EXHIBIT 1.2
GREENVILLE FEDERAL FINANCIAL CORPORATION
(a federal corporation)
Up to 1,397,250 Shares
(Subject to Increase Up to 1,606,837 Shares)
COMMON STOCK ($0.01 Par Value)
Subscription Price $10.00 Per Share
AGENCY AGREEMENT
[ ], 2005
Xxxxx, Xxxxxxxx & Xxxxx, Inc.
000 Xxxxxxxxx Xxxxx
Xxxxxx, Xxxx 00000-0000
Ladies and Gentlemen:
Greenville Federal Financial Corporation, a newly formed federally
chartered stock corporation ("Greenville Federal Financial Corporation"),
Greenville Federal MHC, a newly formed federally chartered mutual holding
company ("Greenville Federal MHC"), and Greenville Federal Savings and Loan
Association, a federally chartered mutual savings and loan association (the
"Bank") (collectively, the "Greenville Federal Parties") hereby confirm, jointly
and severally, their agreement with Xxxxx, Xxxxxxxx & Xxxxx, Inc. ("KBW" or the
"Agent"), as follows:
SECTION 1. THE OFFERING. The Bank, in accordance with the Plan of
Reorganization and Stock Issuance Plan, adopted April 18, 2005 (the "Plan"),
intends to convert from mutual to stock form and to reorganize into a federal
mutual holding company structure as a wholly owned subsidiary of Greenville
Federal Financial Corporation, which in turn will be a majority-owned subsidiary
of the Greenville Federal MHC (the "Reorganization"). All capitalized terms used
in this Agreement and not defined in this Agreement shall have the meanings set
forth in the Plan. The Reorganization is being conducted in accordance with the
laws of the United States and the applicable regulations of the Office of Thrift
Supervision (the "OTS") (such laws and the regulations are referred to herein as
the "MHC Regulations"). In connection with the Reorganization, Greenville
Federal Financial Corporation will offer stock on a priority basis to (i)
Eligible Account Holders; (ii) tax-qualified employee plans of the Bank and
Greenville Federal Financial Corporation; (iii) Supplemental Eligible Account
Holders; and (iv) Other Members. Pursuant to the Plan, Greenville Federal
Financial Corporation is offering a minimum of 1,032,750 and a maximum of
1,397,250 shares (subject to an increase up to 1,606,837 shares)
of common stock, $0.01 par value per share (the "Common Stock"), in the
Subscription Offering, and, if necessary, (i) the Direct Community Offering
and/or (ii) a Public Offering.
Pursuant to the Plan, Greenville Federal Financial Corporation will offer
and sell shares of its Common Stock (the "Shares") in the Subscription Offering,
Direct Community Offering, and/or Public Offering (collectively, the
"Offering"). Greenville Federal Financial Corporation may offer Shares, if any,
remaining after the Subscription Offering, in the Direct Community Offering with
a preference to natural persons residing in Darke County, Ohio, and then to the
general public. In the event a Direct Community Offering is held, it may be held
at any time during or promptly after the Subscription Offering. Depending on
market conditions, Shares available for sale but not subscribed for in the
Subscription Offering or purchased in the Direct Community Offering may be
offered in the Public Offering to the general public on a best efforts basis, as
described in subsection 4(c) below. Upon completion of the Offering, pursuant to
the Plan, 45% of the outstanding Common Stock of Greenville Federal Financial
Corporation will be publicly held and 100% of the outstanding common stock of
the Bank will be held by Greenville Federal Financial Corporation. Greenville
Federal Financial Corporation will sell the Shares in the Offering at $10.00 per
share (the "Purchase Price"). If the number of Shares offered is increased or
decreased in accordance with the Plan, the term "Shares" shall mean such greater
or lesser number, where applicable.
Greenville Federal Financial Corporation has filed with the U.S.
Securities and Exchange Commission (the "Commission" or the "SEC") a
Registration Statement on Form SB-2 (File No. 333-126035) in order to register
the Shares under the Securities Act of 1933, as amended (the "1933 Act"), and
has filed such amendments thereto as have been required to the date hereof (the
"Registration Statement"). The prospectus, as amended, included in the
Registration Statement at the time it initially became effective is hereinafter
called the "Prospectus," except that if any prospectus is filed by Greenville
Federal Financial Corporation pursuant to Rule 424(b) or (c) of the rules and
regulations of the Commission under the 1933 Act (the "1933 Act Regulations")
differing from the prospectus included in the Registration Statement at the time
it 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 and shall include any supplements and
amendments thereto from and after their dates of effectiveness or use,
respectively.
In connection with the Reorganization, the Bank filed with the OTS a
Notice of Mutual Holding Company Reorganization and Application for Approval of
an Issuance by a Subsidiary of a Mutual Holding Company, including exhibits and
the Prospectus (the "MHC Notice"). Greenville Federal Financial Corporation has
filed with the OTS its application on Form H-(e)1-S (the "Holding Company
Application") to become a savings and loan holding company under the Home
Owners' Loan Act, as amended (the "HOLA"), and the regulations promulgated
thereunder. Collectively, the MHC Notice and Greenville Federal Financial
Corporation Application may also be termed the "Applications."
SECTION 2. RETENTION OF AGENT. Subject to the terms and conditions herein
set forth, the Greenville Federal Parties hereby appoint the Agent as their
financial advisor and marketing
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agent to utilize its best efforts to solicit subscriptions for Shares and to
advise and assist the Greenville Federal Parties with respect to Greenville
Federal Financial Corporation's sale of the Shares in the Offering.
On the basis of the representations, warranties, and agreements herein
contained, but subject to the terms and conditions herein set forth, the Agent
accepts such appointment and agrees to consult with and advise the Greenville
Federal Parties as to the matters set forth in the letter agreement, dated
February 9, 2005, between the Bank and KBW (the "Letter Agreement"). It is
acknowledged by the Greenville Federal Parties that the Agent shall not be
required to purchase any Shares or be obligated to take any action that is
inconsistent with all applicable laws, regulations, decisions or orders.
Except as described in Section 14 of this Agreement, the obligations of
the Agent pursuant to this Agreement shall terminate upon the completion or
termination or abandonment of the Plan by Greenville Federal Financial
Corporation or upon termination of the Offering, but in no event later than 45
days after the completion of the Subscription Offering (the "End Date"). All
fees or expenses due to the Agent but unpaid will be payable to the Agent in
next day funds at the earlier of the Closing Date (as hereinafter defined) or
the End Date. In the event the Offering is extended beyond the End Date, the
Greenville Federal Parties and the Agent may agree to renew this Agreement under
mutually acceptable terms and subject to the approval of any governmental agency
or regulatory authority having jurisdiction over such matters.
In the event Greenville Federal Financial Corporation is unable to sell a
minimum of 1,397,250 Shares by the End Date, this Agreement shall terminate and
Greenville Federal Financial Corporation shall refund to any persons who have
subscribed for any of the Shares the full amount that it may have received from
them plus accrued interest, as set forth in the Prospectus, and none of the
parties to this Agreement shall have any obligation to the other parties
hereunder, except as set forth in this Section 2 and in Sections 10, 12, 13 and
14 hereof.
In the event the Offering is terminated for any reason not attributable to
the action or inaction of the Agent, the Agent shall be paid the fees due to the
date of such termination pursuant to Section 4(a) below, and to the
reimbursement of expenses pursuant to Section 10 below.
SECTION 3. SALE AND DELIVERY OF SHARES. If all conditions precedent to the
consummation of the Reorganization, including, without limitation, the sale of
all Shares required by the Plan to be sold, are satisfied, Greenville Federal
Financial Corporation agrees to issue, or have issued, the Shares sold in the
Offering and to release for delivery certificates for such Shares on the Closing
Date (as hereinafter defined) against payment to Greenville Federal Financial
Corporation by any means authorized by the Plan; provided, however, that no
funds shall be released to Greenville Federal Financial Corporation until the
conditions specified in Section 11 hereof shall have been complied with to the
reasonable satisfaction of the Agent and its counsel. The release of Shares
against payment therefor shall be made on a date and at a place acceptable to
the Greenville Federal Parties and the Agent. Certificates for Shares shall be
delivered directly to the purchasers in accordance with their directions. The
date upon which
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Greenville Federal Financial Corporation shall release or deliver the Shares
sold in the Offering, in accordance with the terms herein, is called the
"Closing Date."
SECTION 4. COMPENSATION. The Agent shall receive the following
compensation for its services hereunder:
(a) A management fee of $25,000, all of which has been paid. Such fees
shall be deemed to have been earned when due. Should the Reorganization be
terminated for any reason not attributable to the action or inaction of the
Agent, the Agent shall have earned and be entitled to be paid fees accruing
through the stage at which the termination occurred.
(b) A Success Fee equal to 1.35% of the aggregate purchase price of the
Common Stock sold in the Subscription Offering and Direct Community Offering.
The management fee described in subparagraph 4(a) shall be applied against the
Success Fee described in this subparagraph 4(b).
(c) If any of the Shares remain available after the Subscription Offering
and the Direct Community Offering, at the request of the Bank, KBW will seek to
form a syndicate of registered broker-dealers ("Selected Dealers") to assist in
the sale of such Shares on a best efforts basis, subject to the terms and
conditions set forth in a selected dealers agreement. KBW will endeavor to
distribute the Shares among the Selected Dealers in a fashion which best meets
the distribution objectives of the Bank and the Plan. KBW will be paid a fee not
to exceed 5.5% of the aggregate purchase price of the shares sold by the
Selected Dealers. From this fee, KBW will pass on to the Selected Dealers who
assist in such offering an amount competitive with gross underwriting discounts
charged at such time for comparable amounts of stock sold at a comparable price
per share in a similar market environment. Fees with respect to purchases
effected with the assistance of Selected Dealers other than KBW shall be
transmitted by KBW to such Selected Dealers. The decision to utilize Selected
Dealers will be made by the Bank upon consultation with KBW. In the event, with
respect to any stock purchases, fees are paid pursuant to this subparagraph
4(c), such fees shall be in lieu of and not in addition to payment pursuant to
subparagraph 4(b).
Full payment of KBW's fees, as described above, shall be made in next day
funds on the earlier of the Closing Date or a determination by the Bank to
terminate or abandon the Plan.
SECTION 5. CLOSING. The closing for the sale of the Shares shall take
place on the Closing Date at such location as mutually agreed upon by the Agent
and the Greenville Federal Parties. At the closing, the Greenville Federal
Parties shall deliver to the Agent in next day funds the commissions, fees and
expenses due and owing to the Agent as set forth in Sections 4 and 10 hereof and
the opinions and certificates required hereby and other documents deemed
reasonably necessary by the Agent shall be executed and delivered to effect the
sale of the Shares as contemplated hereby and pursuant to the terms of the
Prospectus.
