34,165,049 Shares
(subject to increase up to 39,289,806 shares
in the event of an oversubscription)
XXXXXX BANCORP, INC.
(a Delaware corporation)
Common Stock
(par value $0.01 per share)
AGENCY AGREEMENT
_______________, 0000
XXXXXXX X'XXXXX & PARTNERS, L.P.
Two World Trade Center, 000xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Xxxxxx Bancorp, Inc., a Delaware corporation (the "Company"), and
The Xxxxxx Savings Bank, a New York State chartered savings bank (the "Bank"),
hereby confirm their agreement with Sandler X'Xxxxx & Partners, L.P. ("Sandler
X'Xxxxx" or the "Agent") with respect to the offer and sale by the Company of
34,165,049 shares (subject to increase up to 39,289,806 shares in the event of
an oversubscription) of the Company's Common Stock, par value $0.01 per share
(the "Common Stock"). The shares of Common Stock to be sold by the Company are
hereinafter called the "Securities." In addition, as described herein, the
Company expects to contribute shares of Common Stock in an amount equal to 3% of
the shares of Common Stock sold in the Offerings (as hereinafter defined) to the
Xxxxxx Savings Bank Foundation (the "Foundation"), such shares hereinafter being
referred to as the "Foundation Shares."
The Securities are being offered in accordance with the plan of
conversion (the "Plan") adopted by the Board of Directors of the Bank pursuant
to which the Bank intends to convert from a New York State chartered mutual
savings bank to a New York State chartered stock savings bank and issue all of
its stock to the Company. Pursuant to the Plan, the Company is offering to
certain of the Bank's depositors and borrowers, and to the Bank's tax qualified
employee benefit plans (the "Employee Plans"), including The Xxxxxx Savings Bank
Employee Stock Ownership Plan (the "ESOP"), rights to subscribe for the
Securities in a subscription offering (the "Subscription Offering"). To the
extent Securities are not subscribed
for in the Subscription Offering, such Securities may be offered to certain
members of the general public in a direct community offering ( the "Community
Offering" and, together with the Subscription Offering, as each may be extended
or reopened from time to time, the "Subscription/Community Offering") to be
commenced concurrently with the Subscription Offering. It is currently
anticipated by the Company and the Bank that any Securities not subscribed for
in the Subscription/Community Offering will be offered, subject to Section 2
hereof, in a syndicated community offering (the "Syndicated Community
Offering"). The Subscription/Community Offering and the Syndicated Community
Offering are hereinafter referred to, collectively, as the "Offerings," and the
conversion of the Bank from mutual to stock form, the acquisition of the capital
stock of the Bank by the Company and the Offerings are hereinafter referred to,
collectively, as the "Conversion." It is acknowledged that the number of
Securities to be sold in the Offerings may be increased or decreased as
described in the Prospectus (as hereinafter defined). If the number of
Securities is increased or decreased in accordance with the Plan, the term
"Securities" shall mean such greater or lesser number, where applicable. In the
event that a holding company form of organization is not utilized, all pertinent
terms of this Agreement will apply to the conversion of the Bank from the mutual
to stock form of organization and the sale of the Bank's common stock.
In connection with the Conversion and pursuant to the terms of the
Plan as described in the Prospectus, the Company has established the Foundation.
Immediately following the consummation of the Conversion, subject to the
approval of the establishment of the Foundation by the depositors of Bank and
compliance with certain conditions as may be imposed by regulatory authorities,
the Company will contribute newly issued shares of Common Stock in an amount
equal to 3% of the Securities sold in the Offering, or between 757,573 and
1,024,951 shares of Common Stock (subject to increase in certain circumstances
to 1,178,694 shares).
The Company has filed with the Securities and Exchange Commission
(the "Commission") a registration statement on Form S-1 (No.333-10471) including
a prospectus for the registration of the Securities and the Foundation Shares
under the Securities Act of 1933, as amended (the "1933 Act"), has filed such
amendments thereto, if any, and such amended prospectuses as may have been
required to the date hereof by the Commission in order to declare such
registration statement effective and will file such additional amendments
thereto and such amended prospectuses and prospectus supplements as may
hereafter be required. Such registration statement (as amended to date, if
applicable, and as from time to time amended or supplemented hereafter) and the
prospectus constituting a part thereof (including, in each case, all documents
incorporated or deemed to be incorporated by reference therein, and the
information, if any, deemed to be part thereof pursuant to the rules and
regulations of the Commission under the 1933 Act, as from time to time amended
or supplemented pursuant to the 1933 Act or otherwise (the "1933 Act
Regulations")), are hereinafter referred to as the "Registration Statement" and
the "Prospectus," respectively, except that if any revised prospectus shall be
used by the Company in connection with the Subscription/Community Offering or
the Syndicated Community Offering which differs from the Prospectus on file with
the Commission at the time the Registration Statement becomes effective (whether
or not such revised prospectus is required to be filed by the Company pursuant
to Rule 424(b) of the 1933 Act Regulations), the term "Prospectus" shall refer
to such revised prospectus from and after the time it is first provided to the
Agent for such use.
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Concurrently with the execution of this Agreement, the Company is
delivering to the Agent copies of the Prospectus to be used in the
Subscription/Community Offering. Such Prospectus contains information with
respect to the Bank, the Company and the Common Stock.
SECTION 1. REPRESENTATIONS AND WARRANTIES.
(a) The Company and the Bank jointly and severally represent and warrant
to the Agent as of the date hereof as follows:
(i) The Registration Statement has been declared effective by the
Commission, no stop order has been issued with respect thereto and no
proceedings therefor have been initiated or, to the knowledge of the
Company and the Bank, threatened by the Commission. At the time the
Registration Statement became effective and at the Closing Time referred to
in Section 2 hereof, the Registration Statement complied and will comply in
all material respects with the requirements of the 1933 Act and the 1933
Act Regulations and did not and will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading. The
Prospectus at the date hereof does not, and at the Closing Time referred to
in Section 2 hereof will not, include an untrue statement of a material
fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided, however, that the representations and
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warranties in this subsection shall not apply to statements in or
omissions from the Prospectus made in reliance upon and in conformity with
information with respect to the Agent furnished to the Company in writing
by the Agent expressly for use in the Prospectus (the "Agent Information,"
which the Company and the Bank acknowledge appears only in the sections
captioned "Market for Common Stock" and the first two paragraphs of the
section captioned "The Conversion - Marketing and Underwriting
Arrangements" of the Prospectus).
(ii) The Company has filed with the Office of Thrift Supervision,
Department of the Treasury (the "OTS") the Company's application for
approval of its acquisition of the Bank (the "Holding Company Application")
on Form H-(e)1-S promulgated under the savings and loan holding company
provisions of the Home Owners' Loan Act, as amended ("HOLA") and the
regulations promulgated thereunder. The Company has received written notice
from the OTS of its approval of the acquisition of the Bank, such approval
remains in full force and effect and no order has been issued by the OTS
suspending or revoking such approval and no proceedings therefor have been
initiated or, to the knowledge of the Company or the Bank, threatened by
the OTS. At the date of such approval, the Holding Company Application
complied in all material respects with the applicable provisions of HOLA
and the regulations promulgated thereunder.
(iii) Pursuant to the General Regulations of the Banking Board of the
State of New York and the rules and regulations of the Federal Deposit
Insurance Corporation (the "FDIC") governing the conversion of New York
State chartered mutual savings banks to stock form (the "Conversion
Regulations"), the Bank has filed with the Superintendent of Banks of the
State of New York (the "Superintendent") and the FDIC an application for
conversion on Form 86-AC and has filed such amendments thereto and
supplementary materials as may have been required to the date hereof (such
application, as amended to date, if applicable, and as from time to time
amended or supplemented
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hereafter, is hereinafter referred to as the "Conversion Application"),
including copies of the Bank's Proxy Statement, dated ____________, 1996,
relating to the Conversion (the "Proxy Statement"), and the Prospectus. The
Superintendent has, by letter dated _____________, 1996, approved the Conversion
Application, such approval remains in full force and effect and no order has
been issued by the Superintendent suspending or revoking such approval and no
proceedings therefor have been initiated or, to the knowledge of the Company or
the Bank, threatened by the Superintendent. The FDIC has, by letter dated
_______________, 1996, approved the Conversion Application, such approval
remains in full force and effect and no order has been issued by the FDIC
suspending or revoking such approval and no proceedings therefor have been
initiated or, to the knowledge of the Company or the Bank, threatened by the
FDIC. At the date of such approval and at the Closing Time referred to in
Section 2, the Conversion Application complied and will comply in all material
respects with the applicable provisions of the Conversion Regulations.
(iv) At the time of their use, the Proxy Statement and any other proxy
solicitation materials will comply in all material respects with the applicable
provisions of the Conversion Regulations and will not contain an untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading. The Company and the Bank will promptly file the
Prospectus and any supplemental sales literature with the Commission, the
Superintendent and the FDIC. The Prospectus and all supplemental sales
literature, as of the date the Registration Statement became effective and at
the Closing Time referred to in Section 2, complied and will comply in all
material respects with the applicable requirements of the Conversion Regulations
and, at or prior to the time of their first use, will have received all required
authorizations of the Superintendent and the FDIC for use in final form.
(v) Neither the Commission, nor the Superintendent, nor the FDIC has,
by order or otherwise, prevented or suspended the use of the Prospectus or any
supplemental sales literature authorized by the Company or the Bank for use in
connection with the Offerings.
(vi) At the Closing Time referred to in Section 2, the Company and the
Bank will have completed the conditions precedent to the Conversion and the
establishment of the Foundation in accordance with the Plan, the applicable
Conversion Regulations and all other applicable laws, regulations, decisions and
orders, including all material terms, conditions and requirements precedent to
the Conversion imposed upon the Company or the Bank by the OTS, the
Superintendent, the FDIC or any other regulatory authority, other than those
which the regulatory authority permits to be completed after the Conversion.
(vii) FinPro, Inc., which prepared the valuation of the Bank as part of
the Conversion, satisfies all requirements for an appraiser set forth in the
Conversion Regulations and any interpretations or guidelines issued by the
Superintendent and the FDIC with respect thereto; _______________, which
prepared the opinion filed as Exhibit 9(f) of the Conversion Application as
required by the Conversion Regulations, satisfies all requirements for an
"independent executive compensation expert" within the meaning of the Conversion
Regulations.
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(viii) The accountants who certified the financial statements and
supporting schedules of the Bank included in the Registration Statement have
advised the Company and the Bank that they are independent public accountants
within the meaning of the Code of Ethics of the American Institute of Certified
Public Accountants; and such accountants are, with respect to the Company, the
Bank and each subsidiary of the Bank, independent certified public accountants
as required by the 1933 Act and the 1933 Act Regulations.
(ix) The only subsidiaries of the Bank are Residential First, Inc.,
RSB Agency, Inc., Blizzard Realty Corp., 1400 Corp., BSR 1400 Corp., Old
Northern Co. Ltd. and Residential Mortgage Banking, Inc. (the "Subsidiaries").
(x) The consolidated financial statements and the related notes
thereto included in the Registration Statement and the Prospectus present fairly
the consolidated financial position of the Bank and the Subsidiaries as at the
dates indicated and the results of operations, retained earnings and cash flows
for the periods specified and comply as to form in all material respects with
the applicable accounting requirements of the 1933 Act Regulations and the
Conversion Regulations; except as otherwise stated in the Registration
Statement, said financial statements have been prepared in conformity with
generally accepted accounting principles applied on a consistent basis; and the
supporting schedules and tables included in the Registration Statement present
fairly the information required to be stated therein.
