Exhibit 1.2
27,600,000 Shares
(subject to increase up to 31,740,000 Shares
in the event of an oversubscription)
First Source Bancorp, Inc.
(a Delaware corporation)
Common Stock
(par value $0.01 per share)
AGENCY AGREEMENT
February __, 0000
XXXXXXX X'XXXXX & PARTNERS, L.P.
Two World Trade Center, 000xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
First Source Bancorp, Inc., a Delaware corporation (the "Company"), First
Savings Bancshares, MHC, a mutual holding company organized under the laws of
the United States of America (the "MHC") and First Savings Bank, SLA, a New
Jersey-chartered stock savings and loan 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 14,242,072 shares
(subject to increase up to 16,378,421 shares in the event of an
oversubscription) of the Company's common stock, par value $0.01 per share (the
"Common Stock"). The shares of Common Stock to be sold by the Company are
hereinafter called the "Securities."
The Securities are being offered for sale in accordance with the plan of
conversion and agreement and plan of reorganization (the "Plan") adopted by the
Boards of Directors of the MHC and the Bank pursuant to which: (i) the MHC will
convert into an interim federal savings bank ("Interim A") and will
simultaneously merge with and into the Bank, and the common stock of the Bank
currently held by the MHC will be canceled; (ii) First Interim Bank of New
Jersey, a stock savings bank to be organized under federal law as a wholly-owned
subsidiary of the Company ("Interim B") will merge with and into the Bank; (iii)
shares of common stock of Interim B held by the Company will be converted into
shares of common stock of the Bank on a one-for-one basis; (iv) the Company will
offer shares of its common stock in a Subscription
-2-
and Community Offering, as described herein; (v) each share of common stock of
the Bank held by the Bank's public stockholders will be converted into shares of
Common Stock (such shares hereinafter being referred to as the "Exchange
Shares") pursuant to an exchange ratio that will result in the holders of such
shares owning in the aggregate the same percentage of the Company as they owned
of the Bank, before giving effect to (a) the payment of cash in lieu of
fractional shares or (b) purchases of Common Stock by such persons in the
Subscription and Community Offering.
Pursuant to the Plan, the Company is offering to certain of the Bank's
depositors and borrowers and to the Bank's tax-qualified employee benefit plans,
including the Bank's employee stock ownership plan (the "ESOP") (collectively,
the "Employee Plans"), 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 a first preference given to the
Bank's public stockholders and a second preference given to natural persons
residing in the Bank's Local Community (as defined in the Plan) 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 the
Subscription Offering. It is currently anticipated by the Bank, the MHC 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." The conversion of the MHC to Interim A, the
merger of Interim A with and into the Bank, the merger of Interim B with and
into the Bank, the exchange of the Bank's public stockholder's shares for shares
of Common Stock and the Offerings are hereinafter referred to collectively as
the "Conversion and Reorganization." It is acknowledged that the number of
Securities to be sold in the Offerings may be increased or decreased as
described in the Prospectus (as hereinafter defined). If the number of
Securities is increased or decreased in accordance with the Plan, the term
"Securities" shall mean such greater or lesser number, where applicable.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-1 (No. 333-42757) including a
related prospectus for the registration of the Securities and the Exchange
Shares 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
prospectus constituting a part thereof (including in each case all documents
incorporated or deemed to be incorporated by reference therein, if any, and the
information, if any, deemed to be 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 that shall be used by the Company in connection with the Subscription
and
-3-
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 MHC, the Company and the Common Stock.
SECTION 1. REPRESENTATIONS AND WARRANTIES.
(a) The Company, the MHC 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, the MHC 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, the MHC and the Bank acknowledge appears
only in the sections captioned "Market for the Common Stock," and "The
Conversion and Reorganization - Marketing and Underwriting Arrangements"
and "- Syndicated Community Offering" of the Prospectus).
(ii) The Company has filed with the Office of Thrift
Supervision, Department of the Treasury (the "OTS") the Company's
application for approval of its acquisition of the Bank (the "Holding
Company Application") on Form H-(e)1 promulgated under the savings and loan
holding company provisions of the Home Owners' Loan Act, as amended (the
"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, the MHC or the Bank, threatened by the OTS. At
-4-
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 holding companies to
stock form (the "Conversion Regulations"), the MHC 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
time to time amended or supplemented hereafter, is hereinafter referred to
as the "Conversion Application"), including copies of (A) the MHC's Proxy
Statement, to be dated on or about _______, 1998, relating to the
Conversion and Reorganization (the "Members' Proxy Statement"), (B) the
Bank's Proxy Statement, to be dated on or about _______, 1998, relating to
the Conversion and Reorganization (the "Stockholders' Proxy Statement"),
and (C) the Prospectus. The Conversion Application includes applications to
form and merge Interim A and Interim B. The OTS has, by letter dated
______, 1998, approved the Conversion Application (including the formation
and merger of Interim A and Interim B), 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, the MHC 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) The Bank has filed with the New Jersey Department of
Banking the Bank's application for approval of the merger of Interim A with
and into the Bank and of the merger of Interim B with and into the Bank
(the "New Jersey Application"). The Bank has received written notice from
the New Jersey Department of Banking of its approval of the New Jersey
Application, such approval remains in full force and effect and no order
has been issued by the New Jersey Department of Banking suspending or
revoking such approval and no proceedings therefor have been initiated or,
to the knowledge of the Company, the MHC or the Bank, threatened by the New
Jersey Department of Banking. At the date of such approval and at the
Closing Time referred to in Section 2, the New Jersey Application complied
and will comply in all material respects with the applicable provisions of
New Jersey law and the regulations promulgated thereunder.
(v) At the time of their use, the Members' Proxy Statement,
the Stockholders' Proxy Statement and any other proxy solicitation
materials will comply in all material respects with the applicable
provisions of the Conversion Regulations and New Jersey law 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 Bank, the MHC
and the Company will promptly file the Prospectus and any supplemental
sales literature with the OTS and the Commission. 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
-5-
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.
(vi) Neither the Commission 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, the MHC or the
Bank for use in connection with the Offerings.
(vii) At the Closing time referred to in Section 2, the
Company, the MHC and the Bank will have completed the conditions precedent
to the Conversion and Reorganization 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 and
Reorganization imposed upon the Company, the MHC or the Bank by the
Commission, the OTS, the New Jersey Department of Banking, 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 and Reorganization.
(viii) Finpro, Inc., which prepared the valuation of the
Company and the Bank as part of the Conversion and Reorganization, has
advised the Company, the MHC 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 with respect thereto.
(ix) KPMG Peat Marwick LLP, the accountants who certified the
consolidated financial statements of the Bank included in the Registration
Statement, have advised the Company, the MHC 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; and such
accountants are, with respect to the Company, the MHC, the Bank and each
subsidiary of the Bank, independent certified public accountants as
required by the Securities Act and the Securities Act Regulations.
(x) The only direct subsidiary of the MHC is the Bank. The
only subsidiaries of the Bank are FSB Financial Corp. and 0000 Xxxxxxxxxx
Xxxxxx Drive, Inc. (the "Subsidiaries").
(xi) The consolidated financial statements and the related
notes thereto included in the Registration Statement and the Prospectus
present fairly the financial position of the MHC, the Bank and the
Subsidiaries as of the dates indicated and the results of operations,
stockholders' equity 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 generally
accepted accounting principles applied on a consistent basis; and the
supporting schedules and tables included in the Registration Statement
present fairly the information required to be stated therein.
-6-
(xii) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as otherwise
stated therein (A) there has been no material adverse change in the
financial condition, results of operations, or business affairs of the
Company, the MHC, the Bank and the Subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, and
(B) except for transactions specifically referred to or contemplated in the
Prospectus, there have been no transactions entered into by the Company,
the MHC, the Bank or the Subsidiaries, other than those in the ordinary
course of business which are material with respect to the Company, the MHC,
the Bank and the Subsidiaries considered as one enterprise.
