Exhibit 1.2
COLONIAL BANKSHARES, INC.
(a Federal Corporation)
Up to 2,221,800 Shares
(Subject to Increase Up to 2,555,070 Shares)
COMMON STOCK ($0.01 Par Value)
Subscription Price $10.00 Per Share
AGENCY AGREEMENT
__________, 2005
Xxxx Xxxx & Co., Inc.
000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000-0000
Ladies and Gentlemen:
Colonial Bankshares, Inc., a federal corporation (the "Holding
Company"), Colonial Bankshares, MHC, a federal mutual holding company (the
"MHC") and Colonial Bank, FSB (the "Bank") (collectively, the "Primary Parties")
hereby confirm, jointly and severally their agreement with Xxxx Xxxx & Co., Inc.
(the "Agent"), as follows:
1. THE OFFERING. On November 1, 2004, the Boards of Directors of
the Primary Parties adopted a Stock Issuance Plan (the "Plan") which provides
for the offering by the Holding Company of up to 2,221,800 shares (the "Shares"
or "Conversion Shares") of common stock, par value $0.01 per share (the "Common
Stock") (subject to an increase up to 2,555,070 shares), in (i) a subscription
offering (the "Subscription Offering"), and, if necessary, (ii) a direct
community offering (the "Direct Community Offering") and (iii) a syndicated
community offering (the "Syndicated Community Offering").
Upon the completion of the Subscription Offering, Community Offering,
and Syndicated Community Offering (collectively, the "Conversion Offerings" or
"Offering"), the purchasers of Shares in the Conversion Offerings will own 46%
of the outstanding Common Stock and the MHC will own 54% of the outstanding
Common Stock. The Holding Company will issue the Shares at a purchase price of
$10.00 per share (the "Purchase Price"). If the number of Conversion Shares is
increased or decreased in accordance with the Plan, the term "Shares" or
"Conversion Shares" shall mean such greater or lesser number, where applicable.
In the Subscription Offering, non-transferable rights to subscribe for
between 1,642,200 and 2,221,800 shares (subject to an increase up to 2,555,070
shares) of the Common Stock ("Subscription Rights") will be granted, in the
following order of priority: (1) the Bank's depositors with account balances of
at least $50.00 as of the close of business on October 31, 2003 ("Eligible
Account Holders"); (2) the Bank's tax-qualified employee plans; (3) the Bank's
depositors with account balances of at least $50.00 as of the close of business
on March 31, 2005 ("Supplemental Eligible Account Holders"); and (4) other
members of the MHC (other than Eligible Account Holders and Supplemental
Eligible Account Holders) (the "Other Members"), subject to the
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priorities and purchase limitations set forth in the Plan. The Holding Company
may offer shares of Common Stock for which subscriptions have not been received
in the Subscription Offering in the Community Offering to members of the general
public, with preference given to natural persons residing in Cumberland and
Gloucester Counties, New Jersey. Shares may also be reserved in the Community
Offering for institutional investors. In the event a Community Offering is held,
it may be held at any time during or immediately after the Subscription
Offering. Depending on market conditions, shares not subscribed for in the
Subscription Offering or purchased in the Community Offering may be offered in
the Syndicated Community Offering to selected members of the general public
through a syndicate of registered broker-dealers managed by the Agent
("Assisting Brokers") which are members of the National Association of
Securities Dealers, Inc. ("NASD").
It is acknowledged that the number of Shares to be sold in the Offering
may be increased or decreased as described in the Prospectus (as hereinafter
defined); that the purchase of Shares in the Offering is subject to maximum and
minimum purchase limitations as described in the Prospectus; and that the
Holding Company may reject, in whole or in part, any subscription received in
the Community Offering and Syndicated Community Offering. If the number of
Shares is increased or decreased in accordance with the Plan, the term "Shares"
shall mean such greater or lesser number where applicable.
The Holding Company has filed with the U.S. Securities and Exchange
Commission (the "Commission") a Registration Statement on Form SB-2 (File No.
333-123583) in order to register the Shares under the Securities Act of 1933, as
amended (the "1933 Act"), and has filed such amendments thereto as have been
required to the date hereof (the "Registration Statement"). The prospectus, as
amended, included in the Registration Statement at the time it initially became
effective is hereinafter called the "Prospectus," except that if any prospectus
is filed by the Holding Company pursuant to Rule 424(b) or (c) of the
regulations of the Commission under the 1933 Act differing from the prospectus
included in the Registration Statement at the time it initially becomes
effective, the term "Prospectus" shall refer to the prospectus filed pursuant to
Rule 424(b) or (c) from and after the time said prospectus is filed with the
Commission and shall include any supplements and amendments thereto from and
after their dates of effectiveness or use, respectively.
In connection with the Offering, the Holding Company filed with the
Office of Thrift Supervision (the "OTS"), pursuant to Title 12, Parts 575 and
563b of the Code of Federal Regulations (the "Conversion Regulations"), an
Application for Approval of a Minority Stock Issuance by a Stock Holding Company
Subsidiary of a Mutual Holding Company on Form MHC-2, including exhibits and the
Prospectus, and has filed amendments thereto as required by the OTS (as so
amended, the "MHC-2").
Concurrently with the execution of this Agreement, the Company is
delivering to the Agent copies of the Prospectus dated __________, 2005 of the
Holding Company to be used in the Subscription Offering and Community Offering
(if any), and, if necessary, will deliver copies of the Prospectus and any
prospectus supplement for use in a Syndicated Community Offering and/or Public
Offering, as defined in the Prospectus (as hereinafter defined).
2. APPOINTMENT OF AGENT. Subject to the terms and conditions of
this Agreement, the Primary Parties hereby appoint Agent as their financial
advisor and marketing agent to utilize its best
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efforts to solicit subscriptions for the Conversion Shares and to advise and
assist the Primary Parties with respect to the sale of the Conversion Shares in
the Conversion Offerings.
On the basis of the representations and warranties of the Primary
Parties contained in, and subject to the terms and conditions of, this Agreement
the Agent accepts such appointment and agrees to consult with and advise the
MHC, the Holding Company and the Bank as to the matters set forth in the letter
agreement ("Letter Agreement"), dated January 6, 2005, between the Holding
Company and Agent (a copy of which is attached hereto as EXHIBIT A). It is
acknowledged by the Primary Parties that the Agent shall not be obligated to
purchase any Shares and shall not be obligated to take any action which is
inconsistent with any applicable law, regulation, decision or order.
Subscriptions for Conversion Shares will be offered by means of order forms as
described in the Prospectus. Except as provided in the last paragraph of this
Section 2, the appointment of the Agent hereunder shall terminate upon
consummation of the Offerings.
