EXHIBIT 1.2 DRAFT FORM OF AGENCY AGREEMENT BETWEEN WEST ESSEX BANK, F.S.B. AND
SANDLER X'XXXXX & PARTNERS, L.P.
2,071,955 SHARES
(SUBJECT TO INCREASE UP TO 2,382,748 SHARES
IN THE EVENT OF AN OVERSUBSCRIPTION)
WEST ESSEX BANCORP, INC.
(A FEDERAL CORPORATION)
COMMON STOCK
(PAR VALUE $.01 PER SHARE)
AGENCY AGREEMENT
August ____, 0000
XXXXXXX X'XXXXX & PARTNERS, L.P.
Two World Trade Center, 000xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
West Essex Bancorp, Inc. a federal corporation (the "Company"), West Essex
Bancorp, M.H.C., a federal mutual holding company (the "MHC") and West Essex
Bank, F.S.B., a federal savings bank (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 2,071,955 shares
(subject to increase up to 2,382,748 shares in the event of an oversubscription)
of the Company's Common Stock, par value $.01 per share (the "Common Stock").
The shares of Common Stock to be sold by the Company are hereinafter called the
"Securities." In addition, as described herein, the Company expects to
contribute shares of Common Stock in an amount equal to 1.8% of the shares of
Common Stock issued in the Conversion (as hereinafter defined) to the West Essex
Bancorp Charitable Foundation (the "Foundation"), such shares hereinafter being
referred to as the "Foundation Shares."
The Securities are being offered for sale and the Foundation Shares are
being contributed in accordance with the Plan of Mutual Holding Company
Reorganization and Stock Issuance Plan (the "Plan") adopted by the Board of
Directors of the Bank pursuant to which the Bank intends to reorganize from a
federally chartered mutual savings bank to a federally chartered stock savings
bank in the federal mutual holding company form of ownership and issue all of
its stock to the Company. Pursuant to the Plan, the Company is offering to the
Bank's tax qualified employee benefit plans, including the Employee Stock
Ownership Plan (the "ESOP") (collectively, the
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"Employee Plans") and to certain of the Bank's depositors rights to subscribe
for the Securities in a subscription offering (the "Subscription Offering"). To
the extent Securities are not subscribed for in the Subscription Offering, such
Securities may be offered to certain members of the general public, with
preference given to certain natural persons residing in Essex, Xxxxxx and Bergen
Counties, New Jersey, 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 and the Company that any Securities not subscribed for in the Subscription
and Community Offering will be offered, subject to Section 3 hereof, in a
syndicated community offering (the "Syndicated Community Offering"). The
Subscription and Community Offering and the Syndicated Community Offering are
hereinafter referred to collectively as the "Offerings," and the reorganization
of the Bank from mutual to stock form in the mutual holding company form of
ownership, the acquisition of the capital stock of the Bank by the Company and
the Offerings are hereinafter referred to collectively as the "Conversion."
Following the completion of the Offering, the purchasers of Common Stock will
own 45.2% of the outstanding Common Stock, and the MHC will own 53% of the
outstanding Common Stock. It is acknowledged that the number of Securities to
be sold in the Conversion may be increased or decreased as described in the
Prospectus (as hereinafter defined). If the number of Securities is increased
or decreased in accordance with the Plan, the term "Securities" shall mean such
greater or lesser number, where applicable. In the event that a holding company
form of organization is not utilized, all pertinent terms of this Agreement will
apply to the conversion of the Bank from the mutual to stock form of
organization and the sale of the Bank's common stock.
In connection with the Conversion and pursuant to the terms of the Plan as
described in the Prospectus, the Company has established the Foundation.
Immediately following the consummation of the Conversion, subject to the
approval of the establishment of the Foundation by the depositors of the Bank
and compliance with certain conditions as may be imposed by regulatory
authorities, the Company will contribute newly issued shares of Common Stock in
an amount equal to 1.8% of the Common Stock issued in the Conversion, or between
64,168 and 86,815 shares of Common Stock (subject to increase in certain
circumstances to 99,837 shares).
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-1 (No. 333-56729), including a
related prospectus, for the registration of the Securities and the Foundation
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
prospectuses constituting a part thereof (including in each case all documents
incorporated or deemed to be incorporated by reference therein and the
information, if any, deemed to be a part thereof pursuant to the rules and
regulations of the Commission under the Securities Act, as from time to time
amended or supplemented pursuant to the Securities Act or otherwise (the
"Securities Act Regulations")), are hereinafter referred to as the "Registration
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Statement" and the "Prospectus," respectively, except that if any revised
prospectus shall be used by the Company in connection with the Subscription and
Community Offering or the Syndicated Community Offering which differs from the
Prospectus on file at the Commission at the time the Registration Statement
becomes effective (whether or not such revised prospectus is required to be
filed by the Company pursuant to Rule 424(b) of the Securities Act Regulations),
the term "Prospectus" shall refer to such revised prospectus from and after the
time it is first provided to the Agent for such use.
Concurrently with the execution of this Agreement, the Company is
delivering to the Agent copies of the Prospectus of the Company to be used in
the Subscription and Community Offering. Such prospectus contains information
with respect to the Bank, the Company and the Common Stock.
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 and the Bank acknowledge appears only in
the first two paragraphs of the section "The Reorganization and Offering
Marketing and Underwriting Arrangements" of the Prospectus).
(ii) The Company has filed with the Department of the Treasury,
Office of Thrift Supervision (the "OTS") the Company's application for
approval of its acquisition of the Bank (the "Holding Company Application")
on Form H-(e)1 promulgated under the savings and loan holding company
provisions of the Home Owners' Loan Act, as amended ("HOLA") and the
regulations promulgated thereunder. The Company has received written
notice from the OTS of its approval of the acquisition of the Bank, such
approval remains in full force and effect and no order has been issued by
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the OTS suspending or revoking such approval and no proceedings therefor
have been initiated or, to the knowledge of the Company or the Bank,
threatened by the OTS. At the date of such approval and at the Closing
Time referred to in Section 2, the Holding Company Application complied and
will comply in all material respects with the applicable provisions of HOLA
and the regulations promulgated thereunder.
(iii) Pursuant to the rules and regulations of the OTS governing
the reorganization of federally chartered mutual savings banks into the
mutual holding company form of ownership (the "MHC Regulations"), the Bank
has filed with the OTS a Notice of Mutual Holding Company Reorganization on
Form MHC-1 and an Application for Approval of a Minority Stock Issuance by
a Savings Association Subsidiary of a Mutual Holding Company on Form MHC-2,
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 "MHC Applications"), including
copies of the Bank's Proxy Statement, dated September ____, 1998, relating
to the Conversion (the "Proxy Statement"), and the Prospectus. The OTS
has, by letter dated __________, 199__, approved the MHC Applications,
such approval remains in full force and effect and no order has been issued
by the OTS suspending or revoking such approval and no proceedings therefor
have been initiated or, to the knowledge of the Company or the Bank,
threatened by the OTS. At the date of such approval and at the Closing
Time referred to in Section 2, the Conversion Application complied and will
comply in all material respects with the applicable provisions of the MHC
Regulations.
(iv) At the time of their use, the Proxy Statement and any
other proxy solicitation materials will comply in all material respects
with the applicable provisions of the MHC Regulations and will not contain
an untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The Company and
the Bank will promptly file the Prospectus and any supplemental sales
literature with the Commission and the OTS. The Prospectus and all
supplemental sales literature, as of the date the Registration Statement
became effective and at the Closing Time referred to in Section 2, complied
and will comply in all material respects with the applicable requirements
of the MHC Regulations and, at or prior to the time of their first use,
will have received all required authorizations of the OTS for use in final
form.
(v) Neither the SEC nor the OTS has, by order or otherwise,
prevented or suspended the use of the Prospectus or any supplemental sales
literature authorized by the Company or the Bank for use in connection with
the Offerings.
(vi) At the Closing Time referred to in Section 2, the Company,
the MHC and the Bank will have completed the conditions precedent to the
Conversion and the establishment of the Foundation in accordance with the
Plan, the applicable MHC Regulations and all other applicable laws,
regulations, decisions and orders, including all material terms,
conditions, requirements and provisions precedent to the Conversion
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imposed upon the Company, the MHC and the Bank by the OTS, or any other
regulatory authority, other than those which the regulatory authority
permits to be completed after the Conversion.