(xi) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, except as otherwise stated therein
(A) there has been no material adverse change in the financial condition,
results of operations or business of the Company, the Bank and the Subsidiaries,
taken as a whole, whether or not arising in the ordinary course of business, and
(B) except for transactions specifically referred to or contemplated in the
Prospectus, there have been no transactions entered into by the Company, the
Bank or the Subsidiaries, other than those in the ordinary course of business,
which are material with respect to the Company, the Bank and the Subsidiaries,
taken as a whole.
(xii) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Delaware with
corporate power and authority to own, lease and operate its properties and to
conduct its business as described in the Prospectus and to enter into and
perform its obligations under this Agreement; and the Company is duly qualified
as a foreign corporation to transact business and is in good standing in the
State of New York and in each other jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure to so qualify would not have a
material adverse effect on the financial condition, results of operations or
business of the Company, the Bank and the Subsidiaries, taken as a whole.
(xiii) Upon consummation of the Conversion and the contribution of the
Foundation Shares as described in the Prospectus, the authorized, issued and
outstanding capital stock of the Company will be within the range as set forth
in the Prospectus under "Capitalization" (except for subsequent issuances, if
any, pursuant to reservations, agreements or employee benefit plans referred to
in the Prospectus); no shares of
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Common Stock have been or will be issued and outstanding prior to the Closing
Time referred to in Section 2; at the time of Conversion, the Securities will
have been duly authorized for issuance and, when issued and delivered by the
Company pursuant to the Plan against payment of the consideration calculated as
set forth in the Plan, will be duly and validly issued and fully paid and
non-assessable; the terms and provisions of the Common Stock and the capital
stock of the Company conform to all statements relating thereto contained in the
Prospectus; the certificates representing the shares of Common Stock will
conform with the requirements of applicable laws and regulations; and the
issuance of the Securities is not subject to preemptive or other similar rights.
(xiv) The Bank, as of the date hereof, is a New York State chartered
savings bank in mutual form and upon consummation of the Conversion will be a
New York State chartered savings bank in stock form, in both instances with full
corporate power and authority to own, lease and operate its properties and to
conduct its business as described in the Prospectus; the Company, the Bank and
the Subsidiaries have obtained all licenses, permits and other governmental
authorizations currently required for the conduct of their respective businesses
or required for the conduct of their respective businesses as contemplated by
the Holding Company Application and the Conversion Application, except where the
failure to obtain such licenses, permits or other governmental authorizations
would not have a material adverse effect on the financial condition, results of
operations or business of the Company, the Bank or the Subsidiaries, taken as a
whole; all such licenses, permits and other governmental authorizations are in
full force and effect, and the Company, the Bank and the Subsidiaries are in all
material respects in compliance therewith; neither the Company, the Bank nor the
Subsidiaries has received notice of any proceeding or action relating to the
revocation or modification of any such license, permit or other governmental
authorization which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, might have a material adverse effect on
the financial condition, results of operations or business of the Company, the
Bank and the Subsidiaries, taken as a whole; and the Bank is in good standing
under the laws of the United States and is qualified to do business in any
jurisdiction in which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business, except where the
failure to so qualify would not have a material adverse effect on the financial
condition, results of operations or business of the Company, the Bank and the
Subsidiaries, taken as a whole.
(xv) The deposit accounts of the Bank are insured by the FDIC up to the
applicable limits and, upon consummation of the Conversion, the liquidation
account for the benefit of eligible account holders will be duly established in
accordance with the requirements of the Conversion Regulations. The Bank is a
"qualified thrift lender" within the meaning of 12 U.S.C. (S) 1467a(m).
(xvi) Upon consummation of the Conversion, the authorized capital stock of
the Bank will be 100,000,000 shares of common stock, par value $0.01 per share
(the "Bank Common Stock"), and 10,000,000 shares of serial preferred stock, par
value $0.01 per share (the "Bank Preferred Stock"), and the issued and
outstanding capital stock of the Bank will be 1,000 shares of Bank Common Stock;
no shares of Bank Common Stock or Bank Preferred Stock have been or will be
issued and outstanding prior to the Closing Time referred to in Section 2; the
shares of Bank Common Stock to be issued to the Company will have been duly
authorized for issuance and, when issued and delivered by
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the Bank pursuant to the Plan against payment of the consideration calculated as
set forth in the Plan and as described in the Prospectus, will be duly and
validly issued and fully paid and nonassessable, and all such Bank Common Stock
will be owned beneficially and of record by the Company free and clear of any
security interest, mortgage, pledge, lien, encumbrance or legal or equitable
claim; the terms and provisions of the Bank Common Stock and the Bank Preferred
Stock conform to all statements relating thereto contained in the Prospectus,
and the certificates representing the shares of Bank Common Stock will conform
with the requirements of applicable laws and regulations; and the issuance of
the Bank Common Stock is not subject to preemptive or similar rights.
(xvii) The Foundation has been duly incorporated and is validly existing
as a non-stock corporation in good standing under the laws of the State of
Delaware with corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the Prospectus; the
Foundation will not be a savings and loan holding company within the meaning of
12 C.F.R. Section 574.2(q) as a result of the issuance of shares of Common Stock
to it in accordance with the terms of the Plan and in the amounts as described
in the Prospectus; no approvals are required to establish the Foundation and to
contribute the shares of Common Stock thereto as described in the Prospectus
other than those set forth in the Superintendent and the FDIC approvals of the
Conversion Application; except as specifically disclosed in the Prospectus and
the Proxy Statement, there are no agreements and/or understandings, written or
oral, between the Company and/or the Bank and the Foundation with respect to the
control, directly or indirectly, over the voting or the acquisition or
disposition of the Foundation Shares; at the time of the Conversion, the
Foundation Shares will have been duly authorized for issuance and, when issued
and contributed by the Company pursuant to the Plan, will be duly and validly
issued and fully paid and non-assessable; and the issuance of the Foundation
Shares is not subject to preemptive or similar rights.
(xviii) Each Subsidiary has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the jurisdiction of its
incorporation, has full corporate power and authority to own, lease and operate
its properties and to conduct its business as described in the Registration
Statement and Prospectus is duly qualified to transact business and is in good
standing in each jurisdiction in which such qualification is required, whether
by reason of the ownership or leasing of property or the conduct of business,
except where the failure to so qualify would not have a material adverse effect
on the financial condition, results of operations or business of the Company,
the Bank and the Subsidiaries, taken as a whole; the activities of the
Subsidiaries are permitted to subsidiaries of a New York State chartered savings
bank by the rules, regulations, resolutions and practices of the Superintendent
and the FDIC; all of the issued and outstanding capital stock of the
Subsidiaries has been duly authorized and validly issued, is fully paid and
nonassessable and is owned by the Bank, free and clear of any security interest,
mortgage, pledge, lien, encumbrance or legal or equitable claim.
(xix) The execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated herein have been duly authorized
by all necessary corporate action of the Company and the Bank, and this
Agreement has been duly executed and delivered by, and is the valid and binding
agreement of, the Company and the Bank, enforceable in accordance with its
terms, except as may be limited by
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bankruptcy, insolvency or other laws affecting the enforceability of the rights
of creditors generally and judicial limitations on the right of specific
performance and except as the enforceability of indemnification and contribution
provisions may be limited by applicable securities laws.
(xx) The execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated herein do not and will not
conflict with or constitute a breach of, or default under, or result in the
creation or imposition of any lien, charge or encumbrance upon any property or
assets of the Company, the Bank or the Subsidiaries pursuant to, any contract,
indenture, mortgage, loan agreement, note, lease or other instrument to which
the Company, the Bank and the Subsidiaries is a party or by which it or any of
them may be bound, or to which any of the property or assets of the Company, the
Bank or the Subsidiaries is subject, except for such defaults that would not,
individually or in the aggregate, have a material adverse effect on the
financial condition, results of operations or business of the Company, the Bank
and the Subsidiaries, taken as whole, nor will such action result in any
violation of the provisions of the certificate of incorporation, organization
certificate, articles of incorporation or charter, as the case may be, or bylaws
of the Company, the Bank or any of the Subsidiaries or any applicable law,
regulation or administrative or court decree.
(xxi) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus and prior to the Closing
Time, except as otherwise may be indicated or contemplated therein, none of the
Company, the Bank or the Subsidiaries will have (A) issued any securities or
incurred any liability or obligation, direct or contingent, for borrowed money,
except borrowings in the ordinary course of business from the same or similar
sources indicated in the Prospectus, or (B) entered into any transaction or
series of transactions which is material in light of the business of the
Company, the Bank and the Subsidiaries, taken as a whole, excluding the
origination, purchase and sale of loans or the purchase or sale of investment
securities or mortgaged-backed securities in the ordinary course of business.
(xxii) No approval of any regulatory or supervisory or other public
authority is required in connection with the execution and delivery of this
Agreement or the issuance of the Securities and the Foundation Shares (except
for the declaration of effectiveness of any required post effective amendment to
the Registration Statement by the Commission and approval thereof by the
Superintendent and the FDIC), which has not been obtained and a copy of which
has been delivered to the Agent, except for the issuance of the restated
organization certificate by the Superintendent and as may be required under the
securities laws of various jurisdictions.
(xxiii) Neither the Company, the Bank nor any of the Subsidiaries is in
violation of its charter or bylaws (and the Bank will not be in violation of its
charter or bylaws in stock form upon consummation of the Conversion); neither
the Company, the Bank nor any of the Subsidiaries is in default (nor has any
event occurred which, with notice or lapse of time, or both, would constitute a
default) in the performance or observance of any obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which the Company, the Bank or the
Subsidiaries is a party or by which it or any of them may be bound, or to which
any of the property or assets of the Company, the Bank or the Subsidiaries is
8
subject, except for such defaults that would not, individually or in the
aggregate, have a material adverse effect on the financial condition, results of
operations or business of the Company, the Bank and the Subsidiaries, taken as a
whole; and there are no contracts or documents of the Company, the Bank or any
of the Subsidiaries which are required to be filed as exhibits to the
Registration Statement or the Conversion Application which have not been so
filed.
(xxiv) No labor dispute with the employees of the Company, the Bank or any
of the Subsidiaries exists or, to the knowledge of the Company or the Bank, is
imminent; and the Company and the Bank are not aware of any existing or imminent
labor disturbance by the employees of any of their principal suppliers or
contractors which might be expected to result in any material adverse change in
the financial condition, results of operations or business of the Company, the
Bank and the Subsidiaries, taken as a whole.
(xxv) Each of the Company, the Bank and the Subsidiaries has good and
marketable title to all properties and assets for which ownership is material to
its business and to those properties and assets described in the Prospectus as
owned by it, free and clear of all liens, charges, encumbrances or restrictions,
except such as are described in the Prospectus or are not material in relation
to the business of the Company, the Bank and the Subsidiaries, taken as a whole;
and all of the leases and subleases material to the business of the Company, the
Bank and the Subsidiaries, taken as a whole, under which the Company, the Bank
or any of the Subsidiaries holds properties, including those described in the
Prospectus, are the legal, valid and binding agreements of the Company, the Bank
or the Subsidiaries, enforceable in accordance with their terms.
(xxvi) Neither the Company, the Bank nor any of the Subsidiaries is in
violation of any directive from the OTS, the Superintendent or the FDIC to make
any material change in the method of conducting its business; the Bank and the
Subsidiaries have conducted and are conducting their business so as to comply
with all applicable statutes, regulations and administrative and court decrees
(including, without limitation, all regulations, decisions, directives and
orders of the OTS, the Superintendent and the FDIC) except in such respects as
would not have a material adverse effect upon the Company, the Bank and the
Subsidiaries, taken as a whole.