If selected broker-dealers are used to assist in the sale of Conversion
Shares in the Syndicated Community Offering, the Primary Parties hereby, subject
to the terms and conditions of this Agreement, appoint the Agent to manage such
broker-dealers in the Syndicated Community Offering. On the basis of the
representations and warranties of the Primary Parties contained in, and subject
to the terms and conditions of, this Agreement, the Agent accepts such
appointment and agrees to manage the selling group of broker-dealers in the
Syndicated Community Offering.
The Agent agrees to make available to the Holding Company for a period
of five years following the consummation of the Offering its Strategic Advisory
Services ("STARS") program. If the Bank elects to participate in the STARS
program, the Agent will meet with the Bank at its request and will render
general advice on the financial matters listed in Section 9 of the Letter
Agreement (but not including (i) any in-depth merger and acquisition analyses or
studies which are available under the Agent's normal fee schedule, or (ii)
advice with respect to a specific acquisition transaction by, or sale of, the
Bank or the Holding Company). If the Holding Company elects to participate in
the STARS program, the Agent will waive the regular retainer fee and hourly
charges for the first five-year period. The Holding Company would be required,
however, to reimburse the Agent for its reasonable out-of-pocket expenses
incurred in conjunction with the performance of these services. Such
out-of-pocket expenses include travel, legal and other miscellaneous expenses.
The Agent would not be permitted to incur any single expense in excess of $500
pursuant to this paragraph without the prior approval of the Holding Company. If
negotiations for a transaction conducted during the five-year period result in
the execution of a definitive agreement and/or consummation of a transaction for
which the Agent customarily would be entitled to a fee for its advisory or other
investment banking services, the Agent shall receive a contingent advisory fee
in accordance with the terms of a separate engagement letter to be entered into
with respect to such transaction. Nothing in this Agreement shall require the
Holding Company to obtain such financial advisory services from the Agent. After
the completion of such five-year period, if the parties wish to continue the
relationship, a fee will be negotiated and an agreement with respect to specific
advisory services will be entered into at this time.
3. REFUND OF PURCHASE PRICE. In the event that the Offering is not
consummated for any reason, including but not limited to the inability to sell
the Conversion Shares during the Offerings (including any permitted extension
thereof), this Agreement shall terminate and any
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persons who have subscribed for any of the Conversion Shares shall have refunded
to them the full amount which has been received from such person, together with
interest at the Bank's current passbook savings rate, from the date payment is
received to the date said refund is made as provided in the Prospectus. Upon
termination of this Agreement, neither the Agent nor the Primary Parties shall
have any obligation to the other except that (i) the Primary Parties shall
remain liable for any amounts due pursuant to Sections 4, 8, 10 and 11 hereof,
unless the transaction is not consummated due to the breach by the Agent of a
warranty, representation or covenant; and (ii) the Agent shall remain liable for
any amount due pursuant to Sections 10 and 11 hereof, unless the transaction is
not consummated due to the breach by the Primary Parties of a warranty,
representation or covenant.
4. FEES. In addition to the expenses specified in Section 8 hereof,
as compensation for the Agent's services under this Agreement, the Agent has
received or will receive the following fees from the Primary Parties:
a. An advisory and administrative services fee in the
amount of $25,000, of which $25,000 has been paid prior
to the date hereof.
b. A sales fee equal to 1.00% of the aggregate Purchase
Price of the Conversion Shares sold in the Offering,
other than those Shares sold pursuant to subparagraph C.
below. No fee shall be payable pursuant to this
subsection in connection with the sale of Shares to
officers, directors, employees or immediate family
members of such persons and qualified and non-qualified
employee benefit plans of the Holding Company.
c. A fee equal to 1.00% of the aggregate Purchase Price of
the Conversion Shares sold by the Agent in any
Syndicated Community Offering which fee along with the
fee payable directly by the Holding Company to assisting
brokers other than the Agent will not exceed 6.00% in
the aggregate. Assisting Brokers will not be utilized
without the prior approval of the Primary Parties, and
it is agreed that Agent will manage the Assisting
Brokers in the Syndicated Offering.
In the event that the Company is required to resolicit subscribers for
Shares in the Subscription and Community Offering and the Agent is required to
provide significant additional services in connection with such a
resolicitation, the Primary Parties and the Agent shall mutually agree to the
dollar amount of additional fees due to the Agent, if any. Until any agreement
called for by this paragraph is reached, the Agent shall not accrue expenses
relating to any resolicitation in an amount that would cause the total expenses
incurred by the Agent to be greater than as set forth in Section 8 hereof
without the prior written consent of the Company or the Bank, which consent
shall not be unreasonably withheld.
If this Agreement is terminated in accordance with the provisions of
Sections 3, 9, or 13, the Agent shall not be entitled to receive the fee set
forth in Sections 4(a)-(c), but the Primary Parties shall pay the Agent an
advisory and administrative services fee of $25,000 and will reimburse the Agent
for its reasonable expenses pursuant to Section 8, including without limitation
accounting, communication, legal and travel expenses, subject to the limitations
set forth in Section 8 hereof.
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5. CLOSING. If the minimum number of Conversion Shares required to
be sold in the Offering on the basis of the most recently updated Appraisal (as
defined in Section 6(h)) are subscribed for at or before the termination of the
Offerings, and the other conditions to the completion of the Offering are
satisfied, the Holding Company agrees to issue the Shares on the Closing Date
(as hereinafter defined) against payment therefore by the means authorized by
the Plan and to deliver certificates evidencing ownership of the Conversion
Shares in such authorized denominations and registered in such names as may be
indicated on the subscription order forms directly to the purchasers thereof as
promptly as practicable after the Closing Date. The Closing shall be held at the
offices of special counsel to the Primary Parties, or at such other place as
shall be agreed upon among the Primary Parties and the Agent, at 10:00 a.m.,
Eastern Standard Time, on the business day selected by the Holding Company which
business day shall be no less than two business days following the giving of
prior notice by the Holding Company to the Agent or at such other time as shall
be agreed upon by the Primary Parties and the Agent. At the Closing, the Primary
Parties shall deliver to the Agent by wire transfer in same-day funds the
commissions, fees and expenses owing as set forth in Sections 4 and 8 hereof and
the opinions required hereby and other documents deemed reasonably necessary by
the Agent shall be executed and delivered to effect the sale of the Shares as
contemplated hereby and pursuant to the terms of the Prospectus. The Holding
Company shall notify the Agent when funds shall have been received for the
minimum number of shares of the Common Stock. The hour and date upon which the
Holding Company shall release the Conversion Shares for delivery in accordance
with the terms hereof is referred to herein as the "Closing Date."