SECTION 6. REPRESENTATIONS AND WARRANTIES OF THE GREENVILLE FEDERAL
PARTIES. The Greenville Federal Parties jointly and severally represent and
warrant to the Agent that:
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(a) Each of the Greenville Federal Parties has all such power, authority,
authorizations, approvals and orders as may be required to enter into this
Agreement, and, as of the Closing Date, each of the Greenville Federal Parties
will have all such power, authority, authorizations, approvals and orders as may
be required to carry out the provisions and conditions hereof and to issue and
sell the Shares to be sold by the Company and related cash contributions, as
provided herein and as described in the Prospectus. The consummation of the
Reorganization, the execution, delivery and performance of this Agreement and
the Letter Agreement and the consummation of the transactions contemplated
herein have been duly and validly authorized by all necessary corporate action
on the part of each of the Greenville Federal Parties. This Agreement has been
validly executed and delivered by each of the Greenville Federal Parties, and is
a valid, legal and binding obligation of each of the Greenville Federal Parties,
in each case enforceable in accordance with its terms, except as the legality,
validity, binding nature and 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, (ii) general equity principles
regardless of whether such enforceability is considered in a proceeding in
equity or at law, and (iii) the extent, if any, that the provisions of Sections
12 or 13 hereof may be unenforceable as against public policy.
(b) The Registration Statement was declared effective by the Commission on
[ ], 2005. No stop order has been issued with respect to the Prospectus. No
proceedings related to the Prospectus have been initiated or, to the knowledge
of the Greenville Federal Parties, threatened by the Commission. At the time the
Registration Statement, including the Prospectus contained therein (including
any amendment or supplement thereto), became effective, the Registration
Statement complied as to form in all material respects with the 1933 Act and the
1933 Act Regulations. The Registration Statement and the Prospectus 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. At the
time any Rule 424(b) or (c) Prospectus was filed with the Commission and at the
Closing Date, the Registration Statement, including the Prospectus (including
any amendment or supplement thereto) and, when taken together with the
Prospectus, any Blue Sky Application or Sales Information (as such terms are
defined in Section 12 hereof) authorized for use by any of the Greenville
Federal Parties in connection with the Offering, will not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; provided, however,
that the representations and warranties in this Section 6(b) shall not apply to
statements or omissions made in reliance upon and in conformity with written
information furnished to the Greenville Federal Parties by the Agent expressly
regarding the Agent included under the caption "Our Reorganization and Stock
Offering - Marketing arrangements" and in the third sentence of the first
paragraph under the caption "Market for the Common Stock."
(c) The MHC Notice, including the Prospectus and the proxy statement for
the solicitation of proxies from members of the Bank for the special meeting to
approve the Plan (the
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"Members' Proxy Statement"), was prepared by the Company and the Bank and filed
with the OTS. The MHC Notice was approved by the OTS on [ ], 2005. The
Prospectus and Members' Proxy Statement have each been authorized for use by the
OTS. As of [ ], 2005 and at all times subsequent thereto until the Closing Date,
the MHC Notice, including the Prospectus and the Members' Proxy Statement
(including any amendment or supplement thereto), will comply in all material
respects with the MHC Regulations, except to the extent waived in writing by the
OTS. The MHC Notice, including the Prospectus and the Members' Proxy Statement
(including any amendment or supplement thereto), does not include any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; provided, however,
that the representations and warranties in this Section 6(c) shall not apply to
statements or omissions made in reliance upon and in conformity with written
information furnished to the Company or the Bank by the Agent or its counsel
expressly regarding the Agent included in the Prospectus contained in the MHC
Notice under the caption "Our Reorganization and Stock Offering - Marketing
arrangements" and in the third sentence of the first paragraph under the caption
"Market for the Common Stock."
(d) The Holding Company Application has been prepared by the Company in
material conformity with the requirements of the OTS and approved by the OTS. A
conformed copy of the Holding Company Application has been delivered to the
Agent and its counsel, receipt of which is hereby acknowledged by the Agent.
(e) No order has been issued by the OTS, the SEC or any state securities
administrator preventing or suspending the use of the Prospectus or any
supplemental sales literature authorized by the Greenville Federal Parties for
use in connection with the Offering, and no action by or before any such
government entity to revoke any approval, authorization or order of
effectiveness related to the Reorganization is pending or, to the best knowledge
of the Greenville Federal Parties, threatened.
(f) Pursuant to the MHC Regulations, the Plan has been approved by the
Board of Directors of the Bank and is subject to approval by the members of the
Bank; at the Closing Date, the offer and sale of the Shares will have been
conducted in all material respects in accordance with the Plan, the MHC
Regulations, and all other applicable laws, regulations, decisions and orders,
including all terms, conditions, requirements and provisions precedent to the
Reorganization imposed upon the Bank by the OTS, the SEC or any other regulatory
authority, other than those which the regulatory authority permits to be
completed after the Reorganization and in the manner described in the
Prospectus. To the best knowledge of the Greenville Federal Parties, no person
has sought to obtain review of the final action of the OTS in approving the
Plan, the MHC Notice or the Holding Company Application pursuant to applicable
statutes or regulations.
(g) Xxxxxx & Company, Inc., which prepared the appraisal of the aggregate
pro forma market value of the Common Stock on which the Offering was based (the
"Appraisal"), has advised the Greenville Federal Parties in writing that it is
independent with respect to each of the Greenville Federal Parties within the
meaning of the MHC Regulations, and the Greenville
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Federal Parties believe Xxxxxx & Company, Inc. to be expert in preparing
appraisals of savings institutions.
(h) Xxxxx Xxxxxxxx LLP, which certified the financial statements filed as
part of the Registration Statement and the MHC Notice, has advised the
Greenville Federal Parties that it is an independent certified public accountant
within the meaning of the Code of Ethics of the AICPA, and Xxxxx Xxxxxxxx LLP
is, with respect to the Greenville Federal Parties and each subsidiary thereof,
an independent certified public accountant as required by the 1933 Act and the
1933 Act Regulations.
(i) The financial statements, schedules and notes related thereto that are
included in the Prospectus fairly present in all material respects the financial
condition, results of operations, equity and cash flows of the Bank at the
respective dates indicated and for the respective periods covered thereby and
comply as to form in all material respects with the applicable accounting
requirements of Title 12 of the Code of Federal Regulations, Regulation S-X of
the SEC and generally accepted accounting principles ("GAAP") (including those
requiring the recording of certain assets at their current market value). Such
financial statements, schedules and notes related thereto have been prepared in
accordance with GAAP consistently applied throughout the periods involved
(except as noted in the Notes to the financial statements), present fairly in
all material respects the information required to be stated therein and are
consistent with the most recent financial statements and other reports filed by
the Bank with the OTS, and any other applicable regulatory authority, 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 Bank
included in the Prospectus, and as to the pro forma adjustments, the adjustments
made therein have been consistently applied on the basis described therein.
(j) 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, results of operations, capital, assets, properties or business of the
Greenville Federal Parties, taken as a whole, whether or not arising in the
ordinary course of business; (ii) there has not been any material increase in
the long-term debt of the Bank or in the principal amount of the Bank's assets
that are classified by the Bank as substandard, doubtful or loss or in loans
past due 90 days or more or real estate acquired by foreclosure, by deed-in-lieu
of foreclosure or deemed in-substance foreclosure or any material decrease in
equity capital or total assets of the Bank, nor have the Greenville Federal
Parties issued any securities or incurred any liability or obligation for
borrowing other than in the ordinary course of business; (iii) there have not
been any material transactions entered into by the Greenville Federal Parties
that have not been disclosed in the Prospectus; (iv) there has not been any
material adverse change in the aggregate dollar amount of the Bank's deposits or
its consolidated net worth; (v) there has been no material adverse change in the
Greenville Federal Parties' relationship with their insurance carriers,
including, without limitation, cancellation or other termination of the
Greenville Federal Parties fidelity bond or any other type of insurance
coverage; (vi) there has been no material change in executive management of the
Greenville
7
Federal Parties; (vii) none of the Greenville Federal Parties has sustained any
material loss or interference with its respective business or properties from
fire, flood, windstorm, earthquake, accident or other calamity, whether or not
covered by insurance; (viii) none of the Greenville Federal Parties is in
default in the payment of principal or interest on any outstanding debt
obligations; (ix) the capitalization, liabilities, assets, properties and
business of the Greenville Federal Parties conform in all material respects to
the descriptions thereof contained in the Prospectus; and (x) none of the
Greenville Federal Parties has any material contingent or other liabilities,
except as set forth in the Prospectus.
(k) Greenville Federal Financial Corporation is a stock corporation duly
organized and validly existing under the laws of the United States, with
corporate power and authority to own its properties and to conduct its business,
as described in the Prospectus, and is qualified to transact business and will
be in good standing in Ohio and in each jurisdiction in which the conduct of
business requires such qualification, unless the failure to qualify in one or
more of such jurisdictions would not have a material adverse effect on the
financial condition, results of operation, capital, properties, business affairs
or prospects of the Greenville Federal Parties taken as a whole (a "Material
Adverse Effect"). As of the Closing Date, Greenville Federal Financial
Corporation will have 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 have a Material Adverse Effect; and
as of the Closing Date, all such licenses, permits and governmental
authorizations will be in full force and effect, and Greenville Federal
Financial Corporation will be in compliance therewith in all material respects,
and Greenville Federal Financial Corporation will be in compliance in all
material respects with all laws, rules, regulations and orders applicable to the
operation of its business.
(l) At the Closing Date, Greenville Federal MHC will be duly chartered and
validly existing as a mutual holding company in good standing under the laws of
the United States with corporate power and authority to own its property and
conduct its business as described in the Prospectus.
(m) As of the date of this Agreement, Greenville Federal Financial
Corporation does not own any equity securities or any equity interest in any
business enterprise.
(n) The Bank has been duly organized and is a validly existing federally
chartered savings and loan association in the mutual form of organization and
upon the Reorganization will become a wholly owned subsidiary of Greenville
Federal Financial Corporation, in both instances duly authorized to conduct its
business and own its property as described in the Registration Statement and the
Prospectus; the Bank has obtained all licenses, permits and other governmental
authorizations currently required for the conduct of its business, except those
that individually or in the aggregate would not have a Material Adverse Effect;
all such licenses, permits and governmental authorizations are in full force and
effect, and the Bank is in compliance with all laws, rules, regulations and
orders applicable to the operation of its business; except where failure to be
in compliance would not, individually or in the aggregate, have a Material
Adverse Effect. The Bank does not own equity securities or any equity interest
in any other active business enterprise except the Federal Home Loan Bank of
Cincinnati and
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Greenville Financial Service Corporation, which as its only business holds cash,
or as would not be material to the operations of the Bank. Upon completion of
the Reorganization, (i) all of the authorized and outstanding capital stock of
the Bank will be owned by Greenville Federal Financial Corporation free and
clear of any mortgage, pledge, lien, encumbrance, claim or restriction of any
kind and (ii) Greenville Federal Financial Corporation will have no direct
subsidiaries other than the Bank. At the Closing Date, the Reorganization will
have been effected in all material respects in accordance with all applicable
statutes, regulations, decisions and orders; and, except with respect to the
filing of certain post-sale, post-Reorganization reports, and documents in
compliance with the 1933 Act Regulations, all terms, conditions, requirements
and provisions with respect to the Reorganization imposed by the OTS or any
other governmental agency, if any, will have been complied with by the
Greenville Federal Parties in all material respects or appropriate waivers will
have been obtained and all material notice and waiting periods will have been
satisfied, waived or elapsed.
(o) Upon the Reorganization, the authorized capital stock of the Bank will
consist of 8,000,000 shares of common stock, of $.01 par value per share (the
"Bank Common Stock"), of which 100 shares of Bank Common Stock will be issued
and outstanding as of immediately following the Reorganization; no additional
shares of Bank Common Stock will be issued.