(vii) FinPro, Inc., which prepared the valuation of the Bank as
part of the Conversion, has advised the Company and the Bank in writing
that it satisfies all requirements for an appraiser set forth in the MHC
Regulations and any interpretations or guidelines issued by the OTS with
respect thereto.
(viii) The accountants who certified the consolidated financial
statements and supporting schedules of the Bank included in the
Registration Statement have advised the Company and the Bank in writing
that they are independent public accountants within the meaning of the Code
of Ethics of the American Institute of Certified Public Accountants (the
"AICPA"), and such accountants are, with respect to the Company, the Bank
and each subsidiary of the Bank, independent certified public accountants
as required by the Securities Act and the Securities Act Regulations.
(ix) The only subsidiaries of the Bank are West Essex Insurance
Agency, West Essex Service Corporation and First Reserve Corporation.
(x) The consolidated financial statements and the related
notes thereto included in the Registration Statement and the Prospectus
present fairly the financial position of the Company, the Bank and its
consolidated subsidiaries at the dates indicated and the results of
operations, retained earnings and cash flows for the periods specified, and
comply as to form in all material respects with the applicable accounting
requirements of the Securities Act Regulations and the MHC 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.
(xi) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as otherwise
stated therein (A) there has been no material adverse change in the
financial condition, results of operations or business affairs of the
Company, the MHC and the Bank and their 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 and the Bank or any of their subsidiaries, other than those in the
ordinary course of business, which are material with respect to the
Company, the MHC and the Bank and its subsidiaries, considered as one
enterprise.
(xii) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the United
States of America with corporate power and authority to own, lease and
operate its properties and to conduct its
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business as described in the Prospectus and to enter into and perform its
obligations under this Agreement; and the Company is duly qualified as a
foreign corporation to transact business and is in good standing in the
State of New 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 and the Bank and their
subsidiaries, considered as one enterprise.
(xiii) The MHC has been duly incorporated and is validly existing
as a corporation in good standing 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; and the MHC
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 and the Bank and their subsidiaries, considered as one enterprise.
(xiv) Upon consummation of the Conversion and the contribution
of the Foundation Shares 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
referred to in the Prospectus); except for shares issued in connection with
the formation of the Company, which shares will be cancelled upon
consummation of the Conversion, no shares of Common Stock have been or will
be issued and outstanding prior to the Closing Time referred to in Section
2; at the time of Conversion, the Securities will have been duly authorized
for issuance and, when issued and delivered by the Company pursuant to the
Plan against payment of the consideration calculated as set forth in the
Plan and stated on the cover page of the Prospectus, will be duly and
validly issued and fully paid and non-assessable; the terms and provisions
of the Common Stock and the capital stock of the Company conform to all
statements relating thereto contained in the Prospectus; the certificates
representing the shares of Common Stock conform to the requirements of
applicable law and regulations; and the issuance of the Securities is not
subject to preemptive or other similar rights.
(xv) As of the Closing Time, the MHC will not own any equity
securities or any equity interest in any business enterprise except as
described in the Prospectus.
(xvi) The Bank, as of the date hereof, is a federally chartered
savings bank in mutual form and upon consummation of the Conversion will be
a federally chartered savings bank in stock form, in both instances with
full corporate power and authority to own, lease and operate its properties
and to conduct its business as described in the
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Prospectus; the Company, the MHC and the Bank and their 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 MHC 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 and the Bank and their subsidiaries considered as one enterprise; all
such licenses, permits and other governmental authorizations are in full
force and effect and the Company, the Bank and its subsidiaries are in all
material respects in compliance therewith; neither the Company, the Bank
nor any of the Bank's 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 and the Bank and
their subsidiaries, considered as one enterprise; and the Bank is in good
standing under the laws of the United States and is qualified as a foreign
corporation in any jurisdiction in which the failure to so qualify would
have a material adverse effect on the financial condition, results of
operations or business affairs of the Company, the MHC and the Bank and
their subsidiaries considered as one enterprise.
(xvii) The deposit accounts of the Bank are insured by the
Federal Deposit Insurance Corporation (the "FDIC") up to the applicable
limits and upon consummation of the Conversion, the rights of the members
of the Bank in its mutual form will be transferred to the MHC in accordance
with the Plan and the MHC regulations. The Bank is a "qualified thrift
lender" within the meaning of 12 U.S.C. Section 1467a(m).
(xviii) Upon consummation of the Conversion, the authorized
capital stock of the Bank will be 9,000,000 shares of common stock, par
value $1.00 per share (the "Bank Common Stock") and 1,000,000 shares of
preferred stock, par value $1.00 per share (the "Bank Preferred Stock"),
and the issued and outstanding capital stock of the Bank will be 100 shares
of Bank Common Stock and no shares of the Bank Preferred Stock, and no
shares of Bank Common Stock or Bank Preferred Stock have been or will be
issued prior to the Closing Time referred to in Section 2; and as of
Closing Time referred to in Section 2, all of the issued and outstanding
capital stock of the Bank will be duly authorized, validly issued and fully
paid and nonassessable and have been issued in compliance with all federal
and state securities laws. The shares of Bank Common Stock to be issued to
the Company will have been duly authorized for issuance and, when issued
and delivered by the Bank pursuant to the Plan against payment of the
consideration calculated as set forth in the Plan and as described in the
Prospectus, will be duly and validly issued and fully paid and
nonassessable, and all such Bank Common Stock will be owned beneficially
and of record by the Company free and clear of any security interest,
mortgage, pledge, lien, encumbrance or legal or equitable claim; the terms
and provisions of the Bank Common Stock and the Bank Preferred Stock
conform to all statements relating thereto contained in the Prospectus, and
the certificates representing the shares of
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the Bank Common Stock will conform with the requirements of applicable laws
and regulations; and the issuance of the Bank Common Stock is not subject
to preemptive or similar rights.
(xix) The Foundation has been duly incorporated and is validly
existing as a non stock 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; the Foundation will not be a savings and loan holding company
withing the meaning of 12 C.F.R. Section 574.2(q) as a result of the
issuance of shares of Common Stock to it in accordance with the terms of
the Plan and in the amounts as described in the Prospectus; no approvals
are required to establish the Foundation and to contribute the shares of
Common Stock thereto as described in the Prospectus other than those
imposed by the OTS; except as specifically disclosed in the Prospectus and
the Proxy Statement, there are no agreements and/or understandings, written
or oral, between the Company and/or the Bank and the Foundation with
respect to the control, directly or indirectly, over the voting and the
acquisition or disposition of the Foundation Shares; at the time of the
Conversion, the Foundation Shares will have been duly authorized for
issuance and, when issued and contributed by the Company pursuant to the
Plan, will be duly and validly issued and fully paid and non-assessable;
and the issuance of the Foundation Shares is not subject to preemptive or
similar rights.
(xx) Each direct and indirect subsidiary of the Bank has been
duly incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation, 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
is duly qualified to transact business and is 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 and the Bank and their subsidiaries considered as one
enterprise; the activities of each such subsidiary are permitted to
subsidiaries of a federally chartered savings bank by the rules,
regulations, resolutions and practices of the OTS; all of the issued and
outstanding capital stock of each such subsidiary has been duly authorized
and validly issued, is fully paid and nonassessable and is owned by the
Bank, directly, free and clear of any security interest, mortgage, pledge,
lien, encumbrance or legal or equitable claim.
(xxi) 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 performance and except as the enforceability of indemnification
and contribution provisions may be limited by applicable securities laws.
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(xxii) Subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus and
prior to the Closing Time, except as otherwise may be indicated or
contemplated therein, none of the Company, the Bank or any subsidiary of
the Bank will have (A) issued any securities or incurred any liability or
obligation, direct or contingent, or borrowed money, except borrowings in
the ordinary course of business from the same or similar sources and in
similar amounts as indicated in the Prospectus, or (B) entered into any
transaction or series of transactions which is material in light of the
business of the Company, the MHC and the Bank and their subsidiaries, taken
as a whole, excluding the origination, purchase and sale of loans or the
purchase or sale of investment securities or mortgaged-backed securities in
the ordinary course of business.
(xxiii) 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 Foundation
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.
(xxiv) Neither the Bank nor any of the Bank's subsidiaries is in
violation of its certificate of incorporation, organization certificate,
articles of incorporation or charter, as the case may be, or bylaws (and
the Bank will not be in violation of its charter or bylaws in stock form,
and the Company and the MHC will not be in violation of their charters and
bylaws, upon consummation of the Conversion); and neither the Company, the
MHC and the Bank nor any of their 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 and the Bank or any of their 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 Bank or any of its 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 of the Company, the MHC and the Bank and their subsidiaries
considered as one enterprise; and there are no contracts or documents of
the Company, the MHC and the Bank or any of the Bank's subsidiaries which
are required to be filed as exhibits to the Registration Statement or the
MHC Application which have not been so filed.