(xiii) 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; the Company
is duly qualified as a foreign corporation to transact business and is in
good standing in the State of New Jersey and in each jurisdiction in which
such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the failure to
so qualify would not have a material adverse effect on the financial
condition, results of operations or business affairs of the Company, the
MHC, the Bank and the Subsidiaries considered as one enterprise.
(xiv) Upon consummation of the Conversion and Reorganization
as described in the Prospectus, 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 specified in the
Prospectus); no shares of Common Stock have been or will be issued and
outstanding prior to the Closing Time referred to in Section 2; the
Securities 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
nonassessable; the Exchange Shares have been duly authorized for issuance
and, when issued, will be duly and validly issued and fully paid and
nonassessable; 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 Delaware law; and the issuance of the
Securities and the Exchange Shares is not subject to preemptive or other
similar rights.
(xv) The MHC has been duly chartered and is validly existing
as a mutual holding company under the laws of the United States of America
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; the MHC is in good
standing under the laws of the State of New Jersey and is qualified to do
business in each jurisdiction in which the failure to so qualify would have
a material adverse effect on the financial condition, results of operations
or business
-7-
affairs of the Company, the MHC, the Bank and the Subsidiaries considered
as one enterprise; upon consummation of the Conversion and Reorganization,
the MHC will convert into Interim A, which will merge with and into the
Bank, with the Bank being the surviving institution.
(xvi) The Bank is a New Jersey-chartered savings and loan
association in stock form; the Bank has and after the consummation of the
Conversion and Reorganization will have, full corporate power and authority
to own, lease and operate its properties and to conduct its business as
described in the Prospectus; and the Bank is in good standing under the
laws of New Jersey and is qualified to do business in each jurisdiction in
which such qualification is required, except where the failure to so
qualify would not have a material adverse effect on the financial
condition, results of operations or business affairs of the Company, the
MHC, the Bank and the Subsidiaries considered as one enterprise.
(xvii) The deposit accounts of the Bank are insured by the
Federal Deposit Insurance Corporation ("FDIC") up to the applicable limits
and, upon consummation of the Conversion and Reorganization, the
liquidation account for the benefit of eligible account holders and
supplemental eligible account holders will be duly established in
accordance with the requirements of the Conversion Regulations. The Bank is
a "qualified thrift lender" within the meaning of 12 U.S.C. Section
1467a(m).
(xviii) The authorized capital stock of the Bank consists of
10,000,000 shares of common stock, par value $0.01 per share (the "Bank
Common Stock") and 1,000,000 shares of preferred stock, (the "Bank
Preferred Stock"), of which [8,016,351] shares of Bank Common Stock and no
shares of Bank Preferred Stock are issued and outstanding as of the date
hereof; no additional shares of Bank Common Stock (except for shares issued
pursuant to employee benefit plans referred to in the Prospectus) and no
shares of Bank Preferred Stock will be issued prior to the Closing Time
referred to in Section 2; the issued and outstanding shares of Bank Common
Stock have been duly authorized and validly issued and are fully paid and
nonassessable and have been issued in compliance with all federal and state
securities laws; the MHC owns [4,134,812] shares of Bank Common Stock
beneficially and of record free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity; the terms and
provisions of the Bank Common Stock conform to all statements relating
thereto contained in the Prospectus; at the time of the consummation of the
Conversion and Reorganization, immediately following the merger of Interim
A with and into the Bank, the Bank shall merge with Interim B, with the
Bank being the surviving institution, and the shares of common stock of
Interim B held by the Company shall be converted into shares of Bank Common
Stock on a one-for-one basis, 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, claim or equity; 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 conform
with the requirements of applicable laws and regulations.
-8-
(xix) The Subsidiaries have been duly incorporated and are
validly existing as corporations in good standing under the laws of the
jurisdiction of their incorporation, have full corporate power and
authority to own, lease and operate their properties and to conduct their
business as described in the Registration Statement and Prospectus, and are
duly qualified to transact business and are in good standing in each
jurisdiction in which such qualification is required, whether by reason of
the ownership or leasing of property or the conduct of business, except
where the failure to so qualify would not have a material adverse effect on
the financial condition, results of operations or business affairs of the
Company, the MHC, the Bank and the Subsidiaries considered as one
enterprise; the activities of the Subsidiaries are permitted to
subsidiaries of a New Jersey-chartered savings and loan association by
federal and New Jersey law and the rules, regulations, resolutions and
practices of the OTS and the New Jersey Department of Banking; all of the
issued and outstanding capital stock of the Subsidiaries has been duly
authorized and validly issued, is fully paid and nonassessable and is owned
by the Bank, free and clear of any security interest, mortgage, pledge,
lien, encumbrance, claim or equitable claim.
(xx) The Company, the MHC, the Bank and the Subsidiaries have
obtained all licenses, permits and other governmental authorizations
currently required for the conduct of their respective businesses or
required for the conduct of their respective businesses as contemplated by
the Holding Company Application and the Conversion Application, except
where the failure to obtain such licenses, permits or other governmental
authorizations would not have a material adverse effect on the financial
condition, results of operations or business affairs of the Company, the
MHC, the Bank and the Subsidiaries considered as one enterprise; all such
licenses, permits and other governmental authorizations are in full force
and effect and the Company, the MHC, the Bank and the Subsidiaries are in
all material respects in compliance therewith; neither the Company, the
MHC, the Bank nor the Subsidiaries has received notice of any proceeding or
action relating to the revocation or modification of any such license,
permit or other governmental authorization which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or finding,
might have a material adverse effect on the financial condition, results of
operations or business affairs of the Company, the MHC, the Bank and the
Subsidiaries considered as one enterprise.
(xxi) From the date of their incorporation until the Closing
Time, neither Interim A nor Interim B will be in violation of its charter
or bylaws, nor will either Interim A or Interim B engage in any business
other than in connection with organizational matters and actions taken in
connection with the consummation of the Conversion and Reorganization.
(xxii) The Company, the MHC 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, the MHC 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
-9-
performance and except as the enforceability of indemnification and
contribution provisions may be limited by applicable securities laws.
(xxiii) 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 specifically
described or contemplated therein, none of the Company, the MHC, the Bank
or the Subsidiaries will have (A) issued any securities or incurred any
liability or obligation, direct or contingent, for borrowed money, except
borrowings in the ordinary course of business from the same or similar
sources indicated in the Prospectus, or (B) entered into any transaction or
series of transactions that is or are material in light of the business of
the Company, the MHC, the Bank and the Subsidiaries considered as one
enterprise, excluding the origination, purchase and sale of loans or the
purchase and sale of investment securities or mortgage-backed securities in
the ordinary course of business.
(xxiv) No approval of any regulatory or supervisory or other
public authority is required in connection with the execution and delivery
of this Agreement or the issuance of the Securities and the Exchange Shares
that has not been obtained and a copy of which has been delivered to the
Agent, except as may be required under the securities laws of various
jurisdictions.
(xxv) Neither the Company, the MHC, the Bank nor any of the
Subsidiaries is in violation of its certificate of incorporation, articles
of incorporation, or charter, as the case may be, or bylaws; and neither
the Company, the MHC, the Bank nor any of the Subsidiaries is in default
(nor has any event occurred which, with notice or lapse of time or both,
would constitute a default) in the performance or observance of any
obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or other instrument to
which the Company, the MHC, the Bank or any of the Subsidiaries is a party
or by which it or any of them may be bound, or to which any of the property
or assets of the Company, the MHC, the Bank or any of the Subsidiaries is
subject, except for such defaults that would not, individually or in the
aggregate, have a material adverse effect on the financial condition,
results of operations or business affairs of the Company, the MHC, the Bank
and the Subsidiaries considered as one enterprise; and there are no
contracts or documents of the Company, the MHC, the Bank or any of the
Subsidiaries which are required to be filed as exhibits to the Registration
Statement or the Conversion Application which have not been so filed.
