GRAND CENTRAL FINANCIAL CORP.
Up to 2,645,000 Shares of Common Stock
($0.01 Par Value Per Share)
Purchase Price $10.00 Per Share
AGENCY AGREEMENT
November ___, 1998
Xxxxxxx Xxxx & Company,
a Division of Xxxxx, Xxxxxxxx & Xxxxx, Inc.
000 Xxxxxxxxx Xxxxx
Xxxxxx, Xxxx 00000-0000
Ladies and Gentlemen:
Grand Central Financial Corp., Wellsville, Ohio ("Company"), and
Central Federal Savings and Loan Association of Wellsville, Wellsville, Ohio
("Association"), a federally chartered mutual savings and loan association with
its deposit accounts insured by the Savings Association Insurance Fund ("SAIF")
administered by the Federal Deposit Insurance Corporation ("FDIC"), hereby
confirm their agreement with Xxxxxxx Xxxx & Company, a Division of Xxxxx,
Xxxxxxxx & Xxxxx, Inc.
("Agent") as follows:
Section 1. The Offering. The Association, in accordance with a plan of
conversion ("Plan"), adopted by its Board of Directors, intends to convert from
a federally chartered mutual savings and loan association to a federally
chartered stock savings and loan association, and issue all of its outstanding
capital stock to the Company. Unless the context requires otherwise, all
references to "Association" herein shall include the Association in its mutual
and in its converted form as a federal stock savings and loan association.
Pursuant to the Plan, the Company intends to offer and sell up to
2,300,000 (subject to adjustment up to 2,645,000) shares of its common stock,
par value $0.01 per share ("Shares" or "Common Stock"), in a subscription
offering ("Subscription Offering") to (i) Eligible Account Holders, (ii) the
Association's ESOP, (iii) Supplemental Eligible Account Holders and (iv) Other
Members, as those terms are defined in the Plan. The Company shall offer any
Shares not subscribed for in the Subscription Offering for sale in a community
offering ("Community Offering" and, when referred to together with the
Subscription Offering, the "Subscription and Community Offering") to certain
members of the general public to whom a copy of the Prospectus (as hereinafter
defined) is delivered, with preference given first, to natural persons who
reside in Columbiana, Xxxxxxxx and Xxxxxxxxx Counties, Ohio. If any Shares are
not subscribed for or purchased in the
Xxxxxxx Xxxx & Company,
a Division of Xxxxx Xxxxxxxx & Xxxxx, Inc.
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Subscription and Community Offering, the Agent, at the request of the Company
and the Association, shall seek to form a syndicate of selected registered
broker-dealers to assist in the sale of such Shares on a best efforts basis in a
syndicated community offering ("Syndicated Community Offering"). It is
acknowledged that the purchase of the Shares is subject to the purchase
limitations described in the Plan and that the Company and the Association may
reject, in whole or in part, any orders received in the Community Offering or
the Syndicated Community Offering. The Subscription Offering, Community Offering
and Syndicated Community Offering are collectively referred to as the
"Offering." Collectively, these transactions are referred to herein as the
"Conversion."
The Company has filed with the Securities and Exchange Commission
("Commission") a registration statement on Form SB-2 (File No. 333-64089),
including exhibits (as amended or supplemented, the "Registration Statement"),
containing a prospectus relating to the Offering, for the registration of the
Shares under the Securities Act of 1933 ("1933 Act"), and has filed such
amendments and supplements thereto, if any, and such amended prospectuses and
supplemented prospectuses as may have been required to the date hereof. The
prospectus, as amended or supplemented, on file with the Commission at the time
the Registration Statement initially becomes effective is hereinafter called the
"Prospectus," except that if any prospectus is filed by the Company pursuant to
Rule 424(b) or (c) of the rules and regulations of the Commission under the 1933
Act ("1933 Act Regulations") differing from the prospectus on file at the time
the Registration Statement initially becomes effective, the term "Prospectus"
shall refer to the prospectus filed pursuant to Rule 424(b) or (c) from and
after the time said prospectus is filed with the Commission.
The Association has filed with the Office of Thrift Supervision ("OTS")
an Application for Approval of Conversion, including exhibits (as amended or
supplemented the "Conversion Application"), including the Prospectus contained
therein, and has filed such amendments or supplements thereto, if any, as may
have been required pursuant to the Home Owners' Loan Act, as amended ("HOLA"),
and 12 C.F.R. Part 563b ("Conversion Regulations"). In addition, the Company has
filed with the OTS an application on Form H-(e)1-S, including exhibits (as
amended or supplemented, the "Holding Company Application"), and has filed such
amendments or supplements thereto, if any, as may have been required to become a
registered savings and loan holding company under the HOLA.
Section 2. Retention of Agent; Compensation and Expenses; Sale and
Delivery of the Shares. Subject to the terms and conditions herein set forth,
the Company and the Association hereby appoint the Agent as their exclusive
financial advisor and marketing agent to utilize its best efforts to solicit
subscriptions for the Shares and to advise and assist the Company and the
Association with respect to the sale of the Shares in the Offering.
On the basis of the representations and warranties and the agreements
herein, but subject to the terms and conditions herein, the Agent accepts such
appointment and agrees to consult with and
Xxxxxxx Xxxx & Company,
a Division of Xxxxx Xxxxxxxx & Xxxxx, Inc.
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advise the Company and the Association as to the matters set forth in the letter
agreement dated June 11, 1998 ("Letter Agreement"), between the Association and
the Agent. The Agent shall not be required to purchase any Shares or take any
action inconsistent with all applicable laws, regulations, decisions or orders.
In the event of the Syndicated Community Offering, the Agent shall seek to
assemble and manage a selling group of selected registered broker-dealers which
are members of the National Association of Securities Dealers, Inc. ("NASD") to
participate in the solicitation of purchase orders for shares under a selected
dealers' agreement in the form attached hereto as Exhibit A.
The obligations of the Agent pursuant to this Agreement shall terminate
upon the completion, termination or abandonment of the Plan by the Association
or upon termination of the Offering, but in no event later than 45 days after
the completion of the Subscription and Community Offering ("End Date"). All
unpaid fees and expenses due to the Agent shall be payable in next day funds at
the earlier of the Closing Date (as hereinafter defined) or the End Date. In the
event the Offering is extended beyond the End Date, the Company, the Association
and the Agent may agree to renew this Agreement under mutually acceptable terms.
In the event the Company is unable to sell a minimum of 1,700,000
Shares during the Offering (including any permitted extensions thereof) herein
provided, this Agreement shall terminate and the Company shall refund to all
persons who have subscribed for any of the Shares, the full amount of their
subscriptions plus accrued interest as set forth in the Prospectus and none of
the parties to this Agreement shall have any obligation to the other parties
hereunder, except as set forth in this Section 2 and in Sections 8, 9, and 10
hereof.
In the event the Offering is terminated for any reason not attributable
to the action or inaction of the Agent, the Agent shall have earned and be
entitled to be paid the fees and expenses accruing to the date of such
termination pursuant to this Section 2.
If all conditions precedent to the consummation of the Conversion,
including, without limitation, the receipt of subscriptions for the minimum
number of Shares permitted to be sold in the Conversion on the basis of the most
recent updated appraisal report and compliance by the Company and the
Association of the conditions set forth in Section 7 hereof to the reasonable
satisfaction of the Agent and its counsel, are satisfied, the Company agrees to
issue, or have issued, the Shares sold in the Offering and deliver certificates
for such Shares within three business days after the Closing Date (as
hereinafter defined) against payment to the Company by any means authorized by
the Plan. The release of Shares against payment therefor shall be made at a
time, date and place mutually acceptable to the Company, the Association and the
Agent. Certificates for Shares shall be delivered directly to the purchasers in
accordance with their directions. The date upon which the Company shall release
or deliver the Shares sold in the Offering, in accordance with the terms herein,
is called the "Closing Date."
Xxxxxxx Xxxx & Company,
a Division of Xxxxx Xxxxxxxx & Xxxxx, Inc.
Page 4
The Agent shall receive the following compensation for its services
hereunder:
(a) A management fee of $25,000, payable in four consecutive
monthly installments, of which $_______ the parties hereto
acknowledge and agree has been paid. Such management fee shall
be deemed earned when due.
(b) A success fee of 1.3% of the aggregate purchase price of the
Shares sold in the Subscription and Community Offering,
excluding Shares subscribed or purchased by the Association's
officers, directors or employees (or their immediate family
members) or by the ESOP or any tax-qualified or stock-based
compensation plans (except Individual Retirement Accounts) or
similar plan created by the Association for some or all of its
directors or employees. The management fee set forth in
subsection (a) shall be applied against the success fee.
(c) For Shares sold in the Syndicated Community Offering by
selected broker-dealers, the Agent shall receive a fee not to
exceed 5.5% of the aggregate purchase price of the Shares sold
by such selected broker-dealers, and the Agent shall pass on
to such selected broker-dealers an amount competitive with
gross underwriting discounts charged at such time for
comparable amounts of stock sold at a comparable price per
share in a similar market environment. In the event any fees
are paid pursuant to this subsection (c), such fees shall be
in lieu of, and not in addition to, the fees paid pursuant to
subsections (a) and (b) above. Fees with respect to purchases
affected with the assistance of broker-dealers other than the
Agent shall be transmitted by the Agent to such broker/dealer.
Whether or not the Conversion is completed or the sale of the Shares by
the Company is consummated, the Company and the Association jointly and
severally agree to pay or reimburse the Agent, from time to time upon the
Agent's request, for: (a) all reasonable out-of-pocket expenses incurred by the
Agent including, but are not limited to, travel, communication, lodging and
postage, not to exceed $10,000 (which expenses the Agent shall document) and (b)
the reasonable legal fees and expenses of its counsel not to exceed $30,000.
The Company and the Association shall bear the expenses of the Offering
customarily borne by issuers including, without limitation, OTS, Commission,
"Blue Sky," and NASD filing and registration fees; the fees of the Association's
accountants, attorneys, appraiser, transfer agent and registrar, and other agent
fees and expenses; any stock issue or transfer taxes; printing, mailing and
marketing and syndicate expenses associated with the Conversion.
Full payment of all fees and expenses payable to the Agent, as
described above, shall be made in next day funds on the earlier of the Closing
Date or the End Date.
Xxxxxxx Xxxx & Company,
a Division of Xxxxx Xxxxxxxx & Xxxxx, Inc.