The Holding Company (or its agent) shall advise the Agent as to the
allocation of Shares should the final allocation not strictly correspond to the
subscriptions received. The Agent shall have no liability to any party for the
records or other information provided by the Holding Company (or its agent) to
the Agent for use in allocating the Shares. Subject to the limitations of
Section 10 hereof, the Holding Company shall indemnify and hold harmless the
Agent for any liability arising out of the allocation of the Shares in
accordance with (i) the Plan generally, and (ii) the records or other
information provided to the Agent by the Holding Company (or its agent).
6. REPRESENTATIONS AND WARRANTIES OF THE PRIMARY PARTIES. The
Primary Parties jointly and severally represent and warrant to the Agent that,
except as disclosed in the Prospectus:
(a) The Bank, the MHC and the Holding Company have, all such
power, authority, authorizations, approvals and orders as may be required to
enter into this Agreement, to carry out the provisions and conditions hereof and
to issue and sell the Shares as provided herein and as described in the
Prospectus, subject to the various limitations and required approvals described
therein. Subject to the receipt of member and regulatory approval, the
consummation of the Offering, the execution, delivery and performance of this
Agreement and the consummation of the transactions herein contemplated have been
duly and validly authorized by all necessary corporate action on the part of the
Bank, the MHC and the Holding Company. This Agreement has been validly executed
and delivered by the Holding Company, the MHC and the Bank, and is a valid,
legal and binding obligation of the Bank, the Holding Company and the MHC, in
each case enforceable in accordance with its terms, except to the extent, if
any, that the provisions of Sections 10 and 11 hereof may be unenforceable as
against public policy, and except to the extent that such enforceability may be
limited by bankruptcy laws, insolvency laws, or other laws affecting the
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enforcement of creditors' rights generally, or the rights of creditors of
savings institutions insured by the FDIC (including the laws relating to the
rights of the contracting parties to equitable remedies).
(b) The Plan has been approved by the OTS.
(c) The Registration Statement was declared effective by the
Commission on ________, 2005; and no stop order has been issued with respect
thereto and no proceedings therefore have been initiated or to the best
knowledge of the Primary Parties threatened by the Commission. At the time the
Registration Statement, including the Prospectus contained therein (including
any amendment or supplement thereto), became effective, the Registration
Statement complied as to form in all material respects with the 1933 Act and the
regulations promulgated thereunder and the Registration Statement, including the
Prospectus contained therein (including any amendment or supplement thereto),
any Blue Sky Application or any Sales Information (as such terms are defined in
Section 10 hereof) authorized by the Primary Parties for use in connection with
the Offerings did not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading, and at the time any Rule 424(b) or (c) Prospectus was filed with
the Commission and at the Closing Date referred to in Section 5, the
Registration Statement, including the Prospectus contained therein (including
any amendment or supplement thereto), and any Blue Sky Application or any Sales
Information authorized by the Primary Parties for use in connection with the
Offerings will not contain an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading; provided,
however, that the representations and warranties in this Section 6(c) shall not
apply to statements or omissions made in reliance upon and in conformity with
written information furnished to the Primary Parties by the Agent expressly
regarding the Agent for use under the captions "Market for the Common Stock" and
"The Offering--Plan of Distribution and Marketing Arrangements" or written
statements or omissions from any sales information or information filed pursuant
to state securities or blue sky laws or regulations regarding the Agent.
(d) The MHC-2, including the Prospectus, was approved by the
OTS on _______________, 2005, and at all times subsequent thereto until the
Closing Date, the MHC-2, including the Prospectus, did and will comply as to
form in all material respects with the Conversion Regulations and any other
applicable rules and regulations of the OTS (except as modified or waived in
writing by the OTS). At the time of the approval and at all times subsequent
thereto until the Closing Date, the MHC-2, including the Prospectus (including
any amendment or supplement thereto), did not and does not include any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; provided, however,
that representations or warranties in this subsection (d) shall not apply to
statements or omissions made in reliance upon and in conformity with written
information furnished to the Primary Parties by the Agent expressly regarding
the Agent for use in Prospectus contained in the MHC-2 under the captions
"Market for the Common Stock" and "The Offering --Plan of Distribution and
Marketing Arrangements" or written statements or omissions from any sales
information or information filed pursuant to state securities or blue sky laws
or regulations regarding the Agent.
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(e) No order has been issued by the OTS, the Commission, or
any state regulatory authority, preventing or suspending the use of the
Prospectus and no action by or before any such government entity to revoke any
approval, authorization or order of effectiveness related to the Offering is
pending or, to the best knowledge of the Primary Parties, threatened.
(f) The Plan has been duly adopted by the Board of Directors
of the Holding Company. To the best knowledge of the Primary Parties, no person
has, or at the Closing Date will have, sought to obtain review of the final
action of the OTS in approving the Plan, the Offering, or the MHC-2, pursuant to
the HOLA or any other statute or regulation.
(g) RP Financial, LC., which prepared the appraisal of the
aggregate pro forma market value of the Holding Company and the Bank on which
the Offerings were based (the "Appraisal"), has advised the Primary Parties in
writing that it is independent with respect to each of the Primary Parties
within the meaning of the Conversion Regulations.
(h) Xxxxx Xxxxxx Company LLP, which certified the financial
statements filed as part of the Registration Statement and the MHC-2, has
advised the Primary Parties that it is, with respect to each of the Primary
Parties, an independent certified public accountant within the meaning of 12
C.F.R. Sections 563c.3 and 571.2(c)(3) and under the 1933 Act and the
Regulations promulgated thereunder.
(i) The financial statements and the notes thereto which are
included in the Registration Statement and which are a part of the Prospectus
present fairly the financial condition and retained earnings of the Holding
Company as of the dates indicated and the results of operations and cash flows
for the periods specified. The financial statements comply in all material
respects with the applicable accounting requirements of Title 12 of the Code of
Federal Regulations, Regulation S-X of the Commission and generally accepted
accounting principles ("GAAP") applied on a consistent basis during the periods
presented except as otherwise noted therein, and present fairly in all material
respects the information required to be stated therein. The other financial,
statistical and pro forma information and related notes included in the
Prospectus present fairly the information shown therein on a basis consistent
with the audited and unaudited financial statements included in the Prospectus,
and as to the pro forma adjustments, the adjustments made therein have been
properly applied on the basis described therein.