(xxvi) The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated herein do
not and will not conflict with or constitute a breach of, or default under,
or result in the creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company, the MHC, the Bank or any of the
Subsidiaries pursuant to, any contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which the Company, the MHC,
the Bank or any of the Subsidiaries is a party or by which it or any of
them may be bound, or to which any of the property or assets of the
Company, the MHC, the Bank or any of the Subsidiaries is subject, except
for such defaults that would not, individually or in the
-10-
aggregate, have a material adverse effect on the financial condition,
results of operations or business affairs of the Company, the MHC, the Bank
and the Subsidiaries considered as one enterprise, nor will such action
result in any violation of the provisions of the certificate or articles of
incorporation, charter or bylaws of the Company, the MHC, the Bank or any
of the Subsidiaries, or any applicable law, regulation or administrative or
court decree.
(xxvii) No labor dispute with the employees of the Company, the
MHC, the Bank or the Subsidiaries exists or, to the knowledge of the
Company, the MHC, or the Bank, is imminent or threatened; and the Company,
the MHC and the Bank are not aware of any existing or threatened labor
disturbance by the employees of any of its principal suppliers or
contractors that might be expected to result in any material adverse change
in the financial condition, results of operations or business affairs of
the Company, the MHC, the Bank and the Subsidiaries considered as one
enterprise.
(xxviii) Each of the Company, the MHC, the Bank and the
Subsidiaries has good and marketable title to all properties and assets for
which ownership is material to the business of the Company, the MHC, the
Bank or the Subsidiaries 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,
the MHC, the Bank and the Subsidiaries considered as one enterprise; and
all of the leases and subleases material to the business of the Company,
the MHC, the Bank and the Subsidiaries considered as one enterprise under
which the Company, the MHC, the Bank and the Subsidiaries hold properties,
including those described in the Prospectus, are valid and binding
agreements of the Company, the MHC, the Bank or the Subsidiaries,
enforceable in accordance with their terms.
(xxix) Neither the Company, the MHC, the Bank nor any of the
Subsidiaries is in violation of any directive from the OTS, the New Jersey
Department of Banking or the FDIC to make any material change in the method
of conducting their respective businesses; the MHC, the Bank and the
Subsidiaries have conducted and are conducting their businesses 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 OTS, the New Jersey
Department of Banking or the FDIC).
(xxx) There is no action, suit or proceeding before or by any
court or government agency or body, domestic or foreign, now pending, or,
to the knowledge of the Company, the MHC, or the Bank, threatened, against
or affecting the Company, the MHC, the Bank or any of the Subsidiaries
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 or business affairs of
the Company, the MHC, the Bank and the Subsidiaries 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 and
-11-
Reorganization; all pending legal or governmental proceedings to which the
Company, the MHC, the Bank or any of the Subsidiaries is a party or of
which any of their respective properties or assets is the subject that are
not described in the Registration Statement, including ordinary routine
litigation incidental to the business, are considered in the aggregate, not
material.
(xxxi) The Bank has obtained the opinions of its counsel,
Xxxxxx Xxxxx, L.L.P., with respect to the legality of the Securities and
the Exchange Shares to be issued and the Federal and New Jersey income tax
consequences of the Conversion and Reorganization, copies of which are
filed as exhibits to the Registration Statement; all material aspects of
the aforesaid opinions that are required to be disclosed are accurately
summarized in the Prospectus; the facts and representations upon which such
opinions are based are truthful, accurate and complete in all material
respects, and neither the Bank, the MHC, nor the Company has taken or will
take any action inconsistent therewith.
(xxxii) The Company is not required to be registered under the
Investment Company Act of 1940, as amended.
(xxxiii) All of the loans represented as assets on the most
recent consolidated financial statements or consolidated selected financial
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 or business of the Company, the
MHC, the Bank and the Subsidiaries considered as one enterprise.
(xxxiv) To the knowledge of the Company, the MHC and the Bank,
(with the exception of the intended loan to the ESOP for the purchase of
the Common Stock to be sold in the Conversion and Reorganization) none of
the Company, the MHC, the Bank or the Subsidiaries, or any of their
respective employees has made any payment of funds of the Company, the MHC,
the Bank or the Subsidiaries 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.
(xxxv) The Company, the MHC, the Bank and the Subsidiaries are
in compliance in all material respects with the applicable financial
recordkeeping and reporting requirements of the Currency and Foreign
Transaction Reporting Act of 1970, as amended, and the rules and
regulations thereunder.
(xxxvi) Neither the Company, the MHC, the Bank nor any of the
Subsidiaries, nor any properties owned or operated by the Company, the MHC,
the Bank or any of the Subsidiaries, is in violation of or is liable under
any Environmental Law (as defined
-12-
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, the
MHC, the Bank and the Subsidiaries considered as one enterprise. There are
no actions, suits or proceedings, or demands, claims, or notices
(including, without limitation, notices, demand letters or requests for
information from any environmental agency) instituted or pending, or to the
knowledge of the Company, the MHC or the Bank threatened, relating to the
liability of any property owned or operated by the Company, the MHC, the
Bank or any of the Subsidiaries under any Environmental Law. For purposes
of this subsection, the term "Environmental Law" means any federal, state,
local or foreign law, statute, ordinance, rule, regulation, code, license,
permit, authorization, approval, consent, order, judgment, decree,
injunction or agreement with any regulatory authority relating to (i) the
protection, preservation or restoration of the environment (including,
without limitation, air, water, vapor, surface water, groundwater, drinking
water supply, surface soil, subsurface soil, plant and animal life or any
other natural resource), and/or (ii) the use, storage, recycling,
treatment, generation, transportation, processing, handling, labeling,
production, release or disposal of any substance presently listed, defined,
designated or classified as hazardous, toxic, radioactive or dangerous, or
otherwise regulated, whether by type or by quantity, including any material
containing any such substance as a component.
(xxxvii) The Company, the MHC, the Bank and the Subsidiaries have
filed all federal, state and local tax returns required to be filed and
have made timely payments of all taxes shown as due and payable in respect
of such returns, and no deficiency has been asserted with respect thereto
by any taxing authority.
(xxxviii) The Company has received approval, subject to official
notice of issuance, to have the Common Stock quoted on the Nasdaq National
Market effective at the Closing Time referred to in Section 2 hereof.
(xxxix) 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 has requested that such registration
statement be effective concurrent with the effectiveness of the
Registration Statement.
(b) Any certificate signed by any officer of the Company, the MHC or the
Bank and delivered to either of the Agent or counsel for the Agent shall be
deemed a representation and warranty by the Company, the MHC or the Bank of each
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 the Securities
in the Subscription and Community Offering and the Syndicated Community
Offering.
-13-
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 that 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 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) providing such other general advice and assistance as
may be requested to promote the successful completion of the Offerings.
The appointment of the Agent hereunder shall terminate upon the earliest to
occur of (a) forty-five (45) days after the last day of the Subscription 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
Securities may be sold, (b) the receipt and acceptance of subscriptions and
purchase orders for all of the Securities, or (c) the completion of the
Syndicated Community Offering.
If any of the Securities remain available after the expiration of the
Subscription 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
Sandler X'Xxxxx and Selected Dealers shall not exceed 7% of the aggregate
purchase price of the Securities sold by such Selected Dealers. Sandler X'Xxxxx
will endeavor to distribute the Securities among the Selected Dealers in a
fashion that best meets the distribution objectives of the Company and the Bank
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 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 that
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
-14-
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 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 Xxxxxx Xxxxx, L.L.P., Washington, D.C., at 10:00 a.m., local time, or
at such other place and time as shall be agreed upon by the parties hereto, on a
business day to be agreed upon by the parties hereto. The Company shall notify
the Agent by telephone, confirmed in writing, when funds shall have been
received for all the Securities. Certificates for Securities shall be delivered
directly to the purchasers thereof in accordance with their directions.
Notwithstanding the foregoing, certificates for Securities purchased through
Selected Dealers shall be made available to the Agent for inspection at least 48
hours prior to the Closing Time at such office as the Agent shall designate.
The hour and date upon which the Company shall release for delivery all of the
Securities, in accordance with the terms hereof, is herein called the "Closing
Time."
The Company will pay any stock issue and transfer taxes that may be payable
with respect to the sale of the Securities.