(xxv) The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated herein have
been duly authorized by all necessary corporate action and do not and will
not conflict with or constitute a breach of, or default under, or result in
the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company, the MHC and the Bank or any of their
subsidiaries pursuant to, any contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which the Company, the MHC
and the Bank or any of their subsidiaries is a party or by which it or any
of them may be bound, or to which any of the
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property or assets of the Bank or any of its 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 and the Bank and
their subsidiaries considered as one enterprise; nor will such action
result in any violation of the provisions of certificate of incorporation,
organization certificate, articles of incorporation or charter or bylaws of
the Company, the MHC and the Bank or any of their subsidiaries, or any
applicable law, administrative regulation or administrative or court
decree.
(xxvi) No labor dispute with the employees of the Bank or any
of its subsidiaries exists or, to the knowledge of the Company, the MHC and
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 which 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 and the Bank and their subsidiaries considered as one enterprise.
(xxvii) Each of the Company, the MHC and the Bank and their
subsidiaries have good and marketable title to all properties and assets
for which ownership is material to the business of the Company, the MHC and
the Bank or their 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 and the Bank or their subsidiaries considered as one enterprise;
and all of the leases and subleases material to the business of the
Company, the MHC and the Bank or their subsidiaries under which the
Company, the MHC and the Bank or their subsidiaries hold properties,
including those described in the Prospectus, are valid and binding
agreements of the Company, the MHC and the Bank and their subsidiaries,
enforceable in accordance with their terms.
(xxviii) None of the Company, the MHC and the Bank nor their
subsidiaries are in violation of any directive from the OTS or the FDIC to
make any material change in the method of conducting their respective
businesses; the Bank and its subsidiaries have conducted and are conducting
their business so as to comply in all material respects with all applicable
statutes, regulations and administrative and court decrees (including,
without limitation, all regulations, decisions, directives and orders of
the OTS or the FDIC).
(xxix) There is no action, suit or proceeding before or by any
court or governmental agency or body, domestic or foreign, now pending, or,
to the knowledge of the Company, the MHC and the Bank, threatened, against
or affecting the Company, the MHC and the Bank or any of their 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 and the Bank and their subsidiaries considered as one
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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; all pending legal or governmental
proceedings to which the Company, the MHC and the Bank or any subsidiary is
a party or of which any of their respective property or assets is the
subject which are not described in the Registration Statement, including
ordinary routine litigation incidental to the business, are considered in
the aggregate not material; and there are no contracts or documents of the
Company, the MHC and the Bank or any of their subsidiaries which are
required to be filed as exhibits to the Registration Statement or the MHC
Application which have not been so filed.
(xxx) The Company has obtained opinions of its counsel,
Xxxxxxx, Xxxxxx & Xxxxxxxx, with respect to the legality of the Securities
to be issued, the Foundation Shares and the federal income tax consequences
of the Conversion, and an opinion of Radics & Co., LLC with respect to the
State and local income tax consequences of the Conversion (including
franchise tax, sales or use tax, stock transfer tax, real property transfer
gain tax and personal property transfer tax), copies of which are filed as
exhibits to the Registration Statement; all material aspects of the
aforesaid opinions are accurately summarized in the Prospectus; the facts
and representations upon which such opinions are based are truthful,
accurate and complete in all material respects; and none of the Company,
the MHC and the Bank has taken or will take any action inconsistent
therewith.
(xxxi) None of the Company, the MHC and the Bank are required
to be registered under the Investment Company Act of 1940, as amended.
(xxxii) 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 and the Bank and their subsidiaries considered as one enterprise.
(xxxiii) To the knowledge of the Company and the Bank, [WITH THE
EXCEPTION OF THE INTENDED LOAN TO THE BANK'S ESOP BY THE COMPANY TO ENABLE
THE ESOP TO PURCHASE SHARES OF COMMON STOCK IN AN AMOUNT OF UP TO 8% OF THE
COMMON STOCK ISSUED IN THE OFFERINGS,] none of the Company, the Bank or
employees of the Bank has made any payment of funds of the Company or the
Bank as a loan for the purchase of the Common Stock or made any other
payment of funds prohibited by law, and no funds have been set aside to be
used for any payment prohibited by law.
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(xxxiv) The Company, the Bank and its 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.
(xxxv) None of the Bank nor its subsidiaries nor any
properties owned or operated by the Bank or its subsidiaries is in
violation of or liable under any Environmental Law (as defined below),
except for such violations or liabilities that, individually or in the
aggregate, would not have a material adverse effect on the financial
condition, results of operations or business affairs of the Company, the
MHC and the Bank and their subsidiaries considered as one enterprise. There
are no actions, suits or proceedings, or demands, claims, notices or
investigations (including, without limitation, notices, demand letters or
requests for information from any environmental agency) instituted or
pending, or to the knowledge of the Company, the MHC and the Bank
threatened, relating to the liability of any property owned or operated by
the Bank or the subsidiaries thereof, 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.
(xxxvi) The Bank and its subsidiaries have filed all federal
income and state and local franchise tax returns required to be filed and
have made timely payments of all taxes shown as due and payable in respect
of such returns, and no deficiency has been asserted with respect thereto
by any taxing authority.
(xxxvii) The Company has received approval, subject to
regulatory approval to consummate the Offerings and issuance, to have the
Securities quoted on the National Market System of the National Association
of Securities Dealers' Automated Quotation System ("Nasdaq National
Market") effective as of the Closing Time referred to in Section 2 hereof.
(xxxviii) 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.
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(b) Any certificate signed by any officer of the MHC, the Company or
the Bank and delivered to either of the Agent to counsel for the Agent shall be
deemed a representation and warranty by the MHC, the Company or the Bank to each
Agent as to the matters covered thereby.
SECTION 2. APPOINTMENT OF SANDLER X'XXXXX; SALE AND DELIVERY OF THE
SECURITIES; CLOSING.
On the basis of the representations and warranties herein contained and
subject to the terms and conditions herein set forth, the Company hereby
appoints Sandler X'Xxxxx as its Agent to consult with and advise the Company,
and to assist the Company with the solicitation of subscriptions and purchase
orders for Securities, in connection with the Company's sale of Common Stock in
the Subscription and Community Offering and the Syndicated Community Offering.
On the basis of the representations and warranties herein contained, and subject
to the terms and conditions herein set forth, Sandler X'Xxxxx accepts such
appointment and agrees to use its best efforts to assist the Company with the
solicitation of subscriptions and purchase orders for Securities in accordance
with this Agreement; provided, however, that the Agent shall not be obligated to
take any action which is inconsistent with any applicable laws, regulations,
decisions or orders. The services to be rendered by Sandler X'Xxxxx pursuant to
this appointment include the following: (i) consulting as to the securities
marketing implications of any aspect of the Plan 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 earlier to
occur of (a) forty-five (45) days after the last day of the Subscription and
Community Offering, unless the Company and the Agent agree in writing to extend
such period and the OTS agrees to extend the period of time in which the Shares
may be sold, or (b) the receipt and acceptance of subscriptions and purchase
orders for all of the Securities, or (c) the completion of the Syndicated
Community Offering.
If any of the Securities remain available after the expiration of the
Subscription and Community Offering, at the request of the Company and the Bank,
Sandler X'Xxxxx will seek to form a syndicate of registered broker 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
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market environment; provided, however, that the aggregate fees payable to Xxxxxx
X'Xxxxx and Selected Dealers shall not exceed 1.5% of the aggregate Purchase
Price of the Securities sold by such Selected Dealers. Xxxxxx X'Xxxxx will
endeavor to distribute the Securities among the Selected Dealers in a fashion
which best meets the distribution objective of the Company and the requirements
of the Plan, which may result in limiting the allocation of stock to certain
Selected Dealers. It is understood that in no event shall Sandler X'Xxxxx be
obligated to act as a Selected Dealer or to take or purchase any Securities.