(j) Since the respective dates as of which information is
given in the Registration Statement, including the Prospectus, other than as
disclosed therein: (i) there has not been any material adverse change in the
financial condition or in the earnings, capital, properties or business affairs
of any of the Primary Parties or of the Primary Parties considered as one
enterprise, whether or not arising in the ordinary course of business; (ii)
there has not been any change in total assets of the Holding Company in an
amount greater than $2,000,000, any material increase in the aggregate amount of
loans past due ninety (90) days or more, or any real estate acquired by
foreclosure or loans characterized as "in substance foreclosure"; nor has the
Holding Company issued any securities or incurred any liability or obligation
for borrowings other than in the ordinary course of business; and (iii) there
have not been any material transactions entered into by any of the Primary
Parties, other than those in the ordinary course of business. The
capitalization, liabilities, assets, properties and business of the Primary
Parties conform in all material respects to the descriptions thereof contained
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in the Prospectus and none of the Primary Parties has any material liabilities
of any kind, contingent or otherwise, except as disclosed in Registration
Statement or the Prospectus.
(k) The Holding Company is a corporation duly organized and
in good standing under the federal laws of the United States, with corporate
authority to own its properties and to conduct its business as described in the
Prospectus, and is qualified to transact business and in good standing in each
jurisdiction in which the conduct of business requires such qualification unless
the failure to qualify in one or more of such jurisdictions would not have a
material adverse effect on the financial condition, earnings, capital,
properties or business affairs of the Primary Parties. The Holding Company has
obtained all licenses, permits and other governmental authorizations required
for the conduct of its business, except those that individually or in the
aggregate would not materially adversely affect the financial condition,
earnings, capital, assets, properties or business of the Primary Parties taken
as a whole; and all such licenses, permits and governmental authorizations are
in full force and effect, and the Holding Company is in compliance therewith in
all material respects.
(l) The MHC is duly organized and is validly existing as a
federally chartered mutual holding company under the laws of the United States,
duly authorized to conduct its business and own its property as described in the
Registration Statement and the Prospectus; the MHC has obtained all licenses,
permits and other governmental authorizations required for the conduct of its
business except those that individually or in the aggregate would not materially
adversely affect the financial condition, earnings, capital, assets or
properties of the Primary Parties taken as a whole; all such licenses, permits
and governmental authorizations are in full force and effect and the MHC is in
compliance therewith in all material respects; the MHC is duly qualified as a
foreign corporation to transact business in each jurisdiction in which the
failure to be so qualified in one or more of such jurisdictions would have a
material adverse effect on the financial condition, earnings, capital, assets,
properties or business of the Primary Parties.
(m) The MHC does not own any equity securities or any equity
interest in any business enterprise except as described in the Prospectus.
(n) The MHC is not authorized to issue any shares of capital
stock.
(o) The Bank is a duly organized and validly existing
federally chartered savings bank in stock form, duly authorized to conduct its
business as described in the Prospectus; the activities of the Bank are
permitted by the rules, regulations and practices of the OTS; the Bank has
obtained all licenses, permits and other governmental authorizations currently
required for the conduct of its business except those that individually or in
the aggregate would not materially adversely affect the financial condition of
the Primary Parties taken as a whole; all such licenses, permits and other
governmental authorizations are in full force and effect and the Bank is in good
standing under the laws of the United States and is duly qualified as a foreign
corporation to transact business in each jurisdiction in which failure to so
qualify would have a material adverse effect upon the financial condition,
earnings, capital, properties or business affairs of the Bank; all of the issued
and outstanding capital stock of the Bank after the Offering will be duly and
validly issued and fully paid and nonassessable; and the Holding Company will
directly own all of such capital stock free and clear of any mortgage, pledge,
lien, encumbrance, claim or restriction. The Bank does not own
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equity securities or any equity interest in any other business enterprise except
as otherwise described in the Prospectus.
(p) The Bank is a member of the Federal Home Loan Bank of
New York ("FHLB of New York"); the deposit accounts of the Bank are insured by
the FDIC up to applicable limits.
(q) [Reserved].
(r) Upon consummation of the Offering, the authorized,
issued and outstanding equity capital of the Holding Company will be within the
range set forth in the Prospectus under the caption "Capitalization" and, except
for the shares of Common Stock held by the MHC, no shares of Common Stock have
been or will be issued and outstanding prior to the Closing Date; and the shares
of Common Stock to be subscribed for in the Offering have been duly and validly
authorized for issuance and, when issued and delivered by the Holding Company
pursuant to the Plan against payment of the consideration calculated as set
forth in the Plan and the Prospectus, will be duly and validly issued and fully
paid and nonassessable; the issuance of the Shares is not subject to preemptive
rights, except for the Subscription Rights granted pursuant to the Plan; and the
terms and provisions of the shares of Common Stock will conform in all material
respects to the description thereof contained in the Prospectus. Upon issuance
of the Shares, good title to the Shares will be transferred from the Holding
Company to the purchasers of Shares against payment therefor in the Offering as
set forth in the Plan and the Prospectus.
(s) Neither the Bank, nor the Holding Company nor the MHC is
in violation of their respective articles of incorporation or charter or their
respective bylaws, or in material default in the performance or observance of
any obligation, agreement, covenant, or condition contained in any contract,
lease, loan agreement, indenture or other instrument to which they are a party
or by which they, or any of their respective property, may be bound which would
result in a material adverse change in the condition (financial or otherwise),
earnings, capital, properties or assets. The consummation of the transactions
herein contemplated will not (i) conflict with or constitute a breach of, or
default under, the articles of incorporation, charter or bylaws of the Bank, the
Holding Company or the MHC, or materially conflict with or constitute a material
breach of, or default under, any material contract, lease or other instrument to
which any of the Primary Parties has a beneficial interest, or any applicable
law, rule, regulation or order that is material to the financial condition of
the Holding Company; (ii) violate any authorization, approval, judgment, decree,
order, statute, rule or regulation applicable to the Primary Parties except for
such violations which would not have a material adverse effect on the financial
condition and results of operations of the Holding Company; or (iii) result in
the creation of any material lien, charge or encumbrance upon any property of
the Primary Parties.
(t) No material default exists, and no event has occurred
which with notice or lapse of time, or both, would constitute a material default
on the part of any of the Primary Parties, in the due performance and observance
of any term, covenant or condition of any indenture, mortgage, deed of trust,
note, bank loan or credit agreement or any other material instrument or
agreement to which any of the Primary Parties is a party or by which any of them
or any of their property is bound or affected in any respect which, in any such
case, is material to the Primary Parties individually or considered as one
enterprise, and such agreements are in full force and effect; and no other party
to
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any such agreements has instituted or, to the best knowledge of the Primary
Parties, threatened any action or proceeding wherein any of the Primary Parties
is alleged to be in default thereunder under circumstances where such action or
proceeding, if determined adversely to any of the Primary Parties, would have a
material adverse effect upon the Primary Parties individually or considered as
one enterprise.