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Section 3. Representations and Warranties of the Company and
Association. The Company and the Association jointly and severally represent and
warrant to the Agent as follows:
(a) The Registration Statement has been declared effective by the
Commission; at the time the Registration Statement became effective, the
Registration Statement, including the Prospectus contained therein, complied as
to form in all material respects with the requirements of the 1933 Act and the
1933 Act Regulations, and the Registration Statement, including the Prospectus
contained therein, and any information regarding the Company or the Association
contained in Sales Information (as such term is defined in Section 8 hereof)
authorized by the Company or the Association for use in connection with the
Offering, did not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading; and at the time any prospectus was filed with the Commission
pursuant to Rule 424(b) or Rule 424(c) of the 1933 Act regulations and as of the
date of this Agreement, the Registration Statement, including the Prospectus
contained therein (including any amendment or supplement thereto), any
information regarding the Company or the Association contained in Sales
Information (as such term is defined in Section 8 hereof) authorized by the
Company or the Association for use in connection with the Offering did not
contain an untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading; provided, however, that the
representations and warranties in this Section 3(a) shall not apply to
statements or omissions made in reliance upon and in conformity with written
information furnished to the Company or the Association by the Agent expressly
regarding the Agent for use in the Prospectus under the captions "Market for
Common Stock" and "The Conversion--Marketing, Underwriting and Records
Management Services Arrangements."
(b) The Conversion Application has been approved by the OTS and the
related Prospectus and the proxy statement of the Association relating to the
special meeting of members at which the Plan shall be considered for approval by
the Association's eligible voting members have been authorized for use by the
OTS; at the time of the approval of the Conversion Application, including the
Prospectus contained therein, and as of the date of this Agreement, the
Conversion Application, including the Prospectus, complied as to form in all
material respects with the Conversion Regulations. At the time of the approval
of the Conversion Application, including the Prospectus contained therein, and
as of the date of this Agreement, the Conversion Application, including the
Prospectus contained therein, did not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading; provided, however, that the representations and
warranties in this Section 3(b) shall not apply to statements or omissions made
in reliance upon and in conformity with written information furnished to the
Company or the Association by the Agent expressly regarding the Agent for use in
the Prospectus under the captions "Market for Common Stock" and "The
Conversion--Marketing, Underwriting and Records Management Services
Arrangements."
Xxxxxxx Xxxx & Company,
a Division of Xxxxx Xxxxxxxx & Xxxxx, Inc.
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(c) The Holding Company Application has been approved by the OTS.
(d) No order has been issued by the OTS, the Commission or any other
governmental agency preventing or suspending the use of the Prospectus and no
action by or before any governmental entity to revoke any approval,
authorization or order of effectiveness related to the Conversion is pending or,
to the best knowledge of the Company and the Association, threatened.
(e) The Plan has been adopted by the Board of Directors of the
Association as required by the Conversion Regulations and has been acknowledged
by the Board of Directors of the Company.
(f) To the best knowledge of the Company and the Association, no person
has sought to obtain review of the final action of the OTS in approving the Plan
or in approving the Conversion Application or the Holding Company Application
pursuant to the HOLA, the Conversion Regulations, state securities laws and
regulations (collectively, the "Blue Sky Laws").
(g) The Association is organized and is validly existing as a federally
chartered savings and loan association in mutual form of organization in good
standing under the laws of the United States, duly authorized to conduct its
business and own its property as described in the Registration Statement and the
Prospectus; the Association has obtained all licenses, permits and other
governmental authorizations required for the conduct of its business except
those that individually or in the aggregate would not materially adversely
affect the financial condition, earnings, capital, assets or properties of the
Company and the Association taken as a whole; all such licenses, permits and
governmental authorizations are in full force and effect and the Association is
complying therewith in all material respects; the Association is duly qualified
as a foreign corporation to transact business in each jurisdiction in which the
failure to be so qualified in one or more of such jurisdictions would have a
material adverse effect on the financial condition, earnings, capital, assets
properties or business of the Association.
(h) The Association does not own any equity securities or any equity
interest in any business enterprise except as described in the Prospectus.
(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, with
corporate power and authority to own, lease and operate its properties and to
conduct its business as described in the Registration Statement and the
Prospectus; the Company is qualified to do business as a foreign corporation in
each jurisdiction in which the conduct of its business requires such
qualification, except where the failure to so qualify would not have a material
adverse effect on the financial condition, earnings, capital, assets, properties
or the business of the Company; the Company has obtained all licenses, permits
and other governmental authorizations currently required for the conduct of its
business except those that individually or in the aggregate would not materially
adversely affect the financial condition,
Xxxxxxx Xxxx & Company,
a Division of Xxxxx Xxxxxxxx & Xxxxx, Inc.
Page 7
earnings, capital, assets or properties of the Company and the Association taken
as a whole; and all such licenses, permits and governmental authorizations are
in full force and effect, and the Company is complying in all material respects
therewith.
(j) The Association is a member of the Federal Home Loan Bank of
Cincinnati ("FHLB-Cincinnati"); the deposit accounts of the Association are
insured by the FDIC under the SAIF up to applicable legal limits; and no
proceedings for the termination or revocation of such membership or insurance
are pending or, to the best knowledge of the Association, threatened.
(k) The Company and the Association have good and marketable title to
all real property and other assets material to the business of the Company and
the Association and to those properties and assets described in the Registration
Statement and Prospectus as owned by them, free and clear of all liens, charges,
encumbrances or restrictions, except as described therein or are not material to
the business of the Company and the Association, taken as a whole; and all of
the leases and subleases material to the business of the Company and the
Association, including those described in the Registration Statement and
Prospectus, are in full force and effect and the Company and the Association are
complying therewith in all material respects.
(l) The Company and the Association have received an opinion of
Xxxxxxx, Xxxxxx & Xxxxxxxx, Washington, D.C., with respect to the federal income
tax consequences of the Conversion, and an opinion from Xxxxx Xxxxxx and Company
LLP with respect to the Ohio income tax consequences of the Conversion, as
described in the Registration Statement and Prospectus; and the facts and
representations upon which such opinions are based are true, accurate and
complete, and neither the Company nor the Association has taken any actions
inconsistent therewith.
(m) The Company and the Association have all such power, authority,
authorizations, approvals and orders as may be required to enter into and
perform this Agreement; the consummation of the Conversion, the execution,
delivery and performance of this Agreement and the consummation of the
transactions herein contemplated have been duly and validly authorized by all
necessary corporate action on the part of the Company and the Association and
this Agreement has been validly executed and delivered by the Company and the
Association and is the valid, legal and binding Agreement of the Company and
the Association enforceable in accordance with its terms, except as the
enforceability thereof may be limited by (i) bankruptcy, insolvency,
moratorium, reorganization, conservatorship, receivership or other similar
laws relating to or affecting the enforcement of creditors' rights generally
or the rights of creditors of insured financial institutions and their
holding companies, the accounts of whose subsidiaries are insured by the
FDIC, (ii) general equity principles regardless of whether such
enforceability is considered in a proceeding in equity or at law, or (iii)
laws relating to the safety and soundness of insured depository institutions
and their affiliates as set forth in 12 U.S.C. Section 1818(b), and except
to the extent, if any, that the provisions of Sections 8 and 9 hereof may be
unenforceable as against public policy or Section 23A of the Federal Reserve
Act, as amended ("Section 23A").
Xxxxxxx Xxxx & Company,
a Division of Xxxxx Xxxxxxxx & Xxxxx, Inc.
Page 8
(n) The execution, delivery and performance of this Agreement by the
Company and the Association shall not conflict with, or result in a breach of,
any of the terms, provision or conditions of, or constitute a default (or event
which with notice or lapse of time or both would constitute a default) under,
the articles of incorporation or bylaws of the Company or the charter and bylaws
of the Association.
(o) The Company and the Association are not in violation of any
directive from the OTS, FDIC or any other governmental agency to make any change
in the method of conducting their businesses so as to comply in all material
respects with all applicable statutes and regulations and, except as set forth
in the Registration Statement and the Prospectus, there is no suit, proceeding,
charge or action before or by any court, regulatory authority or governmental
agency or body, pending or, to the best knowledge of the Company and the
Association, threatened, which might materially and adversely affect the
Conversion, the performance of this Agreement, the consummation of the
transactions contemplated by the Plan and as described in the Registration
Statement and the Prospectus or which might have a material adverse affect on
the financial condition, earnings, capital, properties, assets or business of
the Company or the Association, taken as a whole.
(p) The financial statements of the Association which are included in
the Registration Statement, the Conversion Application and the Prospectus
present fairly the financial condition, results of operations, retained earnings
and cash flows of the Association at the respective dates thereof and for the
respective periods covered thereby, and comply as to form in all material
respects with the applicable accounting requirements of the Conversion
Regulations, Regulation S-X of the Commission, and generally accepted accounting
principles ("GAAP") consistently applied through the periods involved (except as
noted therein). Such financial statements are consistent with the most recent
financial statements and other reports filed by the Association with the OTS,
except that accounting principles employed in such regulatory filings conform to
the requirements of such authorities and not necessarily to GAAP. The other
financial, statistical and pro forma information and related notes included in
the Prospectus present fairly the information shown therein on a basis
consistent with the audited and unaudited financial statements of the
Association included in the Registration Statement and the Prospectus, and as to
the pro forma adjustments, the adjustments made therein have been properly
applied on the bases described therein.
(q) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, except as may otherwise be stated
therein: (i) there has not been any material adverse change in the financial
condition, earnings, capital, properties or business of the Company and the
Association, considered as one enterprise, whether or not arising in the
ordinary course of business; (ii) there has not been any material increase in
loans past due 90 days or more or in real estate acquired by foreclosure, by
deed-in-lieu of foreclosure, or deemed in-substance foreclosure, (iii) there has
not been any material decrease in surplus and reserves or total assets of the
Association, (iv) neither the Company nor the Association has issued any
securities or incurred
Xxxxxxx Xxxx & Company,
a Division of Xxxxx Xxxxxxxx & Xxxxx, Inc.
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any liability or obligation for borrowing other than in the ordinary course of
business; (v) there have not been any transactions entered into by the Company
or the Association, except with respect to those transactions entered into in
the ordinary course of business; (vi) the properties and business of the Company
and the Association conform in all material respects to the descriptions thereof
contained in the Prospectus; and (vii) neither the Company nor the Association
has any material contingent liabilities except as disclosed in the Prospectus.
(r) Neither the Company nor the Association is in violation of its
articles of incorporation or bylaws or charter or bylaws, as applicable, or in
default in the performance or observance of any obligation, agreement, covenant,
or condition contained in any contract, lease, loan agreement, indenture or
other instrument to which it is a party or by which it or any of its property
may be bound, which would result in a material adverse effect on the financial
condition, earnings, capital, assets, properties or business of the Company and
the Association, considered as one enterprise.
(s) No default exists, and no event has occurred which with notice or
lapse of time, or both, would constitute a material default on the part of the
Company or the Association in the due performance and observance of any term,
covenant or condition of any indenture, mortgage, deed of trust, note, bank loan
or credit agreement or any other instrument or agreement to which the Company or
the Association is a party or by which any of them or any of their property is
bound or affected, except such defaults which would not have a material adverse
effect on the financial condition, earnings, capital, assets, properties or
business of the Company and the Association, considered as one enterprise; and
such agreements are in full force and effect and no other party to any such
agreements has instituted or, to the best knowledge of the Company and the
Association, threatened any action or proceeding wherein the Company or the
Association might be alleged to be in default thereunder under circumstances
where such action or proceeding, if determined adversely to the Company or the
Association, would have a material adverse effect on the financial condition,
earnings, capital, assets, properties or business of Company and the
Association, considered as one enterprise.
