Exhibit 1.2
QUAINT OAK BANCORP,
INC.
(a Pennsylvania Corporation)
Up to 1,207,500 Shares
(Subject to Increase Up to 1,388,625 Shares)
COMMON STOCK ($0.01 Par
Value)
Subscription Price $10.00 Per Share
FORM OF AGENCY AGREEMENT
May __, 2007
Xxxx Xxxx & Co., Inc.
00
Xxxxxxxx Xxxxxxxx
Xxxxxxx Xxxx, Xxx Xxxxxx 00000
Ladies and Gentlemen:
Quaint
Oak Bancorp, Inc., a Pennsylvania corporation (the “Company”), and Quaint Oak
Savings Bank, a Pennsylvania-chartered savings bank in mutual form (the “Bank”)
(references to the “Bank” include the Bank as a Pennsylvania-chartered savings bank
in mutual form and as a Pennsylvania-chartered savings bank in stock form, as indicated
by the context, and together with the Company, the “Primary Parties”), hereby
confirm, jointly and severally, their agreement with Xxxx Xxxx & Co., Inc. (the “Agent”),
as follows:
1.
The Offering. On January 10, 2007, the Board of Trustees of the Bank adopted a
Plan of Conversion (such plan, as ratified and approved on February 15, 2007 by
the Board of Trustees and as amended by The Board of Trustees on March 19, 2007,
the “Plan”), which provides for the conversion of the Bank from a
Pennsylvania-chartered savings bank in mutual form to a Pennsylvania-chartered
savings bank in stock form (the “Conversion”), the reorganization of the Bank into a
holding company structure, and the issuance of all of the Bank’s outstanding Common
Stock, as defined below, to the Company (together with the Conversion and the Offering
or Conversion Offerings, as defined below, the “Reorganization”). Upon completion
of the Reorganization and pursuant to the Plan, the Bank will be a wholly-owned
subsidiary of the Company. The Reorganization will be accomplished pursuant to
applicable federal law, Pennsylvania law and the rules and regulations of the
Pennsylvania Department of Banking (the “Department”), the Federal Deposit Insurance
Corporation (the “FDIC”), and the Office of Thrift Supervision (the “OTS”). In
connection with the Reorganization, the Company will offer Shares (as defined below) in
a subscription offering and, if necessary, a community offering and/or a syndicated
community offering. The Company is offering up to 1,207,500 shares (the “Shares” or
“Conversion Shares”) of common stock, par value $0.01 per share (the “Common Stock”)
(subject to an increase up to 1,388,625 shares), in (i) a subscription offering (the “Subscription
Offering”), and, if necessary; (ii) a direct community offering (the “Community
Offering”); and (iii) a syndicated community offering (the “Syndicated Community
Offering”), in connection with the Reorganization.
Upon
the completion of the Subscription Offering, Community Offering, and Syndicated
Community Offering (collectively, the “Conversion Offerings” or “Offering”), the
purchasers of
Shares in the Conversion Offerings
will own 100% of the outstanding Common Stock of the Company. The Company will
issue the Shares at a purchase price of $10.00 per share (the “Purchase Price”). If
the number of Conversion Shares is increased or decreased in accordance with the Plan,
the term “Shares” or “Conversion Shares” shall mean such greater or lesser number,
where applicable.
In
the Subscription Offering, subject to the allocation procedures and purchase
limitations set forth in the Plan, non-transferable rights to subscribe for between
892,500 and 1,207,500 shares (subject to an increase up to 1,388,625 shares) of the
Common Stock (“Subscription Rights”) will be granted, in the following order of
priority: (1) the Bank’s depositors with account balances of at least $50.00 as of
the close of business on December 31, 2005 (“Eligible Account Holders”); (2) the Bank’s
tax-qualified employee stock ownership plan; (3) the Bank’s depositors with account
balances of at least $50.00 as of the close of business on _______________ (“Supplemental
Eligible Account Holders”); and (4) the Bank’s depositors as of _____________ (“Other
Members”). The Company may offer shares of Common Stock for which subscriptions have
not been received in the Subscription Offering in the Community Offering to members of
the general public, with preference given to natural persons residing in Bucks
County, Pennsylvania. In the event a Community Offering is held, it may be held at
any time during or immediately after the Subscription Offering. Depending on market
conditions, shares not subscribed for in the Subscription Offering or purchased in the
Community Offering may be offered in the Syndicated Community Offering to selected
members of the general public through a syndicate of registered broker-dealers
managed by the Agent (“Assisting Brokers”) which are members of the National
Association of Securities Dealers, Inc. (“NASD”).
It
is acknowledged that the number of Shares to be sold in the Offering may be increased
or decreased as described in the Prospectus (as hereinafter defined); that the
purchase of Shares in the Offering is subject to maximum and minimum purchase
limitations as described in the Prospectus; and that the Company may reject, in
whole or in part, any subscription received in the Community Offering and Syndicated
Community Offering.
The
Company has filed with the U.S. Securities and Exchange Commission (the “Commission”) a
Registration Statement on Form SB-2 (File No. 333-141474) 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 the Company pursuant to Rule 424(b) or (c) of the
regulations of the Commission under the 1933 Act 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
accordance with Title 7, Chapter 16 of the Pennsylvania statutes and 12 C.F.R. § 303.161
(the “Conversion Regulations”), the Bank has filed with the Department and with the
FDIC an Application for Conversion (the “Conversion Application”). In connection
with the Reorganization, the Company filed with the OTS an application on Form
H-(e)1-S (the
“Holding Company Application,” and
together with the Conversion Application, the “Applications”) for approval for the
Company to acquire the Bank.
Concurrently
with the execution of this Agreement, the Company is delivering to the Agent copies of
the Prospectus dated May ___, 2007 of the Company to be used in the Subscription
Offering and Community Offering (if any), and, if necessary, will deliver copies
of the Prospectus and any prospectus supplement for use in a Syndicated Community
Offering and/or Public Offering, as defined in the Prospectus (as hereinafter defined).
2.
Appointment of Agent. Subject to the terms and conditions of this Agreement, the
Primary Parties hereby appoint Agent as financial advisor and selling agent to consult
with and to advise and assist the Primary Parties with respect to the sale of the
Conversion Shares in the Conversion Offerings.
On
the basis of the representations and warranties of the Primary Parties contained in,
and subject to the terms and conditions of, this Agreement the Agent accepts such
appointment and agrees to consult with and advise the Company and the Bank as to the
matters set forth in the letter agreement (“Letter Agreement”), dated February 1,
2007, between the Bank and Agent (a copy of which is attached hereto as
Exhibit A). It is acknowledged by the Primary Parties that the Agent shall not be
obligated to purchase any Shares and shall not be obligated to take any action which is
inconsistent with any applicable law, regulation, decision or order. Except as
provided in the last paragraph of this Section 2, the appointment of the Agent
hereunder shall terminate upon consummation of the Offering.
If
selected broker-dealers are used to assist in the sale of Conversion Shares in
the Syndicated Community Offering, the Primary Parties hereby, subject to the terms
and conditions of this Agreement, appoint the Agent to manage such broker-dealers
in the Syndicated Community Offering. On the basis of the representations
and warranties of the Primary Parties contained in, and subject to the terms and
conditions of, this Agreement, the Agent accepts such appointment and agrees to manage
the selling group of broker-dealers in the Syndicated Community Offering.
The
Agent agrees to make available to the Company for a period of one year following the
consummation of the Offering its Strategic Advisory Services (“STARS”) program. If
the Company elects to participate in the STARS program, the Agent will meet with
the Company at its request and will render general advice on the financial
matters listed in Section 9 of the Letter Agreement (but not including (i) any
in-depth merger and acquisition analyses or studies which are available under the
Agent’s normal fee schedule, or (ii) advice with respect to a specific acquisition
transaction by, or sale of, the Bank or the Company). If the Company elects to
participate in the STARS program, the Agent will waive the regular retainer fee and
hourly charges for the first year of such participation. The Company would be required,
however, to reimburse the Agent for its reasonable out-of-pocket expenses incurred
in conjunction with the performance of these services. Such out-of-pocket
expenses include travel, legal and other miscellaneous expenses. The Agent would not
be permitted to incur any single expense in excess of $1,000 pursuant to this
paragraph without the prior approval of the Company. If negotiations for a
transaction conducted during the one-year participation period result in the
execution of a definitive agreement and/or consummation of a transaction for which the
Agent
customarily would be entitled to a
fee for its advisory or other investment banking services, the Agent shall receive a
contingent advisory fee in accordance with the terms of a separate engagement letter
to be entered into with respect to such transaction. Nothing in this Agreement shall
require the Company to obtain such financial advisory services from the Agent. After
the completion of such one-year participation period, if the parties wish to continue
the relationship, a fee will be negotiated and an agreement with respect to specific
advisory services will be entered into at that time.
3.
Refund of Purchase Price. In the event that the Reorganization is not
consummated for any reason, including but not limited to the inability to sell a
minimum of 892,500 Shares during the Offering (including any permitted extension
thereof), this Agreement shall terminate and any persons who have subscribed for any
of the Conversion Shares shall have refunded to them the full amount which has been
received from such person, together with interest, if applicable, at the Bank’s
current passbook savings rate, from the date payment is received to the date said
refund is made as provided in the Prospectus. Upon termination of this Agreement,
neither the Agent nor the Primary Parties shall have any obligation to the other
except that (i) the Primary Parties shall remain liable for any amounts due pursuant
to Sections 4, 8, 10 and 11 hereof, unless the transaction is not consummated due
to the breach by the Agent of a warranty, representation or covenant; and (ii) the
Agent shall remain liable for any amount due pursuant to Sections 10 and 11 hereof,
unless the transaction is not consummated due to the breach by the Primary Parties of a
warranty, representation or covenant.
4.
Fees. In addition to the expenses specified in Section 8 hereof, as
compensation for the Agent’s services under this Agreement, the Agent has received or
will receive the following fees from the Primary Parties:
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(a) |
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An
advisory, administrative services and sales fee in the amount of $135,000, of which
$25,000 has been paid prior to the date hereof and the remaining
$110,000 shall be payable at the Closing Date (as defined herein). |
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(b) |
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If
any of the Shares remain unsubscribed after the Subscription Offering and unsold after
the Community Offering, at the request of the Company, the Agent will
form a group of approved broker-dealer firms in accordance with
Section 2 for purposes of the Syndicated Community Offering. The fees
payable by the Company pursuant to this Section 4(b) will not exceed
six percent (6.00%) of the aggregate dollar amount of the Shares sold
in the Syndicated Community Offering. Of such fee, the Agent will
receive one percent (1.00%) of the aggregate dollar amount of the Shares sold
pursuant to this Section 4(b) as a management fee, and the
Primary Parties will pay the remainder to the Assisting Brokers,
which may include the Agent, in amounts relating to the number of
Shares sold by such Assisting Brokers pursuant to this Section 4(b). All such fees
payable under this Section 4(b) shall be in addition to all fees
payable under Section 4(a) and shall be paid at the Closing Date. |
In
the event of a Syndicated Community Offering, the Company, in consultation with the
Agent, shall be authorized to determine which NASD member firms participate in the
Syndicated Community Offering and the extent of their participation. The Agent shall
not commence sales
of Common Stock through members of
the selling group of broker-dealers without the specific prior approval of the Company.
In
the event that the Company is required to resolicit subscribers for Shares in the
Subscription and Community Offering and the Agent is required to provide significant
additional services in connection with such a resolicitation, the Primary Parties and
the Agent shall mutually agree to the dollar amount of additional fees due to the
Agent, if any. Until any agreement called for by this paragraph is reached, the
Agent shall not accrue expenses relating to any resolicitation in an amount that
would cause the total expenses incurred by the Agent to be greater than as set forth in
Section 8 hereof without the prior written consent of the Company or the Bank, which
consent shall not be unreasonably withheld.