In addition to reimbursement of the expenses specified in Section 4 hereof,
the Agent will receive the following compensation for its services hereunder:
(a) one and fifteen-hundredths percent (1.15%) of the aggregate actual
purchase price of the Securities sold in the Subscription Offering and Community
Offering, excluding in each case shares purchased by (i) any benefit plan of the
Company or the Bank established for the benefit of their respective directors,
officers or employees or (ii) any director, officer or employee of the Company
or the Bank or any member of such person's immediate family (which term shall
mean parents, spouse, siblings, children and grandchildren) whether or not
living in the same household; 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 fifteen-hundredths percent (1.15%).
Any fees payable to Sandler X'Xxxxx for Securities sold by Sandler X'Xxxxx under
any such agreement shall be limited to an aggregate of one and fifteen-
hundredths percent (1.15%) of the actual purchase price of such Securities.
-15-
If this Agreement is terminated by the Agent in accordance with the
provisions of Section 9(a) hereof or if the Conversion and Reorganization is
terminated by the Company or the Bank, no fee shall be payable by the Company or
the Bank to Sandler X'Xxxxx; however, Sandler X'Xxxxx shall be entitled to
reimbursement for all of its reasonable out-of-pocket expenses incurred in
connection with its engagement 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 $50,000, $25,000 of which has been previously paid, and the
remaining $25,000 of which shall be payable upon execution hereof, which shall
be credited against any fees or expenses payable hereunder.
SECTION 3. COVENANTS OF THE COMPANY, THE MHC AND THE BANK. The Company, the
MHC and the Bank covenant with the Agent as follows:
(a) The Company, the MHC and the Bank will prepare and file such amendments
or supplements to the Registration Statement, the Prospectus, the Conversion
Application, the Members' Proxy Statement and the Stockholders' 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, the MHC 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 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 reasonably acceptable to the Agent. The
Company, the MHC and the Bank will notify the Agent immediately, and confirm the
notice in writing, (i) of the effectiveness of any post-effective amendment to
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, the MHC 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.
-16-
(b) The Company, the MHC and the Bank will give the Agent notice of its
intention to prepare or file 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 that the
Company proposes for use in connection with the Syndicated Community Offering of
the Securities that 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, the MHC and the Bank will deliver to the Agent as many
signed copies and as many conformed copies of the Conversion Application and the
Registration Statement as originally filed and of each amendment thereto
(including exhibits filed therewith or incorporated by reference therein) as the
Agent may reasonably request, and from time to time such number of copies of the
Prospectus as the Agent may reasonably request.
(d) During the period when the Prospectus is required to be delivered, the
Company, the MHC 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 (the "1934 Act")
and the rules and regulations of the Commission promulgated thereunder,
including, without limitation, Regulation M under the 1934 Act, so far as
necessary to permit the continuance of sales or dealing in shares of Common
Stock during such period in accordance with the provisions hereof and the
Prospectus.
(e) If any event or circumstance shall occur as a result of which it is
necessary, in the opinion of counsel for the Agent, to amend or supplement the
Prospectus in order to make the Prospectus not misleading in the light of the
circumstances existing at the time it is delivered to a purchaser, the Company,
the MHC 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, the MHC 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, the MHC and the
Bank each will furnish such information with respect to itself as the Agent may
from time to time reasonably request.
(f) The Company, the MHC 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, the MHC 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
-17-
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").
(h) The Company will make generally available to its security holders as
soon as practicable but no later than sixty (60) days from the close of the
period covered thereby an earnings statement (in form complying with the
provisions of Rule 158 of the Securities 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 in such period an annual report
(including consolidated statements of financial condition and consolidated
statements of income, stockholders' equity and cash flows of the Company, the
Bank and the Subsidiaries, certified by independent public accountants) and, as
soon as practicable after the end of each of the first three quarters of each
fiscal year (beginning with the fiscal quarter ending after the effective date
of the Registration Statement), will make available to its stockholders
consolidated summary financial information of the Company, the Bank and the
Subsidiaries for such quarter in reasonable detail. In addition, such annual
report and quarterly consolidated summary financial information shall be made
public through the issuance of appropriate press releases at the same time or
prior to the time of the furnishing thereof to stockholders of the Company.
(j) During the period ending on the third anniversary of the expiration of
the fiscal year during which the closing of the transactions contemplated hereby
occurs, the Company will furnish to the Agent (i) as soon as 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 1934 Act or any national securities exchange or system on which any class of
securities of the Company is listed, and (ii) from time to time, such other
information concerning the Company as the Agent may reasonably request.
(k) The Company, the MHC and the Bank will conduct the Conversion and
Reorganization 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 and Reorganization imposed upon the Company or the Bank by the
OTS.
-18-
(l) Each of 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.
(n) The Company will maintain the effectiveness of the registration of the
common stock under the Exchange Act for not less than three years. The Company
will file with the Nasdaq Stock Market all documents and notices required by the
Nasdaq Stock Market of companies that have issued securities that are listed on
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
("NASD") "Interpretation Relating to Free-Riding and Withholding."
(p) 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.
(q) Other than in connection with any employee benefit plan or arrangement
described in the Prospectus, the Company will not, without the prior written
consent of the Agent, sell or issue, contract to sell or otherwise dispose of,
any shares of Common Stock other than the Securities or the Exchange Shares for
a period of 180 days after the Closing Time.
(r) During the period beginning on the date hereof and ending on the later
of the third anniversary of the Closing Time or the date on which the Agent
receives full payment in satisfaction of any claim for indemnification or
contribution to which it may be entitled pursuant to Sections 6 or 7,
respectively, neither the Company nor the Bank shall, without the prior written
consent of the Agent, which consent shall not be unreasonably withheld, take or
permit to be taken any action that could result in the Bank Common Stock
becoming subject to any security interest, mortgage, pledge, lien or
encumbrance; provided, however, that this covenant shall be null and void if the
Board of Governors of the Federal Reserve System or other Federal agency with
jurisdiction over the Bank, by regulation, policy statement or general or
specific interpretive release or letter permits indemnification of the Agent by
the Bank as contemplated by Section 6(a) hereof.
(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.
-19-
(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
consolidated financial statements of the Bank and the Subsidiaries which have
been read by KPMG Peat Marwick LLP as stated in their letters to be furnished
pursuant to subsections (e) and (f) of Section 5 hereof.
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, including any required
NASD filing fees (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, the MHC's and the
Bank's counsel, accountants, appraisers, conversion agent and other advisors,
(v) the qualification of the Securities under securities laws in accordance with
the provisions of Section 3(f) hereof, including filing fees and the fees and
disbursements of counsel in connection therewith and in connection with the
preparation of the Blue Sky Survey, (vi) the printing and delivery to the Agent
of copies of the Registration Statement as originally filed and of each
amendment thereto and the printing and delivery of the Prospectus and any
amendments or supplements thereto to the purchasers in the Offerings and the
Agent, (vii) the printing and delivery to the Agent of copies of a Blue Sky
Survey and (viii) the fees and expenses incurred in connection with the listing
of the Common Stock on the Nasdaq Stock Market. In the event the Agent incurs
any such fees and expenses on behalf of the Bank, the MHC or the Company, the
Bank will reimburse the Agent for such fees and expenses whether or not the
Conversion and Reorganization is consummated; provided, however, that the Agent
shall not incur any substantial expenses on behalf of the Bank, the MHC or the
Company pursuant to this Section without the prior approval of the Bank.
Sandler X'Xxxxx shall bear all of its out-of-pocket expenses incurred in
connection with the Offerings, including, without limitation, advertising,
promotional, syndication and travel expenses and fees and expenses of the
Agent's counsel.
SECTION 5. CONDITIONS OF AGENT'S OBLIGATIONS. The Company, the MHC, the
Bank and the Agent agree that the issuance and sale of the Securities and all
obligations of the Agent hereunder are subject to the accuracy of the
representations and warranties of the Company, the MHC 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, the MHC and the Bank made
pursuant to the provisions hereof, to the performance by the Company, the MHC
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
-20-
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.
