1,293,750 Shares
(subject to increase up to 1,487,813 shares
in the event of an oversubscription)
ATLANTIC LIBERTY FINANCIAL CORP.
(a Delaware corporation)
Common Stock
(par value $0.10 per share)
AGENCY AGREEMENT
August __, 0000
XXXXXXX X'XXXXX & PARTNERS, L.P.
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Atlantic Liberty Financial Corp., a Delaware corporation (the
"Company"), and Atlantic Liberty Savings, F.A., a federal savings association
(the "Bank"), hereby confirm their agreement with Sandler X'Xxxxx & Partners,
L.P. ("Sandler X'Xxxxx" or the "Agent") with respect to the offer and sale by
the Company of 1,293,750 shares (subject to increase up to 1,487,813 shares in
the event of an oversubscription) of the Company's Common Stock, par value $0.10
per share (the "Common Stock"). The shares of Common Stock to be sold by the
Company are hereinafter called the "Securities."
The Securities are being offered for sale in accordance with the plan
of conversion (the "Plan") adopted by the Board of Directors of the Bank
pursuant to which the Bank intends to convert from a federally chartered mutual
savings association to a federally chartered stock savings association and issue
all of its stock to the Company. Pursuant to the Plan, the Company is offering
to the Bank's tax qualified employee benefit plans, including the Employee Stock
Ownership Plan (the "ESOP") (collectively, the "Employee Plans") and to certain
of the Bank's depositors and borrowers rights to subscribe for the Securities in
a subscription offering (the "Subscription Offering"). To the extent Securities
are not subscribed for in the Subscription Offering, such Securities may be
offered to certain members of the general public, with preference given to
certain natural persons residing in Brooklyn, New York, in a direct community
offering (the "Community
Offering" and together with the Subscription Offering, as each may be extended
or reopened from time to time, the "Subscription and Community Offering") to be
commenced concurrently with, during or promptly after the Subscription Offering.
It is currently anticipated by the Bank and the Company that any Securities not
subscribed for in the Subscription and Community Offering will be offered,
subject to Section 2 hereof, in a syndicated community offering (the "Syndicated
Community Offering"). The Subscription and Community Offering and the Syndicated
Community Offering are hereinafter referred to collectively as the "Offerings,"
and the conversion of the Bank from mutual to stock form, the acquisition of the
capital stock of the Bank by the Company and the Offerings are hereinafter
referred to collectively as the "Conversion." It is acknowledged that the price
of the Securities may be decreased and the number of Securities to be sold in
the Conversion may be increased or decreased as described in the Prospectus (as
hereinafter defined). If the number of Securities is increased or decreased in
accordance with the Plan, the term "Securities" shall mean such greater or
lesser number, where applicable. In the event that a holding company form of
organization is not utilized, all pertinent terms of this Agreement will apply
to the conversion of the Bank from the mutual to stock form of organization and
the sale of the Bank's common stock.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form SB-2 (No. 333-90828), including a
related prospectus, for the registration of the Securities under the Securities
Act of 1933, as amended (the "Securities Act"), has filed such amendments
thereto, if any, and such amended prospectuses as may have been required to the
date hereof by the Commission in order to declare such registration statement
effective, and will file such additional amendments thereto and such amended
prospectuses and prospectus supplements as may hereafter be required. Such
registration statement (as amended to date, if applicable, and as from time to
time amended or supplemented hereafter) and the prospectuses constituting a part
thereof (including in each case all documents incorporated or deemed to be
incorporated by reference therein and the information, if any, deemed to be a
part thereof pursuant to the rules and regulations of the Commission under the
Securities Act, as from time to time amended or supplemented pursuant to the
Securities Act or otherwise (the "Securities Act Regulations")), are hereinafter
referred to as the "Registration Statement" and the "Prospectus," respectively,
except that if any revised prospectus shall be used by the Company in connection
with the Subscription and Community Offering or the Syndicated Community
Offering which differs from the Prospectus on file at the Commission at the time
the Registration Statement becomes effective (whether or not such revised
prospectus is required to be filed by the Company pursuant to Rule 424(b) of the
Securities Act Regulations), the term "Prospectus" shall refer to such revised
prospectus from and after the time it is first provided to the Agent for such
use.
Concurrently with the execution of this Agreement, the Company is
delivering to the Agent copies of the Prospectus of the Company to be used in
the Subscription and Community Offering. Such prospectus contains information
with respect to the Bank, the Company and the Common Stock.
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SECTION 1.REPRESENTATIONS AND WARRANTIES.
(a) The Company and the Bank jointly and severally represent and
warrant to the Agent as of the date hereof as follows:
(i) The Registration Statement has been declared effective
by the Commission, no stop order has been issued with respect thereto and
no proceedings therefor have been initiated or, to the knowledge of the
Company and the Bank, threatened by the Commission. At the time the
Registration Statement became effective and at the Closing Time referred to
in Section 2 hereof, the Registration Statement complied and will comply in
all material respects with the requirements of the Securities Act and the
Securities Act Regulations and did not and will not contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading. The Prospectus, at the date hereof does not and at the Closing
Time referred to in Section 2 hereof will not, include an untrue statement
of a material fact or omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under which
they were made, not misleading; PROVIDED, HOWEVER, that the representations
and warranties in this subsection shall not apply to statements in or
omissions from the Registration Statement or Prospectus made in reliance
upon and in conformity with information with respect to the Agent furnished
to the Company in writing by the Agent expressly for use in the
Registration Statement or Prospectus (the "Agent Information," which the
Company and the Bank acknowledge appears only in the sections captioned
"Market for the Common Stock" and the first four paragraphs of the section
"The Conversion-Plan of Distribution and Marketing Arrangements" of the
Prospectus).
(ii) The Company has filed with the Department of the
Treasury, Office of Thrift Supervision (the "OTS") the Company's
application for approval of its acquisition of the Bank (the "Holding
Company Application") on Form H-(e)1-S promulgated under the savings and
loan holding company provisions of the Home Owners' Loan Act, as amended
("HOLA") and the regulations promulgated thereunder. The Company has
received written notice from the OTS of its approval of the acquisition of
the Bank, such approval remains in full force and effect and no order has
been issued by the OTS suspending or revoking such approval and no
proceedings therefor have been initiated or, to the knowledge of the
Company or the Bank, threatened by the OTS. At the date of such approval
and at the Closing Time referred to in Section 2, the Holding Company
Application complied and will comply in all material respects with the
applicable provisions of HOLA and the regulations promulgated thereunder.
(iii) Pursuant to the rules and regulations of the OTS
governing the conversion of federally chartered mutual savings banks to
stock form (the "Conversion Regulations"), the Bank has filed with the OTS
an application for conversion on Form AC, and has filed such amendments
thereto and supplementary materials as may have been required to the date
hereof (such application, as amended to date, if applicable, and as from
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time to time amended or supplemented hereafter, is hereinafter referred to
as the "Conversion Application"), including copies of the Bank's Proxy
Statement, dated August __, 2002, relating to the Conversion (the "Proxy
Statement"), and the Prospectus. The OTS has, by letter dated August __,
2002, approved the Conversion Application, including the Proxy Statement
and Prospectus, such approval remains in full force and effect and no order
has been issued by the OTS suspending or revoking such approval and no
proceedings therefor have been initiated or, to the knowledge of the
Company or the Bank, threatened by the OTS. At the date of such approval
and at the Closing Time referred to in Section 2, the Conversion
Application complied and will comply in all material respects with the
applicable provisions of the Conversion Regulations.
(iv) At the time of their use, the Proxy Statement and any
other proxy solicitation materials will comply in all material respects
with the applicable provisions of the Conversion Regulations and will not
contain an untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The Company and
the Bank will promptly file the Prospectus and any supplemental sales
literature with the Commission and the OTS. The Prospectus and all
supplemental sales literature, as of the date the Registration Statement
became effective and at the Closing Time referred to in Section 2, complied
and will comply in all material respects with the applicable requirements
of the Conversion Regulations and, at or prior to the time of their first
use, will have received all required authorizations of the OTS for use in
final form.
(v) Neither the SEC nor the OTS has, by order or otherwise,
prevented or suspended the use of the Prospectus or any supplemental sales
literature authorized by the Company or the Bank for use in connection with
the Offerings.
(vi) At the Closing Time referred to in Section 2, the
Company and the Bank will have completed the conditions precedent to the
Conversion in accordance with the Plan, the applicable Conversion
Regulations and all other applicable laws, regulations, decisions and
orders, including all material terms, conditions, requirements and
provisions precedent to the Conversion imposed upon the Company or the Bank
by the OTS, the Federal Deposit Insurance Corporation (the "FDIC"), or any
other regulatory authority, other than those which the regulatory authority
permits to be completed after the Conversion.
(vii) Xxxxxxx Financial Advisors, Inc. ("Xxxxxxx"), which
prepared the valuation of the Bank as part of the Conversion, has advised
the Company and the Bank in writing that it satisfies all requirements for
an appraiser set forth in the Conversion Regulations and any
interpretations or guidelines issued by the OTS and the FDIC with respect
thereto. Xxxxxxx, which prepared the opinion filed as Exhibit ___ of the
Conversion Application as required by the Conversion Regulations, satisfies
all requirements for an "independent appraisal expert" within the meaning
of the Conversion Regulations.
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(viii) The accountants who certified the consolidated
financial statements and supporting schedules of the Bank included in the
Registration Statement have advised the Company and the Bank in writing
that they are independent public accountants within the meaning of the Code
of Ethics of the American Institute of Certified Public Accountants (the
"AICPA"), and such accountants are, with respect to the Company and the
Bank, independent certified public accountants as required by the
Securities Act and the Securities Act Regulations.
(ix) There do not exist any direct or indirect subsidiaries
of the Bank.
(x) The consolidated financial statements and the related
notes thereto included in the Registration Statement and the Prospectus
present fairly the financial position of the Company and the Bank at the
dates indicated and the results of operations, retained earnings and cash
flows for the periods specified, and comply as to form in all material
respects with the applicable accounting requirements of the Securities Act
Regulations and the Conversion Regulations; except as otherwise stated in
the Registration Statement, said financial statements have been prepared in
conformity with accounting principles generally accepted in the United
States applied on a consistent basis; and the supporting schedules and
tables included in the Registration Statement present fairly the
information required to be stated therein.
(xi) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as otherwise
stated therein (A) there has been no material adverse change in the
financial condition, results of operations, business affairs or prospects
of the Company and the Bank considered as one enterprise, whether or not
arising in the ordinary course of business consistent with past practice,
and (B) except for transactions specifically referred to or contemplated in
the Prospectus, there have been no transactions entered into by the Company
or the Bank, other than those in the ordinary course of business consistent
with past practice, which are material with respect to the Company and the
Bank, considered as one enterprise.