(t) Notwithstanding subscription rights granted pursuant to the Plan,
no preemptive rights exist with respect to the Shares.
(u) No approval of any regulatory or supervisory or other public
authority is required in connection with the execution and delivery of this
Agreement or the issuance of the Shares, except for the approvals of the OTS and
the Commission and any necessary qualification, notification, registration or
exemption under the Blue Sky Laws of the various jurisdictions in which the
Shares are to be offered.
(v) Xxxx, Xxxxx, Xxxxxxx, Xxxxx, Oneson & Company, which has certified
the financial statements of the Association contained in the Registration
Statement, Conversion Application, and the Prospectus, are, with respect to the
Company and the Association, independent public
Xxxxxxx Xxxx & Company,
a Division of Xxxxx Xxxxxxxx & Xxxxx, Inc.
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accountants within the meaning of the Code of Professional Ethics of the
American Institute of Certified Public Accountants, the Conversion Regulations,
and the 1933 Act Regulations.
(w) Xxxxxx and Company, Inc., which has prepared the Conversion
Valuation Appraisal Report as of September 18, 1998, as amended or supplemented,
if so amended or supplemented ("Appraisal"), is independent of the Company and
the Association within the meaning of the Conversion Regulations.
(x) Xxxxxx and Company, Inc., which has prepared the Conversion
Valuation Appraisal Report as of September 18, 1998, as amended or supplemented,
if so amended or supplemented ("Appraisal"), is independent of the Company and
the Association within the meaning of the Conversion Regulations.
(y) The Company and the Association have timely filed all required
federal, state and local tax returns; and the Company and the Association have
paid all taxes due and payable in respect of such returns, and except where
permitted to be extended, and have made adequate reserves for similar future tax
liabilities and no deficiency has been asserted with respect thereto by any
taxing authority.
(z) The Association complies in all material respects with the
applicable financial recordkeeping and reporting requirements of the Currency
and Foreign Transactions Reporting Act of 1970, as amended, and the regulations
and rules thereunder.
(aa) Neither the Company nor the Association has lent any funds for the
purchase of Shares or has made any other payment of funds prohibited by law, and
no funds have been set aside to be used for any payment prohibited by law.
(bb) Neither the Company nor the Association has: (i) issued any
securities within the last 18 months (except for notes to evidence other bank
loans or other liabilities in the ordinary course of business or as described in
the Prospectus and with respect to the Company, except for shares issued in
connection with the incorporation of the Company); (ii) had any dealings within
the immediate prior 12 months with any NASD member, or any person related to or
associated with such member, other than discussions and meetings relating to the
Offering and purchases and sales of United States government and agency and
other securities in the ordinary course of business; (iii) entered into a
financial or management consulting agreement except as contemplated hereunder
and except for the Letter Agreement; and (iv) engaged any intermediary
other than the Agent in connection with the Offering, and no person is being
compensated in any manner for such service.
(cc) The Company and the Association have not relied upon the Agent or
the Agent's counsel for any legal, tax or accounting advice in connection with
the Conversion.
Xxxxxxx Xxxx & Company,
a Division of Xxxxx Xxxxxxxx & Xxxxx, Inc.
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(dd) All documents delivered by the Association or the Company or their
representatives in connection with the issuance and sale of the Common Stock and
the Agent's exercise of due diligence, were, on the dates on which they were
delivered, accurate and complete in all material respects or were amended in
writing to be accurate and complete in all material respects.
(ee) The records of Eligible Account Holders, Supplemental Eligible
Account Holders and Other Members are accurate and complete in all material
respects and the Agent shall have no liability to any person for the accuracy,
reliability and completeness of such records or for any denial or reduction of a
subscription or order to purchase Common Stock, whether as a result of a
properly calculated allocation pursuant to the Plan or otherwise, based upon
such records.
(ff) To the best knowledge of the Company and the Association, the
Company and the Association comply in all material respects with all laws, rules
and regulations relating to environmental protection, and neither the Company
nor the Association has been notified or is otherwise aware that either of them
is potentially liable, or is considered potentially liable, under the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended, or any other Federal, state or local environmental laws and
regulations; no action, suit, regulatory investigation or other proceeding is
pending, or to the best knowledge of the Company and the Association, threatened
against the Company or the Association relating to environmental protection, nor
does the Company or the Association have any reason to believe any such
proceedings may be brought against either of them; and to the best knowledge of
the Company and the Association, no disposal, release or discharge of hazardous
or toxic substances, pollutants or contaminants, including petroleum and gas
products, as any of such terms may be defined under federal, state or local law,
has occurred on, in, at or about any facilities or properties owned or leased by
the Company or the Association or in which the Association has a security
interest.
Any certificate signed by an officer of the Company or the Association
pursuant to the conditions of this Agreement and delivered to the Agent or its
counsel that refers to this Agreement shall be deemed to be a representation and
warranty by the Company or the Association to the Agent as to the matters
covered thereby with the same effect as if such representation and warranty were
set forth herein.
Section 4. Representations and Warranties of the Agent. The Agent
represents and warrants to the Company and the Association that:
(a) The Agent is a corporation in good standing under the laws of the
State of New York with full power and authority to provide the services to be
furnished to the Association and the Company hereunder.
(b) The execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby have been duly and validly authorized by
all necessary corporate
Xxxxxxx Xxxx & Company,
a Division of Xxxxx Xxxxxxxx & Xxxxx, Inc.
Page 12
action on the part of the Agent, and this Agreement has been duly and validly
executed and delivered by the Agent and is the legal, valid and binding
agreement of the Agent, enforceable in accordance with its terms, except as the
enforceability thereof may be limited by (i) bankruptcy, insolvency, moratorium,
reorganization, conservatorship, receivership or other similar laws relating to
or affecting the enforcement of creditors' rights generally, (ii) general equity
principles regardless of whether such enforceability is considered in a
proceeding in equity or at law, or (iii) except to the extent, if any, that the
provisions of Sections 8 and 9 hereof may be unenforceable as against public
policy.
(c) The execution and delivery of this Agreement by the Agent, the
consummation of the transactions contemplated hereby and compliance with the
terms and provision hereof shall not conflict with, or result in a breach of,
any of the terms, provision or conditions of, or constitute a default (or event
which with notice or lapse of time or both would constitute a default) under,
the articles of incorporation of the Agent or any material agreement, indenture
or other instrument to which the Agent is a party or by which it or its property
is bound.
(d) The Agent and its employees, and to the best knowledge of the
Agent, its representatives, who shall perform any of the services hereunder
shall be duly authorized and empowered, and shall have all licenses, approvals
and permits necessary to perform such services; and the Agent is a registered
selling agent in each of the jurisdictions in which the Shares are to be offered
for sale by the Company in reliance upon the Agent as a registered selling agent
as set forth in the blue sky memorandum prepared with respect to the Offering.
(e) No approval of any regulatory, supervisory or other public
authority other than the NASD is required in connection with the Agent's
execution and delivery of this Agreement and the approval of the NASD has been
received.
(f) There is no suit, proceeding, charge, or action before or by any
court, regulatory authority or government agency or body pending or, to the best
knowledge of the Agent, threatened, which might materially and adversely affect
the Agent's performance of this Agreement.
Section 5. Covenants of the Company and the Association. The Company
and the Association hereby jointly and severally covenant with the Agent as
follows:
(a) From the time the Registration Statement, including the Prospectus
contained therein (including any amendment or supplement thereto), became
effective and up to the Closing Date, the Registration Statement, including the
Prospectus contained therein (including any amendment or supplement thereto),
and any information regarding the Company or the Association contained in Sales
Information (as such term is defined in Section 8 hereof) authorized by the
Company or the Association for use in connection with the Offering, shall not
contain an untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in light
Xxxxxxx Xxxx & Company,
a Division of Xxxxx Xxxxxxxx & Xxxxx, Inc.
Page 13
of the circumstances under which they were made, not misleading; provided,
however, that the covenant in this Section 5(a) shall not apply to statements or
omissions made in reliance upon and in conformity with written information
furnished to the Company or the Association by the Agent expressly regarding the
Agent for use in the Prospectus under the captions "Market for Common Stock" and
"The Conversion--Marketing, Underwriting and Records Management Services
Arrangements."
(b) From the time of the approval of the Conversion Application,
including the Prospectus contained therein, and up to the Closing Date, the
Conversion Application, including the Prospectus contained therein, shall not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading; provided,
however, that this covenant in this Section 5(b) shall not apply to statements
or omissions made in reliance upon and in conformity with written information
furnished to the Company or the Association by the Agent expressly regarding the
Agent for use in the Prospectus under the captions "Market for Common Stock" and
"The Conversion--Marketing, Underwriting and Records Management Services
Arrangements."
(c) At any time after the date the Registration Statement is declared
effective, the Company shall not file any amendment or supplement to the
Registration Statement without providing the Agent and its counsel an
opportunity to review such amendment or supplement, and shall not file any
amendment or supplement to which the Agent or its counsel shall reasonably
object.
(d) At any time after the Conversion Application is approved by the
OTS, the Association shall not file any amendment or supplement to the
Conversion Application without providing the Agent and its counsel an
opportunity to review such amendment or supplement, and shall not file any
amendment or supplement to which the Agent or its counsel shall reasonably
object.
(e) At any time after the Holding Company Application is approved by
the OTS, the Company shall not file any amendment or supplement to such Holding
Company Application without providing the Agent and its counsel an opportunity
to review such amendment or supplement, and shall not file any amendment or
supplement to which the Agent or its counsel shall reasonably object.
(f) The Company and the Association shall notify the Agent in writing
of any violation of its articles of incorporation and bylaws, in the case of the
Company, and its charter and bylaws, in the case of the Association, at any time
after the date hereof and prior to the Closing Date. Unless waived in writing by
the Agent, which waiver shall not be unreasonably withheld, the Company shall
not be in violation of its articles of incorporation or bylaws, and the
Association shall not be in violation of its charter or bylaws, at any time
after the date hereof and prior to the Closing Date.
Xxxxxxx Xxxx & Company,
a Division of Xxxxx Xxxxxxxx & Xxxxx, Inc.
Page 14
(g) The Company and the Association shall use their best efforts to
cause any post-effective amendment to the Registration Statement to be declared
effective by the Commission and any post-approval amendment to the Conversion
Application to be approved by the OTS, and shall immediately notify the Agent
upon receipt of any information concerning any of the following events: (i) when
any post-effective amendment to the Registration Statement has become effective;
(ii) when any post-approval amendment to the Conversion Application has been
approved; (iii) when any post-approval amendment to the Holding Company
Application has been approved; (iv) when any comments from the Commission, the
OTS, or any other governmental entity are issued with respect to the
Registration Statement, Conversion Application, Holding Company Application, or
the transactions contemplated by this Agreement; (v) when any request is made by
the Commission, the OTS or any other governmental entity for any amendment or
supplement to the Registration Statement, the Conversion Application or the
Holding Company Application, or for any other additional information; (vi) when
the Commission, the OTS or any other governmental entity issues any order or
takes or threatens any action to suspend the Offering, the effectiveness of the
Registration Statement, or the use of the Prospectus or any other filing of the
Company or the Association under the Conversion Regulations, or other applicable
law; (vii) the issuance by the Commission, the OTS or any other governmental
authority of any stop order suspending the effectiveness of the Registration
Statement or the approval of the Conversion Application or Holding Company
Application, or of the initiation or threat of initiation of any proceedings for
any such purpose; or (viii) the occurrence of any event mentioned in paragraph
(m) below; and the Company and the Association will make every reasonable effort
to prevent the issuance by the Commission, the OTS or any state authority of any
order referred to in (vi) and (vii) above, and if any such order shall at any
time be issued, to obtain the lifting thereof at the earliest possible time.