(xxvii) There is no action, suit or proceeding before or by any court or
governmental agency or body, domestic or foreign, now pending or, to the
knowledge of the Company or the Bank, threatened, against or affecting the
Company, the Bank or any of the Subsidiaries which is required to be disclosed
in the Registration Statement (other than as disclosed therein), or any action,
suit or proceeding which might result in any material adverse change in the
financial condition, results of operations or business of the Company, the Bank
and the Subsidiaries, taken as a whole, or which might materially and adversely
affect the properties or assets thereof, the performance of this Agreement or
the consummation of the Conversion; all pending legal or governmental
proceedings to which the Company, the Bank or any of the Subsidiaries is a party
or of which any of their respective properties or assets is the subject which
are not described in the Registration Statement, including ordinary routine
litigation incidental to the business, are, considered in the aggregate, not
material.
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(xxviii) The Bank has obtained opinions of its counsel, Xxxxxxx, Xxxxxx &
Xxxxxxxx, with respect to the legality of the Securities and the Foundation
Shares to be issued and the federal income tax consequences of the Conversion,
copies of which are filed as exhibits to the Registration Statement; all
material aspects of the aforesaid opinions that are required to be disclosed are
accurately summarized in the Prospectus; the facts and representations upon
which such opinions are based are truthful, accurate and complete in all
material respects, and neither the Bank nor the Company has taken or will take
any action inconsistent therewith.
(xxix) The Bank has obtained an opinion of X'Xxxxxx, Xxxxx & Corteselli,
with respect to the New York State and New York City income tax consequences of
the Conversion and the opinion of KPMG Peat Marwick, LLP with respect to the
federal income tax consequences of the Foundation, copies of which are filed as
exhibits to the Registration Statement; all material aspects of the aforesaid
opinions that are required to be disclosed are accurately summarized in the
Prospectus; the facts and representations upon which such opinions are based are
truthful, accurate and complete in all material respects, and neither the Bank
nor the Company has taken or will take any action inconsistent
therewith.
(xxx) The Company is not required to be registered under the Investment
Company Act of 1940, as amended.
(xxxi) All of the loans represented as assets on the most recent
financial statements or selected financial information of the Bank included in
the Prospectus meet or are exempt from all requirements of federal, state and
local law pertaining to lending, including, without limitation, truth in lending
(including the requirements of Regulations Z and 12 C.F.R. Part 226 and 12
C.F.R. Section 563.99), real estate settlement procedures, consumer credit
protection, equal credit opportunity and all disclosure laws applicable to such
loans, except for violations which, if asserted, would not result in a material
adverse effect on the financial condition, results of operations or business of
the Company, the Bank and the Subsidiaries, taken as a whole.
(xxxii) With the exception of the Company's intended loan to the ESOP for
the purpose of enabling the ESOP to purchase shares of Common Stock in an amount
up to 8% of the aggregate of the Foundation Shares and the Common Stock sold in
the Offering, to the knowledge of the Company and the Bank, none of the Company,
the Bank or any employee of the Bank has made any payment of funds of the
Company or the Bank as a loan for the purchase of the Common Stock or made any
other payment of funds prohibited by law, except for such other prohibited
payments of funds which would not result in a material adverse change in the
financial condition, results of operations or business of the Company, the Bank
and the Subsidiaries, taken as a whole, and no funds have been set aside to be
used for any payment prohibited by law.
(xxxiii) The Company, the Bank and the Subsidiaries are in compliance in
all material respects with the applicable financial recordkeeping and reporting
requirements of the Currency and Foreign Transaction Reporting Act of 1970, as
amended, and the rules and regulations thereunder, and the lending practices of
the Bank are and have been in conformity with the Real Estate Settlement
Procedures Act, as amended, and the rules and regulations thereunder.
10
(xxxiv) Neither the Company, the Bank nor the Subsidiaries nor any
properties owned or operated by the Company, the Bank or the Subsidiaries,
is in violation of or liable under any Environmental Law (as defined
below), except for such violations or liabilities that, individually or in
the aggregate, would not have a material adverse effect on the financial
condition, results of operations or business of the Company, the Bank and
the Subsidiaries, taken as a whole. There are no actions, suits or
proceedings, or demands, claims, notices or investigations (including,
without limitation, notices, demand letters or requests for information
from any environmental agency) instituted or pending or, to the knowledge
of the Company or the Bank, threatened relating to the liability of any
property owned or operated by the Company, the Bank or the Subsidiaries
under any Environmental Law. For purposes of this subsection, the term
"Environmental Law" means any federal, state, local or foreign law,
statute, ordinance, rule, regulation, code, license, permit, authorization,
approval, consent, order, judgment, decree, injunction or agreement with
any regulatory authority relating to (i) the protection, preservation or
restoration of the environment (including, without limitation, air, water,
vapor, surface water, groundwater, drinking water supply, surface soil,
subsurface soil, plant and animal life or any other natural resource),
and/or (ii) the use, storage, recycling, treatment, generation,
transportation, processing, handling, labeling, production, release or
disposal of any substance presently listed, defined, designated or
classified as hazardous, toxic, radioactive or dangerous, or otherwise
regulated, whether by type or by quantity, including any material
containing any such substance as a component.
(xxxv) The Company, the Bank and the Subsidiaries have filed all
federal income and state and local franchise tax returns required to be
filed and have made timely payments of all taxes shown as due and payable
in respect of such returns, and no deficiency has been asserted with
respect thereto by any taxing authority.
(xxxvi) The Company has received approval, subject to issuance, to have
the Common Stock quoted on the Nasdaq Stock Market (the "Nasdaq National
Market") effective at the Closing Time referred to in Section 2 hereof.
(b) Any certificate signed by any officer of the Company or the Bank and
delivered to either of the Agent or counsel for the Agent shall be deemed a
representation and warranty by the Company or the Bank as to each of the matters
covered thereby.
SECTION 2. APPOINTMENT OF SANDLER X'XXXXX; SALE AND DELIVERY OF THE
SECURITIES; CLOSING.
On the basis of the representations and warranties herein contained
and subject to the terms and conditions herein set forth, the Company hereby
appoints Sandler X'Xxxxx as its Agent to consult with and advise the Company,
and to assist the Company with the solicitation of subscriptions and purchase
orders for Securities, in connection with the Company's sale of the Securities
in the Subscription/Community Offering and the Syndicated Community Offering. On
the basis of the representations and warranties herein contained, and subject to
the terms and conditions herein set forth, Sandler X'Xxxxx accepts such
appointment and agrees to use its best efforts to assist the Company with the
solicitation of subscriptions and purchase orders for Securities in accordance
with this Agreement; provided, however, that the Agent shall not be obligated to
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take any action which is inconsistent with any applicable laws, regulations,
decisions or orders. The services to be rendered by Sandler X'Xxxxx pursuant to
this
11
appointment include the following: (i) consulting as to the securities marketing
implications of any aspect of the Plan or related corporate documents; (ii)
reviewing with the Bank's Board of Trustees the independent appraiser's
appraisal of the Common Stock, particularly with regard to aspects of the
appraisal involving the methodology employed; (iii) reviewing all offering
documents, including the Prospectus, stock order forms and related offering
materials (it being understood that the preparation and filing of such documents
are the sole responsibility of the Company and the Bank and their counsel); (iv)
assisting in the design and implementation of a marketing strategy for the
Offerings; (v) assisting in obtaining all requisite regulatory approvals; (vi)
assisting in connection with listing the Company's common stock on the Nasdaq
Stock Market; (vii) assisting Bank management in preparing for meetings with
potential investors and broker-dealers; and (viii) providing such other general
advice and assistance as may be requested to promote the successful completion
of the Offerings.
The appointment of the Agent hereunder shall terminate upon the
earliest to occur of (a) forty-five (45) days after the last day of the
Subscription/Community Offering, unless the Company and the Agent agree in
writing to extend such period and the Superintendent and the FDIC agree to
extend the period of time in which the Securities may be sold, (b) the receipt
and acceptance of subscriptions and purchase orders for all of the Securities or
(c) the completion of the Syndicated Community Offering.
If any of the Securities remain available after the expiration of
the Subscription/Community Offering, at the request of the Company and the Bank,
the Agent will seek to form a syndicate of registered brokers or dealers
("Selected Dealers") to assist in the solicitation of purchase orders of such
Securities on a best efforts basis, subject to the terms and conditions set
forth in a selected dealers' agreement (the "Selected Dealers' Agreement"), in
substantially the form set forth as Exhibit A to this Agreement. The Agent will
endeavor to limit the aggregate fees to be paid by the Company and the Bank
under any such Selected Dealers' Agreement to an amount competitive with gross
underwriting discounts charged at such time for underwritings of comparable
amounts of stock sold at a comparable price per share in a similar market
environment; provided, however, that the aggregate fees payable to the Agent and
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Selected Dealers shall not exceed 7% of the aggregate Purchase Price (as defined
in the Prospectus) of the Securities sold by such Selected Dealers. The Agent
will endeavor to distribute the Securities among the Selected Dealers in a
fashion which best meets the distribution objectives of the Company and the Bank
and the requirements of the Plan and applicable law, which may result in
limiting the allocation of stock to certain Selected Dealers. It is understood
that in no event shall the Agent be obligated to act as a Selected Dealer or to
take or purchase any Securities.
In the event the Company is unable to sell at least the Total
Minimum of Securities, as disclosed on the cover of the Prospectus, within the
period herein provided, this Agreement shall terminate, and the Company shall
refund to any persons who have subscribed for any of the Securities the full
amount which it may have received from them, together with interest as provided
in the Prospectus, and no party to this Agreement shall have any obligation to
the others hereunder, except for the obligations of the Company and the Bank as
set forth in Sections 4, 6(a) and 7 hereof and the obligations of the Agent as
set forth in Sections 6(b) and 7 hereof. Appropriate arrangements for placing
the funds received from subscriptions for Securities or other offers to purchase
Securities in special interest-bearing accounts with the Bank until all
Securities are sold and paid for were made prior to the commencement of the
12
Subscription Offering, with provision for refund to the purchasers as set forth
above, or for delivery to the Company if all Securities are sold.
If at least the Total Minimum of Securities, as disclosed on the
cover of the Prospectus, are sold, the Company agrees to issue or have issued
the Securities sold and to release for delivery certificates for such Securities
at the Closing Time against payment therefor by release of funds from the
special interest-bearing accounts referred to above. The closing shall be held
at the offices of Xxxxxxx, Xxxxxx & Xxxxxxxx, at 10:00 a.m., local time, or at
such other place and time as shall be agreed upon by the parties hereto, on a
business day to be agreed upon by the parties hereto. The Company shall notify
the Agent by telephone, confirmed in writing, when funds shall have been
received for all the Securities. Certificates for Securities shall be delivered
directly to the purchasers thereof in accordance with their directions.
Notwithstanding the foregoing, certificates for Securities purchased through
Selected Dealers shall be made available to the Agent for inspection at least 48
hours prior to the Closing Time at such office as the Agent shall designate. The
hour and date upon which the Company shall release for delivery all of the
Securities, in accordance with the terms hereof, are herein called the "Closing
Time."
The Company will pay any stock issue and transfer taxes which may
be payable with respect to the sale of the Securities.