In the event the Company is unable to sell at least the total minimum of
the Securities, as set forth on the cover page of the Prospectus, within the
period herein provided, this Agreement shall terminate and the Company shall
refund to any persons who have subscribed for any of the Securities the full
amount which it may have received from them, together with interest as provided
in the Prospectus, and no party to this Agreement shall have any obligation to
the others hereunder, except for the obligations of the Company and the Bank as
set forth in Sections 4, 6(a) and 7 hereof and the obligations of the Agent as
provided in Sections 6(b) and 7 hereof. Appropriate arrangements for placing the
funds received from subscriptions for Securities or other offers to purchase
Securities in special interest-bearing accounts with the Bank until all
Securities are sold and paid for were made prior to the commencement of the
Subscription Offering, with provision for refund to the purchasers as set forth
above, or for delivery to the Company if all Securities are sold.
If at least the total minimum of Securities, as set forth on the cover page
of the Prospectus, are sold, the Company agrees to issue or have issued the
Securities sold and to release for delivery certificates for such Securities at
the Closing Time against payment therefor by release of funds from the special
interest-bearing accounts referred to above. The closing shall be held at the
offices of Xxxxxxx, Xxxxxx & Xxxxxxxx, 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 date upon which the Company shall release for delivery all of the
Securities, in accordance with the terms hereof, is herein called the "Closing
Date." The hour and date upon which the Company shall release for delivery all
of the Securities, in accordance with the terms hereof, is herein called the
"Closing Time."
The Company will pay any stock issue and transfer taxes which may be
payable with respect to the sale of the Securities.
In addition to reimbursement of the expenses specified in Section 4 hereof,
the Agent will receive the following compensation for its services hereunder:
(a) One and one half-percent (1.5%) of the aggregate Actual Purchase
Price (as defined in the Prospectus) of the Securities sold in the
Subscription and Community
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Offering, excluding in each case shares purchased by (i) any employee
benefit plan of the Company or the Bank established for the benefit of
their respective directors, officers and employees, (ii) by any foundation
or charitable organization established by the Bank in connection with the
Conversion, and (iii) any director, officer or employee of the Company or
the Bank or members of their immediate families (which term shall mean
parents, grandparents, spouse, siblings, children and grandchildren); and
(b) with respect to any Securities sold by a NASD member firm (other
than Sandler X'Xxxxx) under the Selected Dealer's Agreement in the
Syndicated Community Offering, (i) the compensation payable to Selected
Dealers under any Selected Dealers' Agreement, (ii) any sponsoring dealers'
fees; and (iii) a management fee to Sandler X'Xxxxx of one and one-half
percent (1.5%). Any fees payable to Sandler X'Xxxxx for Securities sold by
Sandler X'Xxxxx under any such agreement shall be limited to an aggregate
of one and one-half percent (1.5%) of the Actual Purchase Price of such
Securities; and
(c) with respect to the performance of proxy solicitation services,
conversion agent services and record management services for the Bank in
the Conversion, Sandler X'Xxxxx shall receive a fee of $15,000.
If this Agreement is terminated by the Agent in accordance with the
provisions of Section 9(a) hereof or the Conversion is terminated by the
Company, no fee shall be payable by the Company to Sandler X'Xxxxx; however, the
Company shall reimburse the Agent for all of its reasonable out-of-pocket
expenses incurred prior to termination, including the reasonable fees and
disbursements of counsel for the Agent in accordance with the provisions of
Section 4 hereof.
All fees payable to the Agent hereunder shall be payable in immediately
available funds at Closing Time, or upon the termination of this Agreement, as
the case may be. In recognition of the long lead times involved in the
registration process, the Bank agrees to make advance payments to the Agent for
services related to paragraphs (a) and (b), above, 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 commencement of the Subscription Offering, which
shall be credited against any fees or reimbursement of 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 and the Bank will prepare and file such amendments or
supplements to the Registration Statement, the Prospectus, the MHC
Application and the Proxy Statement as may hereafter be required by the
Securities Act Regulations or the MHC Regulations or as may hereafter be
requested by the Agent. Following completion of the Subscription and
Community Offering, in the event of a Syndicated Community Offering, the
Company and the Bank will (i) promptly prepare and file with the Commission
a post-effective amendment to the Registration Statement relating to the
results of the Subscription and Community Offering, any additional
information with respect to the proposed plan of distribution and any
revised pricing information or (ii) if
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no such post-effective amendment is required, will file with, or mail for
filing to, the Commission a prospectus or prospectus supplement containing
information relating to the results of the Subscription and Community
Offering and pricing information pursuant to Rule 424 of the Securities Act
Regulations, in either case in a form acceptable to the Agent. The Company
and the Bank will notify the Agent immediately, and confirm the notice in
writing, (i) of the effectiveness of any post-effective amendment of the
Registration Statement, the filing of any supplement to the Prospectus and
the filing of any amendment to the MHC 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 MHC Application or any amendment or supplement to the
Prospectus or for additional information, (iv) of the issuance by the OTS
of any order suspending the Offerings or the use of the Prospectus or the
initiation of any proceedings for that purpose, (v) of the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement or the initiation of any proceedings for that
purpose, and (vi) of the receipt of any notice with respect to the
suspension of any qualification of the Securities for offering or sale in
any jurisdiction. The Company and the Bank will make every reasonable
effort to prevent the issuance of any stop order and, if any stop order is
issued, to obtain the lifting thereof at the earliest possible moment.
(b) The Company and the Bank will give the Agent notice of its
intention to file or prepare any amendment to the MHC Application or
Registration Statement (including any post-effective amendment) or any
amendment or supplement to the Prospectus (including any revised prospectus
which the Company proposes for use in connection with the Syndicated
Community Offering of the Securities which differs from the prospectus on
file at the Commission at the time the Registration Statement becomes
effective, whether or not such revised prospectus is required to be filed
pursuant to Rule 424(b) of the Securities Act Regulations), will furnish
the Agent with copies of any such amendment or supplement a reasonable
amount of time prior to such proposed filing or use, as the case may be,
and will not file any such amendment or supplement or use any such
prospectus to which the Agent or counsel for the Agent may object.
(c) The Company and the Bank will deliver to the Agent as many signed
copies and as many conformed copies of the Conversion Application and the
Registration Statement as originally filed and of each amendment thereto
(including exhibits filed therewith or incorporated by reference therein)
as the Agent may reasonably request, and from time to time such number of
copies of the Prospectus as the Agent may reasonably request.
(d) During the period when the Prospectus is required to be
delivered, the Company and the Bank will comply, at their own expense, with
all requirements imposed upon them by the OTS, by the applicable MHC
Regulations, as from time to time in force, and by the Securities Act, the
Securities Act Regulations, the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and the rules and regulations of the Commission
promulgated thereunder, including, without limitation, Regulation M under
the Exchange
-17-
Act, so far as necessary to permit the continuance of sales or dealing in
shares of Common Stock during such period in accordance with the provisions
hereof and the Prospectus.
(e) If any event or circumstance shall occur as a result of which it
is necessary, in the opinion of counsel for the Agent, to amend or
supplement the Prospectus in order to make the Prospectus not misleading in
the light of the circumstances existing at the time it is delivered to a
purchaser, the Company and the Bank will forthwith amend or supplement the
Prospectus (in form and substance satisfactory to counsel for the Agent) so
that, as so amended or supplemented, the Prospectus will not include an
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances existing at the time it is delivered to a purchaser, not
misleading, and the Company and the Bank will furnish to the Agent a
reasonable number of copies of such amendment or supplement. For the
purpose of this subsection, the Company and the Bank will each furnish such
information with respect to itself as the Agent may from time to time
reasonably request.
(f) The Company and the Bank will take all necessary action, in
cooperation with the Agent, to qualify the Securities for offering and sale
under the applicable securities laws of such states of the United States
and other jurisdictions as the MHC Regulations may require and as the Agent
and the Company have agreed; provided, however, that the Company and the
Bank shall not be obligated to file any general consent to service of
process or to qualify as a foreign corporation in any jurisdiction in which
it is not so qualified. In each jurisdiction in which the Securities have
been so qualified, the Company and the Bank will file such statements and
reports as may be required by the laws of such jurisdiction to continue
such qualification in effect for a period of not less than one year from
the effective date of the Registration Statement.
(g) The Company authorizes Sandler X'Xxxxx and any Selected Dealers
to act as agent of the Company in distributing the Prospectus to persons
entitled to receive subscription rights and other persons to be offered
Securities having record addresses in the states or jurisdictions set forth
in a survey of the securities or "blue sky" laws of the various
jurisdictions in which the Offerings will be made (the "Blue Sky Survey").