(xii) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Delaware with corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the Prospectus and
to enter into and perform its obligations under this Agreement; and the
Company is duly qualified as a foreign corporation to transact business and
is in good standing in the State of New York and in each other jurisdiction
in which such qualification is required, whether by reason of the ownership
or leasing of property or the conduct of business, except where the failure
to so qualify would not have a material adverse effect on the financial
condition, results of operations or business affairs or prospects of the
Company and the Bank, considered as one enterprise.
5
(xiii) Upon consummation of the Conversion, the authorized,
issued and outstanding capital stock of the Company will be as set forth in
the Prospectus under "Capitalization" (except for subsequent issuances, if
any, pursuant to reservations, agreements or employee benefit plans
referred to in the Prospectus); [except for shares issued in connection
with the initial capitalization of the Company, which shares will be
cancelled upon consummation of the Conversion,] [TO BE DETERMINED] no
shares of Common Stock or other capital stock of the Company have been or
will be issued and outstanding prior to the Closing Time referred to in
Section 2; at the time of Conversion, the Securities will have been duly
authorized for issuance and, when issued and delivered by the Company
pursuant to the Plan against payment of the consideration calculated as set
forth in the Plan and stated on the cover page of the Prospectus, will be
duly and validly issued and fully paid and non-assessable; the terms and
provisions of the Common Stock and the capital stock of the Company conform
to all statements relating thereto contained in the Prospectus; the
certificates representing the shares of Common Stock conform to the
requirements of applicable law and regulations; and the issuance of the
Securities is not subject to preemptive or other similar rights.
(xiv) The Bank, as of the date hereof, is a federally
chartered savings association in mutual form and upon consummation of the
Conversion will be a federally chartered savings association in stock form,
in both instances with full corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectus; the Company and the Bank have obtained all licenses, permits
and other governmental authorizations currently required for the conduct of
their respective businesses or required for the conduct of their respective
businesses as contemplated by the Holding Company Application and the
Conversion Application, except where the failure to obtain such licenses,
permits or other governmental authorizations would not have a material
adverse effect on the financial condition, results of operations, business
affairs or prospects of the Company and the Bank considered as one
enterprise; all such licenses, permits and other governmental
authorizations are in full force and effect and the Company and the Bank
are in all material respects in compliance therewith; neither the Company
nor the Bank has received notice of any proceeding or action relating to
the revocation or modification of any such license, permit or other
governmental authorization which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, might have a
material adverse effect on the financial condition, results of operations,
business affairs or prospects of the Company and the Bank, considered as
one enterprise; and the Bank is validly existing and in good standing under
the laws of the United States and is qualified to transact business as a
foreign corporation in any jurisdiction in which the failure to so qualify
would have a material adverse effect on the financial condition, results of
operations, business affairs or prospects of the Company and the Bank
considered as one enterprise.
(xv) The deposit accounts of the Bank are insured by the
FDIC up to the applicable limits. Upon consummation of the Conversion, the
liquidation account for the benefit of eligible account holders and
supplemental eligible account holders of the Bank will
6
be duly established in accordance with the requirements of the Conversion
Regulations. The Bank is a "qualified thrift lender" within the meaning of
12 U.S.C. Section 1467a(m).
(xvi) Upon consummation of the Conversion, the authorized
capital stock of the Bank will be 5,000,000 shares of common stock, par
value $.10 per share (the "Bank Common Stock") and 2,000,000 shares of
preferred stock, par value $.10 per share (the "Bank Preferred Stock"), and
the issued and outstanding capital stock of the Bank will be ______ shares
of Bank Common Stock and no shares of the Bank Preferred Stock, and no
shares of Bank Common Stock or Bank Preferred Stock have been or will be
issued prior to the Closing Time referred to in Section 2; and as of the
Closing Time referred to in Section 2, all of the issued and outstanding
capital stock of the Bank will be duly authorized, validly issued and fully
paid and nonassessable and have been issued in compliance with all federal
and state securities laws. The shares of Bank Common Stock to be issued to
the Company will have been duly authorized for issuance and, when issued
and delivered by the Bank pursuant to the Plan against payment of the
consideration calculated as set forth in the Plan and as described in the
Prospectus, will be duly and validly issued and fully paid and
nonassessable, and all such Bank Common Stock will be owned beneficially
and of record by the Company free and clear of any security interest,
mortgage, pledge, lien, encumbrance or legal or equitable claim; the terms
and provisions of the Bank Common Stock and the Bank Preferred Stock
conform to all statements relating thereto contained in the Prospectus, and
the certificates representing the shares of the Bank Common Stock will
conform with the requirements of applicable laws and regulations; and the
issuance of the Bank Common Stock is not subject to preemptive or similar
rights.
(xvii) The Company and the Bank have taken all corporate
action necessary for them to execute, deliver and perform this Agreement,
and this Agreement has been duly executed and delivered by, and is the
valid and binding agreement of, the Company and the Bank, enforceable in
accordance with its terms, except as may be limited by bankruptcy,
insolvency or other laws affecting the enforceability of the rights of
creditors generally and judicial limitations on the right of specific
performance and except as the enforceability of indemnification and
contribution provisions may be limited by applicable securities laws.
(xviii) Subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus and
prior to the Closing Time, except as otherwise may be indicated or
contemplated therein, neither the Company nor the Bank will have (A) issued
any securities or incurred any liability or obligation, direct or
contingent, or borrowed money, except borrowings in the ordinary course of
business consistent with past practice from the same or similar sources and
in similar amounts as indicated in the Prospectus, or (B) entered into any
transaction or series of transactions which is material in light of the
business of the Company and the Bank, taken as a whole, excluding the
origination, purchase and sale of loans or the purchase or sale of
investment securities or mortgaged-backed securities in the ordinary course
of business consistent with past practice.
7
(xix) No approval of any regulatory or supervisory or other
public authority is required in connection with the execution and delivery
of this Agreement or the issuance of the Securities that has not been
obtained and a copy of which has been delivered to the Agent, except as may
be required under the "blue sky" or state securities laws of various
jurisdictions.
(xx) Neither the Company nor the Bank is in violation of its
certificate of incorporation, organization certificate, articles of
incorporation or charter, as the case may be, or bylaws (and the Bank will
not be in violation of its charter or bylaws in stock form upon
consummation of the Conversion); and neither the Company nor the Bank is in
default (nor has any event occurred which, with notice or lapse of time or
both, would constitute a default) in the performance or observance of any
obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or other instrument to
which the Company or the Bank is a party or by which it or either of them
may be bound, or to which any of the property or assets of the Company or
the Bank is subject, except for such defaults that would not, individually
or in the aggregate, have a material adverse effect on the financial
condition, results of operations, business affairs or prospects of the
Company and the Bank considered as one enterprise; and there are no
contracts or documents of the Company or the Bank which are required to be
filed as exhibits to the Registration Statement or the Conversion
Application which have not been so filed.
(xxi) The consummation of the Conversion, the execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated herein have been duly authorized by all necessary
corporate action on the part of the Company and the Bank and do not and
will not conflict with or constitute a breach of, or default under, or
result in the creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company or the Bank pursuant to, any
contract, indenture, mortgage, loan agreement, note, lease or other
instrument to which the Company or the Bank is a party or by which it or
either of them may be bound, or to which any of the property or assets of
the Company or the Bank is subject, except for such defaults that would
not, individually or in the aggregate, have a material adverse effect on
the financial condition, results of operations, business affairs or
prospects of the Company and the Bank considered as one enterprise; nor
will such action result in any violation of the provisions of the
certificate of incorporation, organization certificate, articles of
incorporation or charter or by-laws of the Company or the Bank, or any
applicable law, administrative regulation or administrative or court
decree.
(xxii) No labor dispute with the employees of the Company or
the Bank exists or, to the knowledge of the Company or the Bank, is
imminent or threatened; and the Company and the Bank are not aware of any
existing or threatened labor disturbance by the employees of any of its
principal suppliers or contractors which might be expected to result in any
material adverse change in the financial condition, results of operations,
business affairs or prospects of the Company and the Bank considered as one
enterprise.
8
(xxiii) Each of the Company and the Bank have good and
marketable title to all properties and assets for which ownership is
material to the business of the Company or the Bank and to those properties
and assets described in the Prospectus as owned by them, free and clear of
all liens, charges, encumbrances or restrictions, except such as are
described in the Prospectus or are not material in relation to the business
of the Company or the Bank considered as one enterprise; and all of the
leases and subleases material to the business of the Company or the Bank
under which the Company or the Bank hold properties, including those
described in the Prospectus, are valid and binding agreements of the
Company and the Bank in full force and effect, enforceable in accordance
with their terms (except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization and similar laws of general
applicability relating to or affecting creditors' rights or general
principles of equity).
(xxiv) Neither the Company nor the Bank are in violation of
any directive from the Commission, the OTS or the FDIC or any other
governmental entity to make any material change in the method of conducting
their respective businesses; the Bank has conducted and is conducting its
business so as to comply in all material respects with all applicable
statutes, regulations and administrative and court decrees (including,
without limitation, all regulations, decisions, directives and orders of
the Commission, the OTS and the FDIC).
(xxv) There is no action, suit or proceeding before or by any
court or governmental agency or body, domestic or foreign, now pending, or,
to the knowledge of the Company or the Bank, threatened, against or
affecting the Company or the Bank which is required to be disclosed in the
Registration Statement (other than as disclosed therein), or which might
result in any material adverse change in the financial condition, results
of operations, business affairs or prospects of the Company and the Bank
considered as one enterprise, or which might materially and adversely
affect the properties or assets thereof or which might materially and
adversely affect the consummation of the Conversion or the performance of
this Agreement; all pending legal or governmental proceedings to which the
Company or the Bank is a party or of which either of their respective
property or assets is the subject which are not described in the
Registration Statement, including ordinary routine litigation incidental to
the business, are considered in the aggregate not material; and there are
no contracts or documents of the Company or any of its subsidiaries which
are required to be filed as exhibits to the Registration Statement or the
Conversion Application which have not been so filed.
(xxvi) The Bank has obtained opinions of its outside legal
counsel, Xxxx Xxxxxx Xxxxxxxx & Xxxxxx, P.C., and its outside tax advisor,
Radics & Co., LLC, with respect to the legality of the Securities to be
issued and the New York State and local income tax and federal income tax
consequences of the Conversion (including franchise tax, sales or use tax,
license fee on foreign corporations, stock transfer tax, real property
transfer gain tax and real estate transfer tax), copies of which are filed
as exhibits to the Registration
9
Statement; all material aspects of the aforesaid opinions are accurately
summarized in the Prospectus; the facts and representations upon which such
opinions are based are truthful, accurate and complete in all material
respects; and neither the Bank nor the Company has taken or will take any
action inconsistent therewith.
(xxvii) The Company is not and, upon completion of the
Conversion and the Offerings and sale of the Common Stock and the
application of the net proceeds therefrom, will not be, required to be
registered under the Investment Company Act of 1940, as amended.