If
this Agreement is terminated in accordance with the provisions of Sections 3, 9, or
13, and the sale of Shares is not consummated, the Agent shall not be entitled to
receive the fee set forth in Sections 4(a)-(c), but the Agent will retain the advisory
and administrative services fee already earned of $25,000 and the Primary Parties will
reimburse the Agent for its reasonable expenses pursuant to Section 8.
5.
Closing. If the minimum number of Conversion Shares required to be sold in the
Offering on the basis of the most recently updated Appraisal (as defined in Section
6(l)) are subscribed for or sold at or before the termination of the Offering, and
the other conditions to the completion of the Reorganization are satisfied, the Company
agrees to issue the Shares on the Closing Date against payment therefore by the means
authorized by the Plan and (i) in the case of Shares subscribed for in the Subscription
Offering and, if applicable, the Community Offering, to deliver certificates
evidencing ownership of the Conversion Shares in such authorized denominations and
registered in such names as may be indicated on the subscription order forms
directly to the purchasers thereof as promptly as practicable after the Closing Date,
and (ii) in the case of Shares sold in the Syndicated Community Offering, if
applicable, to issue such Shares to the Agent (or one or more Assisting Broker,
as directed by the Agent) for the benefit of the purchasers thereof, with any
transfer taxes payable in connection with the transfer of the Shares to the Agents
and/or Assisting Brokers duly paid. Upon delivery, any Shares sold in the Syndicated
Community Offering shall be registered in such names and in such denominations as
the Agent shall request in writing not later than one full business day prior to the
Closing Date.
The
closing of the issuance and sale of the Shares (the “Closing”) shall be held at the
offices of special counsel to the Primary Parties, or at such other place as shall be
agreed upon among the Primary Parties and the Agent, at 10:00 a.m., Eastern Standard
Time, on the business day selected by the Company which business day shall be no less
than two business days following the giving of prior notice by the Company to the Agent
or at such other time as shall be agreed upon by the Primary Parties and the Agent. At
the Closing, the Primary Parties shall deliver to the Agent by wire transfer in same-day
funds the commissions, fees and expenses owing as set forth in Sections 4 and 8 hereof
and the opinions required hereby and other documents to be delivered on the Closing Date
as set forth in this Agreement shall be executed and delivered to effect the sale of the
Shares as contemplated hereby and pursuant to the terms of the Prospectus; provided,
however, that all out-of-pocket expenses to which the Agent is entitled under Section 8
hereof shall be due and payable upon receipt of the Company or the Bank of a
written accounting therefor setting
forth in reasonable detail the expenses incurred by the Agent. The hour and date upon
which the Company shall release the Conversion Shares for delivery in accordance with the
terms hereof is referred to herein as the “Closing Date.”
The
Agent shall have no liability to any party for the records or other information
provided by the Primary Parties (or their agents) to the Agent for use in allocating
the Shares.
6.
Representations and Warranties of the Primary Parties. The Primary Parties
jointly and severally represent and warrant to the Agent that, except as disclosed in
the Prospectus:
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(a) |
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The
Bank has and, as of the Closing Date, Company will have all such power, authority,
authorizations, approvals and orders as may be required to enter
into this Agreement, to carry out the provisions and conditions
hereof and to issue and sell the Shares as provided herein and as
described in the Prospectus, subject to the various limitations
and required approvals described therein. The consummation of
the Reorganization, the execution, delivery and performance of
this Agreement and the Letter Agreement and the consummation of the transactions
herein contemplated have been duly and validly authorized by all
necessary corporate action on the part of the Bank and, as of the
Closing Date, will have been duly and validly authorized by all
necessary corporate action on the part of the Company. This Agreement has been
validly executed and delivered by the Company and the Bank, and
is a valid, legal and binding obligation of the Company and the
Bank, enforceable in accordance with its terms, except to the extent,
if any, that the provisions of Sections 10 and 11 hereof may be unenforceable as
against public policy, and except to the extent that such
enforceability may be limited by bankruptcy laws, insolvency laws,
or other laws affecting the enforcement of creditors’ rights
generally, or the rights of creditors of savings institutions
insured by the FDIC (including the laws relating to the rights of the
contracting parties to equitable remedies). |
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(b) |
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The
Plan has been approved by the Department, the FDIC and the OTS. |
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(c) |
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The
Registration Statement was declared effective by the Commission on May ___, 2007, and
no stop order has been issued with respect thereto and no proceedings
therefore have been initiated or, to the knowledge of the
Primary 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 regulations promulgated thereunder and the
Registration Statement, including the Prospectus contained therein
(including any amendment or supplement thereto), any Blue Sky
Application or any Sales Information (as such terms are defined
in Section 10 hereof) authorized by the Primary Parties for use in connection with the
Offering did not contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, and at
the |
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time
any Rule 424(b) or (c) Prospectus was filed with the Commission and at
the Closing Date referred to in Section 5, the Registration Statement,
including the Prospectus contained therein (including any amendment or
supplement thereto), and any Blue Sky Application or any Sales Information authorized
by the Primary Parties for use in connection with the Offering will
not contain an untrue statement of a material fact or omit to state
a material fact necessary in order to make the statements therein,
in light of the circumstances under which they were made, not misleading; provided,
however, that the representations and warranties in this Section
6(c) shall not apply to statements or omissions made in reliance
upon and in conformity with written information furnished to the
Primary Parties by the Agent expressly regarding the Agent for use under the
captions “Market For The Common Stock” and “The Conversion And
Offering – Plan of Distribution and Marketing Arrangements” or
written statements or omissions from any Blue Sky Application or any
Sales Information, as defined below. |
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(d) |
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At
the time of filing the Registration Statement relating to the offering of the Shares
and at the date hereof, the Company was not, and is not, an
ineligible issuer, as defined in Rule 405. At the time of the filing
of the Registration Statement and at the time of the use of any issuer free
writing prospectus, as defined in Rule 433(h), the Company met the
conditions required by Rules 164 and 433 for the use of a free writing
prospectus. If required to be filed, the Company has filed any
issuer free writing prospectus related to the offered Shares at the time it is
required to be filed under Rule 433 and, if not required to be
filed, will retain such free writing prospectus in the Company’s
records pursuant to Rule 433(g) and if any issuer free writing
prospectus is used after the date hereof in connection with the offering of the Shares
the Company will file or retain such free writing prospectus as
required by Rule 433. |
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(e) |
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As
of the Applicable Time, neither (i) the Issuer-Represented General Free Writing
Prospectus(es) issued at or prior to the Applicable Time and the
Statutory Prospectus, all considered together (collectively, the “General
Disclosure Package”), nor (ii) any individual Issuer-Represented
Limited-Use Free Writing Prospectus, when considered together
with the General Disclosure Package, included any untrue statement
of a material fact or omitted to state any material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading. The preceding sentence does
not apply to statements in or omissions from any Prospectus included
in the Registration Statement relating to the offered Shares or any
Issuer-Represented Free Writing Prospectus based upon and in conformity with
written information furnished to the Company by the Agent
specifically for use therein. As used in this paragraph and
elsewhere in this Agreement: |
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(i) |
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“Applicable
Time” means each and every date when a potential purchaser submitted a
subscription or otherwise committed to purchase Shares. |
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(ii) |
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“Statutory
Prospectus” as of any time, means the Prospectus relating to the offered Shares
that is included in the Registration Statement relating to
the |
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offered Shares
immediately prior to that time, including any document
incorporated by reference therein. |
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(iii) |
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“Issuer-Represented
Free Writing Prospectus” means any “issuer free writing prospectus,” as defined in
Rule 433(h), relating to the offered Shares that is
required to be filed with the Commission by the Company or
required to be filed with the Commission. The term does not
include any writing exempted from the definition of prospectus pursuant to clause
(g) of Section 2(a)(10) of the 1933 Act, without regard to
Rule 172 or Rule 173. |
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(iv) |
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“Issuer-Represented
General Free Writing Prospectus” means any Issuer-Represented Free Writing
Prospectus that is intended for general distribution to
prospective investors, as evidenced by its being specified
in Exhibit B to this Agreement. |
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(v) |
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“Issuer-Represented
Limited-Use Free Writing Prospectus” means any Issuer-Represented Free Writing
Prospectus that is not an Issuer-Represented General Free
Writing Prospectus. The term Issuer-Represented
Limited-Use Free Writing Prospectus also includes any “bona
fide electronic road show,” as defined in Rule 433, that
is made available without restriction pursuant to Rule
433(d)(8)(ii) or otherwise, even though not required to be
filed with the Commission. |
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(f) |
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Each
Issuer-Represented Free Writing Prospectus, as of its date of first use and at all
subsequent times through the completion of the Offering and sale of
the offered Shares or until any earlier date that the Company
notified or notifies the Agent (as described in the next sentence), did not,
does not and will not include any information that conflicted,
conflicts or will conflict with the information contained in the
Registration Statement relating to the offered Shares, including
any document incorporated by reference therein that has not been superseded or
modified. If at any time following the date of first use of an
Issuer-Represented Free Writing Prospectus there occurred or
occurs an event or development as a result of which such
Issuer-Represented Free Writing Prospectus conflicted or would
conflict with the information contained in the Registration
Statement relating to the offered Shares or included or would
include an untrue statement of a material fact or omitted or
would omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances prevailing
at that subsequent time, not misleading, the Company has notified or will notify
promptly the Agent so that any use of such Issuer-Represented
Free-Writing Prospectus may cease until it is amended or supplemented
and the Company has promptly amended or will promptly amend or
supplement such Issuer-Represented Free Writing Prospectus to eliminate or correct
such conflict, untrue statement or omission. The foregoing two
sentences do not apply to statements in or omissions from any
Issuer-Represented Free Writing Prospectus based upon and in
conformity with written information furnished to the Company by the
Agent specifically for use therein. |
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(g) |
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The
Conversion Application, including the Prospectus and proxy statement for
solicitation of proxies from depositors of the Bank for the
special meeting of depositors (the “Depositors Proxy Statement”),
was approved by the Department on May ___, 2007 and by the FDIC on May ___, 2007.