In addition to reimbursement of the expenses specified in Section 4
hereof, the Agent will receive the following compensation for its services
hereunder:
(a) one and three quarters percent (1.75%) of the aggregate
Purchase Price (as defined in the Prospectus) of the Securities sold in
the Subscription Offering and in the Community Offering, excluding in each
case shares purchased by (i) any employee benefit plan of the Company or
the Bank established for the benefit of their respective directors,
officers and employees, (ii) any director, officer or employee of the
Company or the Bank or members of their immediate families (which term
shall mean parents, grandparents, spouse, siblings, children and
grandchildren) or any partner or employee of the Bank's general counsel;
and
(b) with respect to any Securities sold by an NASD member firm
(other than Sandler X'Xxxxx) under the Selected Dealers' Agreement in the
Syndicated Community Offering, (i) the sales commission payable to
Selected Dealers under any Selected Dealers' Agreement, (ii) any
sponsoring dealer's fees and (iii) a management fee to Sandler X'Xxxxx of
one and one-half percent (1.5%) of the aggregate Purchase Price of such
Securities. Any fees payable to Sandler X'Xxxxx for Securities sold by
Sandler X'Xxxxx under any such agreement shall be limited to an aggregate
of one and three-quarters percent (1.75%) of the aggregate Purchase Price
of such Securities.
If this Agreement is terminated by the Agent in accordance with the
provisions of Section 9(a) hereof or the Conversion is terminated by the Company
or the Bank, no fees shall be payable by the Company or the Bank to Sandler
X'Xxxxx; however, the Bank shall reimburse Sandler X'Xxxxx for its reasonable
out-of-pocket expenses incurred prior to termination, including the reasonable
fees and disbursements of counsel for the Agent, in accordance with the
provisions of Section 4 hereof.
13
All fees payable to the Agent hereunder shall be payable in
immediately available funds at Closing Time, or upon termination of this
Agreement, as the case may be. In recognition of the long lead times involved in
the conversion process, the Bank agrees to make advance payments to the Agent in
the aggregate amount of $50,000, $25,000 of which was paid upon execution of the
engagement letter, dated June 3, 1996, and the remaining $25,000 of which shall
be payable upon commencement of the Subscription Offering, which shall be
credited against any fees or reimbursement of expenses payable under this
Section.
SECTION 3. COVENANTS OF THE COMPANY AND THE BANK. The Company and the Bank
covenant with the Agent as follows:
(a) The Company and the Bank will prepare and file such amendments or
supplements to the Registration Statement, the Prospectus, the Conversion
Application and the Proxy Statement, the Prospectus, the Conversion Application
and the Proxy Statement as may hereafter be required by the 1933 Act Regulations
or the Conversion Regulations or as may hereafter be reasonably requested by the
Agent. Following completion of the Subscription/Community Offering, in the event
of a Syndicated Community Offering, the Company and the Bank will (i) promptly
prepare and file with the Commission a post-effective amendment to the
Registration Statement relating to the results of the Subscription/Community
Offering, any additional information with respect to the proposed plan of
distribution and any revised pricing information or (ii) if no such post-
effective amendment is required, will file with, or mail for filing to, the
Commission a prospectus or prospectus supplement containing information relating
to the results of the Subscription/Community Offering and pricing information
pursuant to Rule 424(c) of the 1933 Act Regulations, in either case in a form
acceptable to the Agent. The Company and the Bank will notify the Agent
immediately, and confirm the notice in writing, (i) of the effectiveness of any
post-effective amendment of the Registration Statement, the filing of any
supplement to the Prospectus or the filing of any amendment to the Conversion
Application, (ii) of the receipt of any comments from the Superintendent, the
FDIC, the OTS or the Commission with respect to the transactions contemplated by
this Agreement or the Plan, (iii) of any request by the Commission, the
Superintendent, the FDIC or the OTS for any amendment to the Registration
Statement or the Conversion Application or the Holding Company Application or
any amendment or supplement to the Prospectus or for additional information,
(iv) of the issuance by the Superintendent or the FDIC of any order suspending
the Offerings or the use of the Prospectus or the initiation of any proceedings
for that purpose, (v) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the initiation of
any proceedings for that purpose, and (vi) of the receipt of any notice with
respect to the suspension of any qualification of the Securities for offering or
sale in any jurisdiction. The Company and the Bank will make every reasonable
effort to prevent the issuance of any stop order and, if any stop order is
issued, to obtain the lifting thereof at the earliest possible moment.
(b) The Company and the Bank will give the Agent notice of its intention
to file or prepare any amendment to the Conversion Application, Holding Company
Application or Registration Statement (including any post-effective amendment)
or any amendment or supplement to the Prospectus (including any revised
prospectus which the Company proposes for use in connection with the Syndicated
Community Offering of the Securities which differs from the prospectus on file
at the Commission at the time the Registration Statement becomes effective,
whether or not such revised prospectus is required to be filed pursuant to Rule
424(b) of the 1933 Act Regulations), will furnish the Agent with copies of any
such amendment or supplement a reasonable amount of time prior to such proposed
filing or use, as the case may
14
be, and will not file any such amendment or supplement or use any such
prospectus to which the Agent or counsel for the Agent may object.
(c) The Company and the Bank will deliver to the Agent as many signed
copies and as many conformed copies of the Conversion Application and the
Registration Statement as originally filed and of each amendment thereto
(including exhibits filed therewith or incorporated by reference therein) as the
Agent may reasonably request, and from time to time such number of copies of the
Prospectus as the Agent may reasonably request.
(d) During the period when the Prospectus is required to be delivered,
the Company and the Bank will comply, at their own expense, with all
requirements imposed upon them by the Superintendent and the FDIC, by the
applicable Conversion Regulations, as from time to time in force, and by the
1933 Act, the 1933 Act Regulations, the Securities Exchange Act of 1934, as
amended (the "1934 Act") and the rules and regulations of the Commission
promulgated thereunder, including, without limitation, Rule 10b-6 under the 1934
Act, so far as necessary to permit the continuance of sales or dealing in shares
of Common Stock during such period in accordance with the provisions hereof and
the Prospectus.
(e) If any event or circumstance shall occur as a result of which it is
necessary, in the opinion of counsel for the Agent, to amend or supplement the
Prospectus in order to make the Prospectus not misleading in the light of the
circumstances existing at the time it is delivered to a purchaser, the Company
and the Bank will forthwith amend or supplement the Prospectus (in form and
substance satisfactory to counsel for the Agent) so that, as so amended or
supplemented, the Prospectus will not include an untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances existing at the time it is delivered
to a purchaser, not misleading, and the Company and the Bank will furnish to the
Agent a reasonable number of copies of such amendment or supplement. For the
purpose of this subsection, the Company and the Bank will each furnish such
information with respect to itself as the Agent may from time to time reasonably
request.
(f) The Company and the Bank will take all necessary action, in
cooperation with the Agent, to qualify the Securities for offering and sale
under the applicable securities laws of such states of the United States and
other jurisdictions as the Conversion Regulations may require and as the Agent
and the Company have agreed; provided, however, that neither the Company nor the
Bank shall be obligated to file any general consent to service of process or to
qualify as a foreign corporation in any jurisdiction in which it is not so
qualified. In each jurisdiction in which the Securities have been so qualified,
the Company and the Bank will file such statements and reports as may be
required by the laws of such jurisdiction to continue such qualification in
effect for a period of not less than one year from the effective date of the
Registration Statement.
(g) The Company authorizes Sandler X'Xxxxx and any Selected Dealer to act
as agent of the Company in distributing the Prospectus to persons entitled to
receive subscription rights and other persons having record addresses in the
states or jurisdictions set forth in a survey of the securities or "blue sky"
laws of the various jurisdictions in which the Offerings will be made (the "Blue
Sky Survey").
15
(h) The Company will make generally available to its security holders
as soon as practicable, but not later than 60 days after the close of the period
covered thereby, an earnings statement (in form complying with the provisions of
Rule 158 of the 1933 Act Regulations) covering a twelve-month period beginning
not later than the first day of the Company's fiscal quarter next following the
"effective date" (as defined in said Rule 158) of the Registration Statement.
(i) During the period ending on the third anniversary of the expiration
of the fiscal year during which the closing of the transactions contemplated
hereby occurs, the Company will furnish to its stockholders as soon as
practicable after the end of each fiscal year in such period an annual report
(including consolidated statements of financial condition and consolidated
statements of income, stockholders' equity and cash flows of the Company, the
Bank and the Subsidiaries, certified by independent public accountants) and, as
soon as practicable after the end of each of the first three quarters of each
fiscal year in such period (beginning with the fiscal quarter ending after the
effective date of the Registration Statement), consolidated summary financial
information of the Company, the Bank and the Subsidiaries for such quarter in
reasonable detail. In addition, such annual report and quarterly consolidated
summary financial information shall be made public through the issuance of
appropriate press releases at the same time or prior to the time of the
furnishing thereof to stockholders of the Company.
(j) During the period ending on the third anniversary of the expiration
of the fiscal year during which the closing of the transactions contemplated
hereby occurs, the Company will furnish to the Agent (i) as soon as available, a
copy of each report or other document of the Company furnished generally to
stockholders of the Company or furnished to or filed with the Commission under
the 1934 Act or any national securities exchange or system on which any class of
securities of the Company is listed and (ii) from time to time, such other
information concerning the Company as the Agent may reasonably request.
(k) Each of the Company and the Bank will use the net proceeds received
by it from the sale of the Securities and the purchase of the Common Stock by
the Company, as the case may be, in the manner specified in the Prospectus under
"Use of Proceeds." The Company and the Bank will conduct the Conversion
(including the formation and operation of the Foundation) in all material
respects in accordance with the Plan, the Conversion Regulations and all other
applicable regulations, decisions and orders thereunder, including all
applicable terms, requirements and conditions precedent to the Conversion
imposed upon the Company or the Bank by the Superintendent, the FDIC or the OTS.
(l) The Company will file with the Commission such reports on Form SR
as may be required pursuant to Rule 463 of the 1933 Act Regulations.
(m) The Company will file a registration statement for the Common Stock
under Section 12(g) of the 1934 Act prior to completion of the Offerings and
will request that such registration statement be effective upon completion of
the Conversion. The Company will maintain the effectiveness of such
registration for not less than three years. The Company will file with the
Nasdaq Stock Market, Inc. all documents and notices required by the Nasdaq Stock
Market, Inc. of companies that have issued securities that are traded in the
over-the-counter market and quotations for which are reported by the Nasdaq
National Market.
16
(n) During the period beginning on the date hereof and ending on the later
of the third anniversary of the Closing Time or the date on which the Agent
receives full payment in satisfaction of any claim for indemnification or
contribution to which it may be entitled pursuant to Sections 6 or 7,
respectively, neither the Company nor the Bank shall, without the prior written
consent of the Agent, which consent shall not be unreasonably withheld, take or
permit to be taken any action that could result in the Bank Common Stock or Bank
Preferred Stock becoming subject to any security interest, mortgage, pledge,
lien or encumbrance; provided, however, that this covenant shall be null and
-------- -------
void if the Board of Governors of the Federal Reserve System, or any other
federal agency having jurisdiction over the Bank, by regulation, policy
statement or general or specific interpretive release or letter, permits
indemnification of the Agent by the Bank as contemplated by Section 6(a) hereof.
(o) The Company and the Bank will take such actions and furnish such
information as are reasonably requested by the Agent in order for the Agent to
ensure compliance with the National Association of Securities Dealers, Inc.'s
"Interpretation Relating to Free-Riding and Withholding."
(p) The Company or the Bank will furnish to Sandler X'Xxxxx as early as
practicable prior to the Closing Date, but no later than two (2) full business
days prior thereto, a copy of the latest available unaudited interim
consolidated financial statements of the Bank and the Subsidiaries which have
been read by KPMG Peat Marwick, LLP, as stated in their letters to be furnished
pursuant to subsections (e) and (f) of Section 5 hereof.