(xxviii) All of the loans represented as assets on the most
recent consolidated financial statements or consolidated selected financial
and other information of the Bank included in the Prospectus meet or are
exempt from all requirements of federal, state or local law pertaining to
lending, including without limitation truth in lending (including the
requirements of Regulations Z and 12 C.F.R. Part 226 and Section 563.99),
real estate settlement procedures, consumer credit protection, equal credit
opportunity and all disclosure laws applicable to such loans, except for
violations which, if asserted, would not result in a material adverse
effect on the financial condition, results of operations, business affairs
or prospects of the Company and the Bank considered as one enterprise.
(xxix) To the knowledge of the Company and the Bank, with the
exception of the intended loan to the Bank's ESOP by the Company to enable
the ESOP to purchase shares of Common Stock in an amount of up to 8.0% of
the Common Stock issued in the Conversion, none of the Company, the Bank
nor employees of the Bank has made any payment of funds of the Company or
the Bank as a loan for the purchase of the Common Stock or made any other
payment of funds prohibited by law, and no funds have been set aside to be
used for any payment prohibited by law.
(xxx) The Company and the Bank carry, or are covered by,
insurance in such amounts and covering such risks as is adequate for the
conduct of their respective businesses and the value fo their respective
properties as is customary for companies engaged in similar industries
(xxxi) The Company and the Bank maintain a system of internal
accounting controls sufficient to provide reasonable assurance that (a)
transactions are executed in accordance with management's general or
specific authorizations; (b) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset accountability; (c)
access to assets is permitted only in accordance with management's general
or specific authorization; and (d) the recorded accountability for assets
is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
10
(xxxii) The Company and the Bank are in compliance in all
material respects with the applicable financial recordkeeping and reporting
requirements of the Currency and Foreign Transaction Reporting Act of 1970,
as amended, and the rules and regulations thereunder.
(xxxiii) The Company and the Bank are in compliance in all
material respects with all presently applicable provisions of the Employee
Retirement Income Security Act of 1974, as amended, including the
regulations and published interpretations thereunder ("ERISA"); no
"reportable event" (as defined in ERISA) has occurred with respect to any
"pension plan" (as defined in ERISA) for which the Company or the Bank,
respectively, would have any liability; both the Company and the Bank have
not incurred and do not expect to incur liability under (i) Title IV of
ERISA with respect to termination of, or withdrawal from, any "pension
plan" or (ii) Sections 412 or 4971 of the Internal Revenue Code of 1986, as
amended, including the regulations and published interpretations thereunder
(the "Code"); and each "pension plan" for which the Company and the Bank
would have any liability that is intended to be qualified under Section
401(a) of the Code is so qualified in all material respects and nothing has
occurred, whether by action or by failure to act, which would cause the
loss of such qualification.
(xxxiv) Neither the Company nor the Bank nor any properties
owned or operated by the Company or the Bank is in violation of or liable
under any Environmental Law (as defined below), except for such violations
or liabilities that, individually or in the aggregate, would not have a
material adverse effect on the financial condition, results of operations
or business affairs of the Company and the Bank considered as one
enterprise. There are no actions, suits or proceedings, or demands, claims,
notices or investigations (including, without limitation, notices, demand
letters or requests for information from any environmental agency)
instituted or pending, or to the knowledge of the Company or the Bank
threatened, relating to the liability of any property owned or operated by
the Company or the Bank, under any Environmental Law. For purposes of this
subsection, the term "Environmental Law" means any federal, state, local or
foreign law, statute, ordinance, rule, regulation, code, license, permit,
authorization, approval, consent, order, judgment, decree, injunction or
agreement with any regulatory authority relating to (i) the protection,
preservation or restoration of the environment (including, without
limitation, air, water, vapor, surface water, groundwater, drinking water
supply, surface soil, subsurface soil, plant and animal life or any other
natural resource), and/or (ii) the use, storage, recycling, treatment,
generation, transportation, processing, handling, labeling, production,
release or disposal of any substance presently listed, defined, designated
or classified as hazardous, toxic, radioactive or dangerous, or otherwise
regulated, whether by type or by quantity, including any material
containing any such substance as a component.
(xxxv) The Company and the Bank have filed all federal income
and state and local franchise tax returns required to be filed and have
made timely payments of all taxes shown as due and payable in respect of
such returns, and no deficiency has been asserted
11
with respect thereto by any taxing authority. The Company and the Bank have
no knowledge of any tax deficiency which has been asserted or could be
asserted against the Company or the Bank.
(xxxvi) The Company has received approval, subject to
regulatory approval to consummate the Offerings and issuance, to have the
Securities quoted on the National Market System of the National Association
of Securities Dealers' Automated Quotation System ("Nasdaq National
Market") effective as of the Closing Time referred to in Section 2 hereof.
(xxxvii) The Company has filed a registration statement for
the Common Stock under Section 12(g) of the Securities Exchange Act of
1934, as amended (the "Exchange Act") and such registration statement was
declared effective concurrent with the effectiveness of the Registration
Statement.
(b) Any certificate signed by any officer of the Company or the
Bank and delivered to either of the Agent to counsel for the Agent shall be
deemed a representation and warranty by the Company or the Bank to each
Agent and, for purposes of the opinion to be delivered to the Agent
pursuant to Section 5(b)(2) hereof, to the counsel fo the Agent as to the
matters covered thereby.
SECTION 2. APPOINTMENT OF SANDLER X'XXXXX; SALE AND DELIVERY OF
THE SECURITIES; CLOSING.
On the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth, the Company
hereby appoints Sandler X'Xxxxx as its Agent to consult with and advise the
Company, and to assist the Company with the solicitation of subscriptions and
purchase orders for Securities, in connection with the Company's sale of Common
Stock in the Subscription and Community Offering and the Syndicated Community
Offering. On the basis of the representations and warranties herein contained,
and subject to the terms and conditions herein set forth, Sandler X'Xxxxx
accepts such appointment and agrees to use its best efforts to assist the
Company with the solicitation of subscriptions and purchase orders for
Securities in accordance with this Agreement; PROVIDED, HOWEVER, that the Agent
shall not be obligated to take any action which is inconsistent with any
applicable laws, regulations, decisions or orders. The services to be rendered
by Sandler X'Xxxxx pursuant to this appointment include the following: (i)
consulting as to the securities marketing implications of any aspect of the Plan
of Conversion or related corporate documents; (ii) reviewing with the Board of
Directors the independent appraiser's appraisal of the common stock; (iii)
reviewing all offering documents, including the Prospectus, stock order form and
related offering materials (it being understood that preparation and filing of
such documents is the sole responsibility of the Company and the Bank and their
counsel); (iv) assisting in the design and implementation of a marketing
strategy for the Offerings; (v) assisting the Company and the Bank in obtaining
all requisite regulatory approvals; (vi) assisting Bank management in preparing
for meetings with potential investors and broker-dealers; and (vii)
12
providing such other general advice and assistance as may be requested to
promote the successful completion of the Offerings.
The appointment of the Agent hereunder shall terminate upon the
earlier to occur of (a) forty-five (45) days after the last day of the
Subscription and Community Offering, unless the Company and the Agent agree in
writing to extend such period and the OTS agrees to extend the period of time in
which the Shares may be sold, or (b) the receipt and acceptance of subscriptions
and purchase orders for all of the Securities, or (c) the completion of the
Syndicated Community Offering.
If any of the Securities remain available after the expiration of
the Subscription and Community Offering, at the request of the Company and the
Bank, Sandler X'Xxxxx will seek to form a syndicate of registered brokers or
dealers ("Selected Dealers") to assist in the solicitation of purchase orders of
such Securities on a best efforts basis, subject to the terms and conditions set
forth in a selected dealers' agreement (the "Selected Dealers' Agreement"),
substantially in the form set forth in Exhibit A to this Agreement. Sandler
X'Xxxxx will endeavor to limit the aggregate fees to be paid by the Company and
the Bank under any such Selected Dealers' Agreement to an amount competitive
with gross underwriting discounts charged at such time for underwritings of
comparable amounts of stock sold at a comparable price per share in a similar
market environment; PROVIDED, HOWEVER, that the aggregate fees payable to Xxxxxx
X'Xxxxx and Selected Dealers shall not exceed __% of the aggregate Purchase
Price of the Securities sold by such Selected Dealers. Xxxxxx X'Xxxxx will
endeavor to distribute the Securities among the Selected Dealers in a fashion
which best meets the distribution objective of the Company and the requirements
of the Plan, which may result in limiting the allocation of stock to certain
Selected Dealers. It is understood that in no event shall Sandler X'Xxxxx be
obligated to act as a Selected Dealer or to take or purchase any Securities.
In the event the Company is unable to sell at least the total
minimum of the Securities, as set forth on the cover page of the Prospectus,
within the period herein provided, this Agreement shall terminate and the
Company shall refund to any persons who have subscribed for any of the
Securities the full amount which it may have received from them, together with
interest as provided in the Prospectus, and no party to this Agreement shall
have any obligation to the others hereunder, except for the obligations of the
Company and the Bank as set forth in Sections 4, 6(a) and 7 hereof and the
obligations of the Agent as provided in Sections 6(b) and 7 hereof. Appropriate
arrangements for placing the funds received from subscriptions for Securities or
other offers to purchase Securities in special interest-bearing accounts with
the Bank until all Securities are sold and paid for were made prior to the
commencement of the Subscription Offering, with provision for refund to the
purchasers as set forth above, or for delivery to the Company if all Securities
are sold.
If at least the total minimum of Securities, as set forth on the
cover page of the Prospectus, are sold, the Company agrees to issue or have
issued the Securities sold and to release for delivery certificates for such
Securities at the Closing Time against payment therefor by release of funds from
the special interest-bearing accounts referred to above. The closing shall be
held at the offices of Xxxx Xxxxxx Xxxxxxxx & Xxxxxx, P.C., at 10:00 a.m., local
time, or at such other
13
place and time as shall be agreed upon by the parties hereto, on a business day
to be agreed upon by the parties hereto. The Company shall notify the Agent by
telephone, confirmed in writing, when funds shall have been received for all the
Securities. Certificates for Securities shall be delivered directly to the
purchasers thereof in accordance with their directions. Notwithstanding the
foregoing, certificates for Securities purchased through Selected Dealers shall
be made available to the Agent for inspection at least 48 hours prior to the
Closing Time at such office as the Agent shall designate. The hour and date upon
which the Company shall release for delivery all of the Securities, in
accordance with the terms hereof, is herein called the "Closing Time." The
Company will pay any stock issue and transfer taxes which may be payable with
respect to the sale of the Securities.