The Conversion Application, including the Prospectus and Depositors
Proxy Statement, did and will comply as to form in all material
respects with the Conversion Regulations and any other applicable
rules and regulations of the Department and the FDIC (except as modified or waived
by the Department or the FDIC, as applicable). At the time of the
approval and at all times subsequent thereto until the Closing Date,
the Conversion Application, including the Prospectus and Depositors
Proxy Statement contained therein, (including any amendment or supplement
thereto) did not and does not include any untrue statement of a
material fact or omit 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; provided, however, that
representations or warranties in this subsection (g) shall not apply
to statements or omissions made in reliance upon and in conformity
with written information furnished to the Primary Parties by the
Agent expressly regarding the Agent for use in Prospectus under the captions
“Market For The Common Stock” and “The Conversion And Offering – Plan
of Distribution and Marketing Arrangements” or written statements
or omissions from any Blue Sky Applications or any Sales Information. |
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(h) |
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The
Holding Company Application was approved by the OTS on May ___, 2007. The
Holding Company Application did and will comply as to form in all
material respects with all applicable rules and regulations of the
OTS (except as modified or waived by the OTS). At the time of the
approval and at all times subsequent thereto until the Closing
Date, the Holding Company Application (including any amendment
or supplement thereto) did not and does not include any untrue
statement of a material fact or omit 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;
provided, however, that representations or warranties in this
subsection (h) shall not apply to statements or omissions made
in reliance upon and in conformity with written information
furnished to the Primary Parties by the Agent expressly regarding
the Agent for use in the Holding Company Application. |
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(i) |
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No
order has been issued by the Commission, the Department, the FDIC or the OTS, or any
other state or federal regulatory authority, preventing or
suspending the use of the Prospectus 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
knowledge of the Primary Parties, threatened. |
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(j) |
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The
Plan has been duly adopted by the Board of Trustees of the Bank. To the knowledge
of the Primary Parties, no person has sought, or at the Closing Date
will have, sought to obtain review of the final action of any state
or federal regulatory authority in approving the Plan, the
Conversion, the Reorganization, or the Applications, pursuant to the
HOLA or any other statute or regulation. |
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(k) |
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The
Company has filed the Holding Company Application with the OTS and as of the Closing
Date, the OTS will have approved the Company’s acquisition of the Bank. |
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(l) |
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RP
Financial, LC., 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 Primary Parties in writing that it is independent
with respect to each of the Primary Parties within the meaning of
the Conversion Regulations and the Primary Parties believe RP Financial LC. to be an
expert in preparing appraisals of savings institutions. |
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(m) |
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Xxxxx
Xxxxxx Company LLP, which certified the financial statements filed as part of the
Registration Statement and Conversion Application, has advised the
Primary Parties that it is an independent certified public accountant
within the meaning of the Code of Ethics of the American Institute of
Certified Public Accountants, and Xxxxx Xxxxxx Company LLP is, with respect to each
of the Primary Parties, an independent certified public accountant as
required by the 1933 Act and the regulations promulgated thereunder
and the regulations of the Public Company Accounting Oversight
Board. |
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(n) |
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The
financial statements and the notes thereto which are included in the Registration
Statement and the Conversion Application and which are a part of the
Prospectus present fairly the financial condition and retained
earnings of the Bank as of the dates indicated and the results of
operations and cash flows for the periods specified. The financial
statements comply in all material respects with the applicable
accounting requirements of Title 12 of the Code of Federal
Regulations, Regulation S-X of the Commission and accounting principles generally
accepted in the United States of America (“GAAP”) applied on a
consistent basis during the periods presented except as otherwise
noted therein, and present fairly in all material respects the
information required to be stated therein. 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 included in the Prospectus, and as to the pro forma
adjustments, the adjustments made therein have been properly applied
on the basis described therein. |
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(o) |
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Since
the respective dates as of which information is given in the Registration Statement,
including the Prospectus, other than as disclosed therein: (i) there
has not been any material adverse change in the financial condition
or in the results of operation, capital, properties, business
affairs or prospects of any of the Primary Parties or of the Primary
Parties considered as one enterprise, whether or not arising in the
ordinary course of business; (ii) there has not been any change in
total assets of the Bank in an amount greater than [____] million, any material
increase in the aggregate amount of loans past due ninety (90) days
or more, or any real estate acquired by foreclosure or loans
characterized as “in substance foreclosure;” nor has the Bank or the
Company issued any securities or incurred any liability or obligation for
borrowings other than in the ordinary course of |
| |
|
|
business; and
(iii) there have not been any material transactions entered into
by any of the Primary Parties, other than those in the ordinary
course of business. The capitalization, liabilities, assets,
properties and business of the Primary Parties conform in all
material respects to the descriptions thereof contained in the
Prospectus and none of the Primary Parties has any material
liabilities of any kind, contingent or otherwise, except as disclosed
in Registration Statement or the Prospectus. |
| |
(p) |
|
The
Company is a corporation duly organized, validly existing, in good standing and
qualified to do business under the laws of the Commonwealth of
Pennsylvania, with corporate power and authority to own its
properties and to conduct its business as described in the Prospectus, and is not
required to be qualified to transact business or to be in good
standing in any other jurisdiction 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 operations, capital,
properties, business affairs or prospects of the Primary Parties
taken as a whole (a “Material Adverse Effect”). As of the Closing
Date, the Company 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 all such licenses, permits and governmental
authorizations are in full force and effect, and the Company will be
in compliance therewith in all material respects. The Company does not, and as of the
Closing Date will not, own any equity securities or any equity
interest in any business enterprise except as described in the
Prospectus. |
| |
(q) |
|
The
Bank is a duly organized and validly existing Pennsylvania-chartered savings bank in
mutual form, and, upon completion of the Reorganization, will become
a duly organized and validly existing Pennsylvania-chartered savings
bank in stock form, in both instances duly authorized to conduct its
business as described in the Prospectus; the activities of the Bank are permitted by
the rules, regulations and practices of the Department and the
FDIC; 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 other governmental authorizations are in full force and effect
and the Bank is and, as of the Closing Date will be, in good standing under
the laws of the Commonwealth of Pennsylvania; all of the issued and
outstanding capital stock of the Bank after the Conversion will be
duly and validly issued to the Company and will be fully paid and
nonassessable; and as of the Closing Date, the Company will directly own all of
such capital stock free and clear of any mortgage, pledge,
lien, encumbrance, claim or restriction of any kind. The Bank does
not own equity securities or any equity interest in any other
business enterprise except as otherwise described in the Prospectus. The Bank has
no direct or indirect, wholly-owned or partially-owned, subsidiaries. |
| |
(r) |
|
The
Bank is a member of the Federal Home Loan Bank of Pittsburgh (“FHLB of Pittsburgh”),
and the deposit accounts of the Bank are insured by the FDIC up to |
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|
|
applicable limits.
Upon consummation of the Conversion and Reorganization, the Bank
will establish a liquidation account for the benefit of the Bank’s
depositors, in accordance with the Plan and the requirements of applicable
Conversion Regulations. |
| |
(s) |
|
Prior
to the completion of the Reorganization, the Bank is not authorized to issue any
shares of Common Stock. Upon completion of the Reorganization, the
Bank will be a wholly-owned subsidiary of the Company. |
| |
(t) |
|
Upon
consummation of the Reorganization, the authorized, issued and outstanding equity
capital of the Company will be within the range set forth in
the Prospectus under the caption “Our Capitalization” and no
shares of Common Stock have been or will be issued and outstanding prior
to the Closing Date; and the shares of Common Stock to be subscribed
for in the Offering have been duly and validly authorized for
issuance and, when issued and delivered by the Company pursuant to
the Plan against payment of the consideration calculated as set forth in the Plan
and the Prospectus, will be duly and validly issued and fully
paid and nonassessable; the issuance of the Shares are not subject
to preemptive rights, except for the Subscription Rights granted to
the Shares pursuant to the Plan; and the terms and provisions of the shares of
Common Stock 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 the Company to the
purchasers of Shares against payment therefor in the Offering as set forth in
the Plan and the Prospectus. |
| |
(u) |
|
The
Primary Parties are not, as of the Closing Date, will not be in violation of
their respective articles of incorporation or charter or their
respective bylaws, or in material 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 they are a party or by which they, or any of their respective
property, may be bound which would result in a Material Adverse
Effect. The consummation of the transactions contemplated herein and in the Plan will
not (i) conflict with or constitute a breach of, or default
under, the articles of incorporation, charter or bylaws of the
Primary Parties, or materially conflict with or constitute a
material breach of, or default under, any material contract, lease or other
instrument to which any of the Primary Parties has a beneficial
interest, or any applicable law, rule, regulation or order that
is material to the financial condition of the Bank; (ii) violate any
authorization, approval, judgment, decree, order, statute, rule or regulation
applicable to the Primary Parties except for such violations which
would not have a Material Adverse Effect; or (iii) result in the
creation of any material lien, charge or encumbrance upon any
property of the Primary Parties. |
| |
(v) |
|
No
material default exists, and no event has occurred which with notice or lapse of time,
or both, would constitute a material default on the part of any of the
Primary 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 material instrument or agreement to which any of the
Primary Parties is a party or by which any of them or any of their property is bound
or affected in any respect which, in any such case, would have a
Material Adverse Effect on the Primary Parties individually or
considered as one enterprise, and all such agreements are in full
force and effect; and no other party to any such agreements has instituted or, to
the knowledge of the Primary Parties, threatened any action or
proceeding wherein any of the Primary Parties is alleged to be in
default thereunder under circumstances where such action or
proceeding, if determined adversely to any of the Primary
Parties, would have a Material Adverse Effect. |
| |
(w) |
|
The
Primary Parties have good and marketable title to all assets which are material to
the business, financial condition, results of operation, capital,
properties and assets of the Primary Parties and to those assets
described in the Prospectus as owned by them, free and clear of all
liens, charges, encumbrances, restrictions or other claims, except
such as are described in the Prospectus or which do not have a Material
Adverse Effect; and all of the leases and subleases which are
material to the businesses of the Primary Parties, including those described in the
Registration Statement or Prospectus, are in full force and effect. |
| |
(x) |
|
The
Primary Parties are not in material violation of any directive from the Department,
the FDIC, the OTS, the Commission, or any other agency to make any
material change in the method of conducting their respective
businesses; the Primary 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
Department, the FDIC, the OTS, and the Commission, except where the failure to so
comply would not reasonably be expected to result in any Material
Adverse Effect on the Primary Parties considered as one enterprise
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 Primary Parties, threatened,
which would reasonably be expected to materially and adversely
affect the Reorganization and the Offering, the performance of
this Agreement, or the consummation of the transactions contemplated in the Plan
as described in the Registration Statement, or which would
reasonably be expected to result in any Material Adverse Effect. |
| |
(y) |
|
The
Primary Parties have received an opinion of their special counsel, Elias, Matz,
Xxxxxxx & Xxxxxxx L.L.P., with respect to the federal income tax
consequences of the Reorganization, as described in the Registration
Statement and Prospectus, and an opinion of Xxxxx Xxxxxx Company LLP with
respect to the Commonwealth of Pennsylvania income tax consequences
of the Reorganization, as described in the Registration Statement
and the Prospectus; and the facts and representations upon which such
opinions are based are truthful, accurate and complete, and none of the Primary
Parties will take any action inconsistent therewith. |
| |
(z) |
|
The
Bank has timely filed or extended all required federal, state and local tax returns,
has paid all taxes that have become due and payable in respect of such
returns, except where permitted to be extended, has made adequate
reserves for similar future tax liabilities, and no deficiency has
been asserted with respect thereto by any taxing authority. |
| |
(aa) |
|
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 Primary Parties of this Agreement, or the sale and issuance
of the Shares, except for the approval of the Department, the FDIC,
the OTS, and the Commission 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 for sale. |
| |
(bb) |
|
None
of the Primary 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 in connection with the
Company’s initial capitalization); (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; (iii) entered
into a financial or management consulting agreement in connection
with the Offering except for the Letter Agreement and as contemplated hereunder;
or (iv) engaged any intermediary between the Agent and the Primary
Parties in connection with the Offering, and no person is being
compensated in any manner for such services. |
| |
(cc) |
|
Neither
the Primary Parties nor, to the knowledge of the Primary Parties, any employee of
the Primary Parties, has made any payment of funds of the Primary
Parties as a loan to any person for the purchase of Conversion
Shares, except for the Company’s loan to the employee stock ownership
plan, the proceeds of which will be used to purchase Conversion
Shares, or has made any other payment of funds prohibited by law,
and no funds have been set aside to be used for any payment prohibited
by law. |
| |
(dd) |
|
The
Bank complies 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. |
| |
(ee) |
|
The
Primary Parties have not relied upon Agent or its counsel for any legal, tax or
accounting advice in connection with the Reorganization, except
for information regarding Agent described in Sections 6(g) and
6(h) and information provided by the Primary Parties’ counsel described in
Section 9(b)(4). |
| |
(ff) |
|
The
records of Eligible Account Holders, Supplemental Eligible Account Holders and
Other Members are accurate and complete in all material respects. |
| |
(gg) |
|
The
Primary Parties comply in all material respects with all laws, rules and regulations
relating to environmental protection, and none of the Primary
Parties has been notified or is otherwise aware that any of them is
potentially liable, or is considered potentially liable, under the
Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended, or any other federal, state or local
environmental laws and regulations; no action, suit, regulatory
investigation or other proceeding is pending, or to the knowledge of the Primary
Parties, threatened against the Primary Parties relating to
environmental protection, nor do the Primary Parties have any reason
to believe any such proceedings may be brought against any of them;
and to the knowledge of the Primary Parties, no disposal, release or discharge of
hazardous or toxic substances, pollutants or contaminants,
including petroleum and gas products, as any of such terms may be
defined under federal, state or local law, has occurred on, in, at
or about any facilities or properties owned or leased by any of the Primary Parties
or, to the knowledge of the Primary Parties, in which the Bank has a
security interest. |
| |
(hh) |
|
All
of the loans represented as assets in the most recent financial information and the
most recent financial statements and notes thereto of the Bank
included in the Prospectus meet or are exempt from all
requirements of federal, state and local law pertaining to lending, including,
without limitation, truth in lending (including the
requirements of 12 C.F.R. Part 226 (Regulation Z)), real estate
settlement procedures, consumer credit protection, equal credit
opportunity and all disclosure laws applicable to such loans, except
for violations which, if asserted, would not result in a Material
Adverse Effect. |
| |
(ii) |
|
None
of the Primary Parties are required to be registered as an investment company under the
Investment Company Act of 1940. |
| |
(jj) |
|
As
of the date hereof, the articles of incorporation of the Company have been filed with
the Secretary of the Commonwealth of Pennsylvania, and is effective
and in force. |
| |
(kk) |
|
The
Primary Parties have taken all actions necessary to obtain at Closing a Blue Sky
Memorandum from Elias, Matz, Xxxxxxx & Xxxxxxx L.L.P. |
Any
certificates signed by an officer of any of the Primary 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 Primary 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
6B. Representations and Warranties of the Agent. Agent represents and
warrants to the Primary Parties that:
(a)
Agent is a corporation and is validly existing in good standing under the laws of
the State of New Jersey with full power and authority to provide the services to be
furnished to the Primary Parties hereunder.