(q) The Company and the Bank will comply with the conditions imposed by or
agreed to with the OTS in connection with its approval of the Holding Company
Application and with the Superintendent or the FDIC in connection with their
approval of the Conversion Application including those conditions relating to
the establishment and the operation of the Foundation; the Company and the Bank
shall use their best efforts to ensure that the Foundation submits within the
time frames required by applicable law a request to Internal Revenue Service to
be recognized as a tax-exempt organization under Section 501(c)(3) of the
Internal Revenue Code of 1986, as amended (the "Code"); the Company and the Bank
will take no action which will result in the possible loss of the Foundation's
tax-exempt status; and neither the Company nor the Bank will contribute any
additional assets to the Foundation until such time that such additional
contributions will be deductible for federal and state income tax purposes.
(r) During the period ending on the first anniversary of the Closing Time,
the Bank will comply with all applicable law and regulation necessary for the
Bank to continue to be a "qualified thrift lender" within the meaning of 12
U.S.C. (S) 1467a(m).
(s) Other than in connection with any employee benefit plan or arrangement
described in the Prospectus, the Company will not, without the prior written
consent of the Agent, sell or issue, contract to sell or otherwise dispose of,
any shares of Common Stock other than the Securities or the Foundation Shares
for a period of 180 days following the Closing Time.
(t) The Company shall not deliver the Securities until the Company and the
Bank have satisfied or caused to be satisfied each condition set forth in
Section 5 hereof, unless such condition is waived by the Agent.
17
SECTION 4. PAYMENT OF EXPENSES. The Company and the Bank jointly and
severally agree to pay all expenses incident to the performance of their
obligations under this Agreement, including, but not limited to, (i) the cost of
obtaining all securities and bank regulatory approvals, (ii) the printing and
filing of the Registration Statement and the Conversion Application as
originally filed and of each amendment thereto, (iii) the preparation, issuance
and delivery of the certificates for the Securities to the purchasers in the
Offerings, (iv) the fees and disbursements of the Company's and the Bank's
counsel, accountants, conversion agent, appraiser and other advisors, (v) the
qualification of the Securities under securities laws in accordance with the
provisions of Section 3(f) hereof, including filing fees and the fees and
disbursements of counsel in connection therewith and in connection with the
preparation of the Blue Sky Survey, (vi) the printing and delivery to the Agent
of copies of the Registration Statement as originally filed and of each
amendment thereto and the printing and delivery of the Prospectus and any
amendments or supplements thereto to the purchasers in the Offerings and the
Agent, (vii) the printing and delivery to the Agent of copies of a Blue Sky
Survey and (viii) the fees and expenses incurred in connection with the listing
of the Common Stock on the Nasdaq Stock Market. In the event the Agent incurs
any such fees and expenses on behalf of the Bank or the Company, the Bank will
reimburse the Agent for such fees and expenses whether or not the Conversion is
consummated; provided, however, that the Agent shall not incur any substantial
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expenses on behalf of the Bank or the Company pursuant to this Section without
the prior approval of the Bank.
The Company and the Bank jointly and severally agree to pay certain
expenses incident to the performance of the Agent's obligations under this
Agreement, including (i) all reasonable out-of-pocket expenses incurred by the
Agent relating to the Offerings, including, without limitation, advertising,
promotional, syndication and travel expenses and fees and expenses of the
Agent's counsel, provided, however, that Sandler X'Xxxxx shall document such
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expenses to the reasonable satisfaction of the Bank and (ii) the filing fees
paid or incurred by the Agent in connection with all filings with the National
Association of Securities Dealers, Inc. All fees and expenses to which the Agent
is entitled to reimbursement under this paragraph of this Section 4 shall be due
and payable upon receipt by the Company or the Bank of a written accounting
therefor setting forth in reasonable detail the expenses incurred by the Agent.
SECTION 5. CONDITIONS OF AGENT'S OBLIGATIONS. The Company, the Bank and the
Agent agree that the issuance and sale of the Securities and all obligations of
the Agent hereunder are subject to the accuracy of the representations and
warranties of the Company and the Bank herein contained as of the date hereof
and the Closing Time, to the accuracy of the statements of officers and
directors of the Company and the Bank made pursuant to the provisions hereof, to
the performance by the Company and the Bank of their obligations hereunder and
to the following further conditions:
(a) No stop order suspending the effectiveness of the Registration
Statement shall have been issued under the 1933 Act or proceedings therefor
initiated or threatened by the Commission, no order suspending the Offerings or
authorization for final use of the Prospectus shall have been issued or
proceedings therefor initiated or threatened by the Superintendent or
18
the FDIC and no order suspending the sale of the Securities in any jurisdiction
shall have been issued.
(b) At Closing Time, the Agent shall have received:
(1) The favorable opinion, dated as of Closing Time, of Muldon,
Xxxxxx & Xxxxxxxx, special counsel for the Company and the Bank, in form
and substance satisfactory to counsel for the Agent, to the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
State of Delaware.
(ii) The Company has full corporate power and authority to
own, lease and operate its properties and to conduct its business as
described in the Registration Statement and Prospectus and to enter
into and perform its obligations under this Agreement.
(iii) The Company is duly qualified as a foreign corporation
to transact business and is in good standing in the State of New
York and in each other jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property
or the conduct of business, except where the failure to be so
qualified would not have a material adverse effect upon the
financial condition, results of operations or business of the
Company, the Bank and the Subsidiaries, taken as a whole.
(iv) Upon consummation of the Conversion and the issuance of
Foundation Shares to the Foundation immediately upon completion
thereof, subject to compliance with all conditions imposed upon the
formation and contribution thereof by the Superintendent, the FDIC
or the OTS under the terms of any written notice or order of
approval of the Conversion Application or the Holding Company
Application, in an amount as described in the Prospectus, the
authorized, issued and outstanding capital stock of the Company will
be within the range as set forth in the Prospectus under
"Capitalization," and no shares of Common Stock have been issued and
outstanding prior to the Closing Time.
(v) The Securities and the Foundation Shares have been duly
and validly authorized for issuance and sale and, when issued and
delivered by the Company pursuant to the Plan against payment of the
consideration calculated as set forth in the Plan, or contributed by
the Company pursuant to the Plan in the case of the Foundation
Shares, will be duly and validly issued and fully paid and non-
assessable.
(vi) The issuance of the Securities and the Foundation Shares
is not subject to preemptive or other similar rights arising by
operation of law or, to the best of such counsel's knowledge,
otherwise.
(vii) The Bank has been at all times since the date hereof and
prior to the Closing Time duly organized, and is validly existing in
good standing under the laws of the State of New York as a New York
State-chartered savings bank
19
of mutual form, and, at Closing Time, has become duly organized, validly
existing and in good standing under the laws of the State of New York as a New
York State chartered savings bank of stock form, in both instances with full
corporate power and authority to own, lease and operate its properties and to
conduct its business as described in the Registration Statement and the
Prospectus; and the Bank is duly qualified as a foreign corporation in each
jurisdiction in which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business, except where the
failure to so qualify would not have a material adverse effect upon the
financial condition, results of operations or business of the Bank.
(viii) The deposit accounts of the Bank are insured by the FDIC up to the
applicable limits.
(ix) Each Subsidiary has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the jurisdiction of its
incorporation, has full corporate power and authority to own, lease and operate
its properties and to conduct its business as described in the Registration
Statement and the Prospectus and is duly qualified as a foreign corporation to
transact business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure to so qualify
would not have a material adverse effect upon the financial condition, results
of operations or business of the Company, the Bank and the Subsidiaries, taken
as a whole; the activities of the Subsidiaries as described in the Prospectus
are permitted to subsidiaries of a savings association holding company and of a
New York State chartered savings bank by the rules, regulations, resolutions and
practices of the OTS and the Superintendent, as the case may be; all of the
issued and outstanding capital stock of each of the Subsidiaries has been duly
authorized and validly issued, is fully paid and non-assessable and is owned by
the Bank free and clear of any security interest, mortgage, pledge, lien,
encumbrance or claim.
(x) The Foundation has been duly incorporated and is validly existing
as a non-stock corporation in good standing under the laws of the State of
Delaware with corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the Prospectus; the
Foundation is not a savings and loan holding company within the meaning of 12
C.F.R. Section 574.2(q) as a result of the issuance of shares of Common Stock to
it in accordance with the terms of the Plan and in the amounts as described in
the Prospectus; no approvals are required to establish the Foundation and to
contribute the shares of Common Stock thereto as described in the Prospectus
other than those set forth in any written notice or order of approval of the
Conversion Application or the Holding Company Application copies of which were
provided to the Agent prior to the Closing Time.
(xi) Upon consummation of the Conversion, all of the issued and
outstanding capital stock of the Bank will be duly authorized and validly issued
and fully paid and nonassessable, and all such capital stock will be owned by
the
20
Company free and clear of any security interest, mortgage, pledge, lien,
encumbrance or claim.
(xii) The OTS has duly approved the Holding Company Application
(including a specific determination that the Bank is a "qualified thrift lender"
within the meaning of 12 U.S.C. (S) 1467a(m)) and the Superintendent and the
FDIC have duly approved the Conversion Application and no action is pending or,
to the best of such counsel's knowledge, threatened respecting the Holding
Company Application or the Conversion Application (including therewith, the
establishment of the Foundation and the contribution of shares of Common Stock
thereto) or the acquisition by the Company of all of the Bank's issued and
outstanding capital stock; the Holding Company Application complies as to form
in all material respects with the applicable requirements of the OTS, and the
Conversion Application complies as to form in all material respects with the
applicable requirements of the Superintendent and the FDIC except as compliance
therewith is specifically waived in writing by the Superintendent or the FDIC,
as the case may be, and, to the best of such counsel's knowledge, include all
documents required to be filed as exhibits thereto and are complete in all
material respects, excluding the Prospectus and any related marketing materials
filed as a part of the Holding Company Application or the Conversion Application
as to which no opinion need be given; the Company is duly authorized to become a
savings association holding company and is duly authorized to own all of the
issued and outstanding capital stock of the Bank to be issued pursuant to the
Plan.
(xiii) The execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby, including the establishment of the
Foundation and the contribution thereto of the Foundation Shares, (A) have been
duly and validly authorized by all necessary action on the part of each of the
Company and the Bank, and this Agreement constitutes the legal, valid and
binding agreement of each of the Company and the Bank, enforceable in accordance
with its terms, except as rights to indemnity and contribution hereunder may be
limited under applicable law (it being understood that such counsel may avail
itself of customary exceptions concerning the effect of bankruptcy, insolvency
or similar laws and the availability of equitable remedies), (B) to the best of
such counsel's knowledge, will not conflict with or constitute a breach of, or
default under, and no default exists and no event has occurred which, with
notice or lapse of time or both, would constitute a default under, or result in
the creation or imposition of any lien, charge or encumbrance upon any property
or assets of the Company, the Bank or the Subsidiaries pursuant to any contract,
indenture, mortgage, loan agreement, note, lease or other instrument to which
the Company, the Bank or the Subsidiaries is a party or by which any of them may
be bound, or to which any of the property or assets of the Company, the Bank or
the Subsidiaries is subject that, individually or in the aggregate, would have a
material adverse effect on the financial condition, results of operations or
business of the Company, the Bank and the Subsidiaries, taken as a whole, and
(C) will not result in any violation of the provisions of the certificate of
incorporation, organization certificate, articles of incorporation or charter,
as the case may be, or bylaws of the Company, the Bank or any Subsidiary.
21
(xiv) The Prospectus has been duly authorized by the Superintendent and
the FDIC for final use pursuant to the Conversion Regulations, and no action has
been taken or is pending, or, to the best of such counsel's knowledge,
threatened, by the Superintendent or the FDIC to revoke such authorization.