(b) At Closing Time, the Agent shall have received:
(1) The favorable opinion, dated as of Closing Time, of Xxxxxx Xxxxx,
L.L.P., counsel for the Company, the MHC and the Bank, in form and
substance satisfactory to counsel for the Agent, providing 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
Jersey 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 or business of the Company, the Bank and the
Subsidiaries considered as one enterprise.
(iv) Upon consummation of the Conversion and Reorganization,
the authorized, issued and outstanding capital stock of the Company
will be as set forth in the Prospectus under "Capitalization," and no
shares of Common Stock have been issued and remain outstanding prior
to the Closing Time other than the shares issued to the Bank to
effectuate the Conversion and Reorganization, which shares will be
canceled at the Closing Time.
(v) The Securities and the Exchange Shares have been duly
and validly authorized for issuance and sale; the Securities, when
issued and delivered by the Company pursuant to the Plan against
payment of the consideration calculated as set forth in the Plan, will
be duly and validly issued and fully paid and non-assessable; the
Exchange Shares, when issued in consideration for shares of the Bank's
Common Stock pursuant to the Exchange Ratio, will be duly and validly
issued and fully paid and non-assessable.
(vi) The issuance of the Securities and the Exchange Shares
is not subject to preemptive or other similar rights arising by
operation of law or, to the best of such counsel's knowledge,
otherwise.
(vii) The MHC is validly existing and in good standing under
the laws of the United States of America as a mutual holding company,
with full corporate
-21-
power and authority to own, lease and operate its properties and to
conduct its business as described in the Registration Statement and
Prospectus and is duly qualified as a foreign corporation in each
jurisdiction in which such qualification is required, except where the
failure to so qualify would not have a material adverse effect upon
the financial condition, results of operations or business affairs of
the MHC.
(viii) 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 State of New Jersey as a
state-chartered savings and loan association of stock form, with full
corporate power and authority to own, lease and operate its properties
and to conduct its business as described in the Registration Statement
and the Prospectus; and the Bank is duly qualified as a foreign
corporation in each jurisdiction in which such qualification is
required, except where the failure to so qualify would not have a
material adverse effect upon the financial condition, results of
operations or business affairs of the Bank.
(ix) The Bank is a member 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.
(x) Upon consummation of the Conversion and Reorganization,
all of the issued and outstanding capital stock of Interim B will have
been duly authorized, validly issued and fully paid and nonassessable,
and all such capital stock will be converted into shares of Bank
Common Stock upon the merger of Interim B with the Bank and is not
subject to any security interest, mortgage, pledge, lien, encumbrance
or claim.
(xi) The Subsidiaries have been duly incorporated and are
validly existing as corporations in good standing under the laws of
the state of New Jersey, have full corporate power and authority to
own, lease and operate their properties and to conduct their business
as described in the Prospectus and are duly qualified as foreign
corporations to transact business and are in good standing in each
jurisdiction in which such qualification is required, except where the
failure to so qualify would not have a material adverse effect upon
the financial condition, results of operations or business of the
Company, the Bank and the Subsidiaries considered as one enterprise;
the activities of the Subsidiaries are permitted to subsidiaries of a
savings and loan holding company and of a New Jersey chartered savings
bank by the rules, regulations, resolutions and practices of the OTS
and by New Jersey law and the rules, regulations, resolutions and
practices of the New Jersey Department of Banking; all of the issued
and outstanding capital stock of the Subsidiaries has been duly
authorized and validly issued, is fully paid and nonassessable and is
owned directly by the Bank, free and clear of any security interest,
mortgage, pledge, lien, encumbrance or claim.
-22-
(xii) Upon consummation of the Conversion and Reorganization,
all of the issued and outstanding capital stock of the Bank will be
duly authorized and validly issued and fully paid and nonassessable,
and all such capital stock will be owned beneficially and of record by
the Company free and clear of any security interest, mortgage, pledge,
lien, encumbrance or legal or equitable claim.
(xiii) The OTS has approved the Holding Company Application and
the Conversion Application (including the formation and merger of
Interim A and Interim B), such approvals remain in full force and
effect and no action is pending or, to the best of such counsel's
knowledge, threatened respecting the Holding Company Application or
the Conversion Application or the acquisition by the Company of all of
the Bank's issued and outstanding capital stock; the Holding Company
Application and the Conversion Application comply as to form in all
material respects with the Conversion Regulations and all other
applicable requirements of the OTS, include all documents required to
be filed as exhibits thereto, and is, to the best of such counsel's
knowledge, truthful, accurate and complete; 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 pursuant to the Plan.
(xiv) The New Jersey Department of Banking has approved the
New Jersey Application, and such approval remains in full force and
effect and no action is pending or, to the best of such counsel's
knowledge, threatened respecting the New Jersey Application; the New
Jersey Application complies as to form in all material respects with
New Jersey law and regulations and all other applicable requirements
of the New Jersey Department of Banking, and includes all documents
required to be filed as exhibits thereto.
(xv) 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, the MHC and the Bank, and this Agreement
constitutes the legal, valid and binding agreement of each of the
Company, the MHC 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 conflict with or constitute a breach
of, or default under, and no event has occurred which, with notice or
lapse of time or both, would constitute a default under, or result in
the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company, the MHC, the Bank or any of the
Subsidiaries pursuant to any contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which the Company, the
MHC, the Bank or any of the Subsidiaries is a party or by which any of
them may be bound, or to which any of the property or assets of the
Company, the MHC, the Bank or any of the Subsidiaries is subject that,
individually or in the aggregate,
-23-
would have a material adverse effect on the financial condition,
results of operations or business affairs of the Company, the Bank and
the Subsidiaries considered as one enterprise and (C) will not result
in any violation of the provisions of the certificate or articles of
incorporation, charter or bylaws of the Company, the MHC, the Bank or
the Subsidiaries.
(xvi) The Prospectus has been duly authorized by the OTS for
final use pursuant to the Conversion Regulations and no action has
been taken, or is pending or, to the best of such counsel's knowledge,
is threatened, by the OTS to revoke such authorization.
(xvii) 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 nor
have proceedings therefor been initiated or, to the best of such
counsel's knowledge, threatened by the Commission.
(xviii) 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 Exchange Shares and the consummation of the
Conversion and Reorganization, except as may be required under the
securities or Blue Sky laws of various jurisdictions as to which no
opinion need be rendered.
(xix) At the time the Registration Statement became effective,
the Registration Statement (other than the financial statements,
appraisal and statistical data included therein, as to which no
opinion need be rendered) complied as to form in all material respects
with the requirements of the Securities Act, the Securities Act
Regulations, and the Conversion Regulations.
(xx) 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.
(xxi) There are no legal or governmental proceedings pending
or threatened against or affecting the Company, the MHC, the Bank or
the Subsidiaries that are required, individually or in the aggregate,
to be disclosed in the Registration Statement and Prospectus, other
than those disclosed therein, and all pending legal or governmental
proceedings to which the Company, the MHC, the Bank or any of the
Subsidiaries is a party or to which any of their property is subject
which are not described in the Registration Statement, including
ordinary routine litigation incidental to the business, are,
considered in the aggregate, not material.
(xxii) The information in the Prospectus describing the
liquidation account under the captions "The Conversion and
Reorganization - Liquidation Rights" and "- Effects of Conversion and
Reorganization - Effect on Liquidation
-24-
Rights," and the information under "Risk Factors - Financial
Institution Regulation and Possible Legislation," "- Certain Anti-
Takeover Provisions Which May Discourage Takeover Attempts," "-
Possible Adverse Income Tax Consequences of the Distribution of
Subscription Rights," "Dividend Policy," "Regulation," "The Conversion
and Reorganization," "Restrictions on Acquisition of the Company and
the Bank," "Description of Capital Stock of the Company" and
"Description of Capital Stock of the Bank" to the extent that it
constitutes matters of law, summaries of legal matters, documents or
proceedings, or legal conclusions, has been reviewed by such counsel
and is complete and accurate in all material respects.
(xxiii) 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.