(b)
The execution and delivery of this Agreement and the consummation of the
transactions contemplated herein have been duly and validly authorized by all
necessary action on the part of Agent, and 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, conservatorship, receivership or
other similar laws relating to or affecting the enforcement of creditors’ rights
generally; (ii) general equity principles regardless of whether such enforceability
is considered in a proceeding in equity or at law; and (iii) the extent, if
any, that the provisions of Sections 10 or 11 hereof may be unenforceable as against
public policy.
(c)
Each of Agent and its employees, agents and representatives who shall
perform any of the services hereunder shall have, and until the Reorganization is
completed or terminated shall maintain all licenses, approvals and permits necessary
to perform such services.
(d)
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.
(e)
Agent is registered as a broker/dealer pursuant to Section 15(b) of the 1934
Act and is a member of the National Association of Securities Dealers, Inc.
(f)
Any funds received in the Offering by the Agent will be handled by the Agent in
accordance with Rule 15c2-4 under the Securities Exchange Act of 1934, as amended (the “1934
Act”) to the extent applicable.
7.
Covenants of the Primary Parties. The Primary Parties hereby jointly and
severally covenant with the Agent as follows:
| |
(a) |
|
The
Company will not, at any time after the date the Registration Statement is declared
effective, file any amendment or supplement to the Registration
Statement without providing the Agent and its counsel an
opportunity to review such amendment or supplement or file any amendment or
supplement to which amendment or supplement the Agent or its counsel
shall reasonably object. The Company will furnish promptly to the
Agent and its counsel copies of all correspondence from the
Commission with respect to the Registration Statement and the Company’s responses
thereto. |
| |
(b) |
|
The
Company represents and agrees that, unless it obtains the prior consent of the Agent
and the Agent represents and agrees that, unless it obtains the prior
consent of the Company, it has not made and will not make any offer
relating to the offered Shares that would constitute an “issuer
free writing prospectus,” as defined in Rule 433, or that would
constitute a “free writing prospectus,” as defined in Rule 405,
required to be filed with the Commission. Any such free writing
prospectus consented to by the Company and the Agent is hereinafter referred to as a
“Permitted Free Writing Prospectus.” The Company represents that it
has treated or agrees that it will treat each Permitted Free Writing |
| |
Prospectus
as an “issuer free writing prospectus,” as defined in Rule 433, and
has complied and will comply with the requirements of Rule 433
applicable to any Permitted Free Writing Prospectus, including timely
Commission filing where required, legending and record keeping. The
Company need not treat any communication as a free writing prospectus
if it is exempt from the definition of prospectus pursuant to Clause (a) of
Section 2(a)(10) of the 1933 Act without regard to Rule 172 or 173. |
| |
(c) |
|
The
Primary Parties will not, at any time after the date the Applications are
approved, file any amendment or supplement to such Applications
without providing the Agent and its counsel an opportunity to
review and comment on such amendment or supplement or file any amendment or
supplement to which amendment or supplement the Agent or its counsel
shall reasonably object. The Primary Parties will furnish
promptly to the Agent and its counsel copies of all
correspondence from the Department, the FDIC or the OTS with respect
to the Applications and the Primary Parties’ responses thereto. |
| |
(d) |
|
The
Primary Parties will use their best efforts to cause the OTS to approve the Company’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 Applications to be approved by the Department,
the FDIC or the OTS, as applicable, and will immediately 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 each of the Applications, as amended, have been approved by
the Department, the FDIC or the OTS, as applicable; (iii) of the
receipt of any comments from the Commission, the Department,
the FDIC, the OTS or any other governmental entity with respect to the
Reorganization or the transactions contemplated by this Agreement;
(iv) of any request by the Commission, the Department, the FDIC,
the OTS, or any other governmental entity for any amendment or
supplement to the Registration Statement or the Applications or for additional
information; (v) of the issuance by the Commission, the Department,
the FDIC, the OTS, or any other governmental agency of any order
or other action suspending the Conversion, the Reorganization
or the Offering or the use of the Registration Statement, the Prospectus, the
Depositors Proxy Statement or any other filing of the Primary
Parties under the Conversion Regulations or other applicable law
or regulation, or the threat of any such action; (vi) of the
issuance by the Commission, the Department, the FDIC, the OTS, or any Bank 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 (vii) upon the
occurrence of any event mentioned in subsection (g) below. The
Primary Parties will make every reasonable effort to prevent the
issuance by the Commission, the Department, the FDIC, the OTS, or any
other state or federal authority of any order referred to in (v) and (vi) above and,
if any such order shall at any time be issued, to obtain the
lifting thereof at the earliest possible time. |
| |
(e) |
|
The
Primary Parties will deliver to the Agent and to its counsel conformed copies
of each of the following documents, with all exhibits: the
Conversion Application and the Holding Company Application, each
as originally filed and each amendment or supplement thereto; and the
Registration Statement, as originally filed and each amendment
thereto. Further, the Primary 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 Primary Parties will also deliver to
the Agent such number of copies of the Prospectus, as amended or
supplemented, as the Agent may reasonably request. |
| |
(f) |
|
The
Primary 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, and the rules and regulations of the
Commission promulgated under such statutes, to be complied with
prior to or subsequent to the Closing Date; and when the Prospectus
is required to be delivered, the Primary Parties will comply in all material
respects, at their own expense, with all material requirements
imposed upon them by the Department, the FDIC, the OTS, the
Conversion Regulations (except as modified or waived in writing by
the Department or the FDIC, as applicable), the Commission, by applicable state and
federal law and regulations and by the 1933 Act, the 1934 Act and the
rules and regulations of the Commission promulgated under such
statutes, in each case as from time to time in force, so far as
necessary to permit the continuance of sales or dealing in shares of Common Stock
during such period in accordance with the provisions hereof and the
Prospectus. |
| |
(g) |
|
Each
of the Primary Parties will inform the Agent of any event or circumstances 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 Primary 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
Primary Parties will, at their expense, prepare, file with the
Commission, the Department, the FDIC or the OTS, as necessary under applicable federal
and state rules and regulations, and furnish to the Agent, a
reasonable number of copies of an amendment or amendments of, or a
supplement or supplements to, the Registration Statement and the
Prospectus (in form and substance reasonably satisfactory to counsel for the Agent
after a reasonable time for review) 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 Primary 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, the Company will endeavor in good faith, in cooperation
with the Agent, to register or to qualify the Shares for offer and
sale or to exempt such Shares from registration and to exempt the
Company 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 the Company 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, the
Company will make and file such statements and reports in each year as are or
may be required by the laws of such jurisdictions. |
| |
(i) |
|
Upon
consummation of the Conversion, the Bank will establish a liquidation account for
the benefit of the Bank’s depositors, in accordance with the
Plan and the requirements of applicable Conversion Regulations. |
| |
(j) |
|
The
Company will not sell or issue, contract to sell or otherwise dispose of, for a
period of 90 days after the date hereof, without the Agent’s prior
written consent, which consent shall not be unreasonably withheld,
any shares of Common Stock other than in connection with any plan or
arrangement described in the Prospectus. |
| |
(k) |
|
For
the period of three years from the date of this Agreement, the Company will furnish
to the Agent upon request (i) a copy of each report of the Company
furnished to or filed with the Commission under the 1934 Act or any
national securities exchange or system on which any class of
securities of the Company is listed or quoted, (ii) a copy of each
report of the Company mailed to holders of Common Stock or
non-confidential report filed with the Commission, the
Department, the FDIC, the OTS or any other supervisory or regulatory
authority or any national securities exchange or system on which any
class of the securities of the Company is listed or quoted, (iii)
each press release and material news item and article released by the Company
and/or Bank, and (iv) from time to time, such other publicly
available information concerning the Primary Parties as the Agent
may reasonably request. |
| |
(l) |
|
The
Primary 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 From The Offering.” |
| |
(m) |
|
The
Primary 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 Conversion Regulations, the 1933 Act and the
1934 Act and the rules and regulations promulgated under such statutes, and
the laws of any state in which the Shares are qualified for sale. |
| |
(n) |
|
Prior
to the Closing Date, the Company shall register its Common Stock under Section 12(g)
of the 1934 Act, as amended, and will request that such registration |
| |
statement
be effective upon completion of the Reorganization. The Company shall
maintain the effectiveness of such registration for not less than
three years or such shorter period as permitted by the Department, the FDIC and
the OTS. |
| |
(o) |
|
For
so long as the Common Stock is registered under the 1934 Act, the Company will
furnish to its stockholders after the end of each fiscal year, in
the time periods prescribed by applicable law and regulations,
such reports and other information as are required to be furnished to its
stockholders under the 1934 Act (including consolidated financial
statements of the Company and its subsidiaries, certified by
independent public accountants). |
| |
(p) |
|
The
Company will report the use of proceeds of the Offering in accordance with Rule 463
under the 1933 Act. |
| |
(q) |
|
The
Primary Parties will maintain appropriate arrangements for depositing all funds
received from persons mailing subscriptions for or orders to
purchase Conversion Shares on an interest bearing basis at the
rate described in the Prospectus until the Closing Date and satisfaction
of all conditions precedent to the release of the Company’s
obligation to refund payments received from persons subscribing
for or ordering Conversion Shares in the Conversion Offerings,
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 Primary 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 Primary 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. |
| |
(r) |
|
The
Primary 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 Rule 2790 of the National Association of
Securities Dealers, Inc. (“NASD”). |
| |
(s) |
|
The
Primary 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, the Department, the FDIC,
and the OTS. |
| |
(t) |
|
The
Primary 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 Department, the
FDIC, the OTS, the HOLA, the Commission, the 1933 Act, the Conversion
Regulations, the 1934 Act and the regulations promulgated by the
Commission pursuant to the 1934 Act to be complied with subsequent
to the Closing Date. The Company will comply with all provisions of
all undertakings contained in the Registration Statement. |
| |
(u) |
|
The
Primary Parties will not amend the Plan without notifying the Agent prior thereto. |
| |
(v) |
|
The
Primary Parties shall provide the Agent with any information necessary to assist with
the allocation process of the Conversion Shares in the event of an
oversubscription, and such information shall be accurate and
reliable in all material respects. |
| |
(w) |
|
The
Company will not deliver the Shares until the Primary Parties have satisfied or
caused to be satisfied each condition set forth in Section 9 hereof,
unless such condition is waived in writing by the Agent. |
| |
(x) |
|
Immediately
upon completion of the sale by the Company of the Shares contemplated by the Plan
and the Prospectus and the completion of certain transactions
necessary to complete the Reorganization, (i) all of the issued and
outstanding shares of capital stock of the Bank shall be owned by the
Company, (ii) the Company shall have no direct subsidiaries other
than the Bank, and (iii) the Reorganization shall have been
effected in accordance with all applicable statutes,
regulations, decisions and orders; and all terms, conditions,
requirements and provisions with respect to the Reorganization
(except those that are conditions subsequent) imposed by the
Commission, the Department, the FDIC, the OTS, or any other
governmental agency, if any, shall have been complied with by the
Primary Parties in all material respects or appropriate waivers
shall have been obtained and all notice and waiting periods shall
have been satisfied, waived or elapsed. |
| |
(y) |
|
As
of the Closing Date, the Primary Parties shall have completed all conditions
precedent to the Reorganization (including the Conversion) in
accordance with the Plan and shall have complied, in all material
respects with the Conversion Regulations and with any other applicable laws,
regulations (except as modified or waived in writing by the
Department, the FDIC, or the OTS), decisions and orders, including
all terms, conditions, requirements and provisions precedent to the
Reorganization imposed upon any of the Primary Parties by the Department, the FDIC, the
OTS or any other regulatory authority as set forth in correspondence
received from the Department, the FDIC, the OTS or any other
regulatory authority. |
| |
(z) |
|
On
or before the Closing Date, the Primary Parties will have completed all conditions
precedent to the Offering 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 Conversion Regulations (except as
modified or waived in writing by the Department or the FDIC) and
with all other applicable laws, regulations, decisions and orders,
including all terms, conditions, requirements and provisions
precedent to the Offering imposed upon any of the Primary Parties by the Department,
the FDIC, the OTS, the Commission or any other regulatory authority
and in the manner described in the Prospectus. |
| |
(aa) |
|
The
Company shall notify the Agent when funds have been received for the minimum number
of Shares set forth in the Prospectus. |
| |
(bb) |
|
The
Company shall register with the OTS as a savings and loan holding company within
90 days of the Closing Date. |
8.