(xv) The Registration Statement is effective under the 1933 Act, and,
to the best of such counsel's knowledge, no stop order suspending the
effectiveness of the Registration Statement has been issued under the 1933 Act
or proceedings therefore initiated or, to the best of such counsel's knowledge,
threatened by the Commission.
(xvi) No further approval, authorization, consent or other order of any
public board or body is required in connection with the execution and delivery
of this Agreement, the issuance of the Securities and the Foundation Shares and
the consummation of the Conversion, except as may be required under the
securities or Blue Sky laws of various jurisdictions as to which no opinion need
be rendered.
(xvii) At the time the Registration Statement became effective, the
Registration Statement (except for the appraisal, financial statements and
schedules and other financial or statistical data included therein, as to which
counsel need make no statement) complied as to form in all material respects
with the requirements of the 1933 Act and the 1933 Act Regulations and the
Conversion Regulations.
(xviii) The Common Stock conforms to the description thereof contained in
the Prospectus, and the form of certificate used to evidence the Common Stock is
in due and proper form and complies with all applicable statutory requirements.
(xix) To the best of such counsel's knowledge, there are no legal or
governmental proceedings pending or threatened against or affecting the Company,
the Bank, the Subsidiaries or the Foundation which are required, individually or
in the aggregate, to be disclosed in the Registration Statement and Prospectus,
other than those disclosed therein, and all pending legal or governmental
proceedings to which the Company, the Bank or the Subsidiaries is a party or to
which any of their property is subject which are not described in the
Registration Statement, including ordinary routine litigation incidental to the
business, are, considered in the aggregate, not material.
(xx) The information in the Prospectus under "Risk Factors -
Establishment of the Charitable Foundation - Tax Consequences," "- Possible
Payment of Financing Corporation Bonds," "- Certain Anti-Takeover Provisions,"
and "- Possible Adverse Income Tax Consequences of the Distribution of
Subscription Rights," "Dividend Policy," "Business of the Bank - Legal
Proceedings," "Federal and State Taxation," "Regulation," "The Conversion -
Establishment of Charitable Foundation," "- Effects of Conversion," "-
Liquidation Rights" and "- Tax Aspects," "Restrictions on Acquisition of the
Company and the Bank," "Description of Capital Stock of the Company" and
"Description of Capital Stock of the Bank," to the extent that it constitutes
22
matters of law, summaries of legal matters, documents or proceedings, or legal
conclusions, has been reviewed by them and is complete and accurate in all
material respects.
(xxi) To the best of such counsel's knowledge, there are no contracts,
indentures, mortgages, loan agreements, notes, leases or other instruments
required to be described or referred to in the Registration Statement or to be
filed as exhibits thereto other than those described or referred to therein or
filed as exhibits thereto, and the descriptions thereof or references thereto
are correct.
(xxii) The Plan has been duly authorized by the Boards of Directors of the
Company and the Bank and the Superintendent's and the FDIC's approval of the
Plan remains in full force and effect; the Bank's organization certificate has
been amended and restated, effective upon consummation of the Conversion and the
filing of such amended and restated organization certificate with the
Superintendent, to authorize the issuance of permanent capital stock; to the
best of such counsel's knowledge, the Company and the Bank have conducted the
Conversion and the establishment and funding of the Foundation in all material
respects in accordance with applicable requirements of the Conversion
Regulations (except as compliance therewith is specifically waived in writing by
the Superintendent or the FDIC, as the case may be), the Plan and all other
applicable regulations, decisions and orders thereunder, including all material
applicable terms, conditions, requirements and conditions precedent to the
Conversion imposed upon the Company or the Bank by the Superintendent or the
FDIC, and no order has been issued by the Superintendent or the FDIC to suspend
the Conversion or the Offerings, and no action for such purposes has been
instituted or, to the best of such counsel's knowledge, threatened by the
Superintendent or the FDIC; and, to the best of such counsel's knowledge, no
person has sought to obtain review of the final action of the Superintendent or
the FDIC in approving the Conversion Application (which includes the Plan which
provides for the establishment of the Foundation) or of the OTS in approving the
Holding Company Application.
(xxiii) To the best of such counsel's knowledge, the Company, the Bank and the
Subsidiaries have obtained all licenses, permits and other governmental
authorizations currently required for the conduct of their respective businesses
as described in the Registration Statement and Prospectus, except for such
licenses, approvals or authorizations the failure of which to have would not
result in a material adverse change in the financial condition, results of
operations or the business of the Company, the Bank and the Subsidiaries, taken
as a whole, all such licenses, permits and other governmental authorizations are
in full force and effect, and the Company, the Bank and the Subsidiaries are in
all material respects complying therewith.
(xxiv) Neither the Company, the Bank nor any of the Subsidiaries is in
violation of its certificate of incorporation, organization certificate,
articles of incorporation or charter, as the case may be, or bylaws (and the
Bank will not be in violation of its organization certificate and bylaws in
stock form upon consummation of the Conversion); and to the best of such
counsel's knowledge,
23
the Company, the Bank and the Subsidiaries are not in default (nor
has any event occurred which, with notice or lapse of time or
both, would constitute a default) in the performance or observance
of any obligation, agreement, covenant or condition contained in
any contract, indenture, mortgage, loan agreement, note, lease or
other instrument to which the Company, the Bank or the
Subsidiaries is a party or by which the Company, the Bank or the
Subsidiaries or any of their property may be bound in any respect
that would have a material adverse effect upon the financial
condition, results of operations or business of the Company, the
Bank or the Subsidiaries, taken as a whole.
(2) The favorable opinion, dated as of Closing Time, of Xxxxxxx
Xxxxxxxx & Wood, counsel for the Agent, with respect to the matters set
forth in Section 5(b)(1)(i), (iv), (v), (vi) (solely as to preemptive
rights arising by operation of law), (xvii) and (xviii) and such other
matters as the Agent may reasonably require.
(3) In giving their opinions required by subsections (b)(1) and
(b)(2), respectively, of this Section, Xxxxxxx, Xxxxxx & Xxxxxxxx and
Xxxxxxx Xxxxxxxx & Wood shall each additionally state that nothing has
come to their attention that would lead them to believe that the
Registration Statement (except for the appraisal, financial statements
and schedules and other financial or statistical data included therein,
as to which counsel need make no statement), at the time it became
effective, contained an untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to
make the statements therein not misleading or that the Prospectus
(except for the appraisal, financial statements and schedules and other
financial or statistical data included therein, as to which counsel
need make no statement), at the time the Registration Statement became
effective or at Closing Time, included an untrue statement of a
material fact or omitted to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading. In giving their opinions,
Xxxxxxx, Xxxxxx & Xxxxxxxx and Xxxxxxx Xxxxxxxx & Xxxx may rely as to
matters of fact on certificates of officers and directors of the
Company and the Bank and certificates of public officials, and as to
matters of Delaware law upon the opinion of Morris, Nichols, Arsht &
Xxxxxxx and as to certain matters of New York law upon the opinion of
__________________, which opinions shall be in form and substance
satisfactory to the Agent, and Xxxxxxx Xxxxxxxx & Xxxx may also rely as
to certain matters on the opinion of Xxxxxxx, Xxxxxx & Xxxxxxxx.
(c) At the Closing Time referred to in Section 2, the Company and the
Bank will have completed in all material respects the conditions precedent to
the Conversion in accordance with the Plan, the applicable Conversion
Regulations and all other applicable laws, regulations, decisions and orders,
including all terms, conditions, requirements and provisions precedent to the
Conversion imposed upon the Company or the Bank by the OTS, the Superintendent,
the FDIC, or any other regulatory authority other than those which the OTS, the
Superintendent or the FDIC permit to be completed after the Conversion.
(d) At the Closing Time, there shall not have been, since the date
hereof or since the respective dates as of which information is given in the
Registration Statement and the Prospectus, any material adverse change in the
financial condition, results of operations or business of the Company, the Bank
and the Subsidiaries, taken as a whole, whether or not arising in the ordinary
course of business, and the Agent shall have received a certificate of the
24
Chief Executive Officer and President of the Company and of the Bank, and the
chief financial or chief accounting officer of the Company and the Bank, dated
as of Closing Time, to the effect that (i) there has been no such material
adverse change, (ii) there has been no material transaction entered into by the
Company or the Bank from the latest statement of financial condition of the
Company or the Bank as set forth in the Registration Statement and the
Prospectus other than transactions referred to or contemplated therein and
transactions in the ordinary course of business, (iii) neither the Company nor
the Bank has received from the OTS, the Superintendent or the FDIC any direction
(oral or written) to make any material change in the method of conducting its
business with which it has not complied (which direction, if any, shall have
been disclosed to the Agent) or which materially and adversely would affect the
financial condition, results of operations or business of the Company, the Bank
and the Subsidiaries, taken as a whole, (iv) the representations and warranties
in Section 1 hereof are true and correct with the same force and effect as
though expressly made at and as of the Closing Time, (v) the Company and the
Bank have complied with all agreements and satisfied all conditions on their
part to be performed or satisfied at or prior to Closing Time, (vi) no stop
order suspending the effectiveness of the Registration Statement has been issued
and no proceedings for that purpose have been initiated or threatened by the
Commission and (vii) no order suspending the Offerings or the authorization for
final use of the Prospectus has been issued and no proceedings for that purpose
have been initiated or threatened by the Superintendent or the FDIC and no
person has sought to obtain regulatory or judicial review of the action of the
Superintendent or the FDIC in approving the Plan in accordance with the
Conversion Regulations, nor has any person sought to obtain regulatory or
judicial review of the action of the OTS in approving the Holding Company
Application.
(e) At the time of the execution of this Agreement, the Agent shall
have received from KPMG Peat Marwick, LLP a letter dated such date, in form and
substance satisfactory to the Agent, to the effect that (i) they are independent
certified public accountants with respect to the Company, the Bank and the
Subsidiaries within the meaning of the Code of Ethics of the American Institute
of Certified Public Accountants, the 1933 Act, the 1933 Act Regulations and the
Conversion Regulations; (ii) it is their opinion that the consolidated financial
statements and supporting schedules included in the Registration Statement and
covered by their opinion therein comply as to form in all material respects with
the applicable accounting requirements of the 1933 Act, the 1933 Act Regulations
and the Conversion Regulations; (iii) based upon limited procedures as agreed
upon by the Agent and KPMG Peat Marwick, LLP and set forth in detail in such
letter, nothing has come to their attention which causes them to believe that
(A) the unaudited financial statements and supporting schedules of the Bank and
the Subsidiaries included in the Registration Statement do no comply as to form
in all material respects with the applicable accounting requirements of the 1933
Act, the 1933 Act Regulations and the Conversion Regulations or are not
presented in conformity with generally accepted accounting principles applied on
a basis substantially consistent with that of the audited financial statements
included in the Registration Statement and the Prospectus, (B) the unaudited
amounts included under the captions "Selected Consolidated Financial and Other
Data of the Bank" and "Recent Developments" in the Registration Statement do not
agree with the amounts set forth in the unaudited consolidated financial
statements as of and for the dates and periods presented under such captions or
such unaudited amounts were not determined on a basis substantially consistent
with that used in determining the corresponding amounts in the audited financial
statements included in the Registration Statement and the Prospectus, (C) at a
specified date not more than five days prior to the date of this Agreement,
there has been any increase in the consolidated long term or short term debt of
the Bank and the Subsidiaries or any decrease in consolidated
25
total assets, allowance for loan losses, total deposits or retained earnings of
the Bank and the Subsidiaries, in each case as compared with the amounts shown
in the May 31, 1996 balance sheet included in the Registration Statement or, (D)
during the period from May 31, 1996 to a specified date not more than five days
prior to the date of this Agreement, there were any decreases, as compared with
the corresponding period in the preceding year, in net interest income, net
interest income after provision for loan losses, or net income of the Bank and
the Subsidiaries, except in all instances for increases or decreases which the
Registration Statement and the Prospectus disclose have occurred or may occur;
and (iv) in addition to the examination referred to in their opinion and the
limited procedures referred to in clause (iii) above, they have carried out
certain specified procedures, not constituting an audit, with respect to certain
amounts, percentages and financial information which are included in the
Registration Statement and Prospectus and which are specified by the Agent and
have found such amounts, percentages and financial information to be in
agreement with the relevant accounting, financial and other records of the
Company, the bank and the Subsidiaries identified in such letter.