(h) As of the Closing Date, the Association shall have all approvals
and authority to issue and sell the capital stock of the Association to the
Company and the Company shall have such approvals and orders to issue and sell
the Shares as provided for herein and as described in the Prospectus.
(i) The Company and the Association shall deliver to the Agent and to
its counsel two conformed copies of the Registration Statement, the Conversion
Application and the Holding Company Application, as originally filed and of each
amendment or supplement thereto. The Company and the Association shall also
deliver such additional copies of the foregoing documents to counsel to the
Agent as may be required for any NASD filings.
(j) Upon consummation of the Conversion, the authorized, issued and
outstanding equity capital of the Company shall be within the range set forth in
the Prospectus under the caption "Capitalization," and, except for shares issued
in connection with the incorporation of the Company which shall be canceled upon
consummation of the Conversion, no shares of Common Stock shall be issued and
outstanding prior to the Closing Date; the Shares shall have been duly and
validly authorized for issuance and, when issued and delivered by the Company
pursuant to the Plan against
Xxxxxxx Xxxx & Company,
a Division of Xxxxx Xxxxxxxx & Xxxxx, Inc.
Page 15
payment of the consideration calculated as set forth in the Plan and in the
Prospectus, shall be duly and validly issued, fully paid and non-assessable; the
terms and provisions of the Shares shall conform to the description thereof
contained in the Registration Statement and the Prospectus; and upon the
issuance of the Shares, good title to the Shares shall be transferred from the
Company to the purchasers thereof against payment therefor, subject to such
claims as may be asserted against the purchasers thereof by third-party
claimants.
(k) The Company and the Association shall furnish to the Agent, from
time to time during the period when the Prospectus is required to be delivered
under the 1933 Act or the Securities Exchange Act of 1934 ("1934 Act"), such
number of copies of such Prospectus as the Agent may reasonably request for the
purposes contemplated by the 1933 Act, the 1933 Act Regulations, the 1934 Act or
the rules and regulations promulgated under the 1934 Act ("1934 Act
Regulations"); and the Company and the Association authorize the Agent to use
the Prospectus in any lawful manner contemplated by the Plan in connection with
the sale of the Shares.
(l) The Company and the Association shall comply with any and all
terms, conditions, requirements and provisions with respect to the Conversion
and the transactions contemplated thereby imposed by the Commission and the OTS,
to be complied with subsequent to the Closing Date; and when the Prospectus is
required to be delivered, the Company and the Association shall comply, at their
own expense, with all requirements imposed upon them by the Commission and the
OTS, including, without limitation, Rule 10b-5 under the 1934 Act, in each case
as from time to time in force, so far as necessary to permit the continuance of
sales or dealing in shares of Common Stock during such period in accordance with
the provisions hereof and the Prospectus.
(m) If, at any time during the period when the Prospectus is
required to be delivered, any event relating to or affecting the Company or
the Association shall occur, as a result of which it is necessary or
appropriate, in the opinion of counsel for the Company and the Association or
in the opinion of the Agent' counsel, to amend or supplement the Registration
Statement or Prospectus in order to make the Registration Statement or
Prospectus not misleading in light of the circumstances existing at the time
the Prospectus is delivered, the Company and the Association shall, at their
own expense, prepare and file with the Commission and the OTS and furnish to
the Agent a reasonable number of copies of an amendment or amendments of, or
a supplement or supplements to, the Registration Statement or Prospectus (in
form and substance satisfactory to the Agent and its counsel after a
reasonable time for review) which shall amend or supplement the Registration
Statement or Prospectus, so that as amended or supplemented the Registration
Statement and the Prospectus shall not contain an untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein, in light of the circumstances existing at the time the
Prospectus is delivered to a purchaser, not misleading.
(n) The Company and the Association shall each timely furnish to the
Agent such information with respect to them as the Agent may from time to time
reasonably request.
Xxxxxxx Xxxx & Company,
a Division of Xxxxx Xxxxxxxx & Xxxxx, Inc.
Page 16
(o) The Company shall take all necessary action required to register
the Shares for offering and sale by the Company or to exempt such Shares from
registration and to exempt the Company as a broker-dealer and its officers,
directors and employees as broker-dealers or Agent under the Blue Sky Laws of
such jurisdictions in which the Agent and the Company and the Association may
reasonably agree upon; provided, however, that the Company shall not be
obligated to file any general consent to service of process or to qualify to do
business in any jurisdiction in which it is not so qualified; and in each
jurisdiction where any of the Shares shall have been qualified or registered the
Company shall prepare and file, at its own expense, such statements and reports
as may be required by the laws of such jurisdiction.
(p) The liquidation account for the benefit of Eligible Account Holders
and Supplemental Eligible Account Holders shall be duly established and
maintained by the Association in accordance with the Conversion Regulations.
(q) The Company and the Association shall not sell or issue, contract
to sell or otherwise dispose of, for a period of 90 days after the Closing Date,
without the prior written consent of the Agent, any shares of Common Stock other
than in connection with any plan or arrangement described in the Prospectus.
(r) The Common Stock shall be the subject of an effective registration
statement under Section 12(g) of the 1934 Act as of the Closing Date and the
Company shall maintain the effectiveness of such registration for not less than
three years.
(s) During the period during which the Common Stock is registered under
the 1934 Act or for three years from the Closing Date, whichever period is
greater, the Company shall furnish to its stockholders as soon as practicable
after the end of each fiscal year an annual report in accordance with Rule
14a-3(b) of the 1934 Act Regulations.
(t) During the period of three years from the Closing Date, the Company
shall furnish to the Agent: (i) as soon as practicable after such information is
publicly available, a copy of each report of the Company furnished to or filed
with the Commission under the 1934 Act or any national securities exchange or
system on which any class of securities of the Company is listed or quoted
(including, but not limited to, reports on Forms 10-K(SB), 10-Q(SB) and 8-K and
all proxy statements and annual reports to stockholders), (ii) if requested, a
copy of each other non-confidential report of the Company mailed to its
stockholders or filed with the Commission, the OTS or any other supervisory or
regulatory authority or any national securities exchange or system on which any
class of securities of the Company is listed or quoted, each press release and
material news items and additional documents and information with respect to the
Company or the Association as the Agent may reasonably request; and (iii) from
time to time, such other non-confidential information concerning the Company or
the Association as the Agent may reasonably request.
Xxxxxxx Xxxx & Company,
a Division of Xxxxx Xxxxxxxx & Xxxxx, Inc.
Page 17
(u) The Company and the Association shall use the net proceeds from the
sale of the Shares in the manner set forth in the Prospectus under the caption
"Use of Proceeds."
(v) The Company shall not distribute any prospectus (as defined in
Section 2(10) of the 1933 Act) other than the Prospectus and the Sales
Information (as defined in Section 8 hereof) in connection with the offer and
sale of the Shares without first notifying the Agent.
(w) The Company shall use its best efforts to (i) encourage and assist
two market makers to establish and maintain a market for the Shares and (ii)
list the Shares on a national securities exchange or on The Nasdaq Stock Market
effective on or prior to the Closing Date.
(x) In accordance with the Plan and as described in the Prospectus, the
Association shall deposit all funds received from subscribers in an interest
bearing account until the Closing Date and the satisfaction of all conditions
precedent to the release of the Shares, or until refunds of such funds have been
made to the persons entitled thereto or withdrawal authorizations canceled.
(y) The Company shall register as a savings and loan holding company
under the HOLA within 90 days of the Closing Date.
(z) The Company and the Association shall take such actions and furnish
such information as are reasonably requested by the Agent in order for the Agent
to ensure compliance with the NASD's "Interpretation Relating to Free Riding and
Withholding."
(aa) The Association shall not amend the Plan of Conversion in any
manner that, in the reasonable opinion of the Agent, would materially and
adversely affect the sale of the Shares or the terms of this Agreement, without
first notifying and receiving the consent of the Agent, which consent shall not
be unreasonably withheld.
(bb) From the date of this Agreement up to the Closing Date, the
records of Eligible Account Holders, Supplemental Eligible Account Holders, and
Other Members shall be accurate, reliable and complete in all material respects;
and the Agent, who shall assist the Company and the Association in their
allocation of the Shares in the event of an oversubscription, shall have no
liability to any person for the accuracy, reliability and completeness of such
records or for any denial or reduction of a subscription or order to purchase
Common Stock, whether as a result of a properly calculated allocation pursuant
to the Plan or otherwise, based upon such records.
(cc) Prior to the Closing Date, the Plan shall have been approved by
the eligible voting members of the Association in accordance with the Conversion
Regulations and the provisions of the Association's mutual charter and bylaws.
Xxxxxxx Xxxx & Company,
a Division of Xxxxx Xxxxxxxx & Xxxxx, Inc.
Page 18
(dd) The Company and the Association shall conduct the Conversion in
accordance with the Plan, all applicable laws and regulations and in the manner
described in the Prospectus.
(ee) The Company and the Association shall comply with the provisions
of Rule 158 of the 1933 Act Regulations.
(ff) The Company shall file with the Commission the information
required by Rule 463 of the 1933 Act Regulations.
(gg) The Company and the Association shall use all reasonable efforts
to comply with, or cause to be complied with, the conditions precedent to the
several obligations of the Agent specified in Section 7 hereof.
(hh) Until and including the Closing Date, the Company and the
Association shall conduct their businesses in material compliance with all
applicable federal and state laws, rules, regulations, decisions, directives and
orders, including all decisions, directives and orders of the Commission, the
OTS and the FDIC.
(ii) Upon completion of the sale by the Company of the Shares
contemplated by the Prospectus, (i) the Association shall have been converted
pursuant to the Plan to a federally chartered stock savings and loan
association, (ii) all of the authorized and outstanding capital stock of the
Association shall be owned by the Company, (iii) the Company shall have no
direct subsidiaries other than the Association, and (iv) the Conversion shall
have been effected in accordance with all applicable statutes, regulations,
decisions and orders; and all terms, conditions, requirements and provisions
with respect to the Conversion (except those that are conditions subsequent)
imposed by the Commission, the OTS or any other governmental agency, if any,
shall have been complied with by the Company and the Association in all material
respects or appropriate waivers shall have been obtained and all notice and
waiting periods shall have been satisfied, waived or elapsed.
(jj) The consummation of the transactions herein contemplated shall not
conflict with or constitute a breach of, or default under, the charter and
bylaws of the Association in capital stock form.