Payment of Expenses. Whether or not the Reorganization is completed or is
consummated, the Primary Parties will pay for all expenses incident to the performance
of this Agreement, including without limitation: (a) the preparation and filing of
the Applications and Registration Statement; (b) the preparation, printing, filing,
delivery and shipment of the Registration Statement, including the Prospectus, and
all amendments and supplements thereto 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 the Company 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) the
accountable out-of-pocket expenses of the Agent. Notwithstanding the foregoing,
the Primary Parties shall not be required to reimburse Agent for more than $35,000 in
legal fees (excluding counsel’s out-of-pocket expenses), except with the prior
approval of the Primary Parties. The Agent will not incur actual accountable
out-of-pocket expenses in excess of $10,000 without the consent of the Primary
Parties. In the event that the Agent incurs any expenses on behalf of the Primary
Parties, the Primary Parties will pay or reimburse the Agent for such accountable
expenses regardless of whether the Reorganization is successfully completed, and
such reimbursements will not be included in the expense limitations set forth
above. The Agent will not incur any single expense of more than $1,000 pursuant to
this paragraph without the prior approval of the Company or the Bank. The Primary
Parties acknowledge, however, that such limitations on expenses and legal fees
may be increased by the mutual consent of the Primary Parties and the Agent in the
event of delay in the Offering requiring the Agent to utilize a Syndicated Community
Offering, a delay as a result of circumstances requiring material additional work
by the Agent or its counsel or an update of the financial information contained in the
Registration Statement and Prospectus, as amended or supplemented, to reflect a period
later than that set forth in the financial statements included in the original
Registration Statement. Not later than two days prior to the Closing Date, the Agent
will provide the Bank with a detailed accounting of all reimbursable expenses to be
paid at the Closing.
9.
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 and other statements of the Primary Parties
herein contained are, at and as of the commencement of the Offering and at and as of
the Closing Date, true and correct, the condition that the Primary Parties shall
have performed all of their obligations hereunder to be performed on or before such
dates and to the following further conditions:
| |
(a) |
|
The
Conversion shall have been approved by the Department and the FDIC. The
Registration Statement shall have been declared effective by the
Commission, the 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 therefore initiated or, to any of the
Primary Parties’ knowledge, 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 therefore initiated or, to any of the
Primary Parties’ knowledge, threatened by the Department, the FDIC,
the OTS, the Commission, or any other governmental body. |
| |
(b) |
|
At
the Closing Date, the Agent shall have received: |
| |
(1)
The favorable opinion, dated as of the Closing Date, of Elias, Matz, Xxxxxxx & Xxxxxxx
L.L.P., and/or local counsel acceptable to the Agent in form and substance
satisfactory to counsel for the Agent as set forth in Exhibit C hereto. The
opinion may be limited to matters governed by the laws of the United States
and the Commonwealth of Pennsylvania. In rendering such opinion regarding
Pennsylvania law, such counsel may rely on local counsel reasonably
acceptable to the Agent and its counsel. In addition, in rendering such
opinion, such counsel may rely (A) as to matters involving the application of
laws of any jurisdiction other than the United States, to the extent such counsel
deems proper and specified in such opinion, upon the opinion of other
counsel of good standing, as long as such other opinion indicates that the
Agent may rely on the opinion, and (B) as to matters of fact, to the extent
such counsel deems proper, on certificates of responsible officers of the Primary
Parties and public officials, provided copies of any such opinion(s) or
certificates of public officials are delivered to Agent together with the
opinion to be rendered hereunder by special counsel to the Primary Parties.
The opinion of such counsel for the Primary Parties shall state that it has no
reason to believe that the Agent is not justified in relying thereon.
|
| |
(2)
The letter of Elias, Matz, Xxxxxxx & Xxxxxxx L.L.P. in form and substance
to the effect that during the preparation of the Registration Statement
and the Prospectus, Elias, Matz, Xxxxxxx & Xxxxxxx L.L.P. participated
in conferences with certain officers of and other representatives of the
Primary Parties, counsel to the Agent, representatives of the independent public
accounting firm for the Primary 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 9(b)(1)) Elias, Matz, Xxxxxxx
& Xxxxxxx L.L.P. 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 Elias, Matz, Xxxxxxx & Xxxxxxx L.L.P. that caused
Elias, Matz, Xxxxxxx & Xxxxxxx L.L.P. to believe that the Registration
Statement and the Prospectus at the time it was declared effective by the Commission
and as of the date of such letter or that the General Disclosure Package as of
the Applicable Time, 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 the financial statements,
schedules and other financial and statistical data included, or statistical
or appraisal methodology employed, in the Registration Statement, Prospectus or
General Disclosure Package). |
| |
(3)
The favorable opinion, dated as of the Closing Date, of Xxxxxxx Xxxxxxxx & Wood
LLP, counsel for the Agent, with respect to such matters as the Agent may
reasonably require; such opinion may rely, as to matters of fact, upon
certificates of officers and directors of the Primary Parties delivered
pursuant hereto or as such counsel may reasonably request and upon the opinion of
Xxxxxxx Xxxxxxxx & Xxxx LLP.
|
| |
(4)
A Blue Sky Memorandum from Elias, Matz, Xxxxxxx & Xxxxxxx L.L.P. relating
to the Offering, including the Agent’s participation therein, and should be
furnished to the Agent with a copy thereof addressed to the Agent or upon which
Elias, Matz, Xxxxxxx & Xxxxxxx L.L.P. shall state the 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.