In addition to the reimbursement of the expenses specified in
Section 4 hereof, the Agent will receive the following compensation for its
services hereunder:
(a) A financial advisory fee of $200,000 if the Conversion and
Offering are consummated; and
(b) With respect to any Securities sold by an NASD member firm
(other than Sandler X'Xxxxx) under the Selected Dealers' Agreement in
the Syndicated Community Offering, (i) the compensation payable to
Selected Dealers under any Selected Dealers' Agreement, (ii) any
sponsoring dealer's fees; and (iii) a management fee to Sandler X'Xxxxx
of one and one-half percent (1.5%). Any fees payable to Sandler X'Xxxxx
for Securities sold by Sandler X'Xxxxx under any such agreement shall
be limited to an aggregate of __________________ percent (_____%) of
the Actual Purchase Price of such Securities.
If this Agreement is terminated by the Agent in accordance with
the provisions of Section 9(a) hereof or the Conversion is terminated by the
Company, no fee shall be payable by the Company to Sandler X'Xxxxx; however, the
Company shall reimburse the Agent for all of its reasonable out-of-pocket
expenses incurred prior to termination, including the reasonable fees and
disbursements of counsel for the Agent in accordance with the provisions of
Section 4 hereof.
All fees payable to the Agent hereunder shall be payable in
immediately available funds at Closing Time, or upon the termination of this
Agreement, as the case may be. In recognition of the long lead times involved in
the conversion process, the Bank agrees to make advance payments to the Agent in
the aggregate amount of $25,000, which shall be payable upon execution hereof
and which shall be credited against any fees or reimbursement of expenses
payable hereunder.
SECTION 3. COVENANTS OF THE COMPANY. The Company and the Bank
covenant with the Agent as follows:
(a) The Company and the Bank will prepare and file such amendments
or supplements to the Registration Statement, the Prospectus, the
Conversion Application and
14
the Proxy Statement as may hereafter be required by the Securities Act
Regulations or the Conversion Regulations or as may hereafter be
requested by the Agent. Following completion of the Subscription and
Community Offering, in the event of a Syndicated Community Offering,
the Company and the Bank will (i) promptly prepare and file with the
Commission a post-effective amendment to the Registration Statement
relating to the results of the Subscription and Community Offering, any
additional information with respect to the proposed plan of
distribution and any revised pricing information or (ii) if no such
post-effective amendment is required, will file with, or mail for
filing to, the Commission a prospectus or prospectus supplement
containing information relating to the results of the Subscription and
Community Offering and pricing information pursuant to Rule 424 of the
Securities Act Regulations, in either case in a form acceptable to the
Agent. The Company and the Bank will notify the Agent immediately, and
confirm the notice in writing, (i) of the effectiveness of any
post-effective amendment of the Registration Statement, the filing of
any supplement to the Prospectus and the filing of any amendment to the
Conversion Application, (ii) of the receipt of any comments from the
OTS or the Commission with respect to the transactions contemplated by
this Agreement or the Plan, (iii) of any request by the Commission or
the OTS for any amendment to the Registration Statement or the
Conversion Application or any amendment or supplement to the Prospectus
or for additional information, (iv) of the issuance by the OTS of any
order suspending the Offerings or the use of the Prospectus or the
initiation of any proceedings for that purpose, (v) of the issuance by
the Commission of any stop order suspending the effectiveness of the
Registration Statement or the initiation of any proceedings for that
purpose, and (vi) of the receipt of any notice with respect to the
suspension of any qualification of the Securities for offering or sale
in any jurisdiction. The Company and the Bank will make every
reasonable effort to prevent the issuance of any stop order and, if any
stop order is issued, to obtain the lifting thereof at the earliest
possible moment.
(b) The Company and the Bank will give the Agent notice of its
intention to file or prepare any amendment to the Conversion
Application or Registration Statement (including any post-effective
amendment) or any amendment or supplement to the Prospectus (including
any revised prospectus which the Company proposes for use in connection
with the Syndicated Community Offering of the Securities which differs
from the prospectus on file at the Commission at the time the
Registration Statement becomes effective, whether or not such revised
prospectus is required to be filed pursuant to Rule 424(b) of the
Securities Act Regulations), will furnish the Agent with copies of any
such amendment or supplement a reasonable amount of time prior to such
proposed filing or use, as the case may be, and will not file any such
amendment or supplement or use any such prospectus to which the Agent
or counsel for the Agent may object.
(c) The Company and the Bank will deliver to the Agent as many
signed copies and as many conformed copies of the Conversion
Application and the Registration Statement as originally filed and of
each amendment thereto (including exhibits filed therewith or
15
incorporated by reference therein) as the Agent may reasonably request,
and from time to time such number of copies of the Prospectus as the
Agent may reasonably request.
(d) During the period when the Prospectus is required to be
delivered, the Company and the Bank will comply, at their own expense,
with all requirements imposed upon them by the OTS, by the applicable
Conversion Regulations, as from time to time in force, and by the
Securities Act, the Securities Act Regulations, the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and the rules and
regulations of the Commission promulgated thereunder, including,
without limitation, Regulation M under the Exchange Act, so far as
necessary to permit the continuance of sales or dealing in shares of
Common Stock during such period in accordance with the provisions
hereof and the Prospectus.
(e) If any event or circumstance shall occur as a result of which
it is necessary, in the opinion of counsel for the Agent, to amend or
supplement the Prospectus in order to make the Prospectus not
misleading in the light of the circumstances existing at the time it is
delivered to a purchaser, the Company and the Bank will forthwith amend
or supplement the Prospectus (in form and substance satisfactory to
counsel for the Agent) so that, as so amended or supplemented, the
Prospectus will not include an untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances existing at the time it is
delivered to a purchaser, not misleading, and the Company and the Bank
will furnish to the Agent a reasonable number of copies of such
amendment or supplement. For the purpose of this subsection, the
Company and the Bank will each furnish such information with respect to
itself as the Agent may from time to time reasonably request.
(f) The Company and the Bank will take all necessary action, in
cooperation with the Agent, to qualify the Securities for offering and
sale under the applicable securities laws of such states of the United
States and other jurisdictions as the Conversion Regulations may
require and as the Agent and the Company have agreed; PROVIDED,
HOWEVER, that the Company and the Bank shall not be obligated to file
any general consent to service of process or to qualify as a foreign
corporation in any jurisdiction in which it is not so qualified. In
each jurisdiction in which the Securities have been so qualified, the
Company and the Bank will file such statements and reports as may be
required by the laws of such jurisdiction to continue such
qualification in effect for a period of not less than one year from the
effective date of the Registration Statement.
(g) The Company authorizes Sandler X'Xxxxx and any Selected
Dealers to act as agent of the Company in distributing the Prospectus
to persons entitled to receive subscription rights and other persons to
be offered Securities having record addresses in the states or
jurisdictions set forth in a survey of the securities or "blue sky"
laws of the various jurisdictions in which the Offerings will be made
(the "Blue Sky Survey").
16
(h) The Company will make generally available to its security
holders as soon as practicable, but not later than 60 days after the
close of the period covered thereby, an earnings statement (in form
complying with the provisions of Rule 158 of the 1933 Act Regulations)
covering a twelve month period beginning not later than the first day
of the Company's fiscal quarter next following the "effective date" (as
defined in said Rule 158) of the Registration Statement.
(i) During the period ending on the third anniversary of the
expiration of the fiscal year during which the closing of the
transactions contemplated hereby occurs, the Company will furnish to
its stockholders as soon as practicable after the end of each such
fiscal year an annual report (including consolidated statements of
financial condition and consolidated statements of income,
stockholders' equity and cash flows, certified by independent public
accountants) and, as soon as practicable after the end of each of the
first three quarters of each fiscal year (beginning with the fiscal
quarter ending after the effective date of the Registration Statement),
consolidated summary financial information of the Company and the Bank
for such quarter in reasonable detail. In addition, such annual report
and quarterly consolidated summary financial information shall be made
public through the issuance of appropriate press releases at the same
time or prior to the time of the furnishing thereof to stockholders of
the Company.
(j) During the period ending on the third anniversary of the
expiration of the fiscal year during which the closing of the
transactions contemplated hereby occurs, the Company will furnish to
the Agent (i) as soon as publicly available, a copy of each report or
other document of the Company furnished generally to stockholders of
the Company or furnished to or filed with the Commission under the
Exchange Act or any national securities exchange or system on which any
class of securities of the Company is listed, and (ii) from time to
time, such other information concerning the Company as the Agent may
reasonably request.
(k) The Company and the Bank will conduct the Conversion in all
material respects in accordance with the Plan, the Conversion
Regulations and all other applicable regulations, decisions and orders,
including all applicable terms, requirements and conditions precedent
to the Conversion imposed upon the Company or the Bank by the OTS.
(l) The Company and the Bank will use the net proceeds received by
it from the sale of the Securities in the manner specified in the
Prospectus under "Use of Proceeds."
(m) The Company will file with the Commission such reports on Form
SR as may be required pursuant to Rule 463 of the Securities Act
Regulations, if such report or substantially similar report is required
by the SEC.
(n) The Company will maintain the effectiveness of the Exchange
Act Registration Statement for not less than three years. The Company
will file with the Nasdaq
17
Stock Market all documents and notices required by the Nasdaq Stock
Market of companies that have issued securities and for which
quotations are reported by the Nasdaq National Market.
(o) The Company and the Bank will take such actions and furnish
such information as are reasonably requested by the Agent in order for
the Agent to ensure compliance with the National Association of
Securities Dealers, Inc.'s "Interpretation Relating to Free-Riding and
Withholding."
(p) Other than in connection with any employee benefit plan or
arrangement described in the Prospectus, the Company will not, without
the prior written consent of the Agent, sell or issue, contract to sell
or otherwise dispose of, any shares of Common Stock other than the
Securities for a period of 180 days following the Closing Time.
(q) During the period beginning on the date hereof and ending on
the later of the third anniversary of the Closing Time or the date on
which the Agent receives full payment in satisfaction of any claim for
indemnification or contribution to which it may be entitled pursuant to
Sections 6 or 7, respectively, neither the Company nor the Bank shall,
without the prior written consent of the Agent, take or permit to be
taken any action that could result in the Bank Common Stock becoming
subject to any security interest, mortgage, pledge, lien or
encumbrance; PROVIDED, HOWEVER, that this covenant shall be null and
void if the Board of Governors of the Federal Reserve System, by
regulation, policy statement or interpretive release, or by written
order or written advice addressed to the Bank or the Agent specifically
addressing the provisions of Section 6(a) hereof, permits
indemnification of the Agent by the Bank as contemplated by such
provisions.
(r) The Company and the Bank will comply with the conditions
imposed by or agreed to with the OTS in connection with its approval of
the Holding Company Application and the Conversion Application.
(s) During the period ending on the first anniversary of the
Closing Time, the Bank will comply with all applicable law and
regulation necessary for the Bank to continue to be a "qualified thrift
lender" within the meaning of 12 U.S.C. Section 1467a(m).