Section 6. Covenants of the Agent. The Agent hereby covenants with the
Company and the Association as follows:
(a) During the Offering, the Agent shall comply, in all material
respects with all requirements imposed upon it by the OTS and, to the extent
applicable, by the 1933 Act, the 1933 Act Regulations, the 1934 Act and the 1934
Act Regulations, and the Agent shall remain a registered selling agent in all
such jurisdictions in which the Company is so relying for the sale of Shares as
Xxxxxxx Xxxx & Company,
a Division of Xxxxx Xxxxxxxx & Xxxxx, Inc.
Page 19
set forth in the blue sky memorandum with respect to the Offering until the
Conversion is consummated or terminated.
(b) The Agent shall distribute the Prospectus in connection with the
sales of the Common Stock in accordance with Conversion Regulations, the 1933
Act and the 1933 Act Regulations.
Section 7. Conditions to the Agent's Obligations. The Agent's
obligations hereunder are subject, to the extent not waived in writing by the
Agent, to the condition that all representations and warranties of the Company
and the Association herein are, at and as of the commencement of the Offering
and at and as of the Closing Date, true and correct in all material respects,
the condition that the Company and the Association shall have performed all of
their obligations hereunder to be performed on or before such dates, and to the
following further conditions:
(a) At the Closing Date, the Company and the Association shall have
conducted the Conversion in all material respects accordance with the Plan, the
Conversion Regulations, and all other applicable laws, regulations, decisions
and orders, including all terms, conditions, requirements and provisions
precedent to the Conversion imposed upon them by the OTS, the FDIC, the
Commission and any state securities agency.
(b) The Registration Statement shall have been declared effective by
the Commission, the Conversion Application approved by the OTS, and the Holding
Company Application approved by the OTS not later than 5:30 p.m. on the date of
this Agreement, or with the Agent's consent at a later time and date; and at the
Closing Date, no stop order suspending the effectiveness of the Registration
Statement shall have been issued under the 1933 Act or proceedings therefore
initiated or threatened by the Commission, or any state authority and no order
or other action suspending the authorization of the Prospectus or the
consummation of the Conversion shall have been issued or proceedings therefore
initiated or, to the best of the Company's and the Association's knowledge,
threatened by the Commission, the OTS or any other federal or state authority.
(c) At the Closing Date, the Agent shall have received:
(1) The favorable opinion, dated as of the Closing Date and
addressed to the Agent for their benefit, of Xxxxxxx, Xxxxxx &
Xxxxxxxx, Washington, D.C., counsel for the Company and the
Association, in form and substance 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 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.
Xxxxxxx Xxxx & Company,
a Division of Xxxxx Xxxxxxxx & Xxxxx, Inc.
Page 20
(iii) The Company is qualified to do business as a foreign corporation
in the State of Ohio and in each other jurisdiction in which such
qualification is required, 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 and the Savings Bank,
taken as a whole.
(iv) Upon consummation of the Conversion 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 will remain outstanding prior to the
Closing Date.
(v) The 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, will be duly and validly issued and fully paid and
non-assessable.
(vi) The issuance of the Securities is not subject to preemptive or
other similar rights arising by operation of law or, to the best of
such counsel's knowledge and information, otherwise.
(vii) The Association has been at all times since the date hereof and
prior to the Closing Date organized, and is validly existing, under the
laws of the United States of America as a federally chartered savings
and loan association of mutual form, and, at the Closing Date , has
become duly organized, validly existing and in good standing under the
laws of the United States of America as a federally chartered savings
and loan association 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 Association is qualified to do business as
a foreign corporation in each jurisdiction in which such qualification
is required, 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 and the Association , taken as a
whole.
(viii) The Association is a member of the FHLB - Cincinnati and the
deposit accounts of the Association are insured by the FDIC up to the
applicable limits.
(ix) Upon consummation of the Conversion, all of the issued and
outstanding capital stock of the Association will be duly authorized
and validly issued and fully paid and nonassessable, and all such
capital stock will be owned of record by the Company free and clear of
any security interest, mortgage, pledge, lien, encumbrance or legal or
equitable claim.
Xxxxxxx Xxxx & Company,
a Division of Xxxxx Xxxxxxxx & Xxxxx, Inc.
Page 21
(x) The OTS has approved the Holding Company Application and the
Conversion Application; such approvals remain in full force and effect
and no action is pending or, to the best of such counsel's knowledge,
threatened respecting the Holding Company Application or the Conversion
Application or the acquisition by the Company of all of the Savings
Bank's issued and outstanding capital stock; the Holding Company
Application and the Conversion Application comply as to form in all
material respects with the Conversion Regulations and all other
applicable requirements of the OTS, and, to best of such counsel's
knowledge, include all documents required to be filed as exhibits
thereto, 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 and loan holding company and is duly
authorized to own all of the issued and outstanding capital stock of
the Association to be issued pursuant to the Plan.
(xi) The execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby, (A) have been duly and validly
authorized by all necessary action on the part of each of the Company
and the Association, and this Agreement constitutes the legal, valid
and binding agreement of each of the Company and the Association,
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 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 or the Association pursuant to any
contract, indenture, mortgage, loan agreement, note, lease or other
instrument to which the Company or the Association is a party or by
which any of them may be bound, or to which any of the property or
assets of the Company or the Association 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
and the Association, taken as a whole, and (C) will not result in any
violation of the provisions of the articles or certificate of
incorporation, charter, as the case may be, or bylaws of the Company or
the Association.
(xii) The Prospectus has been duly authorized by the OTS 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 OTS to revoke such authorization.
(xiii) The Registration Statement has been declared effective under the
1933 Act and no stop order suspending the effectiveness of the
Registration Statement has been issued under
Xxxxxxx Xxxx & Company,
a Division of Xxxxx Xxxxxxxx & Xxxxx, Inc.
Page 22
the 1933 Act or proceedings therefor that require notice initiated or,
to the best of such counsel's knowledge, threatened by the Commission.
(xiv) 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 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.
(xv) At the time the Registration Statement became effective, the
Registration Statement (other than the financial statements, appraisal
and statistical data included therein, as to which no opinion need be
rendered) complied as to form in all material respects with the
requirements of the 1933 Act and the 1933 Act Regulations.
(xvi) 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 and regulatory requirements.
(xvii) To the best of such counsel's knowledge, there are no legal or
governmental proceedings pending or threatened against or affecting the
Company or the Association that 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 or the Association 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.
(xviii) The information in the Prospectus describing the liquidation
account under the captions "The Conversion - Effects of Conversion -
Effect on Liquidation Rights," and the information under "Risk Factors
- Possible Adverse Income Tax Consequences of the Distribution of
Subscription Rights," "Regulation," "The Conversion," "Restrictions on
Acquisition of the Company and the Association," "Description of
Capital Stock of the Company" and "Description of Capital Stock of the
Association" to the extent that it constitutes matters of law,
summaries of legal matters, documents or proceedings, or legal
conclusions, is complete in all material respects.
(xix) 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.
(xx) The Plan has been duly authorized by the Boards of Directors of
the Company and the Association; the Association's charter has been
amended, effective upon consummation
Xxxxxxx Xxxx & Company,
a Division of Xxxxx Xxxxxxxx & Xxxxx, Inc.
Page 23
of the Conversion and the filing of such amended charter with the OTS,
to authorize the issuance of permanent capital stock; to the best of
such counsel's knowledge, the Company and the Association have
conducted the Conversion in all material respects in accordance with
applicable requirements of the Plan, the Conversion Regulations, 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
Association by the OTS and no order, to the best of such counsel's
knowledge, has been issued by the OTS to suspend the Offerings and, no
action for such purpose has been instituted or, to the best of such
counsel's knowledge threatened by the OTS; and, to the best of such
counsel's knowledge, no person has sought to obtain review of the final
action of the OTS in approving the Plan.
(xxi) To the best of such counsel's knowledge and information, each of
the Company and the Association have obtained all licenses, permits and
other governmental approvals and authorizations currently required for
the conduct of their respective businesses as described in the
Registration Statement and Prospectus, except for such licenses,
permits, 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 and the
Association, taken as a whole, and all such licenses, permits and other
governmental authorizations are in full force and effect, and each of
the Company and the Association is in all material respects complying
therewith.
(xxii) Neither the Company nor the Association is in violation of its
certificate or articles of incorporation or charter, as the case may
be, upon consummation of the Conversion nor, to the best of such
counsel's knowledge, 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 or the
Association is a party or by which the Company, the Association or the
Subsidiary or any of their respective 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 and the
Association, taken as a whole.
In giving such opinion, such counsel may rely as to all matters of fact
on certificates of officers or directors of the Company and the Association and
certificates of public officials. All references "to such counsel's knowledge"
in such opinion shall refer to the actual and conscious awareness of facts or
other information of the individual attorneys who have been actively involved in
the transactions contemplated by this Agreement or the preparation of such
opinion . For purposes of such opinion, no proceedings shall be deemed to be
pending, no order or stop order shall be deemed to be issued, and no action
shall be deemed to be instituted unless, in each case, a director or executive
officer of the Company or the Association, or their counsel, shall have received
a copy
Xxxxxxx Xxxx & Company,
a Division of Xxxxx Xxxxxxxx & Xxxxx, Inc.
Page 24
of such proceedings, order, stop order or action. Such counsel may assume that
any agreement is the valid and binding obligation of any parties to such
agreement other than the Company or the Association.
In addition, such counsel shall provide a letter stating that during
the preparation of the Registration Statement, Conversion Application and the
Prospectus, such counsel participated in conferences with certain officers and
other representatives of the Association and the Company, representatives of the
Agent, counsel to the Agent, representatives of the independent public
accountants for the Association and the Company at which the contents of the
Registration Statement, the Conversion Application and the Prospectus and
related matters were discussed and, although they are not passing upon and do
not assume the responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statement, the Conversion Application
and Prospectus, on the basis of the foregoing (relying as to factual matters on
certificates of officers and other factual representations by the Association
and the Company), nothing has come to such counsel's attention that caused them
to believe that the Registration Statement at the time it was declared effective
by the SEC, or the Prospectus as of its date and as of the Closing Date,
contained or contains any untrue statement of a material fact or omitted or
omits to state any material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading (it being understood that such counsel shall express
no comment or opinion with respect to the financial statements, schedules and
other financial information and statistical and stock valuation data included,
or statistical methodology employed, in the Registration Statement, Conversion
Application and Prospectus).
(2) The favorable opinion, dated as of the Closing Date, of
Xxxxxx & Aguggia LLP, Washington, D.C., counsel to the Agent, with
respect to such matters as the Agent may reasonably require. Such
opinion may rely, as to matters of fact, upon certificates of officers
and directors of the Company and the Association delivered pursuant
hereto or as such counsel shall reasonably request.