|
| |
(c) |
|
Concurrently
with the execution of this Agreement, the Agent shall receive a letter from Xxxxx
Xxxxxx Company LLP, dated the date hereof and addressed to the Agent,
such letter (i) confirming that Xxxxx Xxxxxx Company LLP is a firm
of independent public accountants within the meaning of the Code of
Professional Ethics of the American Institute of Certified Public Accountants, the 1933
Act and the regulations promulgated thereunder, and no information
concerning its relationship with or interests in the Primary
Parties is required by the Applications or Item 13 of the
Registration Statement, and stating in effect that in Xxxxx Xxxxxx
Company LLP’s opinion 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, the 1934 Act and the
related published rules and regulations of the Commission
thereunder and the Conversion Regulations and generally accepted
accounting principles consistently applied; (ii) stating in effect
that, on the basis of certain agreed upon procedures (but not an audit examination
in accordance with generally accepted auditing standards)
consisting of a reading of the minutes of the meetings of the Board
of Trustees or the Board of Directors, as applicable, of the
Primary Parties, the Audit Committee of the Bank, a review (in
accordance with Statement of Auditing Standards No. 100, Interim
Financial Information) of the unaudited interim financial
information as of and for the interim period ending March 31, 2007,
and consultations with officers of the Company responsible for
financial and accounting matters, nothing came to their attention
which caused them to believe that: (A) such unaudited financial statements and
financial information included in the section titled “Recent
Developments” 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) during the period
from the date of the Recent Developments information included in
the |
| |
Prospectus
to a date not more than three (3) business days prior to the date of
the Prospectus there was any increase in borrowings (defined as
advances from the FHLB of Pittsburgh, securities sold under
agreements to repurchase and any other form of debt other than
deposits), non-performing loans, special mention loans or decrease in total
assets, allowance for loan losses, total deposits, or equity
capital of the Bank at the date of such letter as compared with the
amounts shown in the March 31, 2007 unaudited statement of
financial condition, or there was any decrease in interest income,
net interest income, net interest income after the provision for
loan losses, income before income taxes, or net income of the Bank
for the number of full months commencing immediately after the Recent Developments
period and ended on the last month-end prior to the date of the
Prospectus as compared to the corresponding period in the preceding
year, which was material to the financial position or results of
operations of the Primary Parties; 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 (c), 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 Primary
Parties directly from such accounting records, to the extent
specified in such letter, such amounts and/or percentages set forth in
the Prospectus as the Agent may reasonably request, and they have found such amounts
and percentages to be in agreement therewith (subject to rounding). |
| |
(d) |
|
At
the Closing Date, the Agent shall receive a letter from Xxxxx Xxxxxx Company LLP
dated the Closing Date, addressed to the Agent, confirming the
statements made by its letter delivered by it pursuant to
subsection (c) of this Section 9 and confirming that the review of the unaudited
interim financial information as of and for the interim period
ending March 31, 2007 is in accordance with Statement on Auditing
Standards No. 100, 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 (3) business days prior to the Closing Date. |
| |
(e) |
|
At
the Closing Date, counsel to the Agent shall have been furnished with such documents
and opinions as counsel for the Agent may require for the purpose
of enabling them to advise the Agent with respect to the issuance
and sale of the Common Stock as herein contemplated and 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. |
| |
(f) |
|
At
the Closing Date, the Agent shall receive a certificate of the Chief Executive
Officer and Chief Financial Officer of each of the Primary Parties,
dated the Closing Date, without personal liability 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 Prospectus, any
Material Adverse |
| |
Effect;
(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) each of the Primary
Parties has 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 9; (v) no stop order has been issued or, to the their
knowledge, is threatened, by the Commission or any other governmental body;
(vi) no order suspending the Reorganization, including the
Conversion and the Offering, the acquisition of all of the shares
of the Bank by the Company or the effectiveness of the
Registration Statement has been issued and to their knowledge, no
proceedings for any such purpose have been initiated or threatened by
the Department, the FDIC, the OTS, the Commission, or any other
federal or state authority; (vii) to their knowledge, no person has sought to
obtain regulatory or judicial review of the action of the
Department, the FDIC or the OTS in approving the Plan or to enjoin
the Reorganization. |
| |
(g) |
|
At
the Closing Date, the Agent shall receive a letter from RP Financial, LC., dated as
of the Closing Date, (i) confirming that said firm is independent
of the Primary Parties and is experienced and expert in the area
of corporate appraisals within the meaning of the Conversion
Regulations, (ii) stating in effect that the Appraisal complies in
all material respects with the applicable requirements of the
Conversion Regulations, and (iii) further stating that its opinion of
the aggregate pro forma market value of the Primary Parties, as converted, expressed
in the Appraisal as most recently updated, remains in effect. |
| |
(h) |
|
Prior
to and at the Closing Date, none of the Primary Parties shall have sustained, since
the date of the latest audited financial statements included in the
Registration Statement and Prospectus, any material loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any
labor dispute or court or governmental action, order or decree,
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 change, or any development involving a prospective
material change in, or affecting the general affairs of, management,
financial position, retained earnings, long-term debt, stockholders’ equity or
results of operations of any of the Primary Parties, considered as
one enterprise, otherwise than as set forth or contemplated in the
Registration Statement and the Prospectus, the effect of which, in
any such case described above, 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. |
| |
(i) |
|
Prior
to and at the Closing Date: (i) in the reasonable opinion of the Agent there shall
have been no Material Adverse Effect on the financial condition
or in results of operation, capital, properties or business
affairs of the Primary Parties considered as one enterprise, from and as
of the latest dates as of which such |
| |
condition
is set forth in the Prospectus, except as referred to therein;
(ii) there shall have been no material transaction entered into by the
Primary Parties from the latest date as of which the financial
condition of the Primary Parties is set forth in the Prospectus,
other than transactions referred to or contemplated therein; (iii)
none of the Primary Parties shall have received from the Department, the FDIC, or the
OTS any direction (oral or written, other than directions applicable
to all state-chartered savings banks) to make any material change in
the method of conducting their business with which it has not complied
in all material respects (which direction, if any, shall have been disclosed to
the Agent) and which would reasonably be expected to have a Material
Adverse Effect; (iv) none of the Primary Parties shall have been in
default (nor shall an event have occurred which, with notice or
lapse of time or both, would constitute a default) under any provision of any
agreement or instrument relating to any material outstanding
indebtedness; (v) no action, suit or proceeding, at law or in
equity or before or by any federal or state commission, board or
other administrative agency, shall be pending or, to the knowledge
of the Primary Parties, threatened against any of the Primary
Parties or affecting any of their properties wherein an unfavorable
decision, ruling or finding would reasonably be expected to have a Material Adverse
Effect; and (vi) the Shares shall have been qualified or registered
for offering and sale under the securities or “blue sky” laws of the
jurisdictions requested by the Agent. |
| |
(j) |
|
At
or prior to the Closing Date, the Agent shall receive (i) a copy of the Conversion
Application and copies of any letters from the Department
approving the Conversion Application and/or authorizing the use
of the Prospectus or the Depositors Proxy Statement, (ii) a copy of the
letter of non-objection from the FDIC with respect to the
Conversion, (iii) a copy of the letter from the OTS approving the
Holding Company Application, (iv) a copy of the order from the
Commission declaring the Registration Statement effective, if available, (v)
copies of certificates of existence for each of the Primary Parties,
or other writing from the Secretary of the Commonwealth of the
Commonwealth of Pennsylvania or the Department in form and substance
reasonably satisfactory to the Agent evidencing the valid existence
of the Company and the Bank as of the Closing Date, (vi) a
certificate from the FDIC evidencing the Bank’s insurance of
accounts, (vii) a certificate of the FHLB of Pittsburgh
evidencing the Bank’s membership therein, and (viii) any other
documents that Agent shall reasonably request. |
| |
(k) |
|
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 (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 three (3); (ii) a general moratorium on the operations of
savings banks, commercial banks or other state- or federally-insured
financial institutions or general moratorium on the withdrawal of
deposits from savings banks, commercial banks or other state- or
federally-insured financial institutions declared by either federal or state
authorities; (iii) any material adverse change in the financial
markets in the United States; or (iv) any outbreak of hostilities
or escalation thereof or other calamity or crisis, including,
without limitation, terrorist activities after the date hereof, the effect of any of
(i) through (iv) herein, in the judgment of the Agent, is so material
and adverse as to make it impracticable market the Shares or to
enforce contracts, including subscriptions or purchase orders, for
the sale of the Shares. |
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 of counsel for the Agent. Any certificate signed by an officer of the
Company or the Bank and delivered to the Agent or to counsel for the Agent shall be
deemed a representation and warranty by the Company or the Bank, as the case may be,
to the Agent as to the statements made therein. If any condition to the Agent’s
obligations hereunder to be fulfilled prior to or at the Closing Date is not
fulfilled, the Agent may terminate this Agreement (provided that if this
Agreement is so terminated but the sale of Shares is nevertheless consummated, the
Agent shall be entitled to the compensation provided for in Section 4 hereof) or, if
the Agent so elects, may waive any such conditions which have not been fulfilled or
may extend the time of their fulfillment.
10.
Indemnification.
| |
(a) |
|
The
Primary 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
paragraph (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) 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 or actions (i) arise out of the
allocation of the Shares in accordance with the Plan generally; (ii) 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), any Issuer-Represented Free
Writing Prospectus, the Applications, or any blue |
| |
sky
application or other instrument or document of the Primary
Parties or based upon written information supplied by any of the
Primary 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 Primary Parties
with its consent or based upon written information furnished by
or on behalf of any of the Primary Parties, whether or not filed in any
jurisdiction in order to qualify or register the Shares under the
securities laws thereof; (iii) 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; (iv) 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), any Issuer-Represented
Free Writing Prospectus, the Applications, any Blue Sky Applications
or Sales Information or other documentation distributed in connection
with the Offering; or (v) result from any claims made with respect to the
accuracy, reliability and completeness of the records of Eligible
Account Holders, Supplemental Eligible Account Holders and 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 paragraph (a) to the extent such losses, claims, damages,
liabilities 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), any Issuer-Represented Free Writing Prospectus, 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 written information
furnished to the Primary Parties by the Agent or its representatives (including
counsel) with respect to the Agent expressly for use in the
Registration Statement (or any amendment or supplement thereto) or
Prospectus (or any amendment or supplement thereto) under the
captions “Market For The Common Stock” and “The Conversion And Offering – Plan
of Distribution and Marketing Arrangements;” provided, further, that
the Primary Parties will not be responsible for any loss, liability,
claim, damage or expense to the extent that a court of competent
jurisdiction finds that they result primarily from material oral misstatements by the
Agent to a 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 Primary Parties any amounts advanced to it by the Primary
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 Primary Parties, their directors
and officers, agents, servants and employees and each person, if
any, who controls any of the Primary 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 paragraph (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 Primary Parties
and any such persons upon written demand for any reasonable
expenses (including 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 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 of supplement thereto), any Issuer-Represented Free
Writing Prospectus, 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 10(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 Registration
Statement (or any amendment or supplement thereto), the
Prospectus (or any amendment or supplement thereto), any Blue Sky
Application or Sales Information in reliance upon and in
conformity with written information furnished to the Primary
Parties by the Agent or its representatives (including counsel)
expressly for use under the captions “Market For The Common Stock” and “The
Conversion And Offering – Plan of Distribution and Marketing Arrangements.” |
| |
(c) |
|
Each
indemnified party shall give prompt written notice to each indemnifying party of
any action, proceeding, claim (whether commenced or threatened), or
suit instituted against it in respect of which indemnity may be
sought hereunder, but failure to so notify an indemnifying party
shall not relieve it from any liability which it may have on
account of this Section 10, Section 11 or otherwise. An
indemnifying party may participate at its own expense in the
defense of such action. In addition, if it so elects within a
reasonable time after receipt of such notice, an indemnifying party,
jointly with any other indemnifying parties receiving such notice,
may assume 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 |
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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. The Primary Parties shall
be liable for any settlement of any claim against the Agent (or its
directors, officers, employees, affiliates or controlling persons), made with the
Primary Parties’ consent, which consent shall not be
unreasonably withheld. The Primary Parties shall not, without the
written consent of the Agent, settle or compromise any claim
against it based upon circumstances giving rise to an indemnification
claim against any Primary Party hereunder unless such settlement
or compromise provides that the Agent and the other indemnified
parties shall be unconditionally and irrevocably released from all liability in
respect of such claim. |
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(d) |
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The
agreements contained in this Section 10 and in Section 11 hereof and the
representations and warranties of the Primary Parties set forth in
this Agreement shall remain operative and in full force and effect
regardless of (i) any investigation made by or on behalf of the Agent or
its officers, directors, controlling persons, agents or employees or
by or on behalf of any of the Primary Parties or any officers,
directors, controlling persons, agents or employees of any of the
Primary Parties; (ii) delivery of and payment hereunder for the Shares; or (iii)
any termination of this Agreement. |
11.
Contribution.
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(a) |
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In
order to provide for just and equitable contribution in circumstances in which the
indemnification provided for in Section 10 is due in accordance with
its terms but is found in a final judgment by a court to be
unavailable from the Primary Parties or the Agent, the Primary Parties and the
Agent shall contribute to the aggregate losses, claims, damages and
liabilities of the nature contemplated by such indemnification 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 Primary
Parties from the sale of the Conversion Shares in the Offering, net of all expenses of
the Offerings except Agent’s Fees, and (ii) the Primary 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 10 above, then
each indemnifying party shall contribute to such amount paid or
payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative fault of the Primary
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 |
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also
the relative benefits received by the Primary 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 Primary 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 Conversion Offerings, net of all expenses of the Conversion
Offerings except Agent’s Fees, received by the Primary 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 Primary
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 Primary
Parties and the Agent agree that it would not be just and equitable if
contribution pursuant to this Section 11 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 11. 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 11 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 from any person
who was not found guilty of such fraudulent misrepresentation.
For purposes of this Section 11, each of the Agent’s and the Primary
Parties’ officers and directors and each person, if any, who
controls the Agent or any of the Primary Parties within the meaning
of the 1933 Act and the 1934 Act shall have the same rights to
contribution as the Primary Parties 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 11, 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 11. |
12.
Survival. All representations, warranties and indemnities and other
statements contained in this Agreement, and Section 11 of the Letter Agreement, or
contained in certificates of officers of the Primary 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
Primary Parties and shall survive the issuance of the Shares, and any legal
representative, successor or assign of the Agent, any of the Primary Parties, and any
indemnified person shall be entitled to the benefit of the respective agreements,
indemnities, warranties and representations.
13.