(p) The Bank is a member of the Federal Home Loan Bank of Cincinnati
("FHLB-Cincinnati"). The deposit accounts of the Bank are insured by the Federal
Deposit Insurance Corporation ("FDIC") up to the maximum limits, and no
proceedings for the termination or revocation of such insurance are pending or,
to the best knowledge of the Greenville Federal Parties, threatened.
(q) Upon consummation of the Reorganization, the authorized, issued and
outstanding capital stock of Greenville Federal Financial Corporation will be
within the range set forth in the Prospectus under the caption "Capitalization"
and no shares of Common Stock have been or will be issued and outstanding prior
to the Closing Date (except for the shares issued upon incorporation of
Greenville Federal Financial Corporation); the Shares have been duly and validly
authorized for issuance and, when issued and delivered by Greenville Federal
Financial Corporation pursuant to the Plan against payment of the consideration
calculated as set forth in the Plan and the Prospectus, will be duly and validly
issued and fully paid and nonassessable; the issuance of the Shares is not
subject to preemptive rights, except for the subscription rights granted
pursuant to the Plan; and the terms and provisions of the Shares will conform in
all material respects to the description thereof contained in the Prospectus.
Upon issuance of the Shares, good title to the Shares will be transferred from
Greenville Federal Financial Corporation to the purchasers of Shares against
payment therefor as set forth in the Plan and the Prospectus.
(r) None of the Greenville Federal Parties is (i) in violation of their
respective charters or bylaws, as applicable or (ii) 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. The execution and delivery of this
Agreement and the consummation of the transactions herein contemplated will not:
(i) violate or
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conflict with the charter or bylaws of any of the Greenville Federal Parties;
(ii) conflict with, or constitute a breach of or default under, any material
contract, lease or other instrument to which any of the Greenville Federal
Parties is a party or by which any of the properties of the Greenville Federal
Parties may be bound, or any applicable law, rule, regulation or order, except
for such conflicts, breaches or defaults that would not individually or in the
aggregate result in a Material Adverse Effect; (iii) violate any authorization,
approval, judgment, decree, order, statute, rule or regulation applicable to the
Greenville Federal Parties, except for such violations which would not have a
Material Adverse Effect; or (iv) result in the creation of any material lien,
charge or encumbrance upon any property of the Greenville Federal Parties,
except for such liens, charges or encumbrances that would not individually or in
the aggregate have a Material Adverse Effect.
(s) All documents made available to or delivered or to be made available
to or delivered by the Greenville Federal Parties or their representatives in
connection with the issuance and sale of the Shares, including records of
account holders, and depositors of the Bank, or in connection with the Agent's
exercise of due diligence, except for those documents which were prepared by
parties other than the Greenville Federal Parties or their representatives, to
the best knowledge of the Greenville Federal Parties, were on the dates on which
they were delivered, or will be on the dates on which they are to be delivered,
true, complete and correct in all material respects.
(t) No default exists, and no event has occurred which with notice or
lapse of time, or both, would constitute a default on the part of any of the
Greenville Federal Parties, in the due performance and observance of any term,
covenant or condition of any indenture, mortgage, deed of trust, note, bank loan
or credit agreement or any other instrument or agreement to which any of the
Greenville Federal Parties is a party or by which any of their property is bound
or affected in any respect which, in any such case, would have a Material
Adverse Effect on the Greenville Federal Parties taken as a whole, and such
agreements are in full force and effect; and no other party to any such
agreements has instituted or, to the knowledge of any of the Greenville Federal
Parties, threatened any action or proceeding wherein any of the Greenville
Federal Parties is alleged to be in default thereunder under circumstances where
such action or proceeding, if determined adversely to any of the Greenville
Federal Parties, would have a Material Adverse Effect.
(u) The Greenville Federal Parties have good and marketable title to all
assets which are material to the businesses of the Greenville Federal Parties,
free and clear of all liens, charges, encumbrances, restrictions or other
claims, except such as are described in the Prospectus, the pledging of assets
to secure advances from the FHLB, or where the absence of good and marketable
title or the existence of such liens, charges, encumbrances, restrictions or
other claims would not have a Material Adverse Effect; and all of the leases and
subleases which are material to the businesses of the Greenville Federal
Parties, including those described in the Registration Statement or Prospectus,
are in force and effect.
(v) The Greenville Federal Parties are not in violation of any directive
from the OTS, or any other agency, to make any material change in the method of
conducting their respective
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businesses; the Greenville Federal Parties have conducted and are conducting
their respective businesses so as to comply in all respects with all applicable
statutes and regulations (including, without limitation, regulations, decisions,
directives and orders of the Commission and the OTS), except where the failure
to so comply would not have a Material Adverse Effect, and there is no charge,
investigation, action, suit or proceeding before or by any court, regulatory
authority or governmental agency or body pending or, to the knowledge of any of
the Greenville Federal Parties, threatened, which might materially and adversely
affect the Reorganization, the performance of this Agreement, or the
consummation of the transactions contemplated in the Plan as described in the
Registration Statement, or which might result in a Material Adverse Effect.
(w) Prior to the Closing Date, the Greenville Federal Parties will have
received opinions of their counsel, Vorys, Xxxxx, Xxxxxxx and Xxxxx LLP
("VSSP"), with respect to the federal and state income tax consequences of the
Reorganization, as described in the Registration Statement and the Prospectus,
and the facts and representations upon which such opinions will be based, will
be truthful, accurate and complete, and none of the Greenville Federal Parties
will take any action inconsistent therewith.
(x) The Bank has filed all required federal and state tax returns, paid
all taxes that have become due and payable, except where permitted to be
extended or where the failure to pay such taxes would not have a Material
Adverse Effect, and made adequate reserves for similar future tax liabilities to
the extent required by GAAP, and no deficiency has been asserted with respect
thereto by any taxing authority.
(y) No approval, authorization, consent or other order of any regulatory
or supervisory or other public authority is required for the execution and
delivery by the Greenville Federal Parties of this Agreement, or the issuance of
the Shares, except for the approval of the OTS and the Commission, such
approvals as may be required under the rules of the NASD or the OTC Bulletin
Board, and any necessary qualification, notification, or registration or
exemption under the securities or blue sky laws of the various states in which
the Shares are to be offered.
(z) None of the Greenville Federal Parties has: (i) issued any securities
within the last 18 months except for (a) notes to evidence bank loans or other
liabilities in the ordinary course of business or as described in the
Prospectus, and (b) shares of Common Stock issued with respect to the initial
capitalization of Greenville Federal Financial Corporation; (ii) had any
dealings with respect to sales of securities within the 12 months prior to the
date hereof with any member of the NASD, or any person related to or associated
with such member, other than discussions and meetings relating to the Offering
and purchases and sales of U.S. government and agency and other securities in
the ordinary course of business; or (iii) engaged any intermediary between the
Agent and the Greenville Federal Parties in connection with the Offering or the
offering of shares of the Common Stock of Greenville Federal Financial
Corporation, and no person is being compensated in any manner for such services.
Appropriate arrangements have been made for placing the funds received from
subscriptions for Shares in a special interest-bearing account with the Bank
until all Shares are sold and paid for, with provision for refund to the
purchasers in the event that the Reorganization is not completed for
11
whatever reason or for delivery to Greenville Federal Financial Corporation if
all Shares are sold.
(aa) To the best knowledge of the Greenville Federal Parties, the
Greenville Federal Parties have not made any payment of funds of the Greenville
Federal Parties as a loan to any person for the purchase of Shares, except for
Greenville Federal Financial Corporation's loan to the employee stock ownership
plan, the proceeds of which may be used to purchase Shares, or has made any
other payment or loan of funds prohibited by law, and no funds have been set
aside to be used for any payment prohibited by law.
(bb) The Greenville Federal Parties are in compliance in all material
respects with the applicable financial record keeping and reporting requirements
of the Currency and Foreign Transactions Reporting Act of 1970, as amended, and
the regulations and rules thereunder.
(cc) None of the Greenville Federal Parties nor any properties owned or
operated by any of them, is in violation of or liable under any Environmental
Law (as defined below), except for such violations or liabilities that,
individually or in the aggregate, would not have a Material Adverse Effect.
There are no actions, suits or proceedings, or demands, claims, notices or
investigations (including, without limitation, notices, demand letters or
requests for information from any environmental agency) instituted or pending
or, to the knowledge of any of the Greenville Federal Parties, threatened
relating to the liability of any property owned or operated by any of the
Greenville Federal Parties under any Environmental Law. For purposes of this
subsection, the term "Environmental Law" means any federal, state, local or
foreign law, statute, ordinance, rule, regulation, code, license, permit,
authorization, approval, consent, order, judgment, decree, injunction or
agreement with any regulatory authority relating to (i) the protection,
preservation or restoration of the environment (including, without limitation,
air, water, vapor, surface water, groundwater, drinking water supply, surface
soil, subsurface soil, plant and animal life or any other natural resource),
and/or (ii) the use, storage, recycling, treatment, generation, transportation,
processing, handling, labeling, production, release or disposal of any substance
presently listed, defined, designated or classified as hazardous, toxic,
radioactive, whether by type or by quantity, including any material containing
any such substance as a component.
(dd) The Greenville Federal Parties have not relied upon Agent or its
counsel for any legal, tax or accounting advice in connection with the
Reorganization.
(ee) The records used by the Greenville Federal Parties to determine the
identity of Eligible Account Holders and Supplemental Eligible Account Holders
and Other Members are accurate and complete in all material respects.
(ff) None of the Greenville Federal Parties is required to be registered
as an investment company under the Investment Company Act of 1940.
12
(gg) The Greenville Federal Parties have requested that VSSP provide at
Closing a Blue Sky Memorandum and assisted VSSP in the preparation of filings
with the securities authorities of various states.
(hh) Any certificates signed by an officer of any of the Greenville
Federal Parties and delivered to the Agent or its counsel that refer to this
Agreement shall be deemed to be a representation and warranty by the Greenville
Federal Parties to the Agent as to the matters covered thereby with the same
effect as if such representation and warranty were set forth herein.
SECTION 7. REPRESENTATIONS AND WARRANTIES OF THE AGENT. Agent represents
and warrants to the Greenville Federal Parties that:
(a) Agent is a duly organized New York corporation and is validly existing
and in good standing under the laws of the State of New York and is licensed to
conduct business in the State of Ohio with full power and authority to provide
the services to be furnished to the Greenville Federal Parties hereunder.
(b) The execution, delivery and performance of this Agreement and the
Letter Agreement and the consummation of the transactions contemplated herein
and therein have been duly and validly authorized by all necessary corporate
action on the part of Agent, and each of this Agreement and the Letter Agreement
is the legal, valid and binding agreement of Agent, enforceable in accordance
with its terms, except as the legality, validity, binding nature and
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, and (ii) general
equity principles regardless of whether such enforceability is considered in a
proceeding in equity or at law.
(c) Each of Agent and its employees, agents and representatives who shall
perform any of the services hereunder shall have, and until the Offering is
consummated or terminated shall maintain, all licenses, approvals and permits
necessary to perform such services and shall comply in all material respects
with all applicable laws and regulations in connection with the performance of
such services.