(d) At the Closing Date, the Agent shall receive a certificate of the
Chief Executive Officer and the Chief Financial Officer of the Company and a
certificate of the Chief Executive Officer and the Chief Financial Officer of
the Association, both dated as of the Closing Date, that state that: (i) they
have reviewed the Prospectus and, at the time the Prospectus became authorized
for final use, the Prospectus did not contain any untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading; (ii) since the respective dates as of which information is given in
the Registration Statement and the Prospectus and as of the Closing Date, no
material adverse change in the financial condition or in the earnings, capital,
properties or business of the Company and the Association, considered as one
enterprise, has occurred and no other event has occurred, which should have been
set forth in an amendment or supplement to the Prospectus which has not been so
set forth, and the conditions set forth in this Section 7 have been satisfied;
(iii) the
Xxxxxxx Xxxx & Company,
a Division of Xxxxx Xxxxxxxx & Xxxxx, Inc.
Page 25
representations and warranties in Section 3 are true and correct with the same
force and effect as though expressly made at and as of the Closing Date; (iv)
the Company and the Association have complied with all agreements and satisfied
all conditions on their part to be performed or satisfied at or prior to the
Closing Date and shall comply in all material respects with all obligations to
be satisfied by them after the Closing Date; (v) no stop order suspending the
effectiveness of the Registration Statement has been initiated or, to the best
knowledge of the Company or the Association, threatened by the Commission or any
state authority; (vi) no order suspending the Offering, the Conversion, or the
effectiveness of the Prospectus has been issued or is pending or, to the best
knowledge of the Company or the Association, threatened by the OTS, the
Commission, or any other authority; and (vii) to the best knowledge of the
Company or the Association, no person has sought to obtain review of the final
action of the OTS approving the Plan.
(e) Prior to and at the Closing Date: (i) in the reasonable opinion of
the Agent, there shall have been no material adverse change in the financial
condition, or in the earnings or business of the Company and the Association,
considered as one enterprise, from that as of the latest dates as of which such
condition is set forth in the Prospectus other than transactions referred to or
contemplated therein; (ii) the Company or the Association shall not have
received any directive from the OTS or the FDIC to make any material change in
the method of conducting their business with which it has not complied (which
directive, if any, shall have been disclosed to the Agent) or which materially
and adversely would affect the business, operations or financial condition or
income of the Company and the Association, considered as one enterprise; (iii)
the Company and the Association shall not have been in default (nor shall an
event have occurred which, with notice or lapse of time or both, would
constitute a default) under any provision of any agreement or instrument
relating to any outstanding indebtedness; (iv) no action, suit or proceedings,
at law or in equity or before or by any federal or state commission, board or
other administrative agency, shall be pending or, to the best knowledge of the
Company and the Association, threatened against the Company or the Association
or affecting any of their properties wherein an unfavorable decision, ruling or
finding would materially and adversely affect the business operations, financial
condition or income of the Company and the Association, considered as one
enterprise; and (v) where required, the Shares have been qualified or registered
for offering and sale under the Blue Sky Laws of the jurisdictions in which the
Shares have been offered for sale.
(f) Concurrently with the execution of this Agreement, the Agent shall
receive a letter from Xxxxx Xxxxxx and Company LLP, dated the date hereof and
addressed to the Agent: (i) confirming that Xxxxx Xxxxxx and Company LLP are
independent public accountants within the meaning of the 1933 Act, the 1933 Act
Regulations, 12 CFR Section 571.2(c)(3) and the Code of Professional Ethics of
the American Institute of Certified Public Accountants, and stating in effect
that based on their reading of the financial statements of the Association as of
December 31, 1997 and 1996 and for the years ended December 31, 1997, 1996 and
1995 audited by Xxxx, Xxxxx, Xxxxxxx, Davis, Oneson & Company and included in
the Registration Statement and the Prospectus, such financial statements and the
related notes comply as to form in all material respects with the
Xxxxxxx Xxxx & Company,
a Division of Xxxxx Xxxxxxxx & Xxxxx, Inc.
Page 26
applicable accounting requirements of the 1933 Act, the 1933 Act Regulations,
the Conversion Regulations, and GAAP applied consistently; (ii) stating in
effect that, on the basis of certain agreed upon procedures (but not an audit
examination in accordance with generally accepted auditing standards) consisting
of a reading of the latest available unaudited interim financial statements of
the Association prepared by the Association, a reading of the minutes of the
meetings of the Boards of Directors of the Association and the Company and the
members of the Association, and consultations with officers of the Association
responsible for financial and accounting matters, nothing came to its attention
which caused it to believe that: (A) the unaudited financial statements of the
Association included in the Prospectus are not in conformity with GAAP applied
on a basis substantially consistent with that of the audited financial
statements included in the Prospectus; and (B) during the period from the date
of the latest audited financial statements included in the Prospectus to a
specified date not more than three business days prior to the date hereof, there
was any increase in borrowings or in non-performing assets by the Company or the
Association; and (C) except as otherwise discussed in the Prospectus, there was
any decrease in retained earnings of the Association at the date of such letter
as compared with amounts shown in the latest audited statement of condition
included in the Prospectus or there was any decrease in net income or net
interest income of the Association for the number of full months commencing
immediately after the period covered by the latest audited income statement
included in the Prospectus and ended on the latest month end prior to the date
of the Prospectus or in such letter as compared to the corresponding period in
the preceding year (included in the Recent Developments Section of the
Prospectus); and (iii) stating that, in addition to the performance of the
procedures referred to in clause (ii) of this subsection (f), it has compared
with the general accounting records of the Company and/or the Association, as
applicable, which are subject to the internal controls of the Company's and/or
the Association's, as applicable, accounting system and other data prepared by
the Company and/or the Association, as applicable, directly from such accounting
records, to the extent specified in such letter, such amounts and/or percentages
set forth in the Prospectus as the Agent may reasonably request, and they have
found such amounts and percentages to be in agreement therewith.
(g) At the Closing Date, the Agent shall receive a letter from Xxxxx
Xxxxxx & Company LLP, dated the Closing Date and addressed to the Agent,
confirming the statements made by them in the letter delivered by them pursuant
to subsection (f) of this Section 10, the "specified date" referred to in clause
(ii) of subsection (f) thereof to be a date specified in such letter, which
shall not be more than three business days prior to the Closing Date.
(h) At the Closing Date, the Agent shall receive a letter from Xxxxxx &
Company, Inc., Inc., dated the Closing Date and addressed to the Agent, (i)
confirming that said firm is independent of the Company and the Association and
is experienced and expert in the area of corporate appraisals within the meaning
of the Conversion Regulations, (ii) stating in effect that the Appraisal
prepared by such firm complies in all material respects with the applicable
requirements of the Conversion Regulations, and (iii) further stating that its
opinion of the aggregate pro forma market value of the Company and the
Association expressed in the appraisal as most recently updated, remains in
effect.
Xxxxxxx Xxxx & Company,
a Division of Xxxxx Xxxxxxxx & Xxxxx, Inc.
Page 27
(i) The Company and the Association shall not have sustained since the
date of the latest audited financial statements included in the Prospectus any
material loss or interference with their businesses from fire, explosion, flood
or other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise than as set
forth or contemplated in the Registration Statement and Prospectus.
(j) At or prior to the Closing Date, the Agent shall receive: (i) a
copy of the letters from the OTS approving the Conversion Application and the
Holding Company Application and authorizing the use of the Prospectus; (ii) a
copy of the order from the Commission declaring the Registration Statement
effective; (iii) a certificate from the OTS evidencing the existence of the
Association; (iv) a certificate of good standing from the State of Delaware
evidencing the good standing of the Company; (v) a certificate from the FDIC
evidencing the Association's insurance of accounts; (vi) a certificate of the
FHLB-Cincinnati evidencing the Association's membership therein, and (vii) any
other documents that the Agent shall reasonably request.
(k) As soon as available after the Closing Date, the Agent shall
receive a copy of the Association's federal stock charter as executed by the
OTS.
(l) At or prior to the Closing Date, there shall not have occurred
any of the following: (i) a suspension or limitation in trading in securities
generally on the New York Stock Exchange or in the over-the-counter market,
or quotations halted generally on The Nasdaq Stock Market, or minimum or
maximum prices for trading have been fixed, or maximum ranges for prices for
securities have been required by either of such exchanges or The Nasdaq Stock
Market or by order of the Commission or any other governmental authority;
(ii) a general moratorium on the operations of commercial banks, Ohio or
federal savings and loan associations or a general moratorium on the
withdrawal of deposits from commercial banks, Ohio or federal savings and
loan associations declared by federal or state authorities; (iii) the
engagement by the United States in hostilities which have resulted in the
declaration, on or after the date hereof, of a national emergency or war; or
(iv) a material decline in the price of equity or debt securities in the
effect of any of the above in the Agent' reasonable judgment, makes it
impracticable or inadvisable to proceed with the Offering or the delivery of
the Shares on the terms and in the manner contemplated in the Registration
Statement and Prospectus.
Section 8. Indemnification.
(a) The Company and the Association jointly and severally agree to
indemnify and hold harmless the Agent, its officers, directors, agents, servants
and employees and each person, if any, who controls the Agent within the meaning
of Section 15 of the 1933 Act or Section 20(a) of the 1934 Act, against any and
all loss, liability, claim, damage or expense whatsoever (including but not
limited to settlement expenses), joint or several, that the Agent or any of them
may suffer or to which the Agent and any such persons may become subject under
all applicable federal or state laws or
Xxxxxxx Xxxx & Company,
a Division of Xxxxx Xxxxxxxx & Xxxxx, Inc.
Page 28
otherwise, and to promptly reimburse the Agent and any such persons upon written
demand for any expenses (including reasonable fees and disbursements of counsel)
incurred by the Agent or any of them in connection with investigating, preparing
to defend or defending any actions, proceedings or claims (whether commenced or
threatened) to the extent such losses, claims, damages, liabilities or actions:
(i) arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement (or any
amendment or supplement thereto), Prospectus (or any amendment or supplement
thereto), the Conversion Application (or any amendment or supplement thereto),
the Holding Company Application (or any amendment or supplement thereto), or any
blue sky application or other instrument or document executed by the Company or
the Association or based upon written information supplied by the Company or the
Association filed in any state or jurisdiction to register or qualify any or all
of the Shares or to claim an exemption therefrom, or provided to any state or
jurisdiction to exempt the Company as a broker-dealer or its officers, directors
and employees as broker-dealers or agents, under the securities laws thereof
(collectively, the "Blue Sky Application"), or any application or other
document, advertisement, oral statement or communication ("Sales Information")
prepared, made or executed by or on behalf of the Company or the Association
based upon written or oral information furnished by or on behalf of the Company
or the Association, whether or not filed in any jurisdiction, in order to
qualify or register the Shares or to claim an exemption therefrom under the
securities laws thereof; (ii) arise out of or based upon the omission or alleged
omission to state in any of the foregoing documents or information, a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading; or
(iii) arise from any theory of liability whatsoever relating to or arising from
or based upon the Registration Statement (or any amendment or supplement
thereto), Prospectus (or any amendment or supplement thereto), the Conversion
Application (or any amendment or supplement thereto), the Holding Company
Application (or any amendment or supplement thereto), any Blue Sky Application
or Sales Information or other documentation distributed in connection with the
Conversion, or (iv) arise out of or based upon the Conversion or the Agent's
engagement hereunder; provided, however, that no indemnification is required
under this paragraph (a) to the extent such losses, claims, damages, liabilities
or actions arise out of or are based upon any untrue material statement or
alleged untrue material statements in, or material omission or alleged material
omission from, the Registration Statement (or any amendment or supplement
thereto), Prospectus (or any amendment or supplement thereto), the Conversion
Application (or any amendment or supplement thereto), the Holding Company
Application (or any amendment or supplement thereto), any Blue Sky Application
or Sales Information made in reliance upon and in conformity with information
furnished in writing to the Company or the Association by the Agent regarding
the Agent; and provided further, however, that the Company and the Association
shall not be liable under the foregoing indemnification provision to the extent
that any loss, claim, damage, liability or action is found in a final judgment
by a court of competent jurisdiction to have resulted from the Agent's bad faith
or gross negligence.