(t) The Company shall not deliver the Securities until the Company
and the Bank have satisfied each condition set forth in Section 5
hereof, unless such condition is waived by the Agent.
(u) The Company or the Bank will furnish to Sandler X'Xxxxx as
early as practicable prior to the Closing Date, but no later than two
(2) full business days prior thereto, a copy of the latest available
unaudited interim financial statements of the Bank which have been read
by Radics & Co., LLC, as stated in their letters to be furnished
pursuant to subsections (e) and (f) of Section 5 hereof.
18
SECTION 4. PAYMENT OF EXPENSES. The Company and the Bank
jointly and severally agree to pay all expenses incident to the performance of
their obligations under this Agreement, including but not limited to (i) the
cost of obtaining all securities and bank regulatory approvals, (ii) the
printing and filing of the Registration Statement as originally filed and of
each amendment thereto, (iii) the preparation, issuance and delivery of the
certificates for the Securities to the purchasers in the Offerings, (iv) the
fees and disbursements of the Company's and the Bank's counsel, accountants
appraiser and other advisors, (v) the qualification of the Securities under
securities laws in accordance with the provisions of Section 3(f) hereof,
including filing fees and the fees and disbursements of counsel in connection
therewith and in connection with the preparation of the Blue Sky Survey, (vi)
the printing and delivery to the Agent of copies of the Registration Statement
as originally filed and of each amendment thereto and the printing and delivery
of the Prospectus and any amendments or supplements thereto to the purchasers in
the Offerings and the Agent, (vii) the printing and delivery to the Agent of
copies of a Blue Sky Survey, and (viii) the fees and expenses incurred in
connection with the quotation of the Securities on the Nasdaq National Market.
In the event the Agent incurs any such fees and expenses on behalf of the Bank
or the Company, the Bank will reimburse the Agent for such fees and expenses
whether or not the Conversion is consummated; PROVIDED, HOWEVER, that the Agent
shall not incur any substantial expenses on behalf of the Bank or the Company
pursuant to this Section without the prior approval of the Bank.
The Company and the Bank jointly and severally agree to pay
certain expenses incident to the performance of the Agent's obligations under
this Agreement, regardless of whether the Conversion is consummated, including
(i) the filing fees paid or incurred by the Agent in connection with all filings
with the National Association of Securities Dealers, Inc., and (ii) all
reasonable out of pocket expenses incurred by the Agent relating to the
Offerings, including, without limitation, advertising, promotional, syndication
and travel expenses and fees and expenses of the Agent's counsel. All fees and
expenses to which the Agent is entitled to reimbursement under this paragraph of
this Section 4 shall be due and payable upon receipt by the Company or the Bank
of a written accounting therefor setting forth in reasonable detail the expenses
incurred by the Agent.
SECTION 5. CONDITIONS OF AGENT'S OBLIGATIONS. The Company, the
Bank and the Agent agree that the issuance and the sale of Securities and all
obligations of the Agent hereunder are subject to the accuracy of the
representations and warranties of the Company and the Bank herein contained as
of the date hereof and the Closing Time, to the accuracy of the statements of
officers and directors of the Company and the Bank made pursuant to the
provisions hereof, to the performance by the Company and the Bank of their
obligations hereunder, and to the following further conditions:
(a) No stop order suspending the effectiveness of the
Registration Statement shall have been issued under the Securities Act
or proceedings therefor initiated or threatened by the Commission, no
order suspending the Offerings or authorization for final use of the
Prospectus shall have been issued or proceedings therefor initiated or
threatened by the OTS and no order suspending the sale of the
Securities in any jurisdiction shall have been issued.
19
(b) At Closing Time, the Agent shall have received:
(1) The favorable opinion, dated as of Closing Time,
of Xxxx Xxxxxx Xxxxxxxx & Xxxxxx, P.C., counsel for the
Company and the Bank, in form and substance satisfactory to
counsel for the Agent, to the effect that:
(i) The Company has been duly incorporated
and is validly existing as a corporation in good
standing under the laws of the State of Delaware.
(ii) The Company has full corporate power
and authority to own, lease and operate its properties
and to conduct its business as described in the
Registration Statement and Prospectus and to enter into
and perform its obligations under this Agreement.
(iii) The Company is duly qualified as a
foreign corporation to transact business and is in good
standing in the State of New York and in each other
jurisdiction in which such qualification is required
whether by reason of the ownership or leasing of
property or the conduct of business, except where the
failure to so qualify would not have a material adverse
effect upon the financial condition, results of
operations, business affairs or prospects of the
Company and the Bank, considered as one enterprise.
(iv) Upon consummation of the Conversion, the
authorized, issued and outstanding capital stock of the
Company will be as set forth in the Prospectus under
"Capitalization" and, [except for shares issued upon
incorporation of the Company,] [TO BE DETERMINED] no
shares of Common Stock have been or will be issued and
outstanding prior to the Closing Time.
(v) The Securities have been duly and validly
authorized for issuance and sale and, when issued and
delivered by the Company pursuant to the Plan against
payment of the consideration calculated as set forth in
the Plan, will be duly and validly issued and fully
paid and non-assessable.
(vi) The issuance of the Securities is not
subject to preemptive or other similar rights arising
by operation of law or, to the best of their knowledge
and information, otherwise.
(vii) The Bank has been at all times since
__________ and prior to the Closing Time duly
organized, and is validly existing and in good standing
under the laws of the United States of America as a
federally chartered savings association of mutual form,
and, at Closing Time, has become duly organized,
validly existing and in good standing under the laws of
the United
20
States of America as a federally chartered savings
association of stock form, in both instances with full
corporate power and authority to own, lease and operate
its properties and to conduct its business as described
in the Registration Statement and the Prospectus; and
the Bank is duly qualified as a foreign corporation in
each jurisdiction in which the failure to so qualify
would have a material adverse effect upon the financial
condition, results of operations, business affairs or
prospects of the Bank.
(viii) The Bank is a member in good standing of
the Federal Home Loan Bank of New York and the deposit
accounts of the Bank are insured by the FDIC up to the
applicable limits.
(ix) Upon consummation of the Conversion, all
of the issued and outstanding capital stock of the Bank
when issued and delivered pursuant to the Plan against
payment of consideration calculated as set forth in the
Plan and set forth in the Prospectus, will be duly
authorized and validly issued and fully paid and
nonassessable, and all such capital stock will be owned
beneficially and of record by the Company free and
clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equity.
(x) The OTS has duly approved the Holding
Company Application and the Conversion Application and
no action is pending, or to the best of such counsel's
knowledge after due inquiry, threatened respecting the
Holding Company Application or the Conversion
Application or the acquisition by the Company of all of
the Bank's issued and outstanding capital stock; the
Holding Company Application and the Conversion
Application comply as to form with the applicable
requirements of the OTS, includes all documents
required to be filed as exhibits thereto, and is, to
the best of such counsel's knowledge after due inquiry,
truthful, accurate and complete; and the Company is
duly authorized to become a savings and loan holding
company and is duly authorized to own all of the issued
and outstanding capital stock of the Bank to be issued
pursuant to the Plan.
(xi) The execution and delivery of this
Agreement and the consummation of the transactions
contemplated hereby, (A) have been duly and validly
authorized by all necessary action on the part of each
of the Company and the Bank, and this Agreement
constitutes the legal, valid and binding agreement of
each of the Company and the Bank, enforceable in
accordance with its terms, except as rights to
indemnity and contribution hereunder may be limited
under applicable law (it being understood that such
counsel may avail itself of customary exceptions
concerning the effect of bankruptcy, insolvency or
similar laws and the availability of equitable
remedies); (B) will not result in any violation of the
provisions of the charter
21
or by-laws of the Company or the Bank; and, (C) will
not conflict with or constitute a breach of, or default
under, and no event has occurred which, with notice or
lapse of time or both, would constitute a default
under, or result in the creation or imposition of any
lien, charge or encumbrance, that, individually or in
the aggregate, would have a material adverse effect on
the financial condition, results of operations,
business affairs or prospects of the Company and the
Bank considered as one enterprise, upon any property or
assets of the Company or the Bank pursuant to any
contract, indenture, mortgage, loan agreement, note,
lease or other instrument to which the Company or the
Bank is a party or by which either of them may be
bound, or to which any of the property or assets of the
Company or the Bank is subject.
(xii) The Prospectus has been duly authorized
by the OTS for final use pursuant to the Conversion
Regulations and no action is pending, or to the best of
such counsel's knowledge after due inquiry, is
threatened, by the OTS to revoke such authorization.
(xiii) The Registration Statement is effective
under the Securities Act and no stop order suspending
the effectiveness of the Registration Statement has
been issued under the Securities Act or, to the best of
such counsel's knowledge after due inquiry, proceedings
therefor initiated or threatened by the Commission.
(xiv) No further approval, authorization,
consent or other order of any public board or body is
required in connection with the execution and delivery
of this Agreement, the issuance of the Securities and
the consummation of the Conversion, except as may be
required under the securities or Blue Sky laws of
various jurisdictions as to which no opinion need be
rendered.
(xv) At the time the Registration Statement
became effective, the Registration Statement (other
than the financial statements and statistical data
included therein, as to which no opinion need be
rendered) complied as to form in all material respects
with the requirements of the Securities Act and the
Securities Act Regulations and the Conversion
Regulations.
(xvi) The Common Stock conforms to the
description thereof contained in the Prospectus, and
the form of certificate used to evidence the Common
Stock is in due and proper form and complies with all
applicable statutory requirements.
(xvii) There are no legal or governmental
proceedings pending or threatened against or affecting
the Company or the Bank which are required,
22
individually or in the aggregate, to be disclosed in
the Registration Statement and Prospectus, other than
those disclosed therein, and all pending legal or
governmental proceedings to which the Company or the
Bank is a party or to which any of their property is
subject which are not described in the Registration
Statement, including ordinary routine litigation
incidental to the business, are, considered in the
aggregate, not material.
(xviii) The information in the Prospectus under
[ "Risk Factors - Establishment of the Charitable
Foundation - Tax Consequences," "-Certain Anti-Takeover
Provisions," and "-Possible Adverse Income Tax
Consequences of the Distribution of Subscription
Rights,""Dividend Policy," "Business of the Bank -
Legal Proceedings", "Taxation," "Regulation," "The
Conversion - Establishment of the Charitable
Foundation, "-Effects of Conversion," "-Liquidation
Rights" and "- Tax Aspects," "Restrictions on
Acquisitions of the Holding Company and the Bank" and
"Description of Capital Stock,"] to the extent that it
constitutes matters of law, summaries of legal matters,
documents or proceedings, or legal conclusions, has
been reviewed by them and is complete and accurate in
all material respects.