(f) At Closing Time, the Agent shall have received from KPMG Peat
Marwich, LLP a letter, dated as of Closing Time, to the effect that they
reaffirm their statements made in the letter furnished pursuant to subsection
(e) of this Section, except that the specified date referred to shall be a
date not more than five days prior to Closing Time.
(g) At Closing Time, the Common Stock shall have been approved for
listing on the Nasdaq Stock Market upon notice of issuance.
(h) At Closing Time, the Agent shall have received a letter from
FinPro, Inc., dated as of the Closing Time, confirming its appraisal.
(i) At Closing Time, counsel for the Agent shall have been furnished
with such documents and opinions as they may require for the purpose of enabling
them to pass upon the issuance and sale of the Securities and the Foundation
Shares as herein contemplated and related proceedings, or in order to evidence
the accuracy of any of the representations or warranties, or the fulfillment of
any of the conditions, herein contained; and all proceedings taken by the
Company in connection with the issuance and sale of the Securities and the
Foundation Shares as herein contemplated shall be satisfactory in form and
substance to the Agent and counsel for the Agent.
(j) At any time prior to Closing Time, (i) there shall not have
occurred any material adverse change in the financial markets in the United
States or elsewhere or any outbreak of hostilities or escalation thereof or
other calamity or crisis the effects of which, in the judgment of the Agent, are
so material and adverse as to make it impracticable to market the Securities or
to enforce contracts, including subscriptions or orders, for the sale of the
Securities, and (ii) trading generally on either the American Stock Exchange or
the New York Stock Exchange shall not have been suspended, and minimum or
maximum prices for trading shall not have been fixed, or maximum ranges for
prices for securities have been required, by either of said Exchanges or by
order of the Commission or any other governmental authority, and a banking
moratorium shall not have been declared by either Federal or New York
authorities.
SECTION 6. INDEMNIFICATION.
26
(a) The Company and the Bank, jointly and severally, agree to indemnify
and hold harmless the Agent, each person, if any, who controls the Agent, within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act, and its
respective partners, directors, officers, employees and agents as follows:
(i) from and against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, related to or arising out of the
Conversion (including the establishment of the Foundation and the
contribution of the Foundation Shares thereto by the Company) or any action
taken by the Agent where acting as agent of the Company and the Bank or
otherwise as described in Section 2 hereof; provided, however, that this
indemnity agreement shall not apply to any loss, liability, claim, damage
or expense found in a final judgement by a court of competent jurisdiction
to have resulted primarily from bad faith, willful misconduct or gross
negligence of the Agent seeking indemnification hereunder;
(ii) from and against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, based upon or arising out of any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), or the omission or
alleged omission therefrom of a material fact required to be stated therein
or necessary to make the statements therin not misleading or arising out of
any untrue statement or alleged untrue statement of a material fact
contained in the Proxy Statement or the Prospectus (or any amendment or
supplement thereto) or the omission or alleged omission therefrom of a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
(iii) from and against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount paid
in settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever described in clauses (i) or (ii) above, if such settlement is
effected with the written consent of the Company or the Bank, which consent
shall not be unreasonably withheld; and
(iv) from and against any and all expense whatsoever, as incurred
(including, subject to Section 6(c) hereof, the fees and disbursements of
counsel chosen by the Agent), reasonably incurred in investigating,
preparing or defending against any litigation, or any investigation,
proceeding or inquiry by any governmental agency or body, commenced or
threatened, or any pending or threatened claim whatsoever described in
clauses (i) or (ii) above, to the extent that any such expense is not paid
under (i), (ii) or (iii) above;
provided, however, that the indemnification provided for in this paragraph (a)
-------- -------
shall not apply to any loss, liability, claim, damage or expense to the extent
arising out of any untrue statement or alleged untrue statement of a material
fact or omission or alleged omission of a material fact required to be stated
therein or necessary to make not misleading any statements contained in the
Prospectus (or any amendment or supplement thereto) made in reliance upon and in
conformity with the Agent Information. 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 in the event that it is
found in a final judgement by a court of
27
competent jurisdiction to constitute an impermissible covered transaction under
Section 23A of the Federal Reserve Act, as amended.
(b) The Agent agrees to indemnify and hold harmless the Company, the
Bank, their directors and trustees, each of their officers who signed the
Registration Statement and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act against
any and all loss, liability, claim, damage and expense described in the
indemnity contained in subsection (a) of this Section, as incurred, but only
with respect to untrue statements or alleged untrue statements of a material
fact or omissions or alleged omissions of a material fact, made in the
Prospectus (or any amendment or supplement thereto) in reliance upon and in
conformity with the Agent Information.
(c) Each indemnified party shall give notice as promptly as reasonably
practicable to each indemnifying party of any action commenced against it in
respect of which indemnity may be sought hereunder, but failure to so notify an
indemnifying party shall not relieve such indemnifying party from any liability
which it may have otherwise than on account of this indemnity agreement. An
indemnifying party may participate at its own expense in the defense of any such
action. In no event shall the indemnifying parties be liable for fees and
expenses of more than one counsel (in addition to no more than one local counsel
in each separate jurisdiction in which any action or proceeding is commenced)
separate from their own counsel for all indemnified parties in connection with
any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances.
(d) The Company and the Bank also agree that the Agent shall not have
any liability (whether direct or indirect, in contract or tort or otherwise) to
the Bank, the Company, its security holders or the Bank's or the Company's
creditors relating to or arising out of the engagement of the Agent pursuant to,
or the performance by the Agent of the services contemplated by, this Agreement,
except to the extent that any loss, claim, damage or liability is found in a
final judgment by a court of competent jurisdiction to have resulted primarily
from the Agent's bad faith, willful misconduct or gross negligence.
(e) In addition to, and without limiting, the provisions of Section
6(a)(iv) hereof, in the event that the Agent, any person, if any, who controls
the Agent within the meaning of Section 15 of the 1933 Act or Section 20 of the
1934 Act or any of its partners, directors, officers, employees or agents is
requested or required to appear as a witness or otherwise gives testimony in any
action, proceeding, investigation or inquiry brought by or on behalf of or
against the Company, the Bank, the Agent or any of its respective affiliates or
any participant in the transactions contemplated hereby in which the Agent or
such person or agent is not named as a defendant or the subject of an
investigation or inquiry, the Company and the Bank jointly and severally agree
to reimburse the Agent for all reasonable and necessary out-of-pocket expenses
incurred by it in connection with preparing or appearing as a witness or
otherwise giving testimony and to compensate the Agent in an amount to be
mutually agreed upon.
SECTION 7. CONTRIBUTION. In order to provide for just and equitable
contribution in circumstances in which the indemnity agreement provided for in
Section 6 hereof is for any reason held to be unenforceable by the indemnified
parties although applicable in accordance with its terms, the Company, the Bank
and the Agent shall contribute to the aggregate losses, liabilities, claims,
damages and expenses of the nature contemplated by said indemnity agreement
incurred by the Company or the Bank and the Agent, as incurred, in such
proportions (i) that
28
the Agent is responsible for that portion represented by the percentage that the
maximum aggregate marketing fees appearing on the cover page of the Prospectus
bears to the maximum aggregate gross proceeds appearing thereon and the Company
and the Bank are jointly and severally responsible for the balance or (ii) if,
but only if, the allocation provided for in clause (i) is for any reason held
unenforceable, in such proportion as is appropriate to reflect not only the
relative benefits to the Company and the Bank on the one hand and the Agent on
the other, as reflected in clause (i), but also the relative fault of the
Company and the Bank on the one hand and the Agent on the other, as well as any
other relevant equitable considerations; provided, however, that no person
-------- -------
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the 0000 Xxx) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this Section 7,
each person, if any, who controls the Agent within the meaning of Section 15 of
the 1933 Act or Section 20 of the 1934 Act shall have the same rights to
contribution as the Agent, and each director of the Company, each trustee of the
Bank, each officer of the Company who signed the Registration Statement and each
person, if any, who controls the Company or the Bank within the meaning of
Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same
rights to contribution as the Company and the Bank. Notwithstanding anything to
the contrary set forth herein, to the extent permitted by applicable law, in no
event shall the Agent be required to contribute an aggregate amount in excess of
the aggregate marketing fees to which the Agent is entitled and actually paid
pursuant to this Agreement.
SECTION 8. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE DELIVERY.
All representations, warranties and agreements contained in this Agreement, or
contained in certificates of officers of the Company or the Bank submitted
pursuant hereto, shall remain operative and in full force and effect, regardless
of any investigation made by or on behalf of the Agent or any controlling
person, or by or on behalf of the Company, and shall survive delivery of the
Securities.
SECTION 9. TERMINATION OF AGREEMENT.
(a) The Agent may terminate this Agreement, by notice to the Company, at
any time at or prior to Closing Time (i) if there has been, since the date of
this Agreement or since the respective dates as of which information is given in
the Registration Statement, any material adverse change in the financial
condition, results of operations or business of the Company or the Bank, or of
the Company, the Bank and the Subsidiaries, taken as a whole, whether or not
arising in the ordinary course of business; (ii) if there has occurred any
material adverse change in the financial markets in the United States or
elsewhere or any outbreak of hostilities or escalation thereof or other calamity
or crisis the effects of which, in the judgement of the Agent, are so material
and adverse as to make it impracticable to market the Securities or to enforce
contracts, including subscriptions or orders, for the sale of the Securities;
(iii) if trading generally on either the Nasdaq Stock Market or the New York
Stock Exchange has been suspended, or minimum or maximum prices for trading have
been fixed, or maximum ranges for prices for securities have been required,
by either of said Exchanges or by order of the Commission or any other
governmental authority, or if a banking moratorium has been declared by either
Federal or New York authorities; (iv) if any condition specified in Section 5
shall not have been fulfilled when and as required to be fulfilled; (v) if there
shall have been such material adverse change in the condition or prospects of
the Company or the Bank or the prospective market for the Company's securities
as in the Agent's good faith opinion would make it inadvisable to proceed with
the offering, sale or delivery of the Securities; (vi) if, in the Agent's
29
good faith opinion, the price for the Securities established by FinPro, Inc. is
not reasonable or equitable under then prevailing market conditions; or (vii) if
the Conversion is not consummated prior to March 31, 1997.
(b) If this Agreement is terminated pursuant to this Section, such
termination shall be without liability of any party to any other party except
that the provisions of Section 4 relating to reimbursement of expenses and the
provisions of Sections 6 and 7 hereof shall survive any termination of this
Agreement.
SECTION 10. NOTICES. All notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the Agent
shall be directed to the Agent at Two World Trade Center, 104th Floor, New York,
New York 10048, attention of Xxxxxxxxx X. Xxxxxx, Principal, with a copy to
Xxxxxxx X. XxXxxxxxxx, Esq., Xxxxxxx Xxxxxxxx & Xxxx at Two World Xxxxx Xxxxxx,
00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000; notices to the Company and the Bank shall
be directed to either of them at 0000 Xxx Xxxxxxxx Xxxxxxxxx, Xxxxxx, Xxx Xxxx
00000, attention of Xxxxxx X. Xxxxxxx, President and Chief Executive Officer,
with a copy to Xxxxxxx X. Xxxxxxxx, Esq., Xxxxxxx, Xxxxxx & Xxxxxxxx, 0000
Xxxxxxxxx Xxxxxx, X.X., Xxxxxxxxxx, X.X. 00000.