Xxxxxxx Xxxx & Company,
a Division of Xxxxx Xxxxxxxx & Xxxxx, Inc.
Page 29
(b) The Agent agrees to indemnify and hold harmless the Company and the
Association, their directors and officers and each person, if any, who controls
the Company or the Association within the meaning of Section 15 of the 1933 Act
or Section 20(a) of the 1934 Act against any and all loss, liability, claim,
damage or expense whatsoever (including but not limited to settlement expenses),
joint or several, which they, or any of them, may suffer or to which they, or
any of them may become subject under all applicable federal and state laws or
otherwise, and to promptly reimburse the Company, the Association, and any such
persons upon written demand for any expenses (including reasonable fees and
disbursements of counsel) incurred by them, or any of them, in connection with
investigating, preparing to defend or defending any actions, proceedings or
claims (whether commenced or threatened) to the extent such losses, claims,
damages, liabilities or actions arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment or supplement thereto), the Conversion
Application (or any amendment or supplement thereto) or the Prospectus (or any
amendment or supplement thereto), or are based upon the omission or alleged
omission to state in any of the foregoing documents a material fact required to
be stated therein or necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading; provided, however,
that the Agent's obligations under this Section 8(b) shall exist only if and
only to the extent (i) that such untrue statement or alleged untrue statement
was made in, or such material fact or alleged material fact was omitted from,
the Registration Statement (or any amendment or supplement thereto), the
Prospectus (or any amendment or supplement thereto) or the Conversion
Application (or any amendment or supplement thereto), and Blue Sky Application
or Sales Information in reliance upon and in conformity with information
furnished in writing to the Company or the Association by the Agent regarding
the Agent.
(c) Each indemnified party shall give prompt written notice to each
indemnifying party of any action, proceeding, claim (whether commenced or
threatened), or suit instituted against it in respect of which indemnity may
be sought hereunder, but failure to so notify an indemnifying party shall not
relieve it from any liability which it may have on account of this Section 8
or otherwise. An indemnifying party may participate at its own expense in the
defense of such action. In addition, if it so elects within a reasonable time
after receipt of such notice, an indemnifying party, jointly with any other
indemnifying parties receiving such notice, may assume defense of such action
with counsel chosen by it and approved by the indemnified parties that are
defendants in such action, unless such indemnified parties reasonably object
to such assumption on the ground that there may be legal defenses available
to them that are different from or in addition to those available to such
indemnifying party. If an indemnifying party assumes the defense of such
action, the indemnifying parties shall not be liable for any fees and
expenses of counsel for the indemnified parties incurred thereafter in
connection with such action, proceeding or claim, other than reasonable costs
of investigation. In no event shall the indemnifying parties be liable for
the fees and expenses of more than one separate firm of attorneys (and any
special counsel that said firm may retain) for each indemnified party in
connection with any one action, proceeding or claim or separate but similar
or
Xxxxxxx Xxxx & Company,
a Division of Xxxxx Xxxxxxxx & Xxxxx, Inc.
Page 30
related actions, proceedings or claims in the same jurisdiction arising out of
the same general allegations or circumstances.
(d) The agreements in this Section 8 and in Section 9 hereof and the
representations and warranties of the Company and the Association set forth in
this Agreement shall remain operative and in full force and effect regardless
of: (i) any investigation made by or on behalf of the Agent or its officers,
directors or controlling persons, agents or employees or by or on behalf of the
Company or the Association or any officers, directors or controlling persons,
agents or employees of the Company or the Association; (ii) delivery of and
payment hereunder for the Shares; or (iii) any termination of this Agreement. To
the extent applicable, the Company's, the Association's and the Agent'
obligations under this Section 8 are subject to and limited by public policy and
the provisions of applicable law, including Section 23A.
Section 9. Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnification provided for in
Section 8 is due in accordance with its terms but is for any reason held by a
court to be unavailable from the Company, the Association or the Agent, as the
case may be, the Company, the Association and the Agent shall contribute to the
aggregate losses, claims, damages and liabilities (including any investigation,
legal and other expenses incurred in connection with, and any amount paid in
settlement of, any action, suit or proceeding of any claims asserted, but after
deducting any contribution received by the Company, the Association or the Agent
from persons other than the other party thereto, who may also be liable for
contribution) in such proportion so that the Agent is responsible for that
portion represented by the percentage that the fees and expenses paid to the
Agent pursuant to Section 2 of this Agreement bears to the gross proceeds
received by the Company from the sale of the Shares in the Offering, and the
Company and the Association shall be responsible for the balance. If, however,
the allocation provided above is not permitted by applicable law or if the
indemnified party failed to give the notice required under Section 8 above, then
each indemnifying party shall contribute to such amount paid or payable by such
indemnified party in such proportion as is appropriate to reflect not only such
relative fault of the Company and the Association, on the one hand, and the
Agent, on the other, in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities (or actions, proceedings
or claims in respect thereto), but also the relative benefits received by the
Company and the Association, on the one hand, and the Agent, on the other, from
the Offering (before deducting expenses). The relative benefits received by the
Company and the Association, on the one hand, and the Agent, on the other, shall
be deemed to be in the same proportion as the gross proceeds from the Offering
received by the Company bear to the total fees and expenses received by the
Agent. The relative fault shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or the Association, on the one hand, or the Agent, on
the other, and the parties' relative intent, good faith, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company, the Association and the Agent agree that it would not be just and
equitable if
Xxxxxxx Xxxx & Company,
a Division of Xxxxx Xxxxxxxx & Xxxxx, Inc.
Page 31
contribution pursuant to this Section 9 were determined by pro-rata allocation
or by any other method of allocation which does not take into account the
equitable considerations referred to above in this Section 9. The amount paid or
payable by an indemnified party as a result of the losses, claims, damages or
liabilities (or actions, proceedings or claims in respect thereof) referred to
above in this Section 9 shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action, proceeding or claim. It is expressly agreed that
the Agent shall not be required to contribute any amount which in the aggregate
exceeds the amount paid (excluding reimbursable expenses) to the Agent under
this Agreement. It is understood that the above stated limitation on the Agent's
liability is essential to the Agent and that the Agent would not have entered
into this Agreement if such limitation had not been agreed to by the parties to
this Agreement. No person found guilty of any fraudulent misrepresentation
(within the meaning of Section 11(f) of the 1933 Act) shall be entitled to
contribution from any person who was not found guilty of such fraudulent
misrepresentation. The obligations of the Company and the Association under this
Section 9 and under Section 8 shall be in addition to any liability which the
Company and the Association may otherwise have. For purposes of this Section 9,
each of the Agent's, the Company's or the Association's officers and directors
and each person, if any, who controls the Agent or the Company or the
Association within the meaning of the 1933 Act and the 1934 Act shall have the
same rights to contribution as the Agent, the Company or the Association. Any
party entitled to contribution, promptly after receipt of notice of commencement
of any action, suit, claim or proceeding against such party in respect of which
a claim for contribution may be made against another party under this Section 9,
shall notify such party from whom contribution may be sought, but the omission
to so notify such party shall not relieve the party from whom contribution may
be sought from any other obligation it may have hereunder or otherwise than
under this Section 9. To the extent applicable, the Company's, the Association's
and the Agent's obligations under this Section 9 are subject to and limited by
public policy and the provisions of applicable law.
Section 10. Survival of Agreements, Representations and Indemnities.
The respective indemnities of the Company, the Association and the Agent, and
the representations and warranties and other statements of the Company, the
Association and the Agent set forth in or made pursuant to this Agreement, shall
remain in full force and effect, regardless of any termination or cancellation
of this Agreement or any investigation made by or on behalf of the Agent, the
Company, the Association or any controlling person referred to in Section 8
hereof, and shall survive the issuance of the Shares, and any legal
representative, successor or assign of the Agent, the Company, the Association,
and any such controlling person shall be entitled to the benefit of the
respective agreements, indemnities, warranties and representations.
Section 11. Termination. (a) The Agent may terminate its obligations
under this Agreement by giving the notice indicated below in subsection (b) at
any time after this Agreement becomes effective as follows:
Xxxxxxx Xxxx & Company,
a Division of Xxxxx Xxxxxxxx & Xxxxx, Inc.
Page 32
(i) In the event the Company fails to sell the required
minimum number of Shares by the End Date, and in accordance with the
provisions of the Plan or as required by the Conversion Regulations,
and applicable law, this Agreement shall terminate upon refund by the
Association to each person who has subscribed for or ordered any of the
Shares the full amount which it may have received from such person,
together with interest as provided in the Prospectus, and no party to
this Agreement shall have any obligation to the other hereunder, except
as otherwise provided in Sections 2, 8, 9 and 10 hereof.
(ii) If any of the conditions specified in Section 7 shall not
have been fulfilled when and as required by this Agreement unless
waived in writing, or by the Closing Date, this Agreement and all of
the Agent's obligations hereunder may be canceled by the Agent by
notifying the Company and the Association of such cancellation as
provided in Section 12 hereof in writing or at any time at or prior to
the Closing Date, and any such cancellation shall be without liability
of any party to any other party except as otherwise provided in
Sections 2, 8, 9 and 10 hereof.
(iii) In the event either the Company or the Association is in
material breach of the representations and warranties or covenants
contained in Sections 3 and 5 and such breach has not been cured after
the Company and the Association have provided the Agent with notice of
such breach.
(b) If the Agent elects to terminate this Agreement with respect to it
as provided in this Section 11, the Company and the Association shall be
notified promptly by telephone, confirmed by letter.
(c) The Company and the Association may terminate this Agreement with
respect to the Agent in the event the Agent is in material breach of the
representation and warranties or covenants contained in Sections 4 and 6 and
such breach has not been cured after the Company and the Association have
provided the Agent with notice of such breach, and no party to this Agreement
shall have any obligation to the other hereunder, except as provided for in
Sections 2, 8, 9 and 10 hereof.
(d) This Agreement may also be terminated by mutual written consent of
the parties hereto.