(d) The execution and delivery of this Agreement by the Agent, the
consummation of the transactions contemplated hereby and compliance with the
terms and provisions hereof will not conflict with, or result in a breach of,
any of the terms, provisions or conditions of, or constitute a default (or an
event which with notice or lapse of time or both would constitute a default)
under the Articles of Incorporation or Bylaws of the Agent or any material
agreement, indenture or other instrument to which the Agent is a party or by
which its property is bound.
(e) No action, suit, charge or proceeding before the Commission, the NASD,
any state securities commission or any court is pending, or to the knowledge of
Agent threatened, against Agent which, if determined adversely to Agent, would
have a material adverse effect upon the ability of Agent to perform its
obligations under this Agreement.
13
(f) Agent is registered as a broker/dealer pursuant to Section 15(b) of
the Securities Exchange Act of 1934 (the "1934 Act") and is a member in good
standing of the NASD.
(g) Any funds received in the Offering by the Agent will be handled by the
Agent in accordance with Rule 15c2-4 under the 1934 Act to the extent
applicable.
SECTION 8. COVENANTS OF THE GREENVILLE FEDERAL PARTIES. The Greenville
Federal Parties hereby jointly and severally covenant with the Agent as follows:
(a) Greenville Federal Financial Corporation will not, at any time after
the date the Registration Statement is initially filed, file any amendment or
supplement to the Registration Statement without providing the Agent and its
counsel a reasonable opportunity to review and comment on such amendment or
supplement. Greenville Federal Financial Corporation will furnish promptly to
the Agent and its counsel copies of all correspondence from the Commission with
respect to the Registration Statement and Greenville Federal Financial
Corporation's responses thereto.
(b) The Greenville Federal Parties will not, at any time after the date
any Application is approved, file any amendment or supplement to such
Application without providing the Agent and its counsel a reasonable opportunity
to review and comment on such amendment or supplement. The Greenville Federal
Parties will furnish promptly to the Agent and its counsel copies of all
correspondence from the OTS with respect to the Applications and the Greenville
Federal Parties' responses thereto.
(c) The Greenville Federal Parties will use their best efforts to cause
the OTS to approve Greenville Federal Financial Corporation's acquisition of the
Bank, and will use their best efforts to cause any post-effective amendment to
the Registration Statement to be declared effective by the Commission and any
post-effective amendment to the MHC Notice to be approved by the OTS, as
applicable, and will promptly upon receipt of any information concerning the
events listed below notify the Agent (i) when the Registration Statement, as
amended, has become effective; (ii) when the MHC Notice as amended, has received
the approval of the OTS; (iii) when the Holding Company Application, as amended,
has been approved by the OTS; (iv) of the receipt of any comments from the OTS
or any other governmental entity with respect to the Reorganization or the
transactions contemplated by this Agreement; (v) of any request by the
Commission, the OTS, or any other governmental entity for any amendment or
supplement to the Registration Statement or the Applications or for additional
information; (vi) of the issuance by the Commission or the OTS, or any other
governmental agency of any order or other action suspending the Offering or the
use of the Registration Statement or the Prospectus or any other filing of the
Greenville Federal Parties under the MHC Regulations or other applicable law, or
the threat of any such action; (vii) of the issuance by the Commission or the
OTS, or any other state authority of any stop order suspending the effectiveness
of the Registration Statement or of the initiation or threat of initiation or
threat of any proceedings for that purpose; or (viii) of the occurrence of any
event mentioned in subsection (g) below. The Greenville Federal Parties will
make every reasonable effort to prevent the issuance by the Commission, the OTS,
or any other state authority of any order
14
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.
(d) The Greenville Federal Parties will deliver to the Agent and to its
counsel two conformed copies of each of the following documents, with all
exhibits: the Applications as originally filed and of each amendment or
supplement thereto, and the Registration Statement, as originally filed and each
amendment thereto. Further, the Greenville Federal Parties will deliver such
additional copies of the foregoing documents to counsel to the Agent as may be
required for any NASD filings. In addition, the Greenville Federal Parties will
also deliver to the Agent such number of copies of the Prospectus, as amended or
supplemented, as determined and agreed to by the Greenville Federal Parties.
(e) The Greenville Federal Parties will furnish to the Agent, from time to
time during the period when the Prospectus (or any later prospectus related to
this offering) is required to be delivered under the 1933 Act or the 1934 Act,
such number of copies of such Prospectus (as amended or supplemented) as the
Agent may reasonably request for the purposes contemplated by the 1933 Act, the
1933 Act Regulations, the 1934 Act or the rules and regulations of the
Commission under the 1934 Act (the "1934 Act Regulations"). Greenville Federal
Financial Corporation authorizes the Agent to use the Prospectus (as amended or
supplemented, if amended or supplemented) in any lawful manner contemplated by
the Plan in connection with the sale of the Shares by the Agent.
(f) The Greenville Federal Parties will comply in all material respects
with any and all terms, conditions, requirements and provisions with respect to
the Reorganization and the transactions contemplated thereby, imposed by the
Commission, by applicable state law and regulations, and by the 1933 Act, the
1934 Act, the 1933 Act Regulations and the 1934 Act Regulations, to be complied
with prior to the Closing Date; and when the Prospectus is required to be
delivered, the Greenville Federal Parties will comply in all material respects,
at their own expense, with all requirements imposed upon them by the OTS, the
MHC Regulations (except as modified or waived in writing by the OTS), the
Commission, by applicable state law and regulations and by the 1933 Act, the
1934 Act, the 1933 Act Regulations and the 1934 Act Regulations, in each case as
from time to time in force, so far as is 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.
(g) During any period when the Prospectus is required to be delivered,
each of the Greenville Federal Parties will inform the Agent of any event or
circumstance of which it is or becomes aware as a result of which the
Registration Statement and/or Prospectus, as then supplemented or amended, would
include an untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein not misleading. If it is
necessary, in the reasonable opinion of counsel for the Greenville Federal
Parties, to amend or supplement the Registration Statement or the Prospectus in
order to correct such untrue statement of a material fact or to make the
statements therein not misleading in light of the circumstances existing at the
time of their use, the Greenville Federal Parties will, at their expense,
prepare, file with the Commission and the OTS, and furnish to the Agent, a
reasonable number of copies of
15
an amendment or amendments of, or a supplement or supplements to, the
Registration Statement and the Prospectus (after a reasonable time for review by
counsel for the Agent) which will amend or supplement the Registration Statement
and/or the Prospectus so that as amended or supplemented it will not contain an
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in light of the circumstances existing
at the time, not misleading. For the purpose of this subsection, each of the
Greenville Federal Parties will furnish such information with respect to itself
as the Agent may from time to time reasonably request.
(h) Pursuant to the terms of the Plan, Greenville Federal Financial
Corporation will endeavor in good faith, in cooperation with the Agent, to
register or to qualify the Shares for offering and sale or to exempt such Shares
from registration and to exempt Greenville Federal Financial Corporation and its
officers, directors and employees from registration as broker-dealers, under the
applicable securities laws of the jurisdictions in which the Offering will be
conducted; provided, however, that Greenville Federal Financial Corporation
shall not be obligated to file any general consent to service of process or to
qualify as a foreign corporation to do business in any jurisdiction in which it
is not so qualified. In each jurisdiction where any of the Shares shall have
been registered or qualified as above provided, Greenville Federal Financial
Corporation will make and file such statements and reports as are required by
the applicable regulatory authority in connection with such registration or
qualification for a period of not less than one year from the effective date of
the Registration Statement.
(i) Greenville Federal Financial Corporation and the Bank will not sell or
issue, contract to sell or otherwise dispose of, for a period of 90 days after
the date hereof, any shares of their capital stock or securities convertible
into or exercisable for shares of their capital stock, without the Agent's prior
written consent other than in connection with any plan or arrangement described
in the Prospectus, including existing stock benefit plans.
(j) The Greenville Federal Parties will use the net proceeds from the sale
of the Common Stock in the manner set forth in the Prospectus under the caption
"How We Intend to Use the Proceeds."
(k) The Greenville Federal Parties will distribute the Prospectus or other
offering materials in connection with the offering and sale of the Common Stock
only in accordance with the MHC Regulations, the 1933 Act, the 1934 Act, the
1933 Act Regulations and the 1934 Act Regulations, and the laws of any state in
which the shares are qualified for sale.
(l) Prior to the Closing Date, Greenville Federal Financial Corporation
shall register its Common Stock under Section 12(b) or 12(g) of the 1934 Act,
and will request that such registration statement shall be effective no later
than the completion of the Reorganization. Greenville Federal Financial
Corporation shall maintain the effectiveness of such registration for not less
than three years or such shorter period as may be required by applicable law.
(m) (i) During the period during which Shares are registered under the
1934 Act, Greenville Federal Financial Corporation will furnish to its
shareholders as soon as practicable after the end of each fiscal year an annual
report of Greenville Federal Financial Corporation
16
(including a consolidated balance sheet and statements of consolidated income,
shareholders' equity and cash flows of Greenville Federal Financial Corporation
and its subsidiaries as at the end of and for such year, certified by
independent public accountants in accordance with Regulation S-X under the 1933
Act and the 1934 Act). (ii) During the period of three years from the date
hereof, Greenville Federal Financial Corporation will furnish to the Agent: (A)
as soon as practicable after such information is publicly available, a copy of
each report of Greenville Federal Financial Corporation 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 or 10-KSB, 10-Q or 10-QSB
and 8-K and all proxy statements and annual reports to stockholders), (B) a copy
of each other non-confidential report of Greenville Federal Financial
Corporation mailed to its shareholders 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 Greenville Federal
Financial Corporation is listed or quoted, each press release and material news
items and additional documents and information with respect to Greenville
Federal Financial Corporation or the Bank as the Agent may reasonably request;
and (C) from time to time, such other nonconfidential information concerning the
Greenville Federal Parties as the Agent may reasonably request.
(n) The Greenville Federal Parties will maintain appropriate arrangements
for depositing all funds received from persons mailing subscriptions for or
orders to purchase Shares on an interest bearing basis as described in the
Prospectus until the Closing Date and satisfaction of all conditions precedent
to the release of Greenville Federal Financial Corporation's obligation to
refund payments received from persons subscribing for or ordering Shares in the
Offering, in accordance with the Plan as described in the Prospectus, or until
refunds of such funds have been made to the persons entitled thereto or
withdrawal authorizations canceled in accordance with the Plan and as described
in the Prospectus. The Greenville Federal Parties will maintain such records of
all funds received to permit the funds of each subscriber to be separately
insured by the FDIC (to the maximum extent allowable) and to enable the
Greenville Federal Parties to make the appropriate refunds of such funds in the
event that such refunds are required to be made in accordance with the Plan and
as described in the Prospectus.
(o) Each of Greenville Federal MHC and Greenville Federal Financial
Corporation will register as a savings and loan holding company under the HOLA.
(p) The Greenville Federal Parties will take such actions and furnish such
information as are reasonably requested by the Agent in order for the Agent to
ensure compliance with the "Interpretation of the Board of Governors of the NASD
on Free Riding and Withholding."
(q) Until the Closing Date, the Greenville Federal Parties will conduct
their businesses in compliance in all material respects with all applicable
federal and state laws, rules, regulations, decisions, directives and orders,
including all decisions, directives and orders of the Commission and the OTS.
