Exhibit 10.1

 

[LETTERHEAD OF INVESTOR]

 

July __, 2013

 

 

First Federal Bancshares of Arkansas, Inc.

1401 Hwy. 62/65 N.

P O Box 550
Harrison, AR 72602

Attn: John Adams, General Counsel

 

Dear Mr. Adams:

 

This letter agreement sets forth the commitment of the undersigned investor (the
“Investor”), subject to the terms and conditions contained herein, to purchase
certain securities of First Federal Bancshares of Arkansas, Inc., an Arkansas
corporation (“First Federal”).

 

It is currently contemplated that, pursuant to an Agreement and Plan of Merger
(as amended, restated, supplemented or otherwise modified from time to time, the
“Merger Agreement”) to be entered into between First Federal and First National
Security Company, an Arkansas corporation (“First National”), First National
will merge (the “Merger”), with and into First Federal with First Federal
emerging as the surviving corporation. In the Merger, shareholders of First
National will receive $74 million in cash and approximately 6.2 million shares
of First Federal stock. First Federal intends to raise approximately $20,000,000
of capital from loans or through the sale of First Federal common stock (the
“Common Stock”) to fund a portion of the cash piece of the Merger Consideration.
Capitalized terms used but not defined herein shall have the respective meanings
ascribed to them in the Merger Agreement.

 

1.        Commitment.    The Investor hereby commits, subject to the terms and
conditions set forth herein, simultaneous with or prior to the Closing, to
purchase, or cause the purchase of, 506,329 shares of Common Stock in an
aggregate amount of $4,000,000 (the “Commitment”) which represents a per share
price of $7.90 - the closing price for the Common Stock as reported by Nasdaq on
the last business day prior to signing the Merger Agreement. The terms of the
Common Stock purchase are set forth on Schedule 1 hereto. The proceeds from the
sale of the Common Stock to the Investor shall be applied to the payment of the
Merger Consideration or expenses incurred in connection with the Merger. First
Federal may, in its sole discretion, reduce the amount of the Commitment or
decline to sell any Common Stock to the Investor.

 

2.        Warrants. In consideration for the Investor entering into this letter
agreement and providing the Commitment, First Federal agrees to immediately
issue to the Investor warrants to purchase common stock of First Federal, in the
number and on the terms specified on Schedule 1 hereto. The warrants shall not
be diminished, redeemed, terminated or otherwise affected in the event First
Federal reduces the amount of the Commitment or declines to sell any Common
Stock to the Investor as contemplated by paragraph 1.

 

3.     Conditions.    The Investor’s obligation to satisfy the Commitment and
purchase the Common Stock shall be subject to the following conditions: (a) the
Merger Agreement shall have been executed and delivered by the parties thereto
and shall not have been terminated, (b) the conditions to First Federal’s
obligations to consummate the transactions contemplated by the Merger Agreement
shall have been satisfied or waived by First Federal, and (c) the financing
transactions contemplated by commitment letters identical to this letter
provided by other investors shall be closed concurrently with the funding of the
Commitment.

 

 
 

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4.        No Modification; Entire Agreement; Assignment.    This letter
agreement may not be amended or otherwise modified without the prior written
consent of First Federal and the Investor. This letter agreement constitutes the
entire agreement between the parties with regard to the subject matter hereof
and supersedes all prior agreements, representations, warranties, understandings
and statements, written or oral, between the Investor or any of its affiliates,
on the one hand, and First Federal and First National or any of their
affiliates, on the other hand. Neither party may transfer or assign any of their
respective rights or obligations hereunder without the written consent of the
other party (which shall not be unreasonably withheld). Any transfer or
assignment in violation of the preceding sentence shall be null and void.

 

5.        Governing Law.    This letter agreement shall be governed by the laws
of the State of Arkansas, without giving effect to any conflicts of law rules
that would direct application of the law of any other jurisdiction.

 

6.        Counterparts.    This letter agreement may be executed via e-mail with
.pdf attachment, electronic or facsimile transmission, through the use of
separate signature pages or in any number of counterparts, and each such
counterpart shall, for all purposes, constitute one agreement binding on all
parties, notwithstanding that all parties are not signatories to the same
counterpart.

 

7.        No Third Party Beneficiaries.    This letter agreement shall inure to
the benefit of and be binding upon the Investor and First Federal. Nothing in
this letter agreement, express or implied, is intended to confer upon any Person
other than the Investor and First Federal any (a) rights or remedies under, or
by reason of, this letter agreement or (b) any rights to enforce the Commitment
or any provisions of this letter agreement.

 

8.        Nonexclusivity. Nothing in this letter agreement shall obligate or
require First Federal to sell any shares of Common Stock to the Investor or to
negotiate with the Investor any alternative funding arrangements. First Federal
may, in its sole discretion, seek to raise capital for the purposes described
herein through one or more alternative funding arrangements from any one or more
third parties without the consent of the Investor.

 

9.        Termination.    The Investor’s obligation to fund the Commitment will
terminate automatically and immediately upon the earliest to occur of (a) the
termination of the Merger Agreement in accordance with its terms, and (b) the
Closing of the Merger.

 

 

 

 

[Remainder of Page Intentionally Left Blank; Signature Page Follows]

 

 
 

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This letter agreement is entered into as of the date first written above.

 

 

 

 

Very truly yours,

 

INVESTOR

                    

Name:

 

 

 

 

 

ACCEPTED AND AGREED
this ___ day of July, 2013

 

 

 

FIRST FEDERAL BANCSHARES OF ARKANSAS, INC.

 

 

 

                 By:     Name:      Title:    

 

 
 

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SCHEDULE 1

 

 

 

Issuer:

First Federal Bancshares of Arkansas, Inc., (the “Company”), an Arkansas
corporation

 

Securities Offered:

Common Stock

 

Registration Rights:

Shares to be issued in a private placement with registrations rights
substantially equivalent to those granted to Bear State Financial Holdings, LLC,
in the May 3, 2011 Investment Agreement

 

Warrants:

Each investor making a commitment to purchase 506,329 Company Common Stock will
receive warrants to acquire 35,443 additional Company Common Stock at a price of
$7.90 per share

 

 

●

Warrants expire 5 years from date of issuance

 

 

●

Warrant holders entitled to registration rights with respect to the underlying
common stock

 

 

●

Subject to standard anti-dilution provisions with respect to dividends, splits,
mergers, combination or exchanges of shares