Section 12. Notices. All communications hereunder, except as herein
otherwise specifically provided, shall be mailed in writing and if sent to the
Agent shall be mailed or delivered and confirmed to Xxxxxxx Xxxx & Company, a
Division of Xxxxx, Xxxxxxxx & Xxxxx, Inc., 000 Xxxxxxxxx, Xxxxxx, Xxxx
00000-5034, Attention: Xxxx Xxxxx (with a copy to Xxxxxx & Aguggia LLP, 0000 X
Xxxxxx, X.X., Xxxxx 000 Xxxx, Xxxxxxxxxx, X.X. 00000, Attention: Xxxx X. Xxxxxx,
Xx., Esquire), if sent to the Company and the Association, shall be mailed or
delivered and confirmed to
Xxxxxxx Xxxx & Company,
a Division of Xxxxx Xxxxxxxx & Xxxxx, Inc.
Page 33
the Company and the Association at 000 Xxxx Xxxxxx, Xxxxxxxxxx, Xxxx 00000,
Attention: Xxxxxxx X. Xxxxxxxx, President and Chief Executive Officer (with a
copy to Xxxxxxx, Xxxxxx & Xxxxxxxx, 0000 Xxxxxxxxx Xxxxxx, X.X., Xxxxxxxxxx,
X.X. 00000, Attention: Xxxxxxx X. Xxxxxxxx, Esquire).
Section 13. Parties. The Company and the Association shall be entitled
to act and rely on any request, notice, consent, waiver or agreement given on
behalf of the Agent when the same shall have been given by the undersigned. The
Agent shall be entitled to act and rely on any request, notice, consent, waiver
or agreement purportedly given on behalf of the Company or the Association, when
the same shall have been given by the undersigned or any other officer of the
Company or the Association. This Agreement shall inure solely to the benefit of,
and shall be binding upon, the Agent, the Company, the Association, and their
respective successors, legal representatives and assigns, and no other person
shall have or be construed to have any legal or equitable right, remedy or claim
under or in respect of or by virtue of this Agreement or any provision herein
contained.
Section 14. Entire Agreement. It is understood and agreed that this
Agreement is the exclusive agreement among the parties hereto, and supersedes
any prior agreement among the parties (except for specific references herein to
the Letter Agreement) and may not be varied except in writing signed by all the
parties.
Section 15. Partial Invalidity. In the event that any term, provision
or covenant herein or the application thereof to any circumstance or situation
shall be invalid or unenforceable, in whole or in part, the remainder hereof and
the application of said term, provision or covenant to any other circumstances
or situation shall not be affected thereby, and each term, provision or covenant
herein shall be valid and enforceable to the full extent permitted by law.
Section 16. Construction. This Agreement shall be construed in
accordance with the laws of the State of New York, except to the extent that
federal law shall apply.
Section 17. Counterparts. This Agreement may be executed in separate
counterparts, each of which so executed and delivered shall be an original, but
all of which together shall constitute but one and the same instrument.
Xxxxxxx Xxxx & Company,
a Division of Xxxxx Xxxxxxxx & Xxxxx, Inc.
Page 34
If the foregoing correctly sets forth the arrangement among the
Company, the Association, and the Agent, please indicate acceptance thereof in
the space provided below for that purpose, whereupon this letter and the Agent's
acceptance shall constitute a binding agreement.
Very truly yours,
GRAND CENTRAL FINANCIAL CORP.
By:
-------------------------------------------
Xxxxxxx X. Xxxxxxxx
President and Chief Financial Officer
CENTRAL FEDERAL SAVINGS AND LOAN
ASSOCIATION OF WELLSVILLE
By:
-------------------------------------------
Xxxxxxx X. Xxxxxxxx
President and Chief Executive Officer
AGREED TO AND ACCEPTED
AS OF THE DATE FIRST WRITTEN ABOVE:
XXXXXXX XXXX & COMPANY,
A DIVISION OF XXXXX, XXXXXXXX & XXXXX, INC.
By:
----------------------------------
Title:
Name:
EXHIBIT A
GRAND CENTRAL FINANCIAL CORP.
Up to 2,300,000 Shares)
(Par Value $0.01 Per Share)
Selected Dealers' Agreement
___________________ ___, 1998
Gentlemen:
We have agreed to assist Central Federal Savings and Loan Association
of Wellsville, Wellsville, Ohio ("Association"), a federally chartered mutual
savings and loan association, in connection with the offer and sale of up to
2,300,000 shares of the common stock, par value $0.01 per share ("Common
Stock"), of Grand Central Financial Corp., Wellsville, Ohio ("Company"), a
Delaware corporation, to be issued in connection with the conversion of the
Association from the mutual to stock form of ownership pursuant to the Home
Owners' Loan Act, as amended, and 12 C.F.R. Part 563b. The total number of
shares of Common Stock to be offered may be decreased to a minimum of 1,700,000
shares and increased to a maximum of 2,645,000 shares. The price per share has
been fixed at $10.00. The Common Stock, the number of shares to be issued, and
certain of the terms on which they are being offered, are more fully described
in the enclosed Prospectus dated November ____, 1998 ("Prospectus"). In
connection with the Conversion, the Company, on a best efforts basis, is
offering for sale such shares of Common Stock ("Shares"), in a Subscription
Offering (as defined in the Prospectus). Any Shares not sold in the Subscription
Offering shall be offered to the general public in the Community Offering (as
defined in the Prospectus) giving preference first, to natural persons residing
in Columbiana, Mahoning and Jefferson Counties, Ohio.
The Subscription and Community Offerings are being conducted under a
plan of conversion ("Plan"), adopted by the Association's Board of Directors.
Pursuant to the Plan, the Association intends to convert from a federally
chartered mutual savings and loan association to a federally chartered stock
savings and loan association and concurrently become the wholly-owned subsidiary
of the Company ("Conversion"). The Subscription and Community Offerings are
further being conducted in accordance with the regulations of the OTS and
subject to the provisions contained in the Plan.
The Common Stock is also being offered in accordance with the Plan by
broker/dealers licensed by the National Association of Securities Dealers, Inc.
("NASD") which have been approved by the Association ("Approved Brokers").
We are offering the Approved Brokers (of which you are one) the
opportunity to participate in the solicitation of offers to buy the Common Stock
and we shall pay you a fee in the amount of
____ percent (____%) of the dollar amount of the Common Stock sold on behalf of
the Company by you, as evidenced by the authorized designation of your firm on
the order form or forms for payment therefor to the special account established
by the Association for the purpose of holding such funds. It is understood, of
course, that payment of your fee shall be made only out of compensation received
by us for the Common Stock sold on behalf of the Company by you, as evidenced in
accordance with the preceding sentence. As soon as practicable after the closing
date of the offering, we shall remit to you, only out of our compensation as
provided above, the fees to which you are entitled hereunder.
Each order form for the purchase of Common Stock must set forth the
identity and address of each person to whom the certificates for such Common
Stock should be issued and delivered. Such order form also must clearly identify
you firm in order for you to receive compensation. You shall instruct any
subscriber who elects to send his order form to you to make any accompanying
check payable to "Grand Central Financial Corp."
This offer is made subject to the terms and conditions herein set forth
and is made only to Approved Brokers who are members in good standing of the
NASD who are to comply with all applicable rules of the NASD, including, without
limitation, the NASD's Interpretation With Respect to Free-Riding and
Withholding and Section 24 of Article III of the NASD's Rules of Fair Practice.
Orders for Common Stock shall be subject to confirmation and we, acting
on behalf of the Company and the Association, reserve the right in our
unfettered discretion to reject any order in whole or in part, to accept or
reject orders in the order of their receipt or otherwise, and to allot. Neither
you nor any other person is authorized by the Company and the Association, or by
us to give any information or make any representations other than those
contained in the Prospectus in connection with the sale of any of the Common
Stock. No Approved Broker is authorized to act as agent for us when soliciting
offers to buy the Common Stock from the public or otherwise. No Approved Broker
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 Approved Broker assisting in selling Common Stock pursuant
hereto agree to comply with the applicable requirements of the Securities
Exchange Act of 1934 and applicable state rules and regulations. Each
customer-carrying selected dealer that is not a minimum net capital reporting
broker/dealer agrees that it shall not use a sweep arrangement and that it shall
transmit all customer checks by noon of the next business day after receipt
thereof. In addition, we and each selected dealer confirm that the Securities
and Exchange Commission interprets Rule 15c2-8 promulgated under the Securities
Exchange Act of 1934 as requiring that a Prospectus be supplied to each person
who is expected to receive a confirmation of sale 48 hours prior to delivery of
such person's order form.
We and each Approved Broker further agree that to the extent that your
customers desire to pay for shares with funds held by or to be deposited with
us, in accordance with the interpretations of the Securities and Exchange
Commission of Rule 15c2-4 promulgated under the Securities Exchange Act of 1934,
either (a) upon receipt of an executed order form or direction to execute an
order form on behalf of a customer to forward the offering price of the Common
Stock ordered on
or before noon of the next business day following receipt or execution of an
order form by us to the Company for deposit in a segregated account or (b) to
solicit indications of interest in which event (i) we shall subsequently contact
any customer indicating interest to confirm the interest and give instructions
to execute and return an order form or to receive authorization to execute the
order form on the customer's behalf, (ii) we shall mail acknowledgments of
receipt of orders to each customer confirming interest on the business day
following such confirmation, (iii) we shall debit accounts of such customers on
the third business day ("Debit Date") following receipt of the confirmation
referred to in (i), and (iv) we shall forward complete order forms together with
such funds to the Company on or before twelve noon on the next business day and
each selected dealer acknowledges that if the procedure in (b) is adopted, our
customers' funds are not required to be in their accounts until the Debit Date.
Unless earlier terminated by us, this Agreement shall terminate upon
the closing date of the Conversion. We may terminate this Agreement or any
provisions hereof any time by written or telegraphic notice to you. Of course,
our obligations hereunder are subject to the successful completion of the
Conversion.
You agree that at any time or times prior to the termination of this
Agreement you shall, upon our request, report to us the number of shares of
Common Stock sold on behalf of the Company by you under this Agreement.
We shall have full authority to take such actions as we may deem
advisable in respect of all matters pertaining to the offering. We shall be
under no liability to you except for lack of good faith and for obligations
expressly assumed by us in this Agreement.
Upon application to us, we shall inform you as to the states in
which we believe the Common Stock has been qualified for sale under, or are
exempt from the requirements of, the respective blue sky laws of such states,
but we assume no responsibility or obligation as to your rights to sell
Common Stock in any state.
Additional copies of the Prospectus and any supplements thereto shall
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
confirmations accompanying this letter at once to us at Xxxxxxx Xxxx & Company,
a Division of Xxxxx, Xxxxxxxx & Xxxxx, Inc., 000 Xxxxxxxxx, Xxxxxx, Xxxx 00000.
The enclosed duplicate copy shall evidence the agreement between us.
XXXXXXX XXXX & COMPANY,
A DIVISION OF XXXXX, XXXXXXXX & XXXXX, INC.
By:
---------------------------------------
Name:
Title:
CONFIRMED AS OF:
_____________ ____, 1998
------------------------------------
(Name of Dealer)
By:
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Name:
-------------------------------
Title:
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