17
(r) The Greenville Federal Parties shall comply with any and all terms,
conditions, requirements and provisions with respect to the Reorganization and
the transactions contemplated thereby imposed by the OTS, the MHC Regulations,
the Commission, the 1933 Act and the 1933 Act Regulations, the 1934 Act and the
1934 Act Regulations to be complied with subsequent to the Closing Date.
Greenville Federal Financial Corporation will comply with all provisions of all
undertakings contained in the Registration Statement.
(s) The Greenville Federal Parties will not amend the Plan without
notifying the Agent prior thereto.
(t) Greenville Federal Financial Corporation shall provide the Agent with
any information necessary to allow the Agent to manage the allocation process in
order to permit Greenville Federal Financial Corporation to carry out the
allocation of the Shares in the event of an oversubscription, and such
information shall be accurate and reliable in all material respects.
(u) Prior to the Closing Date, the Greenville Federal Parties will inform
the Agent of any event or circumstances of which it is aware as a result of
which the Registration Statement and/or Prospectus, as then amended or
supplemented, would contain an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein not
misleading.
(v) Greenville Federal Financial Corporation will not deliver the Shares
until the Greenville Federal Parties have satisfied or caused to be satisfied
each condition set forth in Section 11 hereof, unless such condition is waived
in writing by the Agent.
(w) Prior to the Closing Date, the Plan shall have been approved by the
members of the Bank in accordance with the Plan and the MHC Regulations and the
applicable provisions, if any, of the Bank's charter and bylaws.
(x) On or before the Closing Date, the Greenville Federal Parties will
have used their best efforts to cooperate with the Agent to effect the quotation
of shares of the Common Stock on the OTC Bulletin Board by the Closing Date and
will use their best efforts to maintain such quotation and will have completed
all conditions precedent to the Reorganization specified in the Plan and the
offer and sale of the Shares will have been conducted in all material respects
in accordance with the Plan, the MHC Regulations (except as modified or waived
in writing by the OTS) and with all other applicable laws, regulations,
decisions and orders, including all terms, conditions, requirements and
provisions precedent to the Reorganization imposed upon any of the Greenville
Federal Parties by the OTS, the Commission or any other regulatory authority and
in the manner described in the Prospectus.
(y) Subsequent to the date the Registration Statement is declared
effective by the Commission and prior to the Closing Date, except as otherwise
may be indicated or contemplated therein or set forth in an amendment or
supplement thereto, none of the Greenville Federal Parties will: (i) issue any
securities or incur any liability or obligation, direct or contingent, for
borrowed money, except borrowings from the same or similar sources indicated in
the Prospectus in the ordinary course of its business, or (ii) enter into any
transaction which is
18
material in light of the business and properties of the Greenville Federal
Parties, taken as a whole.
SECTION 9. COVENANTS OF THE AGENT. The Agent hereby covenants with the
Greenville Federal Parties as follows:
(a) During the Offering, the Agent shall comply, in all material respects,
with all requirements imposed upon it by the OTS and by the 1933 Act, the 1933
Act Regulations, the 1934 Act and the 1934 Act Regulations with respect to the
Offering.
(b) The Agent shall distribute the Prospectus in connection with the sales
of the Common Stock in accordance with the MHC Regulations, the 1933 Act and the
1933 Act Regulations.
SECTION 10. PAYMENT OF EXPENSES. Whether or not the Reorganization is
completed or the sale and issuance of the Shares by Greenville Federal Financial
Corporation is consummated, the Greenville Federal Parties will pay for all
their expenses incident to the performance of this Agreement customarily borne
by issuers, including without limitation: (a) the preparation and filing of the
MHC Notice; (b) the preparation, printing, filing, delivery and mailing of the
Registration Statement, including the Prospectus, and all documents related to
the Offering and proxy solicitation; (c) all filing fees and expenses in
connection with the qualification or registration of the Shares for offer and
sale by Greenville Federal Financial Corporation under the securities or "Blue
Sky" laws, including without limitation filing fees, reasonable legal fees and
disbursements of counsel in connection therewith, and in connection with the
preparation of a blue sky law survey; (d) the filing fees of the NASD related to
the Agent's fairness filing under NASD Rule 2710; (e) fees and expenses related
to the preparation of the independent appraisal; (f) fees and expenses related
to auditing and accounting services; (g) expenses relating to advertising,
temporary personnel, investor meetings and stock information center; (h)
transfer agent fees and costs of preparation and distribution of stock
certificates; and (i) any fees or expenses associated with quoting on the OTC
Bulletin Board. The Greenville Federal Parties also agree to reimburse Agent for
reasonable out-of-pocket expenses accompanied by appropriate documentation,
including costs of travel, meals and lodging, photocopying, telephone, facsimile
and couriers, as well as legal fees and expenses, incurred by Agent in
connection with the services hereunder. Agent will not seek reimbursement of
legal fees and expenses in excess of $35,000 without the approval of the Bank.
The reasonable out-of-pocket expenses for the Agent are estimated to be $10,000.
In the event that the Agent incurs any expenses on behalf of the Greenville
Federal Parties, the Greenville Federal Parties will pay or reimburse the Agent
for such expenses regardless of whether the Reorganization is successfully
completed, and such reimbursements will not be included in the expense
limitations set forth above. The Greenville Federal Parties acknowledge,
however, that such limitations may be increased by the mutual consent of the
Bank and Agent in the event of delay in the Offering requiring the Agent to
utilize a Public Offering, a delay as a result of circumstances requiring
material additional work by Agent or its counsel or an update of the financial
information in tabular form contained in the Prospectus for a period later than
March 31, 2005. Not later than two days prior to the Closing Date, the Agent
will provide the Bank
19
with a detailed accounting of all reimbursable expenses to be paid at the
Closing in next day funds. In the event the Bank determines to abandon or
terminate the Plan prior to Closing, payment of such expenses shall be made in
next day funds on the date such determination is made.
SECTION 11. CONDITIONS TO THE AGENT'S OBLIGATIONS. The obligations of the
Agent hereunder and the occurrence of the Closing and the Reorganization are
subject to the condition that all representations and warranties of the
Greenville Federal Parties herein contained are, at and as of the commencement
of the Offering and (except to the extent such representations and warranties
speak as of an earlier date) at and as of the Closing Date, true and correct,
the condition that the Greenville Federal Parties shall have performed, in all
material respects, 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 Greenville Federal Parties shall have
conducted the Reorganization in all material respects in accordance with the
Plan, the MHC Regulations and all other applicable laws, regulations, decisions
and orders, including all terms, conditions, requirements and provisions
precedent to the Reorganization imposed upon them by the OTS and the SEC or any
other authority government.
(b) The Registration Statement shall have been declared effective by the
SEC, the MHC Notice and Holding Company Application shall have been approved by
the OTS and no stop order or other action suspending the effectiveness of the
Registration Statement shall have been issued under the 1933 Act or proceedings
therefor initiated or, to the knowledge of the Greenville Federal Parties,
threatened by the Commission or any state authority and no order or other action
suspending the authorization for use of the Prospectus or the consummation of
the Reorganization shall have been issued, or proceedings therefor initiated or,
to the knowledge of the Greenville Federal Parties, threatened by the OTS, the
Commission, or any other governmental body. The Shares shall have been
registered for offering and sale or exempted therefrom under the securities or
blue sky laws of the jurisdictions as the Agent shall have reasonably requested
and as agreed to by Greenville Federal Financial Corporation.
(c) At the Closing Date, the Agent shall have received:
(1) The opinion, dated as of the Closing Date, of VSSP, in form and
substance satisfactory to the Agent and counsel for the Agent, to the
effect that:
(i) Greenville Federal Financial Corporation is a corporation
duly organized and validly existing under the laws of the United
States, with corporate power and authority to own its properties and
to conduct its business as described in the Prospectus.
(ii) The Bank is a validly existing federally chartered mutual
savings and loan association, and upon consummation of the
Reorganization, the Bank will become a validly existing federally
chartered stock savings bank, with full power and authority to own
its properties and to conduct its business as described
20
in the Prospectus and to enter into this Agreement and perform its
obligations hereunder; the activities of the Bank as described in
the Prospectus are permitted by federal law and the rules and
regulations of the OTS (or valid waivers granted it by the OTS from
such rules and regulations); all of the capital stock of the Bank to
be outstanding upon completion of the Reorganization will be validly
issued, fully paid and nonassessable and will be owned of record and
beneficially by Greenville Federal Financial Corporation, free and
clear, to such counsel's Actual Knowledge, of any mortgage, pledge,
lien, encumbrance, claim or restriction.
(iii) The Bank is a member in good standing of the Federal
Home Loan Bank of Cincinnati. The Bank is an insured depository
institution under the provisions of the Federal Deposit Insurance
Act, as amended, and to such counsel's Actual Knowledge, no
proceedings for the termination or revocation of the federal deposit
insurance of the Bank are pending or threatened.
(iv) Greenville Federal MHC has been duly organized and is
validly existing as a federally chartered mutual holding company,
duly authorized to conduct its business and own its properties as
described in the Registration Statement and Prospectus.
(v) Upon consummation of the Reorganization and the issuance
of the Shares immediately upon completion of the Reorganization,
under the terms of the approval order of the OTS, in an amount as
described in the Prospectus, (a) the authorized, issued and
outstanding capital stock of Greenville Federal Financial
Corporation will be within the range set forth in the Prospectus
under the caption "Capitalization," and no shares of Common Stock
have been or will be issued and outstanding prior to the Closing
Date (except for the shares issued upon incorporation of Greenville
Federal Financial Corporation); (b) the Shares to be subscribed for
in the Offering will have been duly and validly authorized for
issuance, and, when issued and delivered by Greenville Federal
Financial Corporation 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 nonassessable; and (c) the
issuance of the Shares is not subject to preemptive rights under the
charter or bylaws of Greenville Federal Financial Corporation, or
arising or outstanding by operation of law or under any contract,
indenture, agreement, instrument or other document known to such
counsel, except for the subscription rights under the Plan. To such
counsel's Actual Knowledge, upon issuance of the Shares, good title
to the Shares will be transferred from Greenville Federal Financial
Corporation to the purchasers thereof against payment therefor,
subject to such claims as may be asserted against the purchasers
thereof by third-party claimants.
(vi) The Greenville Federal Parties have full power and
authority to enter into this Agreement and to consummate the
transactions contemplated hereby and by the Plan. The execution and
delivery of this Agreement and the
21
consummation of the transactions contemplated hereby have been duly
authorized by all necessary corporate action on the part of the
Greenville Federal Parties; and this Agreement constitutes a valid,
legal and binding obligation of each of the Greenville Federal
Parties, enforceable in accordance with its terms, except as rights
to indemnity and contribution thereunder may be limited under
applicable law, and subject to the qualification that (i)
enforcement thereof may be limited by bankruptcy, insolvency,
moratorium, reorganization, conservatorship, receivership or other
laws (including the laws of fraudulent conveyance) or judicial
decisions affecting the enforceability of creditors' rights
generally or the rights of creditors of savings associations or
financial institutions, the accounts of which are insured by the
FDIC, or their holding companies, and (ii) enforcement thereof is
subject to general equity principles (regardless of whether such
enforceability is considered in a proceeding in equity or at law)
and to the effect of certain laws and judicial decisions upon the
availability of injunctive relief and enforceability of equitable
remedies, including the remedies of specific performance and
self-help.