SECTION 11. PARTIES. This Agreement shall inure to the benefit of and be
binding upon the Agent, the Company and the Bank and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Agent, the Company and the Bank and their respective successors and the
controlling persons and officers and directors referred to in Sections 6 and 7
and their heirs and legal representatives, any legal or equitable right, remedy
or claim under or in respect of this Agreement or any provision herein or
therein contained. This Agreement and all conditions and provisions hereof and
thereof are intended to be for the sole and exclusive benefit of the Agent, the
Company and the Bank and their respective successors, and said controlling
persons and officers and directors and their heirs and legal representatives,
and for the benefit of no other person, firm or corporation.
SECTION 12. ENTIRE AGREEMENT; AMENDMENT. This Agreement represents the
entire understanding of the parties hereto with reference to the transactions
contemplated hereby and supersedes any and all other oral or written agreements
heretofore made, except for the engagement letter, dated June 3, 1996, by and
between the Agent and the Bank, relating to the Agent's providing conversion
agent services and proxy solicitation services to the Company and the Bank in
connection with the Conversion, which engagement letter shall be governed solely
by its terms. No waiver, amendment or other modification of this Agreement shall
be effective unless in writing and signed by the parties hereto.
SECTION 13. GOVERNING LAW AND TIME. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York applicable to
agreements made and to be performed in said State without regard to the
conflicts of laws provisions thereof. Specified times of day refer to Eastern
time.
SECTION 14. SEVERABILITY. Any term or provision of this Agreement which
is invalid or unenforceable in any jurisdiction shall, as to that jurisdiction,
be ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the
30
remaining terms and provisions of this Agreement or affecting the validity or
enforceability of any of the terms or provisions of this Agreement in any other
jurisdiction. If any provision of this Agreement is so broad as to be
unenforceable, the provision shall be interpreted to be only so broad as is
enforceable.
SECTION 15. HEADINGS. Sections headings are not to be considered part of
this Agreement, are for convenience and reference only and are not to be deemed
to be full or accurate descriptions of the contents of any paragraph or
subparagraph.
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If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
between the Agent, the Company and the Bank in accordance with its terms.
Very truly yours,
ROSLYN BANCOPR, INC.
By:______________________________________
Xxxxxx X. Xxxxxxx
President and Chief Executive Officer
THE XXXXXX SAVINGS BANK
By:______________________________________
Xxxxxx X. Xxxxxxx
President and Chief Executive Officer
CONFIRMED AND ACCEPTED,
as of the date first above written:
SANDLER X'XXXXX & PARTNERS, L.P.
By: Sandler X'Xxxxx & Partners Corp.,
the sole general partner
By:__________________________________
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If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
between the Agent, the Company and the Bank in accordance with its terms.
Very truly yours,
XXXXXX BANCORP, INC.
By:/s/ Xxxxxx X. Xxxxxxx
------------------------------------
Xxxxxx X. Xxxxxxx
President and Chief Executive Officer
THE XXXXXX SAVINGS BANK
By:/s/ Xxxxxx X. Xxxxxxx
------------------------------------
Xxxxxx X. Xxxxxxx
President and Chief Executive Officer
CONFIRMED AND ACCEPTED,
as of the date first above written:
SANDLER X'XXXXX & PARTNERS, L.P.
By: Sandler X'Xxxxx & Partners Corp.,
the sole general partner
By:/s/ Xxxxxxxxx X. Xxxxxx
--------------------------------------
Vice President
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Exhibit A
---------
XXXXXX BANCORP, INC.
34,165,049 Shares
(Maximum Offered in Conversion)
Common Stock
(Par Value $0.01 Per Share)
SELECTED DEALER'S AGREEMENT
_________, 1996
We have agreed to assist Xxxxxx Bancorp, Inc. (the "Company") in connection
with the offer and sale of shares (the "Shares") of Common Stock, par value
$0.01 per share, of the Company, to be issued in connection with the conversion
of The Xxxxxx Savings Bank, a New York State chartered savings bank (the
"Bank"), from mutual to stock form. The Company, in connection with its plan to
effect such conversion, offered [34,165,049] Shares for subscription by certain
of the Bank's depositors and the Bank's employee stock ownership plan in a
subscription offering, and certain members of the general public in a concurrent
direct community offering. The Shares which were not subscribed for pursuant to
such subscription and direct community offerings are being offered to the public
in a syndicated community offering (the "Syndicated Community Offering") in
accordance with the rules of the New York State Banking Department (the "NYBD")
and the conversion regulations of the Federal Deposit Insurance Corporation (the
"FDIC"). The Shares, the bases on which the number of Shares to be issued may
change, and certain of the terms on which they are being offered are more fully
described in the enclosed Prospectus (the "Prospectus").
We are offering to Selected Dealers (of which you are one) the opportunity
to participate in the solicitation of offers to buy the Shares in the Syndicated
Community Offering and we will pay you a fee in the amount of [one and one-half
percent (1.5%)] of the dollar amount of the Shares sold on behalf of the Company
by you. The number of Shares sold by you shall be determined based on the
authorized designation of your firm on the order form or forms for such Shares
accompanying the funds transmitted for payment therefor (whether in the form of
a check payable to the Bank or a withdrawal from an existing account at the
Bank) to the special account established by the Company for the purpose of
holding such funds. It is understood, of course, that payment of your fee will
be made only out of compensation received by us for the Shares sold on behalf of
the Company by you, as evidenced in accordance with the preceding sentence. The
Bank has requested us to invite you to become a "Sponsoring Dealer," that is, a
Selected Dealer who solicits offers which result in the sale on behalf of the
Bank of at least ______ Shares. You may become a Sponsoring Dealer (subject to
your fulfillment of the requirement in the preceding sentence) by checking the
box on the confirmation at the end of this letter. If you become a Sponsoring
Dealer, you shall be entitled to an additional fee in the amount of _____
percent (____%) of the dollar amount of the Shares sold on behalf of the Company
by you as evidenced in the manner set forth above.
Each order form for the purchase of Shares must set forth the identity,
---- --------
address and tax identification number of each person ordering Shares regardless
------- --- -------------- ------
of whether the Shares will be registered in street name or in the purchaser's
name. Such order form should clearly identify your firm.
As soon as practicable after all the Shares are sold, we will remit to
you, out of our compensation as provided above, the fees to which you are
entitled hereunder, including your Sponsoring Dealer fee.
This offer is made subject to the terms and conditions herein set forth
and is made only to Selected Dealers which are (i) members in good standing of
the National Bank of Securities Dealers, Inc. ("NASD") which agree to comply
with all applicable rules of the NASD, including, without limitation, the NASD's
Interpretation With Respect to Free-Riding and Withholding and Section 24 of
Article III of the NASD's Rules of Fair Practice, or (ii) foreign dealers not
eligible for membership in the NASD which agree (A) not to sell any Shares
within the United States, its territories or possessions or to persons who are
citizens thereof or resident therein and (B) in making other sales to comply
with the above-mentioned NASD Interpretation, Sections 8, 24 and 36 of the
above-mentioned Article III as if they were NASD members and Section 25 of such
Article III as it applies to non-member brokers or dealers in a foreign country.
Orders for Shares will be strictly subject to confirmation and we, acting
on behalf of the Company, reserve the right in our absolute discretion to reject
any order in whole or in part, to accept or reject orders in the order of their
receipt or otherwise, and to allot. Neither you nor any other person is
authorized by the Company, the Bank or by us to give any information or make
anyrepresentations other than those contained in the Prospectus in connection
with the sale or any of the Shares. No Selected Dealer is authorized to act as
agent for us when soliciting offers to buy the Shares from the public or
otherwise. No Selected Dealer shall engage in any stabilizing (as defined in
Rule 10b-7 promulgated under the Securities Exchange Act of 1934) with respect
to the Company's Common Stock during the offering.
We and each Selected Dealer assisting in selling Shares pursuant hereto
agree to comply with the applicable requirements of the Securities Exchange Act
of 1934 and applicable rules and regulations issued by the Federal Reserve Board
and the OTS. In addition, we and each Selected Dealer confirm that the
Securities and Exchange Commission interprets Rule 15c2-8 promulgated under the
Securities Exchange Act of 1934 as requiring that a prospectus be supplied to
each person who is expected to receive a confirmation of sale 48 hours prior to
delivery of such person's order form.
We and each Selected Dealer further agree to the extent that our customers
desire to pay for Shares with funds held by or to be deposited with us, in
accordance with the interpretation of the Securities and Exchange Commission of
Rule 15c2-4 promulgated under the Securities Exchange Act of 1934 either (a)
upon receipt of an executed order form or direction to execute an order form on
behalf of a customer to forward the syndicated community offering price for the
Shares ordered on or before 12:00 noon on the business day following receipt or
execution of an order form by us to the Bank for deposit in a segregated account
or (b) to solicit indications of interest in which event (i) we will
subsequently contact any customers indicating interest to confirm the interest
and give instructions to execute and return an order form or to receive
authorization to execute an order form on their behalf, (ii) we will mail
2
acknowledgements of receipt of orders to each customer confirming interest on
the business day following such confirmation, (iii) we will debit accounts of
such customers on the fifth business day (the "debit date") following receipt of
the confirmation referred to in (i), and (iv) we will forward completed order
forms together with such funds to the Bank on or before 12:00 noon on the next
business day following the debit date for deposit in a segregated account. We
acknowledge that if the procedure in (b) is adopted, our customer's funds are
not required to be in their accounts until the debit date. We and each Selected
Dealer further acknowledge that, in order to use the foregoing "sweep
arrangements," we comply with the net capital requirements for broker/dealers
under Rule 15c3-1(a)(1) of the Securities Exchange Act of 1934.
Unless earlier terminated by us, this Agreement shall terminate 45 full
business days after the date hereof, but may be extended by us for an additional
period or periods not exceeding 30 full business days in the aggregate. We may
terminate this Agreement or any provisions hereof at any time by written or
telegraphic notice to you. Of course, our obligations hereunder are subject to
the successful completion of the offering, including the sale of all of the
Shares.
You agree that at any time or times prior to the termination of this
Agreement you will, upon our request, report to us the number of Shares sold on
behalf of the Company by you under this Agreement.
We shall have full authority to take such actions as we may deem advisable
in respect to all matters pertaining to the offering. We shall be under no
liability to you except for lack of good faith and for obligations expressly
assumed by us in this Agreement.
Upon application to us, we will inform you as to the states in which we
believe the Shares have been qualified for sale under, or are exempt from the
requirements of, the respective blue sky laws of such states, but we assume no
responsibility or obligation as to your rights to sell Shares in any state.
Additional copies of the Prospectus and any supplements thereto will be
supplied in reasonable quantities upon request.
Any notice from us to you shall be deemed to have been duly given if
mailed, telephoned or telegraphed to you at the address to which this Agreement
is mailed.
This Agreement shall be construed in accordance with the laws of the State of
New York.
Please confirm your agreement hereto by signing and returning the
confirmation accompanying this letter at once to us at Sandler X'Xxxxx &
Partners, L.P., Xxx Xxxxx Xxxxx Xxxxxx, 000xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000.
The enclosed duplicate copy will evidence the agreement between us.
Very truly yours,
SANDLER X'XXXXX & PARTNERS, L.P.
By:
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