(xix) To the best of such counsel's knowledge,
there are no contracts, indentures, mortgages, loan
agreements, notes, leases or other instruments required
to be described or referred to in the Registration
Statement or to be filed as exhibits thereto other than
those described or referred to therein or filed as
exhibits thereto, the descriptions thereof or
references thereto are correct, and no default exists,
and no event has occurred which, with notice or lapse
of time or both, would constitute a default, in the due
performance or observance of any material obligation,
agreement, covenant or condition contained in any
contract, indenture, mortgage, loan agreement, note,
lease or other instrument so described, referred to or
filed.
(xx) The Plan has been duly authorized by the
Board of Directors of the Company and the Board of
Directors of the Bank and, the OTS's approval of the
Plan remains in full force and effect; the Bank's
charter, effective upon consummation of the Conversion
and the filing of such charter with the OTS, authorizes
the issuance of permanent capital stock; the Company
and the Bank have conducted the Conversion in all
material respects in accordance with applicable
requirements of the Conversion Regulations, the Plan
and all other applicable regulations, decisions and
orders thereunder, including all material applicable
terms, conditions, requirements and conditions
precedent to the Conversion imposed upon the Company or
the Bank by the OTS and, no order has been issued by
the OTS to suspend the Conversion or the Offerings and
no action for such purpose
23
has been instituted or threatened by the OTS; and, to
the best of such counsel's knowledge after due inquiry,
no person has sought to obtain review of the final
action of the OTS in approving the Conversion
Application or the Holding Company Application.
(xxi) To the best of such counsel's knowledge
after due inquiry, the Company and the Bank have
obtained all licenses, permits and other governmental
authorizations currently required for the conduct of
their respective businesses as described in the
Registration Statement and Prospectus, and all such
licenses, permits and other governmental authorizations
are in full force and effect, and the Company and the
Bank are in all material respects complying therewith.
(xxii) Neither the Company nor the Bank is in
violation of its certificate of incorporation,
organization certificate, articles of incorporation or
charter, as the case may be, or bylaws (and the Bank
will not be in violation of its charter in stock form
upon consummation of the Conversion) or in default (nor
has any event occurred which, with notice or lapse of
time or both, would constitute a default) in the
performance or observance of any obligation, agreement,
covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or
other instrument to which the Company or the Bank is a
party or by which the Company or the Bank or any of
their property may be bound.
(xxiii) The Company is not and, upon completion
of the Conversion and the Offerings and the sale of the
Common Stock and the application of the net proceeds
therefrom, will not be required to be registered as an
investment company under the Investment Company Act of
1940.
(2) The favorable opinion, dated as of Closing Time,
of Xxxxxxx Xxxxxx & Xxxxxxxx LLP, counsel for the Agent, with
respect to the matters set forth in Section 5(b)(1)(i), (iv),
(v), (vi) (solely as to preemptive rights arising by operation
of law), (xi), (xii), (xiii), (xv) and (xvi) and such other
matters as the Agent may reasonably require.
(3) In giving their opinions required by subsections
(b)(l) and (b)(2), respectively, of this Section, Xxxx Xxxxxx
Xxxxxxxx & Xxxxxx, P.C. and Xxxxxxx Xxxxxx & Xxxxxxxx LLP
shall each additionally state that nothing has come to their
attention that would lead them to believe that the
Registration Statement (except for financial statements and
schedules and other financial or statistical data included
therein, as to which counsel need make no statement), at the
time it became effective, contained an untrue statement of a
material fact or omitted to state a material fact required to
be stated therein or necessary to make the statements therein
not
24
misleading or that the Prospectus (except for financial
statements and schedules and other financial or statistical
data included therein, as to which counsel need make no
statement), at the time the Registration Statement became
effective or at Closing Time, included an untrue statement of
a material fact or omitted to state a material fact necessary
in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. In
giving their opinions, Xxxx Xxxxxx Xxxxxxxx & Xxxxxx, P.C. and
Xxxxxxx Xxxxxx & Xxxxxxxx LLP may rely as to matters of fact
on certificates of officers and directors of the Company and
the Bank and certificates of public officials, and as to
certain matters of Delaware law upon the opinion of
______________, which opinions shall be in form and substance
satisfactory to counsel for the Agent, and Xxxxxxx Xxxxxx &
Xxxxxxxx LLP may also rely on the opinion of Xxxx Xxxxxx
Xxxxxxxx & Xxxxxx, P.C.
(c) At Closing Time referred to in Section 2, the Company
and the Bank shall have completed in all material respects the
conditions precedent to the Conversion in accordance with the Plan, the
applicable Conversion Regulations and all other applicable laws,
regulations, decisions and orders, including all terms, conditions,
requirements and provisions precedent to the Conversion imposed upon
the Company or the Bank by the OTS, or any other regulatory authority
other than those which the OTS permits to be completed after the
Conversion.
(d) At Closing Time, there shall not have been, since the
date hereof or since the respective dates as of which information is
given in the Registration Statement and the Prospectus, any material
adverse change in the financial condition, results of operations,
business affairs or prospects of the Company and the Bank considered as
one enterprise, whether or not arising in the ordinary course of
business consistent with past practice, and the Agent shall have
received a certificate of the Chief Executive Officer of the Company
and of the Bank, the President of the Company and the Bank and the
chief financial or chief accounting officer of the Company and of the
Bank, dated as of Closing Time, to the effect that (i) there has been
no such material adverse change, (ii) there shall have been no material
transaction entered into by the Company or the Bank from the latest
date as of which the financial condition of the Company or the Bank as
set forth in the Registration Statement and the Prospectus other than
transactions referred to or contemplated therein and transactions in
the ordinary course of business consistent with past practice, (iii)
neither the Company nor the Bank shall have received from the OTS any
direction (oral or written) to make any material change in the method
of conducting its business with which it has not complied (which
direction, if any, shall have been disclosed to the Agent) or which
materially and adversely would affect the business affairs, financial
condition, results of operations or prospects of the Company or the
Bank, (iv) the representations and warranties in Section 1 hereof are
true and correct with the same force and effect as though expressly
made at and as of the Closing Time, (v) the Company and the Bank have
complied with all agreements and satisfied all conditions on their part
to be performed or satisfied at or prior to Closing Time, (vi) no stop
order suspending the effectiveness of the Registration Statement has
been
25
issued and no proceedings for that purpose have been initiated or
threatened by the Commission and (vii) no order suspending the
OfferingS or the authorization for final use of the Prospectus has been
issued and no proceedings for that purpose have been initiated or
threatened by the OTS or the FDIC and no person has sought to obtain
regulatory or judicial review of the action of the OTS in approving the
Plan in accordance with the Conversion Regulations nor has any person
sought to obtain regulatory or judicial review of the action of the OTS
in approving the Holding Company Application.
(e) At the time of the execution of this Agreement, the
Agent shall have received from Radics & Co., LLC a letter dated such
date, in form and substance satisfactory to the Agent, to the effect
that (i) they are independent public accountants with respect to the
Company and the Bank within the meaning of the Code of Ethics of the
American Institute of Certified Public Accountants, the Securities Act
and the Securities Act Regulations and the Conversion Regulations; (ii)
it is their opinion that the consolidated financial statements and
supporting schedules included in the Registration Statement and covered
by their opinions therein comply as to form in all material respects
with the applicable accounting requirements of the Securities Act and
the Securities Act Regulations; (iii) based upon limited procedures as
agreed upon by the Agent and Xxxxxxx Xxxxxx & Xxxxxxxx LLP set forth in
detail in such letter, nothing has come to their attention which causes
them to believe that (A) the unaudited financial statements and
supporting schedules of the Bank included in the Registration Statement
do not comply as to form in all material respects with the applicable
accounting requirements of the Securities Act, the Securities Act
Regulations and the Conversion Regulations or are not presented in
conformity with generally accepted accounting principles applied on a
basis substantially consistent with that of the audited financial
statements included in the Registration Statement and the Prospectus,
(B) the unaudited amounts of net interest income and net income set
forth under "Selected Financial and Other Data" in the Registration
Statement and Prospectus do not agree with the amounts set forth in
unaudited consolidated financial statements as of and for the dates and
periods presented under such captions or such amounts were not
determined on a basis substantially consistent with that used in
determining the corresponding amounts in the audited financial
statements included in the Registration Statement, (C) at a specified
date not more than five days prior to the date of this Agreement, there
has been any increase in the consolidated long term or short term debt
of the Bank or any decrease in consolidated total assets, the allowance
for loan losses, total deposits or net worth of the Bank, in each case
as compared with the amounts shown in the _____________, 2002 balance
sheet included in the Registration Statement or, (D) during the period
from ______________, 2002 to a specified date not more than five days
prior to the date of this Agreement, there were any decreases, as
compared with the corresponding period in the preceding year, in total
interest income, net interest income, net interest income after
provision for loan losses, income before income tax expense or net
income of the Bank, except in all instances for increases or decreases
which the Registration Statement and the Prospectus disclose have
occurred or may occur; and (iv) in addition to the examination referred
to in their opinions and the limited procedures referred to in clause
(iii) above, they have carried out certain specified
26
procedures, not constituting an audit, with respect to certain amounts,
percentages and financial information which are included in the
Registration Statement and the Prospectus and which are specified by
the Agent, and have found such amounts, percentages and financial
information to be in agreement with the relevant accounting, financial
and other records of the Company and the Bank identified in such
letter.
(f) At Closing Time, the Agent shall have received from
Radics & Co., LLC a letter, dated as of Closing Time, to the effect
that they reaffirm the statements made in the letter furnished pursuant
to subsection (d) of this Section, except that the specified date
referred to shall be a date not more than five days prior to Closing
Time.
(g) At Closing Time, the Securities shall have been
approved for quotation on the Nasdaq National Market upon notice of
issuance.
(h) At Closing Time, the Agent shall have received a letter
from Xxxxxxx, dated as of the Closing Time, confirming its appraisal.
(i) At Closing Time, counsel for the Agent shall have been
furnished with such documents and opinions as they may require for the
purpose of enabling them to pass upon the issuance and sale of the
Securities as herein contemplated and related proceedings, or in order
to evidence the accuracy of any of the representations or warranties,
or the fulfillment of any of the conditions, herein contained; and all
proceedings taken by the Company in connection with the issuance and
sale of the Securities as herein contemplated shall be satisfactory in
form and substance to the Agent and counsel for the Agent.
(j) At any time prior to Closing Time, (i) there shall not
have occurred any material adverse change in the financial markets in
the United States or elsewhere or any outbreak of hostilities or
escalation thereof or other calamity or crisis the effect of which, in
the judgment of the Agent, are so material and adverse as to make it
impracticable to market the Securities or to enforce contracts,
including subscriptions or orders, for the sale of the Securities, and
(ii) trading generally on either the American Stock Exchange, the New
York Stock Exchange or the Nasdaq Stock Market shall not have been
suspended, and minimum or maximum prices for trading shall not have
been fixed, or maximum ranges for prices for securities have been
required, by either of said Exchanges or by order of the Commission or
any other governmental authority, and a banking moratorium shall not
have been declared by either Federal or New York authorities.