(u) The Primary Parties have good and marketable title to
all assets which are material to the businesses of the Primary Parties and to
those assets described in the Prospectus as owned by them, free and clear of all
material liens, charges, encumbrances, restrictions or other claims, except such
as are described in the Prospectus or which do not have a material adverse
effect on the businesses of the Primary Parties taken as a whole; and all of the
leases and subleases which are material to the businesses of the Primary
Parties, as described in the Registration Statement or Prospectus, are in full
force and effect.
(v) The Primary Parties are not in material violation of any
directive from the OTS, the FDIC, the Commission or any other agency to make any
material change in the method of conducting their respective businesses; the
Primary Parties have conducted and are conducting their respective businesses so
as to comply in all respects with all applicable statutes and regulations
(including, without limitation, regulations, decisions, directives and orders of
the OTS, the Commission and the FDIC), except where the failure to so comply
would not reasonably be expected to result in any material adverse change in the
financial condition, results of operations, capital, properties or business
affairs of the Primary Parties considered as one enterprise and there is no
charge, investigation, action, suit or proceeding before or by any court,
regulatory authority or governmental agency or body pending or, to the best
knowledge of any of the Primary Parties, threatened, which would reasonably be
expected to materially and adversely affect the Offering, the performance of
this Agreement, or the consummation of the transactions contemplated in the Plan
as described in the Registration Statement, or which would reasonably be
expected to result in any material adverse change in the financial condition
results of operations, capital, properties or business affairs of the Primary
Parties considered as one enterprise.
(w) Prior to the Closing Date, the Primary Parties will have
received an opinion of their special counsel, Xxxx Xxxxxx Xxxxxxxx & Xxxxxx,
P.C., with respect to the federal income tax consequences of the Offering, as
described in the Registration Statement and the Prospectus, and an opinion from
Xxxxx Xxxxxx Company LLP with respect to the tax consequences of the proposed
transaction under the laws of the State of New Jersey; and the facts and
representations upon which such opinions are based are truthful, accurate and
complete, and none of the Primary Parties will take any action inconsistent
therewith.
(x) The Holding Company has timely filed or extended all
required federal and state tax returns, has paid all taxes that have become due
and payable in respect of such returns, except where permitted to be extended,
has made adequate reserves for similar future tax liabilities, and no deficiency
has been asserted with respect thereto by any taxing authority.
(y) No approval, authorization, consent or other order of
any regulatory or supervisory or other public authority is required for the
execution and delivery by the Primary Parties of this Agreement, or the issuance
of the Shares, except for the approval of the OTS and the
10
Commission (which have been received) and any necessary qualification,
notification, or registration or exemption under the securities or blue sky laws
of the various states in which the Shares are to be offered.
(z) None of the Primary Parties has: (i) issued any
securities within the last 18 months (except for (a) notes to evidence bank
loans or other liabilities in the ordinary course of business or as described in
the Prospectus, and (b) securities issued in connection with the Bank's
reorganization into the mutual holding structure); (ii) had any dealings with
respect to sales of securities within the 12 months prior to the date hereof
with any member of the NASD, or any person related to or associated with such
member, other than discussions and meetings relating to the Offering and
purchases and sales of U.S. government and agency and other securities in the
ordinary course of business; (iii) entered into a financial or management
consulting agreement except for the Letter Agreement and as contemplated
hereunder; or (iv) engaged any intermediary between the Agent and the Primary
Parties in connection with the Offering, and no person is being compensated in
any manner for such services.
(aa) Neither the Primary Parties nor, to the best knowledge
of the Primary Parties, any employee of the Primary Parties, has made any
payment of funds of the Primary Parties as a loan to any person for the purchase
of Conversion Shares, except for the Holding Company's loan to the ESOP the
proceeds of which will be used to purchase Conversion Shares, or has made any
other payment of funds prohibited by law, and no funds have been set aside to be
used for any payment prohibited by law.
(ab) The Bank complies in all material respects with the
applicable financial record keeping and reporting requirements of the Currency
and Foreign Transactions Reporting Act of 1970, as amended, and the regulations
and rules thereunder.
(ac) The Primary Parties have not relied upon Agent or its
counsel for any legal, tax or accounting advice in connection with the Offering.
(ad) The records of Eligible Account Holders, Supplemental
Eligible Account Holders and Other Members are accurate and complete in all
material respects.
(ae) The Primary Parties comply with all laws, rules and
regulations relating to environmental protection, and none of them has been
notified or is otherwise aware that any of them is potentially liable, or is
considered potentially liable, under the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, or any other Federal, state
or local environmental laws and regulations; no action, suit, regulatory
investigation or other proceeding is pending, threatened against the Primary
Parties relating to environmental protection, nor do the Primary Parties have
any reason to believe any such proceedings may be brought against any of them;
and no disposal, release or discharge of hazardous or toxic substances,
pollutants or contaminants, including petroleum and gas products, as any of such
terms may be defined under federal, state or local law, has occurred on, in, at
or about any facilities or properties owned or leased by any of the Primary
Parties or, to the best knowledge of the Holding Company, in which the Holding
Company has a security interest.
11
(af) All of the loans represented as assets on the most
recent financial statements or selected financial information of the Holding
Company included in the Prospectus meet or are exempt from all requirements of
federal, state and local law pertaining to lending, including, without
limitation, truth in lending (including the requirements of Regulations Z and 12
C.F.R. Part 226), 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
Primary Parties taken as a whole.
(ag) None of the Primary Parties are required to be
registered as an investment company under the Investment Company Act of 1940.
Any certificates signed by an officer of any of the Primary Parties and
delivered to the Agent or its counsel that refer to this Agreement shall be
deemed to be a representation and warranty by the Primary Parties to the Agent
as to the matters covered thereby with the same effect as if such representation
and warranty were set forth herein.
SECTION 6.B. REPRESENTATIONS AND WARRANTIES OF THE AGENT. Agent
represents and warrants to the Primary Parties that:
(a) Agent is a corporation and is validly existing in good
standing under the laws of the State of New Jersey with full power and authority
to provide the services to be furnished to the Primary Parties hereunder.
(b) The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly and validly
authorized by all necessary action on the part of Agent, and this Agreement and
is the legal, valid and binding agreement of Agent, enforceable in accordance
with its terms except as the legality, validity, binding nature and
enforceability thereof may be limited by (i) bankruptcy, insolvency, moratorium,
conservatorship, receivership or other similar laws relating to or affecting the
enforcement of creditors' rights generally, (ii) general equity principles
regardless of whether such enforceability is considered in a proceeding in
equity or at law, and (iii) the extent, if any, that the provisions of Sections
10 or 11 hereof may be unenforceable as against public policy.