(h) The Company will make generally available to its security holders
as soon as practicable, but not later than 60 days after the close of the
period covered thereby, an earnings statement (in form complying with the
provisions of Rule 158 of the 1933 Act Regulations) covering a twelve month
period beginning not later than the first day of the Company's fiscal
quarter next following the "effective date" (as defined in said Rule 158)
of the Registration Statement.
(i) During the period ending on the third anniversary of the
expiration of the fiscal year during which the closing of the transactions
contemplated hereby occurs, the Company will furnish to its stockholders as
soon as practicable after the end of each such fiscal year an annual report
(including consolidated statements of financial condition and consolidated
statements of income, stockholders' equity and cash flows, certified by
-18-
independent public accountants) and, as soon as practicable after the end
of each of the first three quarters of each fiscal year (beginning with the
fiscal quarter ending after the effective date of the Registration
Statement), consolidated summary financial information of the Company, the
Bank and its 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 Exchange Act or any national
securities exchange or system on which any class of securities of the
Company is listed, and (ii) from time to time, such other information
concerning the Company as the Agent may reasonably request.
(k) The Company, the MHC and the Bank will conduct the Conversion,
including the formation and operation of the Foundation, in all material
respects in accordance with the Plan, the MHC Regulations and all other
applicable regulations, decisions and orders, including all applicable
terms, requirements and conditions precedent to the Conversion imposed upon
the Company or the Bank by the OTS.
(l) Within 90 days of the Closing Date, the Company and the MHC will
each register as a savings and loan holding company under the HOLA.
(m) The Company, the MHC and the Bank will use the net proceeds
received by them from the sale of the Securities in the manner specified in
the Prospectus under "Use of Proceeds."
(n) The Company will maintain the effectiveness of the Exchange Act
Registration Statement for not less than three years. The Company will
file with the Nasdaq Stock Market all documents and notices required by the
Nasdaq Stock Market of companies that have issued securities that are
traded in the over-the-counter market and quotations for which are reported
by the Nasdaq National Market.
(o) The Company and the Bank will take such actions and furnish such
information as are reasonably requested by the Agent in order for the Agent
to ensure compliance with the National Association of Securities Dealers,
Inc.'s "Interpretation Relating to Free-Riding and Withholding."
(p) Other than in connection with any employee benefit plan or
arrangement described in the Prospectus, the Company will not, without the
prior written consent of the Agent, sell or issue, contract to sell or
otherwise dispose of, any shares of Common Stock other than the Securities
for a period of 180 days following the Closing Time.
-19-
(q) During the period beginning on the date hereof and ending on the
later of the third anniversary of the Closing Time or the date on which the
Agent receives full payment in satisfaction of any claim for
indemnification or contribution to which it may be entitled pursuant to
Sections 6 or 7, respectively, none of the Company, the MHC and 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, by regulation, policy statement or interpretive
release, or by written order or written advice addressed to the Bank or the
Agent specifically addressing the provisions of Section 6(a) hereof,
permits indemnification of the Agent by the Bank as contemplated by such
provisions.
(r) The Company, the MHC 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, the Conversion Application including those
conditions relating to the establishment and the operation of the
Foundation; the Company and the Bank shall use their best efforts to ensure
that the Foundation submits within the time frames required by applicable
law a request to the Internal Revenue Service to be recognized as a tax-
exempt organization under Section 501(c)(3) of the Internal Revenue Code of
1986, as amended (the "Code"); the Company, the MHC and the Bank will take
no action which will result in the possible loss of the Foundation's tax
exempt status; and neither the Company nor the Bank will contribute any
additional assets to the Foundation until such time that such additional
contributions will be deductible for federal and state income tax purposes.
(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,
the MHC and the Bank have satisfied each condition set forth in Section 5
hereof, unless such condition is waived by the Agent.
(u) The Company or the Bank will furnish to Sandler X'Xxxxx as early
as practicable prior to the Closing Date, but no later than two (2) full
business days prior thereto, a copy of the latest available unaudited
interim consolidated financial statements of the Bank and the Subsidiaries
which have been read by Radics & Co., LLC, as stated in their letters to be
furnished pursuant to subsections (e) and (f) of Section 5 hereof.
SECTION 4. PAYMENT OF EXPENSES. The Company, the MHC and the Bank
jointly and severally agree to pay all expenses incident to the performance of
their obligations under this Agreement, including but not limited to (i) the
cost of obtaining all securities and bank regulatory approvals, (ii) the
printing and filing of the Registration Statement as originally filed and of
each amendment thereto, (iii) the preparation, issuance and delivery of the
certificates for the Securities to the purchasers in the Offerings, (iv) the
fees and disbursements of the Company's and the
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Bank's counsel, accountants, appraiser and other advisors, (v) the qualification
of the Securities under securities laws in accordance with the provisions of
Section 3(f) hereof, including filing fees and the fees and disbursements of
counsel in connection therewith and in connection with the preparation of the
Blue Sky Survey, (vi) the printing and delivery to the Agent of copies of the
Registration Statement as originally filed and of each amendment thereto and the
printing and delivery of the Prospectus and any amendments or supplements
thereto to the purchasers in the Offerings and the Agent, (vii) the printing and
delivery to the Agent of copies of a Blue Sky Survey, and (viii) the fees and
expenses incurred in connection with the listing of the Securities on the Nasdaq
National Market. In the event the Agent incurs any such fees and expenses on
behalf of the Company, the MHC and the Bank, the Bank will reimburse the Agent
for such fees and expenses whether or not the Conversion is consummated;
provided, however, that the Agent shall not incur any substantial expenses on
behalf of the Company, the MHC and the Bank pursuant to this Section without the
prior approval of the Bank.
The Company, the MHC and the Bank jointly and severally agree to pay
certain expenses incident to the performance of the Agent's obligations under
this Agreement, regardless of whether the Conversion is consummated, including
(i) the filing fees paid or incurred by the Agent in connection with all filings
with the National Association of Securities Dealers, Inc., and (ii) all
reasonable out of pocket expenses incurred by the Agent relating to the
Offerings, including, without limitation, advertising, promotional, syndication
and travel expenses and fees and expenses of the Agent's counsel, up to a
maximum aggregate amount of $60,000. All fees and expenses to which the Agent
is entitled to reimbursement under this paragraph of this Section 4 shall be due
and payable upon receipt by the Company or the Bank of a written accounting
therefor setting forth in reasonable detail the expenses incurred by the Agent.
SECTION 5. CONDITIONS OF AGENT'S OBLIGATIONS. The Company, the MHC and
the Bank and the Agent agree that the issuance and the sale of Securities and
all obligations of the Agent hereunder are subject to the accuracy of the
representations and warranties of the Company, 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 and their obligations hereunder, and to the following further
conditions:
(a) No stop order suspending the effectiveness of the Registration
Statement shall have been issued under the Securities Act or proceedings
therefor initiated or threatened by the Commission, no order suspending the
Offerings or authorization for final use of the Prospectus shall have been
issued or proceedings therefor initiated or threatened by the OTS and no
order suspending the sale of the Securities in any jurisdiction shall have
been issued.
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(b) At Closing Time, the Agent shall have received:
(1) The favorable opinion, dated as of Closing Time, of Xxxxxxx,
Xxxxxx & Xxxxxxxx, counsel for the Company, the MHC and the Bank, in
form and substance satisfactory to counsel for the Agent, to the
effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
United States of America.
(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
affairs of the Company, the MHC and the Bank and their
subsidiaries, considered as one enterprise.
(iv) Upon consummation of the Conversion, and the issuance
of the Foundation Shares to the Foundation immediately upon
completion thereof, the authorized, issued and outstanding
capital stock of the Company will be as set forth in the
Prospectus under "Capitalization" and, except for shares issued
upon formation of the Company, no shares of Common Stock have
been or will be issued and outstanding prior to the Closing Time.
(v) The Securities and the Foundation Shares have been
duly and validly authorized for issuance and sale and, when
issued and delivered by the Company pursuant to the Plan against
payment of the consideration calculated as set forth in the Plan,
or contributed by the Company pursuant to the Plan in the case of
the Foundation Shares, will be duly and validly issued and fully
paid and non-assessable.
(vi) The issuance of the Securities and the Foundation
Shares is not subject to preemptive or other similar rights
arising by operation of law or, to the best of their knowledge
and information, otherwise.