(xxiv) The Plan has been duly authorized by the Boards of
Directors of the Company, the MHC and the Bank and the OTS' approval
of the Plan remains in full force and effect; to the best of such
counsel's knowledge, the Company, the MHC and the Bank have conducted
the Conversion and Reorganization in all material respects in
accordance with applicable requirements of the Plan, the Conversion
Regulations and all other applicable regulations, decisions and orders
thereunder, including all material applicable terms, conditions,
requirements and conditions precedent to the Conversion and
Reorganization imposed upon the Company, the MHC or the Bank by the
OTS, and no order has been issued by the OTS to suspend the Conversion
and Reorganization or the Offerings and no action for such purpose has
been instituted or threatened by the OTS; and, to the best of such
counsel's knowledge, no person has sought to obtain review of the
final action of the OTS in approving the Conversion Application or the
Holding Company Application.
(xxv) To the best of such counsel's knowledge, each of the
Company, the MHC, the Bank and the Subsidiaries have obtained all
licenses, permits and other governmental approvals and authorizations
currently required for the conduct of their respective businesses as
described in the Registration Statement and Prospectus, and all such
licenses, permits and other governmental authorizations are in full
force and effect, and each of the Company, the MHC, the Bank and the
Subsidiaries is in all material respects complying therewith.
-25-
(xxvi) Neither the Company, the MHC, the Bank nor any of the
Subsidiaries is in violation of its certificate or articles of
incorporation or charter, as the case may be, or bylaws nor, to the
best of such counsel's knowledge, is in default (nor has any event
occurred which, with notice or lapse of time or both, would constitute
a default) in the performance or observance of any obligation,
agreement, covenant or condition contained in any contract, indenture,
mortgage, loan agreement, note, lease or other instrument to which the
Company, the MHC, the Bank or any of the Subsidiaries is a party or by
which the Company, the MHC, the Bank or any of the Subsidiaries or any
of their respective property may be bound.
(xxvii) The stockholders of the Bank do not have dissenters'
rights or any other rights to dissent from the Conversion and
Reorganization and receive the fair value of their shares of Bank
Common Stock under New Jersey or Federal law.
(xxviii) The Company is not 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 Breyer &
Aguggia, 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), (xv)(A), (xix) and (xx) 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, Xxxxxx Xxxxx, L.L.P. and Breyer &
Aguggia shall each additionally state that nothing has come to their
attention that would lead them to believe that the Registration Statement
(except for the appraisal, financial statements and schedules and other
financial or statistical data included therein, as to which counsel need
make no statement), at the time it became effective, contained an untrue
statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading or that the Prospectus (except for the appraisal, financial
statements and schedules and other financial or statistical data included
therein, as to which counsel need make no statement), at the time the
Registration Statement became effective or at Closing Time, included an
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading. In giving their opinions, Xxxxxx Xxxxx, L.L.P. and Breyer &
Aguggia may rely as to certain matters of fact on certificates of officers
and directors of the Company, the MHC and the Bank and certificates of
public officials, and as to matters of New Jersey law and Delaware law upon
the opinions of __________________ and Morris, Nichols, Arsht & Xxxxxxx,
respectively, which opinions shall be in form and substance satisfactory to
the Agent, and Breyer & Aguggia may also rely as to certain matters on the
opinion of Xxxxxx Xxxxx, L.L.P.
-26-
(c) At the Closing Time referred to in Section 2, the Company, the MHC and
the Bank shall have completed in all material respects the conditions precedent
to the Conversion and Reorganization 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 and Reorganization imposed upon the Company, the MHC or the
Bank by the OTS or any other regulatory authority, other than those permitted to
be completed after the Conversion and Reorganization.
(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 or business affairs of the Company, the MHC,
the Bank and the Subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, and the Agent shall have received a
certificate of the President and Chief Executive Officer of the Company, the MHC
and the Bank and the chief financial or chief accounting officer of the Company,
the MHC and the Bank, dated as of Closing Time, to the effect that (i) there has
been no such material adverse change, (ii) there has been no material
transaction entered into by the Company, the MHC or the Bank from the latest
date as of which the financial condition of the Company, the MHC or the Bank is
set forth in the Registration Statement and the Prospectus other than
transactions referred to or contemplated therein and transactions in the
ordinary course of business, (iii) neither the Company, the MHC nor the Bank
shall have received from the OTS or the New Jersey Department of Banking 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 might
affect the financial condition, results of operations or business affairs of the
Company, the MHC and 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, the MHC and the Bank have
complied with all agreements and satisfied all conditions on their part to be
performed or satisfied at or prior to Closing Time, (vi) no stop order
suspending the effectiveness of the Registration Statement has been issued and
no proceedings for that purpose have been initiated or threatened by the
Commission and (vii) no order suspending the Offerings or the authorization for
final use of the Prospectus has been issued and no proceedings for that purpose
have been initiated or threatened by the 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 KPMG Peat Marwick LLP a letter dated such date, in form and
substance satisfactory to the Agent, to the effect that: (i) they are
independent certified public accountants with respect to the Company, the MHC
the Bank and the Subsidiaries within the meaning of the Securities Act, the
Securities Act Regulations and the Conversion Regulations; (ii) it is their
opinion that the consolidated financial statements included in the Registration
Statement and covered by their opinion therein comply as to form in all material
respects with the applicable accounting requirements of the Securities Act, the
Securities Act Regulations and the OTS Regulations; (iii) based upon limited
procedures as agreed upon by the Agent and KPMG Peat Marwick LLP and
-27-
set forth in detail in such letter, nothing has come to their attention which
causes them to believe that (A) the unaudited financial statements and
supporting schedules of the Bank and the Subsidiaries included in the
Registration Statement do not comply as to form in all material respects with
the applicable accounting requirements of the Securities Act, the Securities Act
Regulations and the OTS 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) at a specified date not more than
five (5) days prior to the date of this Agreement, there has been any increase
in the consolidated borrowings of the Bank and the Subsidiaries or any decrease
in consolidated total assets, allowance for loan losses, total deposits or
stockholders' equity exclusive of the unrealized gain in investment securities
available for sale of the Bank and the Subsidiaries, in each case as compared
with the amounts shown in the December 31, 1997 balance sheet included in the
Registration Statement or, (C) during the period from December 31, 1997 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, or net income of
the Bank and the Subsidiaries, except in all instances for increases or
decreases that 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 procedures, not constituting an audit,
with respect to certain amounts, percentages and financial information that are
included in the Registration Statement and Prospectus and that are specified by
the Agent, and have found such amounts, percentages and financial information to
be in agreement with the relevant accounting, financial and other records of the
Company, the MHC the Bank and the Subsidiaries identified in such letter.
(f) At Closing Time, the Agent shall have received from KPMG Peat Marwick
LLP a letter, dated as of Closing Time, to the effect that they reaffirm their
statements made in the letter furnished pursuant to subsection (e) of this
Section, except that the specified date referred to shall be a date not more
than five days prior to Closing Time.
(g) At Closing Time, the Securities shall have been approved for listing on
the Nasdaq National Market upon notice of issuance.
(h) At Closing Time, the Agent shall have received a letter from Finpro,
Inc., dated as of the Closing Time, confirming its appraisal.
(i) At Closing Time, counsel for the Agent shall have been furnished with
such documents and opinions as they may require for the purpose of enabling them
to pass upon the issuance and sale of the Securities and the Exchange Shares as
herein contemplated and related proceedings, or in order to evidence the
accuracy of any of the representations or warranties, or the fulfillment of any
of the conditions, herein contained; and all proceedings taken by the Company in
connection with the issuance and sale of the Securities and the Exchange Shares
as herein contemplated shall be satisfactory in form and substance to the Agent
and counsel for the Agent.