(vii) Pursuant to the MHC Regulations, the Plan has been duly
approved by the required vote of the Bank's members, based upon the
certificate of the inspector of election, and duly adopted by the
required vote of the directors of Greenville Federal Financial
Corporation and the Bank.
(viii) The Plan complies in all material respects with the MHC
Regulations; the MHC Notice and the Holding Company Application have
been approved by the OTS, and, to such counsel's Actual Knowledge,
no action has been taken and, to such counsel's Actual Knowledge,
none is pending or threatened by the OTS, Commission or any other
governmental authority to revoke such approval or to suspend the
Offering or the use of the Prospectus, and subject to the
satisfaction of any conditions set forth in such approvals, no
further approval, registration, authorization, consent or other
order of any federal or state regulatory agency, public board or
body is required in connection with the execution and delivery of
this Agreement, the offer, sale and issuance of the Shares and the
consummation of the Reorganization, except as may be required under
the securities or "Blue Sky" laws of various jurisdictions as to
which no opinion need be rendered. To such counsel's Actual
Knowledge, no person has sought to obtain regulatory or judicial
review of the final action of the OTS approving the Plan, the MHC
Notice, the Prospectus or the Holding Company Application.
(ix) The Registration Statement has become effective under the
1933 Act, and to such counsel's Actual Knowledge, no stop order
suspending the effectiveness of the Registration Statement has been
issued, or proceedings for that purpose have been instituted by the
Commission and to such counsel's Actual Knowledge, no such
proceedings have been threatened by the Commission.
22
(x) The terms and provisions of the Shares conform in all
material respects to the description thereof contained in the
Registration Statement and the Prospectus, and the forms of
certificates proposed to be used to evidence the Shares are in due
and proper form in compliance with applicable laws.
(xi) At the time the MHC Notice, including the Prospectus and
Members' Proxy Statement contained therein, was approved by the OTS,
the MHC Notice, including the Prospectus and Members' Proxy
Statement contained therein, as amended or supplemented, complied as
to form in all material respects with the requirements of the MHC
Regulations (other than the financial statements, notes to financial
statements, financial tables or other financial and statistical data
included therein and the appraisal valuation and the business plan,
as to which counsel need express no opinion).
(xii) At the time that the Registration Statement became
effective and as of the Closing Date, the Registration Statement,
including the Prospectus (as amended or supplemented) (other than
the financial statements, notes to financial statements, financial
tables or other financial and statistical data included therein and
the appraisal valuation and the business plan, as to which counsel
need express no opinion), complied as to form in all material
respects with the requirements of the 1933 Act and the rules and
regulations promulgated thereunder.
(xiii) To such counsel's Actual Knowledge, there are no legal
or governmental proceedings pending or threatened (i) asserting the
invalidity of this Agreement, (ii) seeking to prevent the
Reorganization or the offer, sale or issuance of the Shares, or
(iii) which are required to be disclosed in the Registration
Statement and Prospectus, other than those disclosed therein.
(xiv) The information in the Prospectus under the captions
"Summary -- The reorganization and the stock offering," "Risk
Factors," "How We Intend to Use the Proceeds," "Our Plans Regarding
Dividends," "Management," "Supervision and Regulation," "Taxation,"
"Our Reorganization and Stock Offering," "Restrictions on
Acquisition of Greenville Federal Financial Corporation and
Greenville Federal" and "Description of Capital Stock of Greenville
Federal Financial Corporation," to the extent that such information
constitutes matters of law, summaries of legal matters, documents or
proceedings, or legal conclusions, has been reviewed by such counsel
and is accurate in all material respects. The descriptions in the
Prospectus of statutes or regulations are accurate summaries and
fairly present the information required to be shown.
(xv) None of the Greenville Federal Parties is required to be
registered as an investment company under the Investment Company Act
of 1940.
(xvi) To such counsel's Actual Knowledge, none of the
Greenville Federal Parties is in violation of its Charter and Bylaws
or in default or violation
23
of any obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, loan agreement, note, lease or other
instrument to which it is a party or by which it or its property may
be bound, except for such defaults or violations which would not
have a Material Adverse Effect on the Greenville Federal Parties
taken as a whole; the execution and delivery of this Agreement, the
incurrence of the obligations herein set forth and the consummation
of the transactions contemplated herein do not (a), to such
counsel's Actual Knowledge, conflict with or constitute a breach of,
or default under, or result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the
Greenville Federal Parties pursuant to any material contract,
indenture, mortgage, loan agreement, note, lease or other instrument
to which any of the Greenville Federal Parties is a party or by
which any of them may be bound, or to which any of the property or
assets of the Greenville Federal Parties are subject, (b) result in
any violation of the provisions of the Charter or Bylaws of the
Greenville Federal Parties, or (c) result in any violation of any
applicable federal or state law, act, regulation (except that no
opinion with respect to the securities and blue sky laws of various
jurisdictions or the rules or regulations of the NASD and/or the OTC
Bulletin Board need be rendered) or, to such counsel's Actual
Knowledge, order or court order, writ, injunction or decree.
(xvii) The Charter and Bylaws of each of Greenville Federal
MHC, Greenville Federal Financial Corporation and the Bank comply in
all material respects with the laws of the United States.
(xviii) To such counsel's Actual Knowledge, none of the
Greenville Federal Parties is in violation of any directive from the
OTS to make any material change in the method of conducting its
respective business.
(xix) To such counsel's Actual Knowledge, there are no
material contracts, indentures, mortgages, loan agreements, notes,
leases or other instruments required to be described or referred to
in the MHC Notice, the Registration Statement or the Prospectus or
required to be filed as exhibits thereto other than those described
or referred to therein or filed as exhibits thereto in the MHC
Notice, the Registration Statement or the Prospectus. The
description in the MHC Notice, the Registration Statement and the
Prospectus of such documents and exhibits is accurate in all
material respects and fairly presents the information required to be
shown.
The opinion may be limited to matters governed by the laws of the
United States and the State of Ohio. In rendering such opinion, such
counsel may rely as to matters of fact on certificates of responsible
officers of the Greenville Federal Parties and public officials; provided
copies of any such certificates are delivered to Agent together with the
opinion to be rendered hereunder. The term "Actual Knowledge" as used
herein shall mean the conscious awareness of facts or other information of
the attorneys in such counsel's firm who have rendered legal services in
connection with the representation of
24
the Greenville Federal Parties in the Offering or the preparation of such
counsel's opinion letter. Such opinion may be limited to present statutes,
regulations and judicial interpretations and to facts as they presently
exist; in rendering such opinion, such counsel need assume no obligation
to revise or supplement it should the present laws be changed by
legislative or regulatory action, judicial decision or otherwise; and such
counsel need express no view, opinion or belief with respect to whether
any proposed or pending legislation, if enacted, or any proposed or
pending regulations or policy statements issued by any regulatory agency,
whether or not promulgated pursuant to any such legislation, would affect
the validity of the Reorganization or any aspect thereof. In the context
of such counsel's opinion described in paragraph (ix) above regarding the
absence of any stop order suspending the effectiveness of the Registration
Statement or the institution of proceedings for that purpose by the
Commission, such counsel's opinion letter shall state that such counsel
has confirmed the same with the staff of the Commission by telephone on
the date of such counsel's opinion. Such counsel may assume that any
agreement is the valid and binding obligation of any parties to such
agreement other than the Greenville Federal Parties. The opinion of such
counsel for the Greenville Federal Parties shall state that it has no
reason to believe that the Agent is not reasonably justified in relying
thereon.
(2) A letter of VSSP, which shall state that during the preparation
of the Registration Statement and the Prospectus, VSSP participated in
conferences with certain officers of and other representatives of the
Greenville Federal Parties, counsel to the Agent, representatives of the
independent public accountants for the Greenville Federal Parties and
representatives of the Agent at which the contents of the Registration
Statement and the Prospectus and related matters were discussed and has
considered the matters required to be stated therein and the statements
contained therein and, although (without limiting the opinions provided
pursuant to Section 11(c)(1)), VSSP has not independently verified the
accuracy, completeness or fairness of the statements contained in the
Registration Statement and Prospectus, on the basis of the foregoing,
nothing has come to the attention of VSSP that caused VSSP to believe that
the Registration Statement at the time it was declared effective by the
Commission and as of the date of such letter, contained or contains any
untrue statement of a material fact or omitted to state any 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
(it being understood that counsel need express no comment or opinion with
respect to statements, notes to financial statements, schedules and other
financial and statistical data included, or statistical or appraisal
methodology employed, in the Registration Statement or Prospectus, the
appraisal valuation or the business plan).
(3) A Blue Sky Memorandum from VSSP relating to the offering,
including Agent's participation therein, and should be furnished to Agent
with a copy thereof addressed to Agent or upon which VSSP shall state
Agent may rely. The Blue Sky Memorandum will relate to the necessity of
obtaining or confirming exemptions, qualifications or the registration of
the common stock under applicable state securities law.
25
(d) Concurrently with the execution of this Agreement, the Agent shall
receive a letter from Xxxxx Xxxxxxxx LLP dated the date hereof and addressed to
the Agent, such letter (i) confirming that Xxxxx Xxxxxxxx LLP is a firm of
independent public accountants within the meaning of the 1933 Act and the 1933
Act Regulations, and stating in effect that in the opinion of Xxxxx Xxxxxxxx
LLP, the financial statements of the Bank included in the Prospectus comply as
to form in all material respects with the applicable accounting requirements of
the 1933 Act and the 1934 Act and the related rules and regulations of the
Commission thereunder; (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 review (in accordance
with Statement of Auditing Standards No. 71) of the latest available unaudited
consolidated interim financial statements of the Bank prepared by the Greenville
Federal Parties, a reading of the minutes of the meetings of the Board of
Directors of the Bank and committees thereof and consultations with officers of
the Bank responsible for financial and accounting matters, nothing came to their
attention which caused them to believe that: (A) such unaudited consolidated
financial statements included in the Prospectus are not in conformity with
generally accepted accounting principles applied on a basis substantially
consistent with that of the audited financial statements included in the
Prospectus; or (B) except as stated in such letter, during the period from the
date of the latest unaudited consolidated financial statements included in the
Prospectus to a specified date not more than three business days prior to the
date of the Prospectus, there was any material increase in borrowings (defined
as securities sold under agreements to repurchase and any other form of debt
other than deposits), non-performing loans or special mention loans or material
decrease in the deposits, total assets or stockholders' equity, or there was any
change in common stock outstanding at the date of such letter as compared with
amounts shown in the latest unaudited statement of condition or there was any
material decrease in net income of the Bank for the period commencing
immediately after the period covered by the latest unaudited income statement
and ended not more than three business days prior to the date of the Prospectus
as compared to the corresponding period in the preceding year; and (iii) stating
that, in addition to the audit examination referred to in its opinion included
in the Prospectus and the performance of the procedures referred to in clause
(ii) of this subsection (d), they have compared with the general accounting
records of the Bank, which are subject to the internal controls of the
accounting system of the Bank and other data prepared by the Greenville Federal
Parties from 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 (subject to rounding).
(e) At the Closing Date, the Agent shall receive a letter from Xxxxx
Xxxxxxxx LLP dated the Closing Date, addressed to the Agent, confirming the
statements made by its letter delivered pursuant to subsection (d) of this
Section 11, the "specified date" referred to in clause (ii)(B) thereof to be a
date specified in such letter, which shall not be more than three business days
prior to the Closing Date.