(vii) The Bank has been at all times since 1995 and prior to
the Closing Time duly organized, and is validly existing and in
good standing under the laws of the United States of America as a
federally chartered
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savings bank of mutual form, and, at Closing Time, has become
duly organized, validly existing and in good standing under the
laws of the United States of America as a federally chartered
savings bank of stock form, in both instances with full corporate
power and authority to own, lease and operate its properties and
to conduct its business as described in the Registration
Statement and the Prospectus; and the Bank is duly qualified as a
foreign corporation in each jurisdiction in which the failure to
so qualify would have a material adverse effect upon the
financial condition, results of operations or business affairs of
the Bank.
(viii) The Bank is a member in good standing of the Federal
Home Loan Bank of New York and the deposit accounts of the Bank
are insured by the FDIC up to the applicable limits. Upon
consummation of the Conversion, the rights of the members of the
Bank in its mutual form will be transferred to the MHC in
accordance with the Plan and the MHC Regulations.
(ix) Each direct and indirect subsidiary of the Bank has
been duly incorporated and is validly existing as a corporation
in good standing under the laws of the jurisdiction of its
incorporation, 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 is duly qualified as
a foreign corporation to transact business and is in good
standing in each jurisdiction in which the failure to so qualify
would have a material adverse effect upon the financial
condition, results of operations or business of the Company, the
MHC and the Bank and their subsidiaries, taken as a whole; the
activities of each such subsidiary are permitted to subsidiaries
of a savings association holding company and of a federally
chartered savings bank by the rules, regulations, resolutions and
practices of the OTS; all of the issued and outstanding capital
stock of each such subsidiary has been duly authorized and
validly issued, is fully paid and non-assessable and is owned by
the Bank, directly or through subsidiaries, free and clear of any
security interest, mortgage, pledge, lien, encumbrance, claim or
equity.
(x) The Foundation has been duly incorporated and is
validly existing as a non-stock 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; the Foundation is
not a savings and loan holding company within the meaning of 12
C.F.R. Section 574.2(q) as a result of the issuance of shares of
Common Stock to it in accordance with the terms of the Plan and
in the amounts as described in the Prospectus; no approvals are
required to establish the Foundation and to contribute the shares
of Common Stock thereto as described in the Prospectus other than
those set forth in any written notice or order of approval or
non-objection of the
-23-
Conversion, the Conversion Application or the Holding Company
Application, copies of which were provided to the Agent prior to
the Closing Time.
(xi) Upon consummation of the Conversion, all of the issued
and outstanding capital stock of the Bank when issued and
delivered pursuant to the Plan against payment of consideration
calculated as set forth in the Plan and set forth in the
Prospectus, will be duly authorized and validly issued and fully
paid and nonassessable, and all such capital stock will be owned
beneficially and of record by the Company free and clear of any
security interest, mortgage, pledge, lien, encumbrance, claim or
equity.
(xii) The OTS has duly approved the Holding Company
Application and the MHC Application and no action is pending, or
to the best of such counsel's knowledge, threatened respecting
the Holding Company Application or the MHC Application or the
acquisition by the Company of all of the Bank's issued and
outstanding capital stock; the Holding Company Application and
the MHC Application comply with the applicable requirements of
the OTS, includes all documents required to be filed as exhibits
thereto, and is, to the best of such counsel's knowledge and
information, truthful, accurate and complete; and the Company is
duly authorized to become a savings association holding company
and is duly authorized to own all of the issued and outstanding
capital stock of the Bank to be issued pursuant to the Plan.
(xiii) The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby, including
the establishment of the Foundation and the contribution thereto
of the Foundation Shares, (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 result in any
violation of the provisions of the charter or bylaws of the
Company, the Bank or any of its subsidiaries; and, (C) will not
conflict with or constitute a breach of, or default under, and no
event has occurred which, with notice or lapse of time or both,
would constitute a default under, or result in the creation or
imposition of any lien, charge or encumbrance, that, individually
or in the aggregate, would have a material adverse effect on the
financial condition, results of operations or business affairs of
the Company, the MHC and the Bank and their subsidiaries
considered as one enterprise, upon any property or assets
-24-
of the Company, the MHC and the Bank or their subsidiaries
pursuant to any contract, indenture, mortgage, loan agreement,
note, lease or other instrument to which the Company, the MHC and
the Bank or their 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 and the Bank or their subsidiaries is subject.
(xiii) The Prospectus has been duly authorized by the OTS
for final use pursuant to the MHC Regulations and no action is
pending, or to the best of such counsel's knowledge, is
threatened, by the OTS to revoke such authorization.
(xiv) The Registration Statement is effective under the
Securities Act and no stop order suspending the effectiveness of
the Registration Statement has been issued under the Securities
Act or, to the best of such counsel's knowledge, proceedings
therefor initiated or threatened by the Commission.
(xv) No further approval, authorization, consent or other
order of any public board or body is required in connection with
the execution and delivery of this Agreement, the issuance of the
Securities and the consummation of the Conversion, except as may
be required under the securities or Blue Sky laws of various
jurisdictions as to which no opinion need be rendered.
(xvi) At the time the Registration Statement became
effective, the Registration Statement (other than the financial
statements and statistical data included therein, as to which no
opinion need be rendered) complied as to form in all material
respects with the requirements of the Securities Act and the
Securities Act Regulations and the MHC Regulations.
(xvii) 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.
(xviii) There are no legal or governmental proceedings
pending or threatened against or affecting the Company, the MHC
and the Bank or their subsidiaries which 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 and the Bank or any of their
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.
-25-
(xix) The information in the Prospectus under "Risk Factors
-Establishment of the Charitable Foundation - Possible
Nondeductibility of the Contribution," and "- Possible Adverse
Income Tax Consequences of the Distribution of Subscription
Rights,""Dividend Policy," "Business of the Bank - Legal
Proceedings", "Federal and State Taxation," "Regulation," "The
Registration and Stock Offering - Establishment of the Charitable
Foundation, " - Effects of Reorganization," and " - Tax Aspects
of the Reorganization," "Restrictions on Acquisitions of the
Bancorp" and "Description of Capital Stock," to the extent that
it constitutes matters of law, summaries of legal matters,
documents or proceedings, or legal conclusions, has been reviewed
by them and is complete and accurate in all material respects.
(xx) 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.
(xxi) The Plan has been duly authorized by the Board of
Directors of the Company and the Board of Directors of the Bank
and the OTS's approval of the Plan remains in full force and
effect; the Bank's charter has been amended, effective upon
consummation of the Conversion and the filing of such amended
charter with the OTS, to authorize the issuance of permanent
capital stock; to the best of such counsel's knowledge, the
Company and the Bank have conducted the Conversion and the
establishment and funding of the Foundation in all material
respects in accordance with applicable requirements of the MHC
Regulations, the Plan and all other applicable regulations,
decisions and orders thereunder, including all material
applicable terms, conditions, requirements and conditions
precedent to the Conversion imposed upon the Company or the Bank
by the OTS and, no order has been issued by the OTS to suspend
the Conversion or the Offerings and no action for such purpose
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 MHC Application
(which includes the Plan which provides for the establishment of
the Foundation) or the Holding Company Application.
-26-
(xxii) To the best of such counsel's knowledge, the
Company, the MHC and the Bank and their subsidiaries have
obtained all licenses, permits and other governmental
authorizations currently required for the conduct of their
respective businesses as described in the Registration Statement
and Prospectus, and all such licenses, permits and other
governmental authorizations are in full force and effect, and the
Company and the Bank and its subsidiaries are in all material
respects complying therewith.
(xxiii) Neither the Company, the Bank nor any of its
subsidiaries is in violation of its certificate of incorporation,
organization certificate, articles of incorporation or charter,
as the case may be, or bylaws (and the Bank will not be in
violation of its charter in stock form, and the MHC will not be
in violation of its charter upon consummation of the Conversion)
or, to the best of such counsel's knowledge, in default (nor has
any event occurred which, with notice or lapse of time or both,
would constitute a default) in the performance or observance of
any obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, loan agreement, note, lease or
other instrument to which the Company, the Bank or any of its
subsidiaries is a party or by which the Company, the Bank or any
of its subsidiaries or any of their property may be bound.