-28-
(j) At any time prior to Closing Time, (i) there shall not have occurred
any material adverse change in the financial markets in the United States or
elsewhere or any outbreak of hostilities or escalation thereof or other calamity
or crisis the effects of which, in the judgment of the Agent, are so material
and adverse as to make it impracticable to market the Securities or to enforce
contracts, including subscriptions or orders, for the sale of the Securities,
and (ii) trading generally on either the Nasdaq National Market, the American
Stock Exchange, or the New York Stock Exchange shall not have been suspended, or
minimum or maximum prices for trading shall not have been fixed, or maximum
ranges for prices for securities shall not have been required, by either of such
Exchanges or Market or by order of the Commission or any other governmental
authority, and a banking moratorium shall not have been declared by either
Federal, New York or New Jersey 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 1934 Act, and
its respective partners, directors, officers, employees and agents as follows:
(i) from and against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, related to or arising out of the
Conversion and Reorganization or any action taken by the Agent where acting
as agent of the Company, the MHC and the Bank or otherwise as described in
Section 2 hereof; provided, however, that this indemnity agreement shall
not apply to any loss, liability, claim, damage or expense found in a final
judgement by a court of competent jurisdiction to have resulted primarily
from the bad faith, willful misconduct or gross negligence of the Agent.
(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 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
-29-
(iv) from and against any and all expense whatsoever, as incurred
(including, subject to Section 6(c) hereof, the fees and disbursements of
counsel chosen by the Agent), reasonably incurred in investigating,
preparing or defending against any litigation, or any investigation,
proceeding or inquiry by any governmental agency or body, commenced or
threatened, or any pending or threatened claim whatsoever described in
clauses (i) or (ii) above, to the extent that any such expense is not paid
under (i), (ii) or (iii) above;
provided, however, that the indemnification provided for in this paragraph (a)
shall not apply to any loss, liability, claim, damage or expense to the extent
arising out of any untrue statement or alleged untrue statement of a material
fact 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 statements therein, in 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 an impermissible covered
transaction under Section 23A of the Federal Reserve Act, as amended.
(b) The Agent agrees to indemnify and hold harmless the Company, the Bank,
their directors and trustees, each of their officers who signed the Registration
Statement, and each person, if any, who controls the Company within the meaning
of Section 15 of the Securities Act or Section 20 of the 1934 Act against any
and all loss, liability, claim, damage and expense described in the indemnity
contained in subsection (a) of this Section, as incurred, but only with respect
to untrue statements or 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
that 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 proceedings 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 to have resulted primarily from the Agent's bad faith,
willful misconduct or gross negligence.
-30-
(e) In addition to, and without limiting, the provisions of Section
(6)(a)(iv) hereof, in the event that the Agent, any person, if any, who controls
the Agent within the meaning of Section 15 of the Securities Act or Section 20
of the 1934 Act or any of its partners, directors, officers, employees or agents
is requested or required to appear as a witness or otherwise gives testimony in
any action, proceeding, investigation or inquiry brought by or on behalf of or
against the Company, the MHC or the Bank or any of its respective affiliates or
any participant in the transactions contemplated hereby in which the Agent or
such person or agent is not named as a defendant or subject to an investigation
or inquiry, the Company and the Bank jointly and severally agree to reimburse
the Agent for all reasonable and necessary out-of-pocket expenses incurred by it
in connection with preparing or appearing as a witness or otherwise giving
testimony and to compensate the Agent in an amount to be mutually agreed upon.
SECTION 7. CONTRIBUTION. In order to provide for just and equitable
contribution in circumstances in which the indemnity agreement provided for in
Section 6 hereof is for any reason held to be unenforceable by the indemnified
parties although applicable in accordance with its terms, the Company, the Bank
and the Agent shall contribute to the aggregate losses, liabilities, claims,
damages and expenses of the nature contemplated by said indemnity agreement
incurred by the Company or the Bank and the Agent, as incurred, in such
proportions (i) that 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, the MHC 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 1934 Act shall have the same rights to contribution as the
Agent, and each director of the Company, each director 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 1934 Act shall have the same rights to
contribution as the Company and the Bank. Notwithstanding anything to the
contrary set forth herein, to the extent permitted by applicable law, in no
event shall the Agent be required to contribute an aggregate amount in excess of
the aggregate marketing fees to which the Agent is entitled and actually paid
pursuant to this Agreement.
SECTION 8. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE DELIVERY.
All representations, warranties and agreements contained in this Agreement, or
contained in certificates of officers of the Company, the MHC or the Bank
submitted pursuant hereto, shall remain operative and in full force and effect,
regardless of any investigation made by or on behalf of the Agent or any
controlling person, or by or on behalf of the Company, and shall survive
delivery of the Securities.
-31-
SECTION 9. TERMINATION OF AGREEMENT.
(a) The Agent may terminate this Agreement, by notice to the Company, at
any time at or prior to Closing Time (i) if there has been, since the date of
this Agreement or since the respective dates as of which information is given in
the Registration Statement, any material adverse change in the financial
condition, results of operations or business affairs of the Company, the MHC or
the Bank, or the Company, the MHC, the Bank and the Subsidiaries 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 effects of which, in the judgment of the
Agent, are so material and adverse as to make it impracticable to market the
Securities or to enforce contracts, including subscriptions or orders, for the
sale of the Securities; or (iii) or if trading generally on either the Nasdaq
National Market, the American Stock Exchange, or the New York Stock Exchange has
been suspended, or minimum or maximum prices for trading have been fixed, or
maximum ranges for prices for securities have been required, by either of such
Exchanges or Market or by order of the Commission or any other governmental
authority, or if a banking moratorium has been declared by either Federal, New
York or New Jersey authorities; or (iv) if any condition specified in Section 5
shall not have been fulfilled when and as required to be fulfilled; or (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; or (vi) if in the
Agent's good faith opinion, the aggregate price for the Securities established
by Finpro, Inc. is not reasonable or equitable under then prevailing market
conditions; or (vii) if the Conversion and Reorganization is not consummated
prior to September 30, 1998.
(b) If this Agreement is terminated pursuant to this Section, such
termination shall be without liability of any party to any other party except
that the provisions of Section 4 hereof relating to reimbursement of expenses
and the provisions of Sections 6 and 7 hereof shall survive any termination of
this Agreement.
SECTION 10. NOTICES. All notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the Agent
shall be directed to the Agent at Two World Trade Center, 000xx Xxxxx, Xxx Xxxx,
Xxx Xxxx 00000, attention of Xxxx X. Xxxxx, with a copy to Xxxx X. Xxxxxxx,
Esq., Breyer & Aguggia, 0000 X Xxxxxx, X.X., Xxxxx 000 Xxxx, Xxxxxxxxxx, X.X.
00000; notices to the Company and the Bank shall be directed to either of them
at 0000 Xxxxxxxxxx Xxxxxx Xxxxx, Xxxxxxxxxx, Xxx Xxxxxx 00000, attention Xx.
Xxxx X. Xxxxxxxx, President, with a copy to Xxxxxx X. Passaic, Jr., Esq., Xxxxxx
Xxxxx, L.L.P., 0000 X Xxxxxx, X.X., Xxxxxxxxxx, X.X. 00000.
SECTION 11. PARTIES. This Agreement shall inure to the benefit of and be
binding upon the Agent, the Company, the MHC 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, the MHC and the Bank and their respective successors and the
controlling persons and officers and directors referred to in
-32-
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, the MHC and the Bank and their respective
successors, and said controlling persons and officers and directors and their
heirs and legal representatives, and for the benefit of no other person, firm or
corporation.
SECTION 12. ENTIRE AGREEMENT; AMENDMENT. With the exception of that certain
agreement between the Bank and Sandler X'Xxxxx dated December 12, 1996 relating
to records management services in connection with the Bank's Conversion, 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. No waiver, amendment or other
modification of this Agreement shall be effective unless in writing and signed
by the parties hereto.
SECTION 13. GOVERNING LAW AND TIME. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York applicable to
agreements made and to be performed in said State without regard to the
conflicts of laws provisions thereof. Unless otherwise noted, specified times of
day refer to Eastern time.
SECTION 14. SEVERABILITY. Any term or provision of this Agreement that 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.
-33-
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,
FIRST SOURCE BANCORP, INC.