(c) Except for licenses, approvals and permits required by
the State of New Jersey or required by another jurisdiction solely because the
Offering is being made in such jurisdiction, each of Agent and its employees,
agents and representatives who shall perform any of the services hereunder shall
have, and until the Offering is completed or terminated shall maintain all
licenses, approvals and permits necessary to perform such services.
(d) No action, suit, charge or proceeding before the
Commission, the NASD, any state securities commission or any court is pending,
or to the knowledge of Agent threatened, against Agent which, if determined
adversely to Agent, would have a material adverse effect upon the ability of
Agent to perform its obligations under this Agreement.
12
(e) Agent is registered as a broker/dealer pursuant to
Section 15(b) of the 1934 Act and is a member of the National Association of
Securities Dealers, Inc.
(f) Any funds received in the Offering by the Agent will be
handled by the Agent in accordance with Rule 15c2-4 under the Securities
Exchange Act of 1934, as amended (the "1934 Act") to the extent applicable.
7. COVENANTS OF THE PRIMARY PARTIES. The Primary Parties hereby
jointly and severally covenant with the Agent as follows:
(a) The Holding Company will not, at any time after the date
the Registration Statement is declared effective, file any amendment or
supplement to the Registration Statement without providing the Agent and its
counsel an opportunity to review such amendment or file any amendment or
supplement to which amendment the Agent or its counsel shall reasonably object.
(b) The Primary Parties will not, at any time after the date
the MHC-2 is approved, file any amendment or supplement to such MHC-2 without
providing the Agent and its counsel an opportunity to review such amendment or
supplement or file any amendment or supplement to which amendment or supplement
the Agent or its counsel shall reasonably object.
(c) The Primary Parties will use their best efforts to cause
any post-effective amendment to the Registration Statement to be declared
effective by the Commission and any post-effective amendment to the MHC-2 to be
approved by the OTS, and will immediately upon receipt of any information
concerning the events listed below notify the Agent (i) when the Registration
Statement, as amended, has become effective; (ii) when the MHC-2, as amended,
has been approved by the OTS; (iii) of the receipt of any comments from the
Commission, the OTS, or any other governmental entity with respect to the
Offering or the transactions contemplated by this Agreement; (iv) of any request
by the Commission, the OTS, any other governmental entity for any amendment or
supplement to the Registration Statement or the MHC-2 or for additional
information; (v) of the issuance by the Commission, the OTS, or any other
governmental agency of any order or other action suspending the Offerings or the
use of the Registration Statement or the Prospectus or any other filing of the
Primary Parties under the Conversion Regulations or other applicable law, or the
threat of any such action; (vi) of the issuance by the Commission, the OTS, the
FDIC or any state authority of any stop order suspending the effectiveness of
the Registration Statement or of the initiation or threat of initiation or
threat of any proceedings for that purpose; or (vii) of the occurrence of any
event mentioned in paragraph (f) below. The Primary Parties will make every
reasonable effort to prevent the issuance by the Commission, the OTS, the FDIC
or any state authority of any order referred to in (v) and (vi) above and, if
any such order shall at any time be issued, to obtain the lifting thereof at the
earliest possible time.
(d) The Primary Parties will deliver to the Agent and to its
counsel conformed copies of each of the following documents, with all exhibits:
each of the MHC-2 as originally filed and of each amendment or supplement
thereto, and the Registration Statement, as originally filed and each amendment
thereto. Further, the Primary Parties will deliver such additional copies of the
foregoing documents to counsel to the Agent as may be required for any NASD
filings. In addition,
13
the Primary Parties will also deliver to the Agent such number of copies of the
Prospectus, as amended or supplemented, as the Agent may reasonably request.
(e) The Primary Parties will comply in all material respects
with any and all terms, conditions, requirements and provisions with respect to
the Offering and the transactions contemplated thereby imposed by the
Commission, by applicable state law and regulations, and by the 1933 Act, the
1934 Act, and the rules and regulations of the Commission promulgated under such
statutes, to be complied with prior to or subsequent to the Closing Date; and
when the Prospectus is required to be delivered, the Primary Parties will comply
in all material respects, at their own expense, with all material requirements
imposed upon them by the OTS, the Conversion Regulations (except as modified or
waived in writing by the OTS), the Commission, by applicable state law and
regulations and by the 1933 Act, the 1934 Act and the rules and regulations of
the Commission promulgated under such statutes, in each case as from time to
time in force, so far as necessary to permit the continuance of sales or dealing
in shares of Common Stock during such period in accordance with the provisions
hereof and the Prospectus.
(f) Each of the Primary Parties will inform the Agent of any
event or circumstances of which it is or becomes aware as a result of which the
Registration Statement and/or Prospectus, as then supplemented or amended, would
include an untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein not misleading. If it is
necessary, in the reasonable opinion of counsel for the Primary Parties, to
amend or supplement the Registration Statement or the Prospectus in order to
correct such untrue statement of a material fact or to make the statements
therein not misleading in light of the circumstances existing at the time of
their use, the Primary Parties will, at their expense, prepare, file with the
Commission and the OTS, and furnish to the Agent, a reasonable number of copies
of an amendment or amendments of, or a supplement or supplements to, the
Registration Statement and the Prospectus (in form and substance reasonably
satisfactory to counsel for the Agent after a reasonable time for review) which
will amend or supplement the Registration Statement and/or the Prospectus so
that as amended or supplemented it will not contain an untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein, in light of the circumstances existing at the time, not
misleading. For the purpose of this subsection, each of the Primary Parties will
furnish such information with respect to itself as the Agent may from time to
time reasonably request.
(g) Pursuant to the terms of the Plan, the Holding Company
will endeavor in good faith, in cooperation with the Agent, to register or to
qualify the Shares for offer and sale or to exempt such Shares from registration
and to exempt the Holding Company and its officers, directors and employees from
registration as broker-dealers, under the applicable securities laws of the
jurisdictions in which the Offering will be conducted; provided, however, that
the Holding Company shall not be obligated to file any general consent to
service of process or to qualify as a foreign corporation to do business in any
jurisdiction in which it is not so qualified. In each jurisdiction where any of
the Shares shall have been registered or qualified as above provided, the
Holding Company will make and file such statements and reports in each year as
are or may be required by the laws of such jurisdictions.
(h) The Holding Company will not sell or issue, contract to
sell or otherwise dispose of, for a period of 90 days after the date hereof,
without the Agent's prior written consent,
14
which consent shall not be unreasonably withheld, any shares of Common Stock
other than in connection with any plan or arrangement described in the
Prospectus.