(f) At the Closing Date, counsel to the Agent shall have been furnished
with such documents as counsel for the Agent may reasonably require for the
purpose of enabling them to advise the Agent with respect to the issuance and
sale of the Shares as herein contemplated and
26
related proceedings, or in order to evidence the accuracy of any of the
representations and warranties, or the fulfillment of any of the conditions
herein contained.
(g) At the Closing Date, the Agent shall receive a certificate of the
Chief Executive Officer and Chief Financial Officer of each of the Greenville
Federal Parties, dated the Closing Date, to the effect that: (i) they have
examined the Registration Statement and at the time the Registration Statement
became authorized for final use, the Prospectus 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 not misleading; (ii) there has not been, since
the respective dates as of which information is given in the Registration
Statement, any Material Adverse Effect otherwise than as set forth or
contemplated in the Registration Statement; (iii) the representations and
warranties contained in Section 6 of this Agreement are true and correct with
the same force and effect as though made at and as of the Closing Date; (iv) the
Greenville Federal Parties have complied in all material respects with all
material agreements and satisfied all conditions on its part to be performed or
satisfied at or prior to the Closing Date including the conditions contained in
this Section 11; (v) no stop order has been issued or, to their knowledge, is
threatened, by the Commission or any other governmental body; (vi) no order
suspending the Offering, the Reorganization, the acquisition of all of the
shares of the Bank by Greenville Federal Financial Corporation, the transactions
required under the Plan to consummate the Reorganization or the effectiveness of
the Prospectus has been issued and to their knowledge, no proceedings for any
such purpose have been initiated or threatened by the OTS, the Commission, or
any other federal or state authority; and (vii) to their knowledge, no person
has sought to obtain regulatory or judicial review of the action of the OTS in
approving the Plan or to enjoin the Reorganization.
(h) At the Closing Date, the Agent shall receive a letter from Xxxxxx &
Company, Inc., dated as of the Closing Date, (i) confirming that said firm is
independent of the Greenville Federal Parties and is experienced and expert in
the area of corporate appraisals, (ii) stating in effect that the Appraisal
complies in all material respects with the applicable requirements of the MHC
Regulations, and (iii) further stating that its opinion of the aggregate pro
forma market value of the Greenville Federal Parties, as converted, expressed in
the appraisal as most recently updated, remains in effect.
(i) None of the Greenville Federal Parties shall have sustained, since the
date of the latest financial statements included in the Registration Statement
and Prospectus, any material loss or interference with its business from fire,
explosion, flood, earthquake 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 in the Registration Statement and the
Prospectus, and since the respective dates as of which information is given in
the Registration Statement and the Prospectus, there shall not have been any
Material Adverse Effect that is in the Agent's reasonable judgment sufficiently
material and adverse as to make it impracticable or inadvisable to proceed with
the Offering or the delivery of the Shares on the terms and in the manner
contemplated in the Prospectus.
(j) Prior to and at the Closing Date, in the reasonable opinion of the
Agent there shall have been no material adverse change in the financial
condition or in the earnings, business
27
affairs or prospects of any of the Greenville Federal Parties independently, or
the Greenville Federal Parties taken as a whole, from and as of the latest dates
as of which such condition is set forth in the Prospectus, except as referred to
therein.
(k) At or prior to the Closing Date, the Agent shall receive (i) a copy of
the MHC Notice and a copy of the letters from the OTS approving the MHC Notice,
(ii) a copy of the order from the Commission declaring the Registration
Statement effective, (iii) an executed copy of the charter of Greenville Federal
Financial Corporation, (iv) an executed copy of the charter of Greenville
Federal MHC; (v) a copy of the letter from the OTS approving the Holding Company
Application, (vi) a certificate from the FHLB-Cincinnati evidencing the Bank's
membership therein, (vii) a certificate from the FDIC evidencing the Bank's
insurance of accounts, and (viii) any other documents that Agent shall
reasonably request.
(l) Subsequent to the date hereof, there shall not have occurred any of
the following: (i) a suspension or limitation in trading in securities generally
on the New York Stock Exchange or American Stock Exchange or in the
over-the-counter market, or quotations halted generally on the Nasdaq Stock
Market, or minimum or maximum prices for trading have been fixed, or maximum
ranges for prices for securities have been required by either of such exchanges
or the NASD or by order of the Commission or any other governmental authority
other than temporary trading halts or limitation (A) imposed as a result of
intraday changes in the Dow Xxxxx Industrial Average, (B) lasting no longer than
until the regularly scheduled commencement of trading on the next succeeding
business-day and (C) which when combined with all other such halts occurring
during the previous five (5) business days, total less than two (2); (ii) a
general moratorium on the operations of federally insured financial institutions
or a general moratorium on the withdrawal of deposits from commercial banks or
other federally insured financial institutions declared by either federal or
state authorities; or (iii) a material adverse change in the financial markets
in the United States or elsewhere or any outbreak of hostilities or escalation
thereof or other calamity or crisis, including, without limitation, terrorist
activities after the date hereof, the effect of which, in the judgment of the
Agent, is so material and adverse as to make it impracticable to market the
Shares or to enforce contracts, including subscriptions or purchase orders, for
the sale of the Shares.
(m) Prior to and at the Closing date, none of the Greenville Federal
Parties will have received from the OTS or the FDIC any direction (oral or
written) to make any material change in the method of conducting their business
with which it has not complied (which direction, if any, shall have been
disclosed to the Agent).
(n) All such opinions, certificates, letters and documents will be in
compliance with the provisions hereof only if they are reasonably satisfactory
in form and substance to the Agent and to counsel for the Agent. Any certificate
signed by an officer of Greenville Federal Financial Corporation or the Bank and
delivered to the Agent or to counsel for the Agent shall be deemed a
representation and warranty by Greenville Federal Financial Corporation or the
Bank, as the case may be, to the Agent as to the statements made therein.
28
SECTION 12. INDEMNIFICATION.
(a) The Greenville Federal Parties jointly and severally agree to
indemnify and hold harmless the Agent, its officers, directors, agents,
attorneys, 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, subject to the
limitation set forth in the last sentence of subsection (c) below), joint or
several, that the Agent or any of such officers, directors, agents, attorneys,
servants, employees and controlling Persons (collectively, the "Related
Persons") may suffer or to which the Agent or the Related Persons may become
subject under all applicable federal and state laws or otherwise, and to
promptly reimburse the Agent and any Related Persons upon written demand for any
reasonable expenses (including reasonable fees and disbursements of counsel and
Agent's time spent according to normal hourly rates) incurred by the Agent or
any Related Persons in connection with investigating, preparing or defending any
actions, proceedings or claims (whether commenced or threatened) to the extent
such losses, claims, damages, liabilities, expenses or actions: (i) arise out of
or are based upon any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement (or any amendment or supplement
thereto), the Prospectus (or any amendment or supplement thereto), the
Applications, or other instrument or document of the Greenville Federal Parties
or based upon written information supplied by any of the Greenville Federal
Parties filed in any state or jurisdiction to register or qualify any or all of
the Shares under the securities laws thereof (collectively, the "Blue Sky
Applications"), or any application or other document, advertisement, or
communication ("Sales Information") prepared, made or executed by or on behalf
of any of the Greenville Federal Parties with its consent or based upon
information furnished by or on behalf of any of the Greenville Federal Parties,
in order to qualify or register the Shares under the securities laws thereof,
(ii) arise out of or are based upon the omission or alleged omission to state in
any of the foregoing documents or information, a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; (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), the Prospectus
(or any amendment or supplement thereto), the Applications, any Blue Sky
Applications or Sales Information or other documentation distributed in
connection with the Offering; or (iv) result from any claims made with respect
to the accuracy, reliability and completeness of the records identifying the
Eligible Account Holders and Supplemental Eligible Account Holders or Other
Members 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; provided, however, that no
indemnification is required under this subsection (a) to the extent such losses,
claims, damages, liabilities, expenses or actions arise out of or are based upon
any untrue material statements or alleged untrue material statements in, or
material omission or alleged material omission from, the Registration Statement
(or any amendment or supplement thereto) or the Prospectus (or any amendment or
supplement thereto), the Applications, the Blue Sky Applications or Sales
Information or other documentation distributed in connection with the
Reorganization made in reliance upon and in conformity with information
furnished to the Greenville Federal Parties by the Agent or its representatives
(including counsel) with respect to
29
the Agent expressly for use in such documents. As of the date of this Agreement,
the only such information about the Agent provided for such use is contained in
the Prospectus under the caption "Our Reorganization and Stock Offering -
Marketing arrangements" and in the third sentence of the first paragraph under
the caption "Market for the Common Stock." Provided further, that the Greenville
Federal Parties will not be responsible for any loss, liability, claim, damage
or expense to the extent a court of competent jurisdiction finds they result
primarily from material oral misstatements by the Agent to a purchaser or
prospective purchaser of Shares which are not based upon information in the
Registration Statement or Prospectus, or from actions taken or omitted to be
taken by the Agent in bad faith or from the Agent's gross negligence or willful
misconduct and the Agent agrees to repay to the Greenville Federal Parties any
amounts advanced to it by the Greenville Federal Parties in connection with
matters as to which it is found by a court of competent jurisdiction not to be
entitled to indemnification hereunder.
(b) The Agent agrees to indemnify and hold harmless the Greenville Federal
Parties, their directors and officers, agents, attorneys, servants and employees
and each person, if any, who controls any of the Greenville Federal Parties
within the meaning of Section 15 of the 1933 Act or Section 20(a) of the 1934
Act against any and all loss, liability, claim, damage or expense whatsoever
(including but not limited to settlement expenses, subject to the limitation set
forth in the last sentence of subsection (c) below), 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 Greenville Federal Parties and any such persons upon
written demand for any reasonable expenses (including out-of-pocket expenses,
fees and disbursements of counsel) incurred by them in connection with
investigating, preparing or defending any actions, proceedings or claims
(whether commenced or threatened) to the extent such losses, claims, damages,
liabilities, expenses 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
Applications or any Blue Sky Applications or Sales Information 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
12(b) shall exist only if and only to the extent that such untrue statement or
alleged untrue statement was made in, or such material fact or alleged material
fact was omitted from, the Applications, Registration Statement (or any
amendment or supplement thereto) or the Prospectus (or any amendment or
supplement thereto) in reliance upon and in conformity with information
furnished to the Greenville Federal Parties by the Agent or its representatives
(including counsel) expressly for use in such documents. As of the date of this
Agreement, the only such information about the Agent provided for such use is
contained in the Prospectus under the caption "Our Reorganization and Stock
Offering - Marketing arrangements" and in the third sentence of the first
paragraph under the caption "Market for the Common Stock."
(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
30
indemnifying party shall not relieve it from any liability which it may have on
account of this Section 12, Section 13 or otherwise, unless the failure to give
such notice promptly results in material prejudice to the indemnifying party. An
indemnifying party may participate at its own expense in the defense of such
action. In addition, if it so elects within a reasonable time after receipt of
such notice, an indemnifying party, jointly with any other indemnifying parties
receiving such notice, may assume the defense of such action with counsel chosen
by it reasonably acceptable to the indemnified parties that are defendants in
such action, unless such indemnified parties reasonably object to such
assumption on the ground that there may be legal defenses available to them that
are different from or in addition to those available to such indemnifying party.