Termination. Agent may terminate this Agreement by giving the notice indicated
below in this Section at any time after this Agreement becomes effective as follows:
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(a) |
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In
the event (i) the Plan is abandoned or terminated by the Company; (ii) the
Company fails to consummate the sale of the minimum number of the
Conversion Shares prior to December 31, 2007 in accordance with the
provisions of the Plan or as required by the Conversion Regulations and
applicable law; (iii) the Agent terminates this relationship because
there has been a material adverse change in the financial condition
or operations of the Primary Parties, considered as one enterprise,
since the date of the latest financial statements included in the Prospectus;
or (iv) 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 specified in Section 9(k)
which might render the sale of the Shares inadvisable, this
Agreement shall terminate and no party to this Agreement shall have any obligation to
the other hereunder, except as set forth in Sections 3, 4, 8, 10 and 11
hereof. |
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(b) |
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If
any of the conditions specified in Section 9 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 3, 4, 8, 10 and 11 hereof. |
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(c) |
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If
Agent elects to terminate this Agreement as provided in this Section, the Bank shall
be notified by the Agent as provided in Section 14 hereof. |
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(d) |
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If
this Agreement is terminated in accordance with the provisions of this Agreement, the
Primary Parties shall pay the Agent the fees earned pursuant to
Section 4 and will reimburse the Agent for its accountable expenses
pursuant to Section 8. |
14.
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 Xxxx Xxxx & Co. Inc.,
00 Xxxxxxxx Xxxxxxxx, Xxxxxxx Xxxx, Xxx Xxxxxx 00000, Attention: Xxxxx Xxxxxxx (with a
copy to V. Xxxxxx Xxxxxxx, Esq., Xxxxxxx Xxxxxxxx & Wood LLP, 0000 Xxxxxxxxxxxx
Xxxxxx, XX, Xxxxx 000,
Washington, D.C. 20006); notices
to the Primary Parties shall be directed to Quaint Oak Savings Bank, 000 Xxxxxxxx
Xxxxx, Xxxxxxxxxxx, Xxxxxxxxxxxx, Attention: Xxxxxx X. Xxxxxx, President and Chief
Executive Officer (with copies to Xxxxxxx X. Xxxxxxx, Esq. and Xxxx X. Xxxxxx, Esq.,
Elias, Matz, Xxxxxxx & Xxxxxxx L.L.P., 000 00xx Xxxxxx XX, 00xx Xxxxx,
Xxxxxxxxxx, XX 00000.
15. Parties. This Agreement
shall inure to the benefit of and be binding upon the Agent and the Primary 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 10 and 11 and their heirs and legal
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.
16. 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.
17. Construction and Waiver of
Jury Trial. This Agreement shall be construed in accordance with the laws of the State
of New Jersey without giving effect to its conflicts of laws principles. Any dispute
hereunder shall be brought in a court in the State of New Jersey. Each of the Primary
Parties and the Agent waives all right to trial by jury in any action, proceeding,
claim or counterclaim (whether based on contract, tort or otherwise) related to or
arising out of this Agreement.
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.
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Very truly yours, |
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QUAINT OAK SAVINGS BANK
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By: ___________________________ |
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Xxxxxx
X. Xxxxxx
President and
Chief Executive Officer
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QUAINT OAK BANCORP, INC. |
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|
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By: ___________________________ |
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Xxxxxx
X. Xxxxxx
President and
Chief Executive Officer |
The
foregoing Agency Agreement is hereby confirmed and accepted as of the date first
set and above written.
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XXXX XXXX & CO., INC. |
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|
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By: ___________________________ |
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Managing
Director |
Exhibit A
Master Selected
Dealer Agreement
___________ __, 2007
Xxxx Xxxx & Co., Inc.
00
Xxxxxxxx Xxxxxxxx
Xxxxxxx Xxxx, XX 00000
Gentlemen:
(1)
General. We understand that Xxxx Xxxx & Co., Inc. (“Xxxx Xxxx”) is entering
into this Agreement with us and other firms who may be offered the right to purchase
as principal a portion of securities being distributed to the public. The terms and
conditions of this Agreement shall be applicable to any public offering of securities (“Securities”)
pursuant to a registration statement filed under the Securities Act of 1933 (the “Securities
Act”) or exempt from registration thereunder (other than a public offering of
Securities effected wholly outside the United States of America), wherein Xxxx Xxxx
(acting for its own account or for the account of any underwriting or similar group or
syndicate) is responsible for managing or otherwise implementing the sale of the
Securities to selected dealers (“Selected Dealers”) and has informed us that such
terms and conditions shall be applicable. Any such offering of Securities to us as a
Selected Dealer is hereinafter called an “Offering.”In the case of any Offering in
which you are acting for the account of any underwriting or similar group or
syndicate (“Underwriters”), the terms and conditions of this Agreement shall be for
the benefit of, and binding upon, such Underwriters, including, in the case of any
Offering in which you are acting with others as representatives of
Underwriters, such other representatives. The term “preliminary prospectus” means
any preliminary prospectus relating to an Offering of Securities or any preliminary
prospectus supplement together with a prospectus relating to an Offering of
Securities; the term “Prospectus” means the prospectus, together with the final
prospectus supplement, if any, relating to an Offering of Securities, filed
pursuant to Rule 424(b) or Rule 424(c) under the Securities Act or any successor or
similar rules.
This
Agreement constitutes the entire agreement of the parties with regard to the subject
matter hereof and supersedes any prior oral or written agreements or understanding
between the parties hereto or their predecessors with respect to the subject matter
hereof.
(2)
Conditions of Offering, Acceptance and Purchase. Any Offering will be subject to
delivery of the Securities and their acceptance by you and any other Underwriters,
may be subject to the approval of all legal matters by counsel and the satisfaction
of other conditions, and may be made on the basis of reservation of Securities or an
allotment against subscription. You will advise us by telegram, telex, facsimile,
e-mail, or other form of written communication (“Written Communication”) of the
particular method and supplementary terms and conditions (including, without
limitation, the information as to prices and offering date referred to in Section
3(c)) of any Offering in which we are invited to participate. To the extent such
supplementary terms and conditions are inconsistent with any provision herein,
such terms and conditions shall supersede any such provision. Unless otherwise
indicated in any such Written Communication, acceptances and other communications by us
with respect to any Offering should be sent to Xxxx Xxxx. You may close the
subscription books at any time in your sole
discretion without notice, and
you reserve the right to reject any acceptance in whole or in part. Payment for
Securities purchased by us is to be made at such office as you may designate, at the
public offering price, or, if you shall so advise us, at such price less the
concession to dealers or at the price set forth or indicated in a Written
Communication, on such date as you shall determine, on one day’s prior notice to us,
by wire transfer to a Xxxx Xxxx account, against delivery of certificates or other
forms evidencing such Securities. If payment is made for Securities purchased by us
at the public offering price, the concession to which we shall be entitled will be paid
to us upon termination of the provisions of Section 3(c) with respect to such Securities.
Unless
we promptly give you written instructions otherwise, if transactions in the
Securities may be settled through the facilities of The Depository Trust Company,
delivery of Securities purchased by us will be made through such facilities if we are
a member, or if we are not a member, settlement may be made through our ordinary
correspondent who is a member.
(3)
Representations, Warranties, and Agreements.
(a)
Registered Offerings. In the case of any Offering of Securities that are
registered under the Securities Act (“Registered Offering”), you shall provide us
with such number of copies of each preliminary prospectus, the Prospectus and any
supplement thereto relating to each Registered Offering as we may reasonably request
for the purposes contemplated by the Securities Act and the Securities Exchange
Act of 1934 (the “Exchange Act”) and the applicable Rules and regulations of the
Securities and Exchange Commission thereunder. We represent that we are familiar
with Rule 15c2-8 under the Exchange Act relating to the distribution of
preliminary and final prospectuses and agree that we will comply therewith. We agree
to keep an accurate record of our distribution (including dates, number of copies, and
persons to whom sent) of copies of the Prospectus or any preliminary prospectus (or any
amendment or supplement to any thereof), and promptly upon request by you, to bring all
subsequent changes to the attention of anyone to whom such material shall have been
furnished. We agree to furnish to persons who receive a confirmation of sale a copy
of the Prospectus filed pursuant to Rule 424(b) or Rule 424(c) under the Securities
Act. We agree that in purchasing Securities in a Registered Offering we will rely
upon no statements whatsoever, written or oral, other than the statements in the
Prospectus delivered to us by you. We will not be authorized by the issuer or other
seller of Securities offered pursuant to a Prospectus or by any Underwriter to give
any information or to make any representation not contained in the Prospectus in
connection with the sale of such Securities. We will not use any free writing
prospectus, unless consented to by you or authorized expressly in writing to you by the
issuer in the Registered Offering.
(b)
Offerings Pursuant to Offering Circular. In the case of any Offering of Securities,
other than a Registered Offering, which is made pursuant to an offering circular or
other document comparable to a prospectus in a Registered Offering, including,
without limitation, an Offering of “exempted securities” as defined in Section
3(a)(2) of the Securities Act (an “Exempted Securities Offering”), you shall provide
us with such number of copies of each preliminary offering circular, the final
offering circular and any supplement thereto relating to each Offering as we may
reasonably request. We agree that we will comply with the applicable federal and
state laws, and the applicable rules and regulations of any regulatory body promulgated
thereunder, governing the use and distribution of offering circulars by brokers
or
dealers. We agree that in
purchasing Securities pursuant to an offering circular we will rely upon no
statements whatsoever, written or oral, other than the statements in the final
offering circular delivered to us by you. We will not be authorized by the issuer
or other seller of Securities offered pursuant to an offering circular or by any
Underwriter to give any information or to make any representation not contained in
the offering circular in connection with the sale of such Securities.
(c)
Offer and Sale to the Public. With respect to any Offering of Securities, you will
inform us by a Written Communication of the public offering price, the selling
concession, the reallowance (if any) to dealers, and the time when we may commence
selling Securities to the public. After such public offering has commenced, you may
change the public offering price, the selling concession, and the reallowance to
dealers. With respect to each Offering of Securities, until the provisions of this
Section 3(c) shall be terminated pursuant to Section 5, we agree to offer Securities to
the public only at the public offering price, except that if a reallowance is in
effect, a reallowance from the public offering price not in excess of such
reallowance may be allowed as consideration for services rendered in distribution to
dealers who are actually engaged in the investment banking or securities business, who
execute the written agreement prescribed by Rule 2740 of the Rules of Conduct of the
National Association of Securities Dealers, Inc. (the “NASD”) and who are either
members in good standing of the NASD or foreign brokers or dealers not eligible for
membership in the NASD who represent to us that they will promptly reoffer such
Securities at the public offering price and will abide by the conditions with respect
to foreign brokers and dealers set forth in Section 3(f) hereof.
(d)
Stabilization and Overallotment. You may, with respect to any Offering, be authorized
to over-allot in arranging sales to Selected Dealers, to purchase and sell Securities,
any other securities of the issuer of the Securities of the same class and series and
any other securities of such issuer that you may designate for long or short account,
and to stabilize or maintain the market price of the Securities. We agree not to
purchase and sell Securities for which an order from a client has not been
received without your consent in each instance. We agree to advise you from time to
time upon request, prior to the termination of the provisions of Section 3(c) with
respect to any Offering, of the amount of Securities purchased by us hereunder
remaining unsold and we will, upon your request, sell to you, for the accounts of the
Underwriters, such amount of Securities as you may designate, at the public offering
price thereof less an amount to be determined by you not in excess of the concession
to dealers. In the event that prior to the later of (i) the termination of the
provisions of Section 3(c) with respect to any Offering, or (ii) the covering by you
of any short position created by you in connection with such Offering for your
account or the account of one or more Underwriters, you purchase or contract to
purchase for the account of any of the Underwriters, in the open market or otherwise,
any Securities theretofore delivered to us, you reserve the right to withhold the
above-mentioned concession to dealers on such Securities if sold to us at the public
offering price, or if such concession has been allowed to us through our purchase at
a net price, we agree to repay such concession upon your demand, plus in each case
any taxes on redelivery, commissions, accrued interest, and dividends paid in
connection with such purchase or contract to purchase.