(i) For the period of three years from the date of this
Agreement, the Holding Company will furnish to the Agent upon request (i) a copy
of each report of the Holding Company furnished to or filed with the Commission
under the 1934 Act or any national securities exchange or system on which any
class of securities of the Holding Company is listed or quoted, (ii) a copy of
each report of the Holding Company mailed to holders of Common Stock or
non-confidential report filed with the Commission or the OTS or any other
supervisory or regulatory authority or any national securities exchange or
system on which any class of the securities of the Holding Company is listed or
quoted, (iii) each press release and material news item and article released by
the Holding Company and/or Bank, and (iv) from time-to-time, such other publicly
available information concerning the Primary Parties as the Agent may reasonably
request.
(j) The Primary Parties will use the net proceeds from the
sale of the Common Stock in the manner set forth in the Prospectus under the
caption "How We Intend To Use The Proceeds From The Offering."
(k) The Holding Company will distribute the Prospectus or
other offering materials in connection with the offering and sale of the Common
Stock only in accordance with the Conversion Regulations, the 1933 Act and the
1934 Act and the rules and regulations promulgated under such statutes, and the
laws of any state in which the shares are qualified for sale.
(l) Prior to the Closing Date, the Holding Company shall
register its Common Stock under Section 12(g) of the 1934 Act, as amended, and
will request that such registration statement be effective upon completion of
the Offering. The Holding Company shall maintain the effectiveness of such
registration for not less than three years or such shorter period as permitted
by the OTS.
(m) For so long as the Common Stock is registered under the
1934 Act, the Holding Company will furnish to its stockholders as soon as
practicable after the end of each fiscal year such reports and other information
as are required to be furnished to its stockholders under the 1934 Act
(including consolidated financial statements of the Holding Company and its
subsidiaries, certified by independent public accountants).
(n) The Holding Company will report the use of proceeds of
the Offering in accordance with Rule 463 under the 0000 Xxx.
(o) The Primary Parties will maintain appropriate
arrangements for depositing all funds received from persons mailing
subscriptions for or orders to purchase Conversion Shares on an interest bearing
basis at the rate described in the Prospectus until the Closing Date and
satisfaction of all conditions precedent to the release of the Holding Company's
obligation to refund payments received from persons subscribing for or ordering
Conversion Shares in the Conversion Offerings, in accordance with the Plan as
described in the Prospectus, or until refunds of such funds have been made to
the persons entitled thereto or withdrawal authorizations canceled in accordance
with the Plan and as described in the Prospectus. The Primary Parties will
maintain, together with the Agent,
15
such records of all funds received to permit the funds of each subscriber to be
separately insured by the FDIC (to the maximum extent allowable) and to enable
the Primary Parties to make the appropriate refunds of such funds in the event
that such refunds are required to be made in accordance with the Plan and as
described in the Prospectus.
(p) The Primary Parties will take such actions and furnish
such information as are reasonably requested by the Agent in order for the Agent
to ensure compliance with Rule 2790 of the National Association of Securities
Dealers, Inc. ("NASD").
(q) The Primary Parties will conduct their businesses in
compliance in all material respects with all applicable federal and state laws,
rules, regulations, decisions, directives and orders including, all decisions,
directives and orders of the Commission, the OTS and the FDIC.
(r) The Holding Company and the Bank shall comply with any
and all terms, conditions, requirements and provisions with respect to the
Offering and the transactions contemplated thereby imposed by the OTS, the HOLA,
the Commission, the 1933 Act, the Regulations, the Exchange Act and the
regulations promulgated by the Commission pursuant to the Exchange Act to be
complied with subsequent to the Closing Date. The Company will comply with all
provisions of all undertakings contained in the Registration Statement.
(s) The Primary Parties will not amend the Plan without
notifying the Agent prior thereto.
(t) The Holding Company shall provide the Agent with any
information necessary to carry out the allocation of the Conversion Shares in
the event of an oversubscription, and such information shall be accurate and
reliable in all material respects.
(u) The Holding Company will not deliver the Shares until
the Primary Parties have satisfied or caused to be satisfied each condition set
forth in Section 9 hereof, unless such condition is waived in writing by the
Agent.
(v) Immediately upon completion of the sale by the Holding
Company of the Shares contemplated by the Plan and the Prospectus, (i) the MHC
shall own at all times more than 50% of the issued and outstanding shares of
Common Stock, (ii) all of the issued and outstanding shares of capital stock of
the Bank shall be owned by the Holding Company, (iii) the Holding Company shall
have no direct subsidiaries other than the Bank, and (iv) the Offering shall
have been effected in accordance with all applicable statutes, regulations,
decisions and orders; and all terms, conditions, requirements and provisions
with respect to the Offering (except those that are conditions subsequent)
imposed by the Commission, the OTS or any other governmental agency, if any,
shall have been complied with by the Primary Parties in all material respects or
appropriate waivers shall have been obtained and all notice and waiting periods
shall have been satisfied, waived or elapsed.
(w) As of the Closing Date, the Primary Parties shall have
completed all conditions precedent to the Offering in accordance with the Plan
and shall have complied in all material respects with applicable laws,
regulations (except as modified or waived in writing by the
16
OTS), decisions and orders, including all terms, conditions, requirements and
provisions precedent to the Offering imposed upon it by the OTS as set forth in
correspondence received from the OTS.
(x) On or before the Closing Date, the Primary Parties will
have completed all conditions precedent to the Offering specified in the Plan
and the offer and sale of the Shares will have been conducted in all material
respects in accordance with the Plan, the Conversion Regulations (except as
modified or waived in writing by the OTS) and with all other applicable laws,
regulations, decisions and orders, including all terms, conditions, requirements
and provisions precedent to the Offering imposed upon any of the Primary Parties
by the OTS, the Commission or any other regulatory authority and in the manner
described in the Prospectus.
8. PAYMENT OF EXPENSES. Whether or not the Offering is completed or
is consummated, the Primary Parties will pay for all expenses incident to the
performance of this Agreement, including without limitation: (a) the preparation
and filing of the MHC-2; (b) the preparation, printing, filing, delivery and
shipment of the Registration Statement, including the Prospectus, and all
amendments and supplements thereto; (c) all filing fees and expenses in
connection with the qualification or registration of the Shares for offer and
sale by the Holding Company under the securities or "blue sky" laws, including
without limitation filing fees, reasonable legal fees and disbursements of
counsel in connection therewith, and in connection with the preparation of a
blue sky law survey; (d) the filing fees of the NASD; (e) fees and expenses
related to the preparation of the independent appraisal; and (f) the reasonable
expenses of the Agent. Notwithstanding the foregoing, the Primary Parties shall
not be required to reimburse Agent for more than $55,000 in legal fees (other
than such fees as shall be related to "blue sky" matters) and out-of-pocket
expenses, except in the event of any material delay in the Offering that would
require an update of the financial information contained in the Registration
Statement, as amended or supplemented, to reflect a period later than that set
forth in the financial statements included in the original Registration
Statement. Not later than two days prior to the Closing Date, the Agent will
provide the Bank with a detailed accounting of all reimbursable expenses to be
paid at the Closing.