SECTION 6. INDEMNIFICATION.
(a) The Company and the Bank, jointly and severally, agree
to indemnify and hold harmless the Agent, each person, if any, who controls the
Agent, within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act, and its respective partners, directors, officers, employees
and agents as follows:
27
(i) from and against any and all loss, liability,
claim, damage and expense whatsoever, as incurred, related to or
arising out of the Conversion or any action taken by the Agent where
acting as agent of the Company or the Bank or otherwise as described in
Section 2 hereof; PROVIDED, HOWEVER, that this indemnity agreement
shall not apply to any loss, liability, claim, damage or expense found
in a final judgment by a court of competent jurisdiction to have
resulted primarily from the bad faith, willful misconduct or gross
negligence of the Agent seeking indemnification hereunder.
(ii) from and against any and all loss, liability,
claim, damage and expense whatsoever, as incurred, based upon or
arising out of any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement (or any amendment
thereto), or the omission or alleged omission therefrom of a material
fact required to be stated therein or necessary to make the statements
therein not misleading or arising out of any untrue statement or
alleged untrue statement of a material fact contained in the Proxy
Statement or Prospectus (or any amendment or supplement thereto) or the
omission or alleged omission therefrom of a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading;
(iii) from and against any and all loss, liability,
claim, damage and expense whatsoever, as incurred, to the extent of the
aggregate amount paid in settlement of any litigation, or any
investigation or proceeding by any governmental agency or body,
commenced or threatened, or of any claim whatsoever described in
clauses (i) or (ii) above, if such settlement is effected with the
written consent of the Company or the Bank, which consent shall not be
unreasonably withheld; and
(iv) from and against any and all expense whatsoever,
as incurred (including, subject to Section 6(c) hereof, the fees and
disbursements of counsel chosen by the Agent), reasonably incurred in
investigating, preparing for or defending against any litigation, or
any investigation, proceeding or inquiry by any governmental agency or
body, commenced or threatened, or any claim pending or threatened
whatsoever described in clauses (i) or (ii) above, to the extent that
any such expense is not paid under (i), (ii) or (iii) above;
PROVIDED, HOWEVER, that the indemnification provided for in this paragraph (a)
shall not apply to any loss, liability, claim, damage or expense to the extent
arising out of any untrue statement or alleged untrue statement of a material
fact contained in the Prospectus (or any amendment or supplement thereto) or the
omission or alleged omission therefrom of a material fact necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading which was made in reliance upon and in conformity with
the Agent Information. Notwithstanding the foregoing, the indemnification
provided for in this paragraph (a) shall not apply to the Bank to the extent
that such indemnification by the Bank would constitute a covered transaction
under Section 23A of the Federal Reserve Act.
28
(b) The Agent agrees to indemnify and hold harmless the
Company, the Bank and their directors, each of their officers who signed the
Registration Statement, and each person, if any, who controls the Company within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act against any and all loss, liability, claim, damage and expense described in
the indemnity contained in subsection (a) of this Section, as incurred, but only
with respect to untrue statements or omissions, or alleged untrue statements or
omissions, of a material fact made in the Prospectus (or any amendment or
supplement thereto) in reliance upon and in conformity with the Agent
Information.
(c) Each indemnified party shall give notice as promptly as
reasonably practicable to each indemnifying party of any action commenced
against it in respect of which indemnity may be sought hereunder, but failure to
so notify an indemnifying party shall not relieve such indemnifying party from
any liability which it may have otherwise than on account of this indemnity
agreement. An indemnifying party may participate at its own expense in the
defense of any such action. In no event shall the indemnifying parties be liable
for fees and expenses of more than one counsel (in addition to no more than one
local counsel in each separate jurisdiction in which any action or proceeding is
commenced) separate from their own counsel for all indemnified parties in
connection with any one action or separate but similar or related actions in the
same jurisdiction arising out of the same general allegations or circumstances.
(d) The Company and the Bank also agree that the Agent
shall not have any liability (whether direct or indirect, in contract or tort or
otherwise) to the Bank, the Company, its security holders or the Bank's or the
Company's creditors relating to or arising out of the engagement of the Agent
pursuant to, or the performance by the Agent of the services contemplated by,
this Agreement, except to the extent that any loss, claim, damage or liability
is found in a final judgment by a court of competent jurisdiction to have
resulted primarily from the Agent's bad faith, willful misconduct or gross
negligence.
(e) In addition to, and without limiting, the provisions of
Section (6)(a)(iv) hereof, in the event that any Agent, any person, if any, who
controls the Agent within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act or any of its partners, directors, officers,
employees or agents is requested or required to appear as a witness or otherwise
gives testimony in any action, proceeding, investigation or inquiry brought by
or on behalf of or against the Company, the Bank, the Agent or any of its
respective affiliates or any participant in the transactions contemplated hereby
in which the Agent or such person or agent is not named as a defendant, the
Company and the Bank jointly and severally agree to reimburse the Agent for all
reasonable and necessary out-of-pocket expenses incurred by it in connection
with preparing or appearing as a witness or otherwise giving testimony and to
compensate the Agent in an amount to be mutually agreed upon.
SECTION 7. CONTRIBUTION. In order to provide for just and
equitable contribution in circumstances in which the indemnity agreement
provided for in Section 6 hereof is for any reason held to be unenforceable by
the indemnified parties although applicable in accordance
29
with its terms, the Company, the Bank and the Agent shall contribute to the
aggregate losses, liabilities, claims, damages and expenses of the nature
contemplated by said indemnity agreement incurred by the Company or the Bank and
the Agent, as incurred, in such proportions (i) that the Agent is responsible
for that portion represented by the percentage that the maximum aggregate
marketing fees appearing on the cover page of the Prospectus bears to the
maximum aggregate gross proceeds appearing thereon and the Company and the Bank
are jointly and severally responsible for the balance or (ii) if, but only if,
the allocation provided for in clause (i) is for any reason held unenforceable,
in such proportion as is appropriate to reflect not only the relative benefits
to the Company and the Bank on the one hand and the Agent on the other, as
reflected in clause (i), but also the relative fault of the Company and the Bank
on the one hand and the Agent on the other, as well as any other relevant
equitable considerations; PROVIDED, HOWEVER, that no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section, each person, if any,
who controls the Agent within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act shall have the same rights to contribution as the
Agent, and each director of the Company, each trustee of the Bank, each officer
of the Company who signed the Registration Statement, and each person, if any,
who controls the Company or the Bank within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act shall have the same rights to
contribution as the Company and the Bank. Notwithstanding anything to the
contrary set forth herein, to the extent permitted by applicable law, in no
event shall the Agent be required to contribute an aggregate amount in excess of
the aggregate marketing fees to which the Agent is entitled and actually paid
pursuant to this Agreement.
SECTION 8. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO
SURVIVE DELIVERY. All representations, warranties and agreements contained in
this Agreement, or contained in certificates of officers of the Company or the
Bank submitted pursuant hereto, shall remain operative and in full force and
effect, regardless of any investigation made by or on behalf of any Agent or
controlling person, or by or on behalf of the Company, and shall survive
delivery of the Securities.
SECTION 9. TERMINATION OF AGREEMENT.
(a) The Agent may terminate this Agreement, by notice to
the Company, at any time at or prior to Closing Time (i) if there has been,
since the date of this Agreement or since the respective dates as of which
information is given in the Registration Statement, any material adverse change
in the financial condition, results of operations, business affairs or prospects
of the Company or the Bank, or the Company and the Bank considered as one
enterprise, whether or not arising in the ordinary course of business, or (ii)
if there has occurred any material adverse change in the financial markets in
the United States or elsewhere or any outbreak of hostilities or escalation
thereof or other calamity or crisis the effect of which, in the judgment of the
Agent, are so material and adverse as to make it impracticable to market the
Securities or to enforce contracts, including subscriptions or orders, for the
sale of the Securities, (iii) if trading generally on the Nasdaq Stock Market,
the American Stock Exchange or the New York Stock Exchange has been suspended,
or
30
minimum or maximum prices for trading have been fixed, or maximum ranges for
prices for securities have been required, by either of said Exchanges or by
order of the Commission or any other governmental authority, or if a banking
moratorium has been declared by either Federal or New York authorities, (iv) if
any condition specified in Section 5 shall not have been fulfilled when and as
required to be fulfilled; (v) if there shall have been such material adverse
change in the condition or prospects of the Company or the Bank or the
prospective market for the Company's securities as in the Agent's good faith
opinion would make it inadvisable to proceed with the offering, sale or delivery
of the Securities; (vi) if, in the Agent's good faith opinion, the price for the
Securities established by Xxxxxxx is not reasonable or equitable under then
prevailing market conditions, or (vii) if the Conversion is not consummated on
or prior to ____________________.
(b) If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party except as provided in Sections 2 and 4 hereof relating to the
reimbursement of expenses and except that the provisions of Sections 6 and 7
hereof shall survive any termination of this Agreement.
SECTION 10. NOTICES. All notices and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
mailed or transmitted by any standard form of telecommunication. Notices to the
Agent shall be directed to the Agent at 000 Xxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx,
Xxx Xxxx 00000, attention of Xxxxxxxxx X. Xxxxxx, General Counsel, facsimile
number (000) 000-0000; notices to the Company and the Bank shall be directed to
either of them at 000 Xxxxxxxx Xxxxxx, Xxxxxxxx, Xxx Xxxx 00000, attention of
Xxxxx X. Xxxxxxx, President.
SECTION 11. PARTIES. This Agreement shall inure to the benefit
of and be binding upon the Agent, the Company and the Bank and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Agent, the Company and the Bank and their respective successors and the
controlling persons and partners, and officers and directors referred to in
Sections 6 and 7 and their heirs and legal representatives, any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision herein or therein contained. This Agreement and all conditions and
provisions hereof and thereof are intended to be for the sole and exclusive
benefit of the Agent, the Company and the Bank and their respective successors,
and said controlling persons and partners and officers and directors and their
heirs and legal representatives, and for the benefit of no other person, firm or
corporation.
SECTION 12. ENTIRE AGREEMENT; AMENDMENT. This Agreement
represents the entire understanding of the parties hereto with reference to the
transactions contemplated hereby and supersedes any and all other oral or
written agreements heretofore made, except for the engagement letter dated April
9, 2002, by and between the Agent and the Company and the Bank, relating to the
Agent's providing conversion agent services to the Company and the Bank in
connection with the Conversion. No waiver, amendment or other modification of
this Agreement shall be effective unless in writing and signed by the parties
hereto.
31
SECTION 13. GOVERNING LAW AND TIME. This Agreement shall be
governed by and construed in accordance with the laws of the State of New York
applicable to agreements made and to be performed in said State without regard
to the conflicts of laws provisions thereof. Unless otherwise noted, specified
times of day refer to Eastern time.