(e)
Open Market Transactions. We agree to abide by Regulation M under the Exchange Act and
we agree not to bid for, purchase, attempt to purchase, or sell, directly or
indirectly, any Securities, any other Reference Securities (as defined in
Regulation M) of the issuer, or any other
securities of such issuer as you
may designate, except as brokers pursuant to unsolicited orders and as otherwise
provided in this Agreement. If the Securities are common stock or securities
convertible into common stock, we agree not to effect, or attempt to induce others
to effect, directly or indirectly, any transactions in or relating to any stock of
such issuer, except to the extent permitted by Rule 101 of Regulation M under the
Exchange Act.
(f)
NASD. We represent that we are actually engaged in the investment banking or
securities business and we are either (i) a member in good standing of the NASD,
(ii) if not such a member, a foreign dealer not eligible for membership, or (iii)
solely in connection with an Exempted Securities Offering, a bank, as defined in
Section 3(a)(6) of the Exchange Act, that does not otherwise fall within
provision (i) or (ii) of this sentence (a “Bank”). If we are a member as described in
(i), we agree that in making sales of the Securities we will comply with all
applicable interpretative materials and Conduct Rules of the NASD, including,
without limitation, Conduct Rules 2740 (relating to Selling Concessions,
Discounts and Other Allowances) and 2790 (relating to New Issues). If we are a
foreign dealer as described in (ii), we agree not to offer or sell any Securities in
the United States of America, its territories or its possessions or to persons who
are citizens thereof or residents therein (other than through you), and in making
sales of Securities outside the United States of America we agree to comply as though
we were a member with Conduct Rules 2730 (relating to Securities Taken in Trade),
2740 (relating to Selling Concessions), 2750 (relating to Transactions with Related
Persons) and 2790 (relating to New Issues) as though we were such a member and to comply
with Conduct Rule 2420 (relating to Dealing with Non-Members) as it applies to a
nonmember broker or dealer in a foreign country. In connection with an Exempted
Securities Offering, if we are a Bank, we agree to also comply, as though we were
an NASD member, with the provision of Rules 2730, 2740 and 2750 of the Conduct Rules. We
further represent, by our participating in an Offering, that we have provided to
you all documents and other information required to be filed with respect to us, any
related person or any person associated with us or any such related person pursuant
to the supplementary requirements of the NASD’s interpretation with respect to review
of corporate financing as such requirements relate to such Offering.
We
further agree that, in connection with any purchase of Securities from you that is
not otherwise covered by the terms of this Agreement (whether you are acting as manager,
as member of an underwriting syndicate or a selling group or otherwise), if a
selling concession, discount or other allowance is granted to us, the preceding
paragraph will be applicable.
(g)
Relationship among Underwriters and Selected Dealers. You may buy Securities
from or sell Securities to any Underwriter or Selected Dealer and, with your
consent, the Underwriters (if any) and the Selected Dealers may purchase Securities
from and sell Securities to each other at the public offering price less all or any part
of the concession. We are not authorized to act as agent for you or any
Underwriter or the issuer or other seller of any Securities in offering Securities
to the public or otherwise. Nothing contained herein or in any Written Communication
from you shall constitute the Selected Dealers partners with you or any Underwriter
or with one another. If the Selected Dealers, among themselves or with the
Underwriters, should be deemed to constitute a partnership for federal income tax
purposes, then we elect to be excluded from the application of Subchapter K, Chapter
1, Subtitle A of the Internal Revenue Code of 1986 and agree not to take any position
inconsistent with that election. We authorize you, in your discretion, to
execute and file on our behalf such evidence of that
election as may be required by the
Internal Revenue Service. Neither you nor any Underwriter shall be under any
obligation to us except for obligations assumed hereby or in any Written
Communication from you in connection with any Offering. In connection with any
Offering, we agree to pay our proportionate share of any tax, claim, demand, or
liability asserted against us, and the other Selected Dealers or any of them, or against
you or the Underwriters, if any, based on any claim that such Selected Dealers or any
of them constitute an association, unincorporated business, or other separate entity,
including in each case our proportionate share of any expense incurred in defending
against any such tax, claim, demand, or liability.
(h)
Blue Sky Laws. Upon application to you, you will inform us as to the jurisdictions
in which you believe the Securities have been qualified for sale or are exempt under
the respective securities or “blue sky”laws of such jurisdictions. We understand and
agree that compliance with the securities or “blue sky” laws in each jurisdiction in
which we shall offer or sell any of the Securities shall be our sole responsibility and
that you assume no responsibility or obligations as to the eligibility of the
Securities for sale or our right to sell the Securities in any jurisdiction.
(i)
Compliance with Law. We agree that in selling Securities pursuant to any Offering
(which agreement shall also be for the benefit of the issuer or other seller of
such Securities), we will comply with the applicable provisions of the Securities
Act and the Exchange Act, the applicable Rules and regulations of the Securities and
Exchange Commission thereunder, the applicable Rules and regulations of the NASD, the
applicable Rules and regulations of any securities exchange having jurisdiction over
the Offering, and the applicable laws, rules and regulations specified in Section 3(c)
hereof. Without limiting the foregoing, (a) we agree that, at all times since we were
invited to participate in an Offering of Securities, we have complied with the
provisions of Regulation M applicable to such Offering, in each case after giving
effect to any applicable exemptions and (b) we represent that our incurrence of
obligations hereunder in connection with any Offering of Securities will not result in
the violation by us of Rule 15c3-1 under the Exchange Act, if such requirements are
applicable to us. You shall have full authority to take such action as you may deem
advisable in respect of all matters pertaining to any Offering. Neither you nor
any Underwriter shall be under any liability to us, except for lack of good faith and
for obligations expressly assumed by you in this Agreement; provided, however, that
nothing in this sentence shall be deemed to relieve you from any liability imposed by the
Securities Act.
(j)
Best Efforts Offerings. If you communicate to us that a particular offering is being
made on a best efforts basis, then the terms in this Section 3(j) apply and other
inconsistent terms in this Agreement do not apply.
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(i)
The offering will be a best efforts offering. The offering also will be contingent
and involve a closing only after receipt of necessary documentation from
the issuer and satisfaction of other conditions, if any, specified in the
prospectus or offering circular and the agency or engagement agreement with you
and the issuer. The offering is designed to comply with applicable SEC rules,
including Rules 15c2-4, 10b-9, and 15c6-1. See NASD Notice to Members 98-4,
87-61 and 84-7.
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(ii)
We represent and agree that we shall take necessary steps to comply with SEC
Rules 15c2-4, 10b-9 and 15c6-1, including, but not limited to, depositing
funds in a complying special account if funds are received before all closing
conditions have been met. We also represent that we are aware that those who
purchase in this best efforts offering are subject to the investor purchase
limitations described in the prospectus or offering circular.
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(4)
Indemnification. We agree to indemnify and hold harmless Xxxx Xxxx, the issuer of the
Securities, each person, if any, who controls (within the meaning of either Section 15
of the Securities Act or Section 20 of the Exchange Act) Xxxx Xxxx or the issuer of
the Securities, and their respective directors, officers and employees from and
against any and all losses, liabilities, costs or claims (or actions in respect
thereof) (collectively, “Losses”) to which any of them may become subject
(including all reasonable costs of investigating, disputing or defending any
such claim or action), insofar as such Losses arise out of or are in connection with the
breach of any representation, warranty or agreement made by us herein.
If
any claim, demand, action or proceeding (including any governmental investigation)
shall be brought or alleged against an indemnified party in respect of which
indemnity is to be sought against an indemnifying party, the indemnified party shall
promptly notify the indemnifying party in writing, and the indemnifying party, upon
request of the indemnified party, shall retain counsel reasonably satisfactory to the
indemnified party to represent the indemnified party and any others the indemnified
party may designate in such proceeding and shall pay the reasonable fees and expenses
of such counsel related to such proceeding. In any such proceeding, any indemnified
party shall have the right to retain its own counsel, but the reasonable fees and
expenses of such counsel shall be at the expense of such indemnified party unless (i)
the indemnifying party and the indemnified party shall have mutually agreed to the
retention of such counsel, (ii) the indemnifying party has failed within a reasonable
time to retain counsel reasonably satisfactory to such indemnified party or (iii) the
named parties to any such proceeding (including any impleaded parties) include both the
indemnifying party and the indemnified party and representation of both parties by the
same counsel would be inappropriate due to actual or potential differing interests
between them. It is agreed that the indemnifying party shall not, in connection
with any proceeding or related proceedings in the same jurisdiction, be liable for
the reasonable fees and expenses of more than one separate law firm (in addition to
local counsel where necessary) for all such indemnified parties. Such firm shall be
designated in writing by the indemnified party. The indemnifying party shall not be
liable for any settlement of any proceeding effected without its written consent, but
if settled with such consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party from and against any
loss or liability by reason of such settlement or judgment. No indemnifying party
shall, without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened proceeding in respect of which any indemnified
party is or could have been a party and indemnity could have been sought hereunder by
such indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject matter of such
proceeding.
The
indemnity agreements contained in this Section and the representations and warranties
by us in this Agreement shall remain operative and in full force and effect
regardless of: (i) any termination of this Agreement, (ii) any investigation
made by an indemnified party or
on such party’s behalf or any
person controlling an indemnified party or by or on behalf of the indemnifying party,
its directors or officers or any person controlling the indemnifying party, and (iii)
acceptance of and payment for any Securities.
(5)
Termination; Supplements and Amendments. This Agreement may be terminated by either
party hereto upon five business days’ written notice to the other party; provided that
with respect to any Offering for which a Written Communication was sent and accepted
prior to such notice, this Agreement as it applies to such Offering shall remain in full
force and effect and shall terminate with respect to such Offering in accordance
with the last sentence of this Section. This Agreement may be supplemented or amended
by you by written notice thereof to us, and any such supplement or amendment to this
Agreement shall be effective with respect to any Offering to which this Agreement
applies after the date of such supplement or amendment. Each reference to “this
Agreement”herein shall, as appropriate, be to this Agreement as so amended and
supplemented. The terms and conditions set forth in Sections 3(c) and (e) with
regard to any offering will terminate at the close of business on the thirtieth
day after the date of the initial public offering of the Securities to which such
Offering relates, but such terms and conditions, upon notice to us, may be terminated
by you at any time.
(6)
Successors and Assigns. This Agreement shall be binding on, and inure to the
benefit of, the parties hereto and other persons specified or indicated in Section 1,
and the respective successors and assigns of each of them.
(7)
Governing Law. This Agreement and the terms and conditions set forth herein with
respect to any Offering together with such supplementary terms and conditions with
respect to such Offering as may be contained in any Written Communication from you to
us in connection therewith shall be governed by, and construed in accordance with,
the laws of the State of New York without regard to conflicts of laws principles.
By
signing this Agreement we confirm that our subscription to, or our acceptance of any
reservation of, any Securities pursuant to an Offering shall constitute (i)
acceptance of and agreement to the terms and conditions of this Agreement (as
supplemented and amended pursuant to Section 5) together with and subject to any
supplementary terms and conditions contained in any Written Communication from you
in connection with such Offering, all of which shall constitute a binding
agreement between us and you, individually, or as representative of any
Underwriters, (ii) in confirmation that our representations and warranties set forth
in Section 3 are true and correct at that time and (iii) confirmation that our
agreements set forth in Sections 2 and 3 have been and will be fully performed by us to
the extent and at the times required thereby.
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Very truly yours, |
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________________ |
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(Name of Firm) |
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By: |
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Confirmed, as of the date
first
above written.
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| XXXX, XXXX & CO., INC. |
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| By: _________________________ |
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Execution Date: _________________________ |