(xxiv) None of the Company, the MHC and the Bank are
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 Xxxx
Xxxxxx Xxxxxx Xxxxxxxx & Xxxxxx, P.C., 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),
(xii), (xvi) and (xvii) 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, Xxxxxxx, Xxxxxx & Xxxxxxxx and
Xxxx Xxxxxx Xxxxxx Xxxxxxxx & Xxxxxx, P.C. shall each additionally
state that nothing has come to their attention that would lead them to
believe that the Registration Statement (except for financial
statements and schedules and other financial or statistical data
included therein, as to which counsel need make no statement), at the
time it became effective, contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading or that the
Prospectus (except for financial statements and schedules and other
financial or statistical data included therein, as to which counsel
need make no statement), at the time the Registration Statement became
effective or at Closing Time, included an untrue statement of a
material fact or omitted to state a material fact necessary in order
to make the statements
-27-
therein, in the light of the circumstances under which they were made,
not misleading. In giving their opinions, Xxxxxxx, Xxxxxx & Xxxxxxxx
and Xxxx Xxxxxx Xxxxxx Xxxxxxxx & Xxxxxx, P.C. may rely as to matters
of fact on certificates of officers and directors of the Company and
the Bank and certificates of public officials, and as to certain
matters of Delaware law upon the opinion of ______________, which
opinions shall be in form and substance satisfactory to counsel for
the Agent, and Xxxx Xxxxxx Xxxxxx Xxxxxxxx & Xxxxxx, P.C. may also
rely on the opinion of Xxxxxxx, Xxxxxx & Xxxxxxxx.
(c) At 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 in accordance with the Plan, the applicable MHC
Regulations and all other applicable laws, regulations, decisions and
orders, including all terms, conditions, requirements and provisions
precedent to the Conversion imposed upon the Company or the Bank by the
OTS, or any other regulatory authority other than those which the OTS
permits to be competed after the Conversion.
(d) At Closing Time, there shall not have been, since the date hereof
or since the respective dates as of which information is given in the
Registration Statement and the Prospectus, any material adverse change in
the financial condition, results of operations or business affairs of the
Company, the MHC and the Bank and their 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 Chief Executive Officer
of the Company, of the Bank and of the MHC, the President of the Company,
the Bank and the MHC and the chief financial or chief accounting officer of
the Company, of the Bank and of the MHC, dated as of Closing Time, to the
effect that (i) there has been no such material adverse change, (ii) there
shall have been no material transaction entered into by the Company or the
Bank from the latest date as of which the financial condition of the
Company or the Bank as set for the in the Registration Statement and the
Prospectus other than transactions referred to or contemplated therein and
transactions in the ordinary cause of business, (iii) neither the Company,
the Bank nor the MHC shall have received from the OTS any direction (oral
or written) to make any material change in the method of conducting its
business with which it has not complied (which direction, if any, shall
have been disclosed to the Agent) or which materially and adversely would
affect the business, financial condition or results of operations of the
Company, the MHC and the Bank or their subsidiaries, (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 Syndicated
Community Offering 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 and no person has sought to obtain regulatory or
judicial review of the action of the OTS in approving
-28-
the Plan in accordance with the MHC Regulations nor has any person sought
to obtain regulatory or judicial review of the action of the OTS in
approving the Holding Company Application.
(e) At the time of the execution of this Agreement, the Agent shall
have received from Radics & Co., LLC a letter dated such date, in form and
substance satisfactory to the Agent, to the effect that (i) they are
independent public accountants with respect to the Company, the Bank and
its subsidiaries within the meaning of the Code of Ethics of the American
Institute of Certified Public Accountants, the Securities Act and the
Securities Act Regulations and the MHC Regulations; (ii) it is their
opinion that the consolidated financial statements and supporting schedules
included in the Registration Statement and covered by their opinions
therein comply as to form in all material respects with the applicable
accounting requirements of the Securities Act and the Securities Act
Regulations; (iii) based upon limited procedures as agreed upon by the
Agent and Radics & Co., LLC 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 its
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 MHC
Regulations or are not presented in conformity with generally accepted
accounting principles applied on a basis substantially consistent with that
of the audited financial statements included in the Registration Statement
and the Prospectus, (B) the unaudited amounts of net interest income and
net income set forth under "Selected Financial Information" in the
Registration Statement and Prospectus do not agree with the amounts set
forth in unaudited consolidated financial statements as of and for the
dates and periods presented under such captions or such amounts were not
determined on a basis substantially consistent with that used in
determining the corresponding amounts in the audited financial statements
included in the Registration Statement, (C) at a specified date not more
than five days prior to the date of this Agreement, there has been any
increase in the consolidated long term or short term debt of the Bank and
its subsidiaries or any decrease in consolidated total assets, the
allowance for loan losses, total deposits or net worth of the Bank and its
subsidiaries, in each case as compared with the amounts included in the
Registration Statement shown as of the latest date or, (D) during the
period from ______________, 1998 to a specified date not more than five
days prior to the date of this Agreement, there were any decreases, as
compared with the corresponding period in the preceding year, in total
interest income, net interest income, net interest income after provision
for loan losses, income before income tax expense or net income of the Bank
and its subsidiaries, except in all instances for increases or decreases
which the Registration Statement and the Prospectus disclose have occurred
or may occur; and (iv) in addition to the examination referred to in their
opinions and the limited procedures referred to in clause (iii) above, they
have carried out certain specified procedures, not constituting an audit,
with respect to certain amounts, percentages and financial information
which are included in the Registration Statement and Prospectus and which
are specified by the Agent, and have found such amounts, percentages and
financial information to be in agreement with the relevant accounting,
-29-
financial and other records of the Company, the Bank and its subsidiaries
identified in such letter.
(e) At Closing Time, the Agent shall have received from Radics & Co.
LLC a letter, dated as of Closing Time, to the effect that they reaffirm
the statements made in the letter furnished pursuant to subsection (d) of
this Section, except that the specified date referred to shall be a date
not more than five days prior to Closing Time.
(f) At Closing Time, the Securities shall have been approved for
listing on the Nasdaq National Market upon notice of issuance.
(g) At Closing Time, the Agent shall have received a letter from
FinPro, Inc., dated as of the Closing Time, confirming its appraisal.
(h) 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
Foundation 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 Foundation Shares as herein contemplated shall be
satisfactory in form and substance to the Agent and counsel for the Agent.
(i) At any time prior to Closing Time, (i) there shall not have
occurred any material adverse change in the financial markets in the United
States or elsewhere or any outbreak of hostilities or escalation thereof or
other calamity or crisis the effect of which, in the judgment of the Agent,
are so material and adverse as to make it impracticable to market the
Securities or to enforce contracts, including subscriptions or orders, for
the sale of the Securities, and (ii) trading generally on either the
American Stock Exchange or the New York Stock Exchange or the Nasdaq Stock
Market shall not have been suspended, and minimum or maximum prices for
trading shall not have been fixed, or maximum ranges for prices for
securities have been required, by either of said Exchanges or by order of
the Commission or any other governmental authority, and a banking
moratorium shall not have been declared by Federal authorities.
SECTION 6. INDEMNIFICATION.
(a) The Company, the MHC and the Bank, jointly and severally, agree
to indemnify and hold harmless the Agent, each person, if any, who controls the
Agent, within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act, and its respective partners, directors, officers, employees
and agents as follows:
(i) from and against any and all loss, liability, claim, damage
and expense whatsoever, as incurred, related to or arising out of the
Conversion (including establishment of the Foundation and the contribution
of the Foundation Shares thereto by
-30-
the Company) or any action taken by the Agent where acting as agent of the
Company or the Bank or otherwise as described in Section 2 hereof;
provided, however, that this indemnity agreement shall not apply to any
loss, liability, claim, damage or expense found in a final judgment by a
court of competent jurisdiction to have resulted primarily from the bad
faith, willful misconduct or gross negligence of the Agent seeking
indemnification hereunder.