SECTION 14. SEVERABILITY. Any term or provision of this
Agreement which is invalid or unenforceable in any jurisdiction shall, as to
that jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining terms
and provisions of this Agreement or affecting the validity or enforceability of
any of the terms or provisions of this Agreement in any other jurisdiction. If
any provision of this Agreement is so broad as to be unenforceable, the
provision shall be interpreted to be only so broad as is enforceable.
SECTION 15. HEADINGS. Sections headings are not to be
considered part of this Agreement, are for convenience and reference only, and
are not to be deemed to be full or accurate descriptions of the contents of any
paragraph or subparagraph.
32
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to the Company a counterpart hereof,
whereupon this instrument, along with all counterparts, will become a binding
agreement between the Agent, the Company and the Bank in accordance with its
terms.
Very truly yours,
Atlantic Liberty Financial Corp.
----------------------------------------
By: Xxxxx X. Xxxxxxx
Title: President
Atlantic Liberty Savings, F.A.
----------------------------------------
By: Xxxxx X. Xxxxxxx
Title: President
CONFIRMED AND ACCEPTED,
as of the date first above written:
SANDLER X'XXXXX & PARTNERS, L.P.
By: Sandler X'Xxxxx & Partners Corp.,
the sole general partner
By:
-----------------------------------------------------
[Name]
Vice President
ATLANTIC LIBERTY FINANCIAL CORP.
1,487,813 Shares
(Maximum Offered to be Sold and Issued in Conversion, subject
to increase up to 1,710,984 shares
under certain circumstances)
Common Stock
(Par Value $0.10 Per Share)
SELECTED DEALER'S AGREEMENT
______________, 2002
Ladies and Gentlemen:
We have agreed to assist Atlantic Liberty Financial Corp. (the "Company")
in connection with the offer for sale and issuance of shares (the "Securities")
of common stock, par value $0.10 per share, of the Company, to be issued in
connection with the conversion and reorganization of Atlantic Liberty Savings,
F.A., a federally chartered mutual savings association (the "Bank").
The Securities are being offered for sale in accordance with the plan of
conversion adopted by the Board of Directors of the Bank pursuant to which the
Bank intends to convert from a federally chartered mutual savings association to
a federally chartered stock savings association and issue all of its stock to
the Company. In connection with its plan to effect such conversion, the Company
is offering to the Bank's tax qualified employee benefit plans, including the
Employee Stock Ownership Plan and to certain of the Bank's depositors and
borrowers rights to subscribe for the Securities in a subscription offering and
to certain members of the general public, with preference given to certain
natural persons residing in Brooklyn, New York, in a concurrent direct community
offering. The Securities which were not subscribed for pursuant to such
subscription and direct community offerings are being offered to the public in a
syndicated community offering (the "Syndicated Community Offering") in
accordance with the rules of the Office of Thrift Supervision ("OTS"). The
Securities, the bases on which the number of Securities to be issued may change,
and certain of the terms on which they are being offered are more fully
described in the enclosed Prospectus (the "Prospectus").
We are offering to Selected Dealers (of which you are one) the opportunity
to participate in the solicitation of offers to buy the Securities in the
Syndicated Community Offering, and we will pay you a fee in the amount of
_____________ percent (______%) of the dollar amount of the Securities sold on
behalf of the Company by you. The number of Securities sold by you shall be
determined based on the authorized designation of your firm on the order form or
forms for such Securities accompanying the funds transmitted for payment
therefor (whether in the form of
1
a check payable to the Bank or a withdrawal from an existing account at the
Bank) to the special account established by the Company for the purpose of
holding such funds. It is understood, of course, that payment of your fee will
be made only out of compensation received by us for the Securities sold on
behalf of the Company by you, as evidenced in accordance with the preceding
sentence. The Bank has requested us to invite you to become a "Sponsoring
Dealer," that is, a Selected Dealer who solicits offers which result in the sale
on behalf of the Bank of at least ____ shares. You may become a Sponsoring
Dealer (subject to your fulfillment of the requirement in the preceding
sentence) by checking the box on the confirmation at the end of this letter. If
you become a Sponsoring Dealer, you shall be entitled to an additional fee in
the amount of _____ percent (_____%) of the dollar amount of the Securities sold
on behalf of the Company by you as evidenced in the manner set forth above.
Each order form for the purchase of Securities must set forth the identity,
address and tax identification number of each person ordering Securities
regardless of whether the Securities will be registered in street name or in the
purchaser's name. Such order form should clearly identify your firm.
As soon as practicable after all of the Securities are sold, we will remit
to you, out of our compensation as provided above, the fees to which you are
entitled hereunder, including your Sponsoring Dealer fee.
This offer is made subject to the terms and conditions herein set forth and
is made only to Selected Dealers which are (i) members in good standing of the
National Association of Securities Dealers, Inc. ("NASD") which agree to comply
with all applicable rules of the NASD, including, without limitation, the NASD's
Interpretation with Respect to Free-Riding and Withholding and 2740 of the
NASD's Conduct Rules, or (ii) foreign dealers not eligible for membership in the
NASD which agree (A) not to sell any Shares within the United States, its
territories or possessions or to persons who are citizens thereof or resident
therein and (B) in making other sales to comply with the above-mentioned NASD
Interpretation, Rules 2730, 2740 and 2750 of the above-mentioned Conduct Rules
as if they were NASD members and Rule 2420 as it applies to non-member brokers
or dealers in a foreign country.
Orders for Securities will be strictly subject to confirmation and we,
acting on behalf of the Company, reserve the right in our absolute discretion to
reject any order in whole or in part, to accept or reject orders in the order of
their receipt or otherwise, and to allot. Neither you nor any other person is
authorized by the Company, the Bank or by us to give any information or make any
representations other than those contained in the Prospectus in connection with
the offering and sale of any of the Securities. No Selected Dealer is authorized
to act as agent for us when soliciting offers to buy the Securities from the
public or otherwise. No Selected Dealer shall engage in any stabilizing (as
defined in Regulation M promulgated under the Securities Exchange Act of 1934,
as amended (the "Exchange Act")) with respect to the Company's common stock
during the offering.
2
We and each Selected Dealer assisting in selling Securities pursuant hereto
agree to comply with the applicable requirements of the Exchange Act, and
applicable rules and regulations issued by the OTS. In addition, we and each
Selected Dealer confirm that the Securities and Exchange Commission (the "SEC")
interprets Rule 15c2-8 promulgated under the Exchange Act as requiring that a
prospectus be supplied to each person who is expected to receive a confirmation
of sale at least 48 hours prior to delivery of such person's order form.
We and each Selected Dealer further agree to the extent that our customers
desire to pay for Securities with funds held by or to be deposited with us, in
accordance with the interpretation of the SEC Rule 15c2-4 promulgated under the
Exchange Act either (a) upon receipt of an executed order form or direction to
execute an order form on behalf of a customer to forward the Syndicated
Community Offering price for the Securities ordered on or before 12:00 p.m. on
the business day following receipt or execution of an order form by us to the
Bank for deposit in a segregated account as agent or trustee for the customer or
(b) to solicit indications of interest in which event (i) we will subsequently
contact any customers indicating interest to confirm the interest and give
instructions to execute and return an order form or to receive authorization to
execute an order form on their behalf, (ii) we will mail acknowledgments or
receipt of orders to each customer confirming interest on the business day
following such confirmation, (iii) we will debit accounts of such customers on
the third business day (the "debit date") following receipt of the confirmation
referred to in (i) and (iv) we will forward completed order forms together with
such funds to the Bank on or before 12:00 p.m. on the next business day
following the debit date for deposit in a segregated account. We acknowledge
that if the procedure in (b) is adopted, our customer's funds are not required
to be in their accounts until the debit date. We and each Selected Dealer
further acknowledge that, in order to use the foregoing "sweep arrangements," we
comply with the net capital requirements for broker/dealers under Rule
15c3-1(a)(1) of the Exchange Act.
Unless earlier terminated by us, this agreement shall terminate 45 full
business days after the date hereof, but may be extended by us for an additional
period or periods not exceeding 30 full business days in the aggregate. We may
terminate this agreement or any provisions hereof at any time by written or
telegraphic notice to you. Of course, our obligations hereunder are subject to
the successful completion of the offering, including the sale of all of the
Securities.
You agree that at any time or times prior to the termination of this
agreement you will, upon our request, report to us the number of Securities sold
on behalf of the Company by you under this agreement.
We shall have full authority to take such actions as we may deem advisable
in respect to all matters pertaining to the offering. We shall be under no
liability to you except for lack of good faith and for obligations expressly
assumed by us in this agreement.
Upon application to us, we will inform you as to the states in which we
believe the Securities have been qualified for sale under, or are exempt from
the requirements of, the
3
respective blue sky laws of such states, but we assume no responsibility or
obligation as to your rights to sell the Securities in any state.
Additional copies of the Prospectus and any supplements thereto will be
supplied in reasonable quantities upon request.
Any notice from us to you shall be deemed to have been duly given if
mailed, telephoned or telegraphed to you at the address to which this agreement
is mailed.
This agreement shall be construed in accordance with the laws of New York.
Please confirm your agreement hereto by signing and returning the
confirmation accompanying this letter at once to us at Sandler X'Xxxxx &
Partners, L.P., 000 Xxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000. The
enclosed duplicate copy will evidence the agreement between us.
Very truly yours,
SANDLER X'XXXXX & PARTNERS, L.P.
By: ____________________________
Selected Dealer's Agreement.wpd
4
Sandler X'Xxxxx & Partners, L.P.
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: ATLANTIC LIBERTY FINANCIAL CORP.
Ladies and Gentlemen:
We hereby confirm our agreement to all the terms and conditions stated in the
foregoing letter. We acknowledge receipt of the Prospectus relating to the
Securities and we further state that in agreeing thereto we have relied upon the
Prospectus and no other statement whatsoever, written or oral. We confirm that
we are (i) a member on good standing of the National Association of Securities
Dealers, Inc. ("NASD"), and agree to comply with all applicable rules of the
NASD, including, without limitation, the NASD's Interpretation With Respect to
Free-Riding and Withholding and Rule 2740 of the NASD's Conduct Rules, or (ii) a
foreign dealer not eligible for membership in the NASD and agree (A) not to sell
any Shares of Atlantic Liberty Financial Corp. within the United States, its
territories or possessions or to persons who are citizens thereof or resident
therein and (B) in making other sales to comply with the above-mentioned NASD
Interpretation, Rules 2730, 2740 and 2750 of the above-mentioned Conduct Rules
as if we were an NASD member and Rule 2420 as it applies to a non-member broker
or dealer in a foreign country.
[__] We wish to become a "Sponsoring Dealer."
Dated: ______________________
______________________________________
(Please print or type name of firm)
By:
-----------------------------------
Selected Dealer's Agreement.wpd