If an indemnifying party assumes the defense of such action, the indemnifying
parties shall not be liable for any fees and expenses of counsel for the
indemnified parties incurred thereafter in connection with such action,
proceeding or claim, other than reasonable costs of investigation. In no event
shall the indemnifying parties be liable for the fees and expenses of more than
one separate firm of attorneys (unless an indemnified party or parties shall
have reasonably concluded that there may be defenses available to it or them
which are different from or in addition to those of other indemnified parties)
for all indemnified parties in connection with any one action, proceeding or
claim or separate but similar or related actions, proceedings or claims in the
same jurisdiction arising out of the same general allegations or circumstances.
No indemnifying party shall be liable for any settlement of any action,
proceeding or suit, which settlement is effected without its prior written
consent. Neither the Greenville Federal Parties nor the Agent shall, without the
written consent of the other, settle or compromise any claim against them or it
based upon circumstances giving rise to an indemnification claim against the
other party hereunder unless such settlement or compromise provides that the
indemnified party shall be unconditionally and irrevocably released from all
liability in respect to such claim.
(d) The agreements contained in this Section 12 and in Section 13 hereof
and the representations and warranties of the Greenville Federal Parties set
forth in this Agreement shall remain operative and in full force and effect
regardless of (i) any investigation made by or on behalf of the Agent or its
officers, directors, controlling persons, agents, attorneys, servants or
employees or by or on behalf of any of the Greenville Federal Parties or any
officers, directors, controlling persons, agents, attorneys, servants or
employees of any of the Greenville Federal Parties; (ii) delivery of and payment
hereunder for the Shares; or (iii) any termination of this Agreement.
Notwithstanding the prior sentence, Sections 12 and 13 hereof are subject to and
limited by all applicable securities and banking laws and regulations.
SECTION 13. CONTRIBUTION.
In order to provide for just and equitable contribution in circumstances
in which the indemnification provided for in Section 12 is due in accordance
with its terms but is found in a final judgment by a court to be unavailable
from the Greenville Federal Parties or the Agent, the Greenville Federal Parties
and the Agent shall contribute to the aggregate losses, claims, damages and
liabilities of the nature contemplated by such indemnification (including any
investigation, legal and other expenses incurred in connection therewith and any
amount paid in settlement of any action, suit, or proceeding of any claims
asserted, but after deducting any
31
contribution received by the Greenville Federal Parties or the Agent from
persons other than the other party thereto, who may also be liable for
contribution) in such proportion so that (i) the Agent is responsible for that
portion represented by the percentage that the fees paid to the Agent pursuant
to Section 4 of this Agreement (not including expenses) ("Agent's Fees"), less
any portion of Agent's Fees paid by Agent to Assisting Brokers, bear to the
total proceeds received by the Greenville Federal Parties from the sale of the
Shares in the Offering, net of all expenses of the Offering, except Agent's fees
and (ii) the Greenville Federal Parties 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 12
above, then each indemnifying party shall contribute to such amount paid or
payable to such indemnified party in such proportion as is appropriate to
reflect not only such relative fault of the Greenville Federal Parties 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 thereof), but also the relative
benefits received by the Greenville Federal Parties on the one hand and the
Agent on the other from the Offering, as well as any other relevant equitable
considerations. The relative benefits received by the Greenville Federal Parties
on the one hand and the Agent on the other hand shall be deemed to be in the
same proportion as the total proceeds from the Offering, except Agent's fees,
net of all expenses of the Offering, received by the Greenville Federal Parties
bear, with respect to the Agent, to the total fees (not including expenses)
received by the Agent less the portion of such fees paid by the Agent to
Assisting Brokers. 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 Greenville Federal Parties 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 Greenville Federal Parties and the Agent agree that it would not
be just and equitable if contribution pursuant to this Section 13 were
determined by pro-rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to above in this
Section 12. The amount paid or payable by an indemnified party as a result of
the losses, claims, damages or liabilities (or action, proceedings or claims in
respect thereof) referred to above in this Section 13 shall be deemed to include
any legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action, proceeding or claim.
It is expressly agreed that the Agent shall not be liable for any loss,
liability, claim, damage or expense or be required to contribute any amount
which in the aggregate exceeds the amount paid (excluding reimbursable expenses)
to the Agent under this Agreement less the portion of such fees paid by the
Agent to Assisting Brokers. It is understood and agreed 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 0000
Xxx) shall be entitled to contribution with respect to any loss or liability
arising from such misrepresentation from any person who was not found guilty of
such fraudulent misrepresentation. The duties, obligations and liabilities of
the Greenville Federal Parties and the Agent under this Section 13 and under
Section 12 shall be in addition to any duties, obligations and liabilities which
the Greenville Federal Parties and the Agent may otherwise have. For purposes of
this Section 13, each of the Agent's and the
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Greenville Federal Parties' officers, directors and, controlling persons within
the meaning of the 1933 Act and the 1934 Act shall have the same rights to
contribution as the Greenville Federal Parties and the Agent. 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 13, will
notify such party from whom contribution may be sought, but the omission to so
notify such party shall not relieve the party from whom contribution may be
sought from any other obligation it may have hereunder or otherwise than under
this Section 13.
SECTION 14. SURVIVAL.
(a) All representations, warranties and indemnities and other statements
contained in this Agreement, or contained in certificates of officers of the
Greenville Federal Parties or the Agent submitted pursuant hereto, shall remain
operative and 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 or its controlling persons, or by or on behalf of the Greenville Federal
Parties and shall survive the issuance of the Shares, and any legal
representative, successor or assign of the Agent, any of the Greenville Federal
Parties, and any indemnified person shall be entitled to the benefit of the
respective agreements, indemnities, warranties and representations.
(b) The provisions of Paragraph 8 of the Letter Agreement, "Additional
Services," shall survive the issuance of the Shares (but not any termination or
cancellation of this Agreement) for a period of one (1) year, and any legal
representative, successor or assign of the Agent and any of the Greenville
Federal Parties shall be entitled during such period to the benefit of the
agreements contained therein.
SECTION 15. TERMINATION.
(a) Agent may terminate this Agreement by giving the notice indicated
below in this Section at any time after this Agreement becomes effective as
follows:
(i) In the event (a) the Plan is abandoned or terminated by Greenville
Federal Financial Corporation; (b) Greenville Federal Financial
Corporation fails to consummate the sale of the minimum number of Shares
prior to [ ], 2005 in accordance with the provisions of the Plan or as
required by the MHC Regulations and applicable law; or (c) immediately
prior to commencement of the Offering, the Agent terminates this
relationship because in its opinion, which shall have been formed in good
faith after reasonable determination and consideration of all relevant
factors, there has been a failure to satisfactorily disclose all relevant
information in the Prospectus or the existence of market conditions which
might render the sale of the Shares inadvisable, this Agreement shall
terminate and the Greenville Federal Parties shall refund 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 in
accordance with Section 2 hereof, and any such termination shall be
without liability of any party to any other party except as otherwise
provided in Sections 2, 4, 10, 12, 13 and 14 hereof.
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(ii) If any of the conditions specified in Section 11 hereof shall not
have been fulfilled when and as required by this Agreement, or by the
Closing Date, or waived in writing by the Agent, this Agreement and all of
the Agent's obligations hereunder may be canceled by the Agent by
notifying the Bank of such cancellation in writing 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, 4, 10, 12, 13 and 14 hereof.
(iii) If Agent elects to terminate this Agreement as provided in this
Section 15(a), the Bank shall be notified by the Agent as provided in
Section 16 hereof.
(iv) If this Agreement is terminated in accordance with the provisions of
this Section 15(a), the Agent shall retain the advisory and management fee
paid to it pursuant to Section 4 and the Greenville Federal Parties shall
reimburse the Agent for any of its other actual, accountable, reasonable
out-of-pocket expenses pursuant to Section 10, including, without
limitation, communication, legal and travel expenses.
(b) Either Agent or the Greenville Federal Parties may terminate this
Agreement in the event any of the Greenville Federal Parties (in the event of a
termination initiated by Agent) or Agent (in the event of a termination
initiated by the Greenville Federal Parties) is in material breach of the
representations and warranties or covenants in this Agreement and such breach
has not been cured within 15 days after the party initiating termination
provides notice of such breach to the breaching party. If this Agreement is
terminated by Agent under circumstances that would permit termination under
Section 15(a) of this Agreement, then the provisions of Section 15(a) shall
apply, regardless of whether this Agreement could also be terminated by Agent
under this Section 15(b).
(c) This Agreement may be terminated by the mutual written consent of the
parties hereto.
SECTION 16. NOTICES. All notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to Agent shall be
directed to Xxxxx, Xxxxxxxx & Xxxxx, Inc., 000 Xxxxxxxxx Xxxxx, Xxxxxx, Xxxx
00000, Attention: Xx. Xxxxxx X. Xxxxxx (with a copy to Squire, Xxxxxxx &
Xxxxxxx, L.L.P., 0000 Xxxxxxxxxx Xxxxxx, 00 X. Xxxx Xxxxxx, Xxxxxxxx, Xxxx
00000, Attention: Xxxx X. Summer, Esq.); notices to the Greenville Federal
Parties shall be directed to Greenville Federal Financial Corporation, 000
Xxxxxx Xxxxxx Xxxxxxxxxx, XX 00000-0000, Attention: Xxxxx X. Xxxxxx, President
(with a copy to Vorys, Xxxxx, Xxxxxxx and Xxxxx LLP, 00 X. Xxx Xxxxxx, Xxxxxxxx,
Xxxx 00000, Attention: Xxxx X. Xxxxx, Esq.).
SECTION 17. PARTIES. This Agreement shall inure to the benefit of and be
binding upon the Agent and the Greenville Federal Parties, and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
parties hereto and their respective successors and the controlling persons and
officers and directors referred to in Sections 12 and 13 and their heirs and
legal
34
representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provisions herein contained. It is understood
and agreed that this Agreement is the exclusive agreement among the parties,
supersedes any prior Agreement among the parties and may not be varied except by
a writing signed by all parties, except for Paragraphs 4, 8 and 12 of the Letter
Agreement, which are not hereby superseded.
SECTION 18. PARTIAL INVALIDITY. In the event that any term, provision or
covenant herein or the application thereof to any circumstances 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 circumstance 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 19. CONSTRUCTION. This Agreement shall be construed in accordance
with the laws of the State of New York.
SECTION 20. 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.
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If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us a counterpart hereof, whereupon this instrument
along with all counterparts will become a binding agreement between you and us
in accordance with its terms.
GREENVILLE FEDERAL MHC
By: ______________________________________
Xxxxx X. Xxxxxx
President and Chief Executive Officer
GREENVILLE FEDERAL FINANCIAL CORPORATION
By: ______________________________________
Xxxxx X. Xxxxxx
President and Chief Executive Officer
GREENVILLE FEDERAL SAVINGS AND LOAN
ASSOCIATION
By: ______________________________________
Xxxxx X. Xxxxxx
President and Chief Executive Officer
The foregoing Agency Agreement is
hereby confirmed and accepted as
of the date first set forth above.
XXXXX, XXXXXXXX & XXXXX, INC.
By: ________________________________
Xxxxxx X. Xxxxxx
Managing Director
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