (if any) and the Selected Dealers may
purchase Securities from and sell Securities to each other at the public
offering price less all or any part of the concession. We are not authorized to
act as agent for you or any Underwriter or the issuer or other seller of any
Securities in offering Securities to the public or otherwise. Nothing contained
herein or in any Written Communication from you shall constitute the Selected
Dealers partners with you or any Underwriter or with one another. Neither you
nor any Underwriter shall be under any obligation to us except for obligations
assumed hereby or in any Written Communication from you in connection with any
Offering. In connection with any Offering, we agree to pay our proportionate
share of any claim, demand, or liability asserted against us, and the other
Selected Dealers or any of them, or against you or the Underwriters, if any,
based on any claim that such separate entity, including in each case our
proportionate share of any expense incurred in defending against any such claim,
demand, or liability.
(g) Blue Sky Laws. Upon application to you, you will inform us
as to the jurisdictions in which you believe the Securities have been qualified
for sale or are exempt under the respective securities or "blue sky" laws of
such jurisdictions. We understand and agree that compliance with the securities
or "blue sky" laws in each jurisdiction in which we shall offer or sell any of
the Securities shall be our sole responsibility and that you assume no
responsibility or obligations as to the eligibility of the Securities for sale
or our right to sell the Securities in any jurisdiction.
(h) Compliance with Law. We agree that in selling Securities
pursuant to any Offering (which agreement shall also be for the benefit of the
issuer or other seller of such Securities), we will comply with the applicable
provisions of the Securities Act and the Exchange Act, the applicable Rules and
regulations of the Securities and Exchange Commission thereunder, the applicable
Rules and regulations of the NASD, and the applicable Rules and regulations of
any securities exchange having jurisdiction over the Offering. You shall have
full authority to take such action as you may deem advisable in respect of all
matters pertaining to any Offering. Neither you nor any Underwriter shall be
under any liability to us, except for lack of good faith and for obligations
expressly assumed by you in this Agreement; provided, however, that nothing in
this sentence shall be deemed to relieve you from any liability imposed by the
Securities Act.
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<PAGE> 46
(4) Termination; Supplements and Amendments. This Agreement may be
terminated by either party hereto upon five business days' written notice to the
other party; provided that with respect to any Offering for which a Written
Communication was sent and accepted prior to such notice, this Agreement as it
applies to such Offering shall remain in full force and effect and shall
terminate with respect to such Offering in accordance with the last sentence of
this Section. This Agreement may be supplemented or amended by you by written
notice thereof to us, and any such supplement or amendment to this Agreement
shall be effective with respect to any Offering to which this Agreement applies
after the date of such supplement or amendment. Each reference to "this
Agreement" herein shall, as appropriate, be to this Agreement as so amended and
supplemented. The terms and conditions set forth in Sections 3(b) and (d) with
regard to any Offering will terminate at the close of business on the thirtieth
day after the date of the initial public offering of the Securities to which
such Offering relates, but such terms and conditions, upon notice to us, may be
terminated by you at any time.
(5) Successors and Assigns. This Agreement shall be binding on, and
inure to the benefit of, the parties hereto and other persons specified or
indicated in Section 1, and the respective successors and assigns of each of
them.
(6) Governing Law. This Agreement and the terms and conditions set
forth herein with respect to any Offering together with such supplementary terms
and conditions with respect to such Offering as may be contained in any Written
Communication from you to us in connection therewith shall be governed by, and
construed in accordance with, the laws of the State of New York.
By signing this Agreement we confirm that our subscription to, or our
acceptance of any reservation of, any Securities pursuant to an Offering shall
constitute (i) acceptance of and agreement to the terms and conditions of this
Agreement (as supplemented and amended pursuant to Section 4) together with and
subject to any supplementary terms and conditions contained in any Written
Communication from you in connection with such Offering, all of which shall
constitute a binding agreement between us and you, individually, or as
representative of any Underwriters, (ii) in confirmation that our
representations and warranties set forth in Section 3 are true and correct at
that time and (iii) confirmation that our agreements set forth in Sections 2 and
3 have been and will be fully performed by us to the extent and at the times
required thereby.
Very truly yours,
---------------------------------------
(Name of Firm)
By:
------------------------------------
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<PAGE> 47
Confirmed, as of the date first above written.
RYAN, BECK & CO., INC.
By:
--------------------------------------
-------------------------
-------------------------
B-6