(ii) from and against any and all loss, liability, claim,
damage and expense whatsoever, as incurred, based upon or arising out of
any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement (or any amendment thereto), or the
omission or alleged omission therefrom of a material fact required to be
stated therein or necessary to make the statements therein not misleading
or arising out of any untrue statement or alleged untrue statement of a
material fact contained in the Proxy Statement or Prospectus (or any
amendment or supplement thereto) or the omission or alleged omission
therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading;
(iii) from and against any and all loss, liability, claim,
damage and expense whatsoever, as incurred, to the extent of the aggregate
amount paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened, or
of any claim whatsoever described in clauses (i) or (ii) above, if such
settlement is effected with the written consent of the Company, the Bank or
the MHC, which consent shall not be unreasonably withheld; and
(iv) from and against any and all expense whatsoever, as
incurred (including, subject to Section 6(c) hereof, the fees and
disbursements of counsel chosen by the Agent), reasonably incurred in
investigating, preparing for or defending against any litigation, or any
investigation, proceeding or inquiry by any governmental agency or body,
commenced or threatened, or any claim pending or threatened whatsoever
described in clauses (i) or (ii) above, to the extent that any such expense
is not paid under (i), (ii) or (iii) above;
provided, however, that the indemnification provided for in this paragraph (a)
shall not apply to any loss, liability, claim, damage or expense to the extent
arising out of any untrue statement or alleged untrue statement of a material
fact contained in the Prospectus (or any amendment or supplement thereto) or the
omission or alleged omission therefrom of a material fact necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading which was made in reliance upon and in conformity with
written information relating to the Agent furnished to the Company or the Bank
by the Agent expressly for use in the Prospectus (or any amendments or
supplements thereto), which information the Company and the Bank acknowledge is
included only in the section captioned "The Reorganization and Offering--
Marketing and Underwriting Arrangements" of the Prospectus (the "Agent
Information"). Notwithstanding the foregoing, the indemnification provided for
in this
-31-
paragraph (a) shall not apply to the Bank to the extent that such
indemnification by the Bank would constitute a covered transaction under Section
23A of the Federal Reserve Act.
(b) The Agent agrees to indemnify and hold harmless the Company, the
MHC, 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
Exchange Act against any and all loss, liability, claim, damage and expense
described in the indemnity contained in subsection (a) of this Section, as
incurred, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, of a material fact made in the Prospectus (or
any amendment or supplement thereto) in reliance upon and in conformity with the
Agent Information.
(c) Each indemnified party shall give notice as promptly as
reasonably practicable to each indemnifying party of any action commenced
against it in respect of which indemnity may be sought hereunder, but failure to
so notify an indemnifying party shall not relieve such indemnifying party from
any liability which it may have otherwise than on account of this indemnity
agreement. An indemnifying party may participate at its own expense in the
defense of any such action. In no event shall the indemnifying parties be liable
for fees and expenses of more than one counsel (in addition to no more than one
local counsel in each separate jurisdiction in which any action or proceeding is
commenced) separate from their own counsel for all indemnified parties in
connection with any one action or separate but similar or related actions in the
same jurisdiction arising out of the same general allegations or circumstances.
(d) The Company, the MHC 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 MHC, the Company, its security holders or the Bank's
or the Company's creditors relating to or arising out of the engagement of the
Agent pursuant to, or the performance by the Agent of the services contemplated
by, this Agreement, except to the extent that any loss, claim, damage or
liability is found in a final judgment by a court of competent jurisdiction to
have resulted primarily from the Agent's bad faith, willful misconduct or gross
negligence.
(e) In addition to, and without limiting, the provisions of Section
(6)(a)(iv) hereof, in the event that any Agent, any person, if any, who controls
the Agent within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act or any of its partners, directors, officers, employees or
agents is requested or required to appear as a witness or otherwise gives
testimony in any action, proceeding, investigation or inquiry brought by or on
behalf of or against the Company, the Bank, the MHC, the Agent or any of its
respective affiliates or any participant in the transactions contemplated hereby
in which the Agent or such person or agent is not named as a defendant, the
Company, the Bank and the MHC 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
-32-
held to be unenforceable by the indemnified parties although applicable in
accordance with its terms, Company, the MHC and 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, the
MHC and 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,
the MHC and the Bank are jointly and severally responsible for the balance or
(ii) if, but only if, the allocation provided for in clause (i) is for any
reason held unenforceable, in such proportion as is appropriate to reflect not
only the relative benefits to the Company and the Bank on the one hand and the
Agent on the other, as reflected in clause (i), but also the relative fault of
the Company and the Bank on the one hand and the Agent on the other, as well as
any other relevant equitable considerations; provided, however, that no person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. For purposes of this Section,
each person, if any, who controls the Agent within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act shall have the same rights
to contribution as the Agent, and each director of the Company, each 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 Exchange Act shall have
the same rights to contribution as the Company and the Bank. Notwithstanding
anything to the contrary set forth herein, to the extent permitted by applicable
law, in no event shall the Agent be required to contribute an aggregate amount
in excess of the aggregate marketing fees to which the Agent is entitled and
actually paid pursuant to this Agreement.
SECTION 8. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE
DELIVERY. All representations, warranties and agreements contained in this
Agreement, or contained in certificates of officers of the Company, 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 any Agent or
controlling person, or by or on behalf of the Company, and shall survive
delivery of the Securities.
SECTION 9. TERMINATION OF AGREEMENT.
(a) The Agent may terminate this Agreement, by notice to the Company,
at any time at or prior to Closing Time (i) if there has been, since the date of
this Agreement or since the respective dates as of which information is given in
the Registration Statement, any material adverse change in the financial
condition, results of operations or business affairs of the MHC, the Company or
the Bank, or the Company, the MHC and the Bank and their 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 effect of which, in the judgment of the
Agent, are so material and adverse as to make it impracticable to market the
Securities or to enforce contracts, including subscriptions or orders, for the
sale of the Securities, (iii) if trading generally on the Nasdaq Stock Market,
the American Stock
-33-
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 said Exchanges or by order of the
Commission or any other governmental authority, or if a banking moratorium has
been declared by Federal authorities, (iv) if any condition specified in
Section 5 shall not have been fulfilled when and as required to be fulfilled;
(v) if there shall have been such material adverse change in the condition or
prospects of the Company, the MHC and the Bank or the prospective market for the
Company's securities as in the Agent's good faith opinion would make it
inadvisable to proceed with the offering, sale or delivery of the Securities;
(vi) if, in the Agent's good faith opinion, the price for the Securities
established by FinPro, Inc. is not reasonable or equitable under then prevailing
market conditions, or (vii) if the Conversion is not consummated on or prior to
____________________.
(b) If this Agreement is terminated pursuant to this Section, such
termination shall be without liability of any party to any other party except as
provided in Section 4 hereof relating to the reimbursement of expenses and
except that the provisions of Sections 6 and 7 hereof shall survive any
termination of this Agreement.
SECTION 10. NOTICES. All notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the Agent
shall be directed to the Agent at Two World Trade Center, 000xx Xxxxx, Xxx Xxxx,
Xxx Xxxx 00000, attention of Xxxxxxxxx X. Xxxxxx , with a copy to Xxxxxx X.
Xxxxxxx, Esq., Xxxx Xxxxxx Xxxxxx Xxxxxxxx & Xxxxxx, P.C., 0000 Xxxxxxxxx
Xxxxxx, XX, Xxxxx 000, Xxxxxxxxxx, X.X. 00000-0000; notices to the Company, the
MHC and the Bank shall be directed to either of them at 000 Xxxxxxxxxx Xxxxxx,
Xxxxxxxx, Xxx Xxxxxx 00000, attention of Xxxxxxx X. Xxxxxxxxx, with a copy to
Xxxxxxx X. Xxxxxxxx Esq., Xxxxxxx, Xxxxxx and Xxxxxxxx, 0000 Xxxxxxxxx Xxxxxx,
XX, 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 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. This Agreement represents the
entire understanding of the parties hereto with reference to the transactions
contemplated hereby and supersedes any and all other oral or written agreements
heretofore made, except for the engagement letter dated __________, by and
between the Agent and the Company and the Bank, relating to the Agent's
providing conversion agent services to the Company and the Bank in
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connection with the Conversion. No waiver, amendment or other modification of
this Agreement shall be effective unless in writing and signed by the parties
hereto.
SECTION 13. GOVERNING LAW AND TIME. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York applicable to
agreements made and to be performed in said State without regard to the
conflicts of laws provisions thereof. Unless otherwise noted, specified times of
day refer to Eastern time.
SECTION 14. SEVERABILITY. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of
this Agreement is so broad as to be unenforceable, the provision shall be
interpreted to be only so broad as is enforceable.
SECTION 15. HEADINGS. Sections headings are not to be considered part of
this Agreement, are for convenience and reference only, and are not to be deemed
to be full or accurate descriptions of the contents of any paragraph or
subparagraph.
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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,
West Essex Bancorp, Inc.
By:_______________________________________
Xxxxxxx X. Xxxxxxxxx, President and
Chief Executive Officer
West Essex Bank, F.S.B.
By:_______________________________________
Xxxxxxx X. Xxxxxxxxx, President and
Chief Executive Officer
West Essex Bancorp, M.H.C.
By:_______________________________________
Xxxxxxx X. Xxxxxxxxx, 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:___________________________________
[Name]
Vice President