By:_______________________________________________
President and Chief Executive Officer
FIRST SAVINGS BANCSHARES, MHC
By:_______________________________________________
President and Chief Executive Officer
FIRST SAVINGS BANK, SLA
By:_______________________________________________
President and Chief Executive Officer
CONFIRMED AND ACCEPTED,
as of the date first above written:
SANDLER X'XXXXX & PARTNERS, L.P.
By: Sandler X'Xxxxx & Partners Corp.,
the sole general partner
By:_______________________________________________
EXHIBIT A
FIRST SOURCE BANCORP, INC.
______________ Shares
(Maximum Offered in Conversion)
Common Stock
(Par Value $.01 Per Share)
SELECTED DEALER'S AGREEMENT
_______________, 1998
We have agreed to assist First Source Bancorp, Inc. (the "Company") in
connection with the offer and sale of shares (the "Shares") of Common Stock, par
value $.01 per share, of the Company, to be issued in connection with the
conversion and reorganization of First Savings Bank, SLA, a New Jersey-chartered
savings and loan association (the "Bank"), and First Savings Bancshares, MHC, a
mutual holding company organized under the laws of the United States of America,
from the mutual holding company to the stock holding company form. The Company,
in connection with its plan to effect such conversion, offered _________ Shares
for subscription by depositors of the Bank as of December 31, 1995, the Bank's
employee stock ownership plan and certain of the Bank's depositors and
borrowers, in a subscription offering, and certain members of the general public
in a concurrent direct community offering. The Shares which were not subscribed
for pursuant to such subscription and direct community offerings are being
offered to the public in a syndicated community offering (the "Syndicated
Community Offering") in accordance with the rules of the Office of Thrift
Supervision ("OTS"). The Shares, the bases on which the number of Shares to be
issued may change, and certain of the terms on which they are being offered are
more fully described in the enclosed Prospectus (the "Prospectus").
We are offering to Selected Dealers (of which you are one) the
opportunity to participate in the solicitation of offers to buy the Shares in
the Syndicated Community Offering and we will pay you a fee in the amount of
___________ percent (______%) of the dollar amount of the Shares sold on behalf
of the Company by you. The number of Shares sold by you shall be determined
based on the authorized designation of your firm on the order form or forms for
such Shares accompanying the funds transmitted for payment therefor (whether in
the form of a check payable to the Bank or a withdrawal from an existing account
at the Bank) to the special account established by the Company for the purpose
of holding such funds. It is understood, of course, that payment of your fee
will be made only out of compensation received by us for the Shares sold on
behalf of the Company by you, as evidenced in accordance with the preceding
sentence. The Company and the Bank have requested us to invite you to become a
"Sponsoring Dealer," that is, a Selected Dealer who solicits offers which result
in the sale on behalf of the Bank of at least ________ Shares. You may become a
Sponsoring Dealer (subject to your fulfillment of the requirement in the
preceding sentence) by checking the box on the confirmation at the end of this
letter. If you become a Sponsoring Dealer, you shall be entitled to an
additional fee in the amount of ______ percent (_____%) of the dollar amount of
the Shares sold on behalf of the Company by you as evidenced in the manner set
forth above.
-2-
Each order form for the purchase of Shares must set forth the
----
identity, address and tax identification number of each person ordering Shares
-------- ------- --- -------------- ------
regardless of whether the Shares will be registered in street name or in the
purchaser's name. Such order form should clearly identify your firm.
As soon as practicable after all the Shares are sold, we will remit to
you, out of our compensation as provided above, the fees to which you are
entitled hereunder, including your Sponsoring Dealer fee.
This offer is made subject to the terms and conditions herein set
forth and is made only to Selected Dealers that 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 NASD Rule
2110 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 and
NASD Rules 2110, 2730 and 2750 as if they were NASD members and NASD Rule 2420
as it applies to non-member brokers or dealers in a foreign country.
Orders for Shares will be strictly subject to confirmation and we,
acting on behalf of the Company, reserve the right in our absolute discretion to
reject any order in whole or in part, to accept or reject orders in the order of
their receipt or otherwise, and to allot. Neither you nor any other person is
authorized by the Company, the Bank or by us to give any information or make any
representations other than those contained in the Prospectus in connection with
the sale of any of the Shares. No Selected Dealer is authorized to act as agent
for us when soliciting offers to buy the Shares from the public or otherwise.
No Selected Dealer shall engage in any stabilizing (as defined in Rule 100 of
Regulation M promulgated under the Securities Exchange Act of 1934) with respect
to the Company's Common Stock during the offering.
We and each Selected Dealer assisting in selling Shares pursuant
hereto agree to comply with the applicable requirements of the Securities
Exchange Act of 1934 and applicable rules and regulations issued by the Federal
Reserve Board and the OTS. In addition, we and each Selected Dealer confirm
that the Securities and Exchange Commission interprets Rule 15c2-8 promulgated
under the Securities Exchange Act of 1934 as requiring that a prospectus be
supplied to each person who is expected to receive a confirmation of sale 48
hours prior to delivery of such person's order form.
We and each Selected Dealer further agree to the extent that our
customers desire to pay for Shares with funds held by or to be deposited with
us, in accordance with the interpretation of the Securities and Exchange
Commission of Rule 15c2-4 promulgated under the Securities Exchange Act of 1934
either (a) upon receipt of an executed order form or direction to execute an
order form on behalf of a customer to forward the syndicated community offering
price for the Shares ordered on or before 12:00 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 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
-3-
acknowledgements of receipt of orders to each customer confirming interest on
the business day following such confirmation, (iii) we will debit accounts of
such customers on the fifth business day (the "debit date") following receipt of
the confirmation referred to herein and 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 Securities Exchange Act of 1934.
Unless earlier terminated by us, this Agreement shall terminate 45
full business days after the date hereof, but may be extended by us for an
additional period or periods not exceeding 30 full business days in the
aggregate. We may terminate this Agreement or any provisions hereof at any time
by written or telegraphic notice to you. Of course, our obligations hereunder
are subject to the successful completion of the offering, including the sale of
all of the Shares.
You agree that at any time or times prior to the termination of this
Agreement you will, upon our request, report to us the number of Shares sold on
behalf of the Company by you under this Agreement.
We shall have full authority to take such actions as we may deem
advisable in respect to all matters pertaining to the offering. We shall be
under no liability to you except for lack of good faith and for obligations
expressly assumed by us in this Agreement.
Upon application to us, we will inform you as to the states in which
we believe the Shares have been qualified for sale under, or are exempt from the
requirements of, the respective blue sky laws of such states, but we assume no
responsibility or obligation as to your rights to sell Shares in any state.
Additional copies of the Prospectus and any supplements thereto will
be supplied in reasonable quantities upon request.
Any notice from us to you shall be deemed to have been duly given if
mailed, telephoned or telegraphed to you at the address to which this Agreement
is mailed.
This Agreement shall be construed in accordance with the laws of New
York.
-4-
Please confirm your agreement hereto by signing and returning the
confirmation accompanying this letter at once to us at Sandler X'Xxxxx &
Partners, L.P., Xxx Xxxxx Xxxxx Xxxxxx, 000xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000.
The enclosed duplicate copy will evidence the agreement between us.
Very truly yours,
SANDLER X'XXXXX & PARTNERS, L.P.
By:_____________________________________
Sandler X'Xxxxx & Partners, L.P.
Two World Trade Center - 000xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: First Source Bancorp
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 Shares 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 in good standing of the National Association of Securities
Dealers, Inc. ("NASD"), which agrees to comply with all applicable rules of the
NASD, including, without limitation, the NASD's Interpretation With Respect to
Free-Riding and Withholding and NASD Rule 2110, or (ii) a foreign dealer not
eligible for membership in the NASD which agrees (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 and NASD Rules 2110, 2730 and 2750
as if they were NASD members and NASD Rule 2420 as it applies to a non-member
broker or dealer in a foreign country.
[ ] We wish to become a "Sponsoring Dealer."
________________________________________
(Please print or type name of firm)
________________________________________
(Authorized Representative)
Dated:______________________