9. CONDITIONS TO THE AGENT'S OBLIGATIONS. The obligations of the
Agent hereunder and the occurrence of the Closing and the Offering are subject
to the condition that all representations and warranties and other statements of
the Primary Parties herein contained are, at and as of the commencement of the
Offering and at and as of the Closing Date, true and correct, the condition that
the Primary Parties shall have performed all of their obligations hereunder to
be performed on or before such dates and to the following further conditions:
(a) The Registration Statement shall have been declared
effective by the Commission and the prospectus contained in the MHC-2 shall have
been approved by the OTS for mailing prior to the commencement of the Offering,
and no stop order or other action suspending the effectiveness of the
Registration Statement shall have been issued under the 1933 Act or proceedings
therefore initiated or, to any of the Primary Parties' best knowledge,
threatened by the Commission or any state authority and no order or other action
suspending the authorization for use of the Prospectus or the consummation of
the Offering shall have been issued or proceedings therefore initiated or, to
any of the Primary Parties' best knowledge, threatened by the OTS, the
Commission, or any other governmental body.
17
(b) At the Closing Date, the Agent shall have received:
(1) The favorable opinion, dated as of the Closing
Date, of Xxxx Xxxxxx Xxxxxxxx & Xxxxxx, P.C., and/or local counsel acceptable to
the Agent in form and substance satisfactory to counsel for the Agent to the
effect that:
(i) The Holding Company is a corporation
duly organized and validly existing under the federal laws of the United States
of America, with corporate power and authority to own its properties and to
conduct its business as described in the Prospectus, and is duly qualified to
transact business and is in good standing in each jurisdiction in which the
conduct of its business requires such qualification and in which the failure to
qualify would have a material adverse effect on the financial condition,
earnings, capital, properties or business affairs of the Primary Parties.
(ii) The Bank is a duly organized and validly
existing federally chartered stock savings bank with full power and authority to
own its properties and to conduct its business as described in the Prospectus
and to enter into this Agreement and perform its obligations hereunder; the
activities of the Bank as described in the Prospectus are permitted by the
rules, regulations and practices of the OTS.
(iii) The activities of the Bank described in
the Prospectus are permitted under federal law to subsidiaries of a savings bank
holding company that is a federal corporation. To the best of such counsel's
knowledge, each of the Holding Company and the Bank has obtained all licenses,
permits, and other governmental authorizations that are material for the conduct
of its business, all such licenses, permits and other governmental authorization
are in full force and effect, and the Holding Company and the Bank are complying
therewith in all material respects.
(iv) The Bank is a member of the FHLB of New
York and the Bank is an insured depository institution under the provisions of
the Federal Deposit Insurance Act, as amended, and to such counsel's knowledge
no proceedings for the termination or revocation of such insurance are pending
or threatened.
(v) The MHC is duly organized and validly
existing as a federally chartered mutual holding company, duly authorized to
conduct its business and own its properties as described in the Registration
Statement and Prospectus.
(vi) Upon consummation of the Offering, (a)
the authorized, issued and outstanding capital stock of the Holding Company will
be within the range set forth in the Prospectus under the caption
"Capitalization," and no shares of Common Stock have been or will be issued and
outstanding prior to the Closing Date (except for the shares issued upon the
Bank's reorganization into the mutual holding company form of organization); (b)
the shares of Common Stock of the Holding Company issued to the MHC will have
been duly and validly authorized for issuance and will be fully paid and
nonassessable; (c) the shares of Common Stock of the Holding Company to be
subscribed for in the Offering will have been duly and validly authorized for
issuance, and when issued and delivered by the Holding Company pursuant to the
Plan against
18
payment of the consideration calculated as set forth in the Plan, will be fully
paid and nonassessable; and (d) the issuance of the shares of Common Stock is
not subject to preemptive rights under the charter, articles of incorporation or
bylaws of any of the Primary Parties, or arising or outstanding by operation of
law or, to the best knowledge of such counsel, under any contract, indenture,
agreement, instrument or other document, except for the subscription rights
under the Plan.
(vii) The execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby have been
duly authorized by all necessary corporate action on the part of the Primary
Parties; and this Agreement constitutes a valid, legal and binding obligation of
each of the Primary Parties, enforceable in accordance with its terms, except to
the extent that the provisions of Sections 10 and 11 hereof may be unenforceable
as against public policy, and except to the extent that such enforceability may
be limited by bankruptcy laws, insolvency laws, or other laws affecting the
enforcement of creditors' rights generally, or the rights of creditors of
savings institutions insured by the FDIC (including the laws relating to the
rights of the contracting parties to equitable remedies).
(viii) The Plan has been duly adopted by the
boards of directors of the Primary Parties in the manner required by the
Conversion Regulations.
(ix) The MHC-2 has been approved by the OTS
and the Prospectus has been authorized for use by the OTS, and subject to the
satisfaction of any conditions set forth in such OTS approvals and clearance
under applicable securities laws, no further approval, registration,
authorization, consent or other order of any federal or state regulatory agency,
public board or body is required in connection with the execution and delivery
of this Agreement, the offer, sale and issuance of the Shares and the
consummation of the Offering.
(x) The Registration Statement has become
effective under the 1933 Act, no stop order suspending the effectiveness of
the Registration Statement has been issued, and, to the best of such counsel's
knowledge, no proceedings for that purpose have been instituted or threatened.
(xi) The material tax consequences of the
Offering are set forth in the Prospectus under the caption "Summary - Tax
Consequences of the Offering." The information in the Prospectus under the
caption "Summary - Tax Consequences of the Offering." has been reviewed by such
counsel and fairly describes such opinions rendered by such counsel and Xxxxx
Xxxxxx Company LLP to the Primary Parties with respect to such matters.
(xii) The terms and provisions of the shares
of Common Stock conform to the description thereof contained in the Registration
Statement and the Prospectus, and the forms of certificates proposed to be used
to evidence the shares of Common Stock are in due and proper form.
(xiii) At the time the MHC-2 was approved, the
MHC-2 (as amended or supplemented) including the Prospectus contained therein,
complied as to form in all material respects with the requirements of the
Conversion Regulations and all applicable laws, rules and regulations and
decisions and orders of the OTS, except as modified or waived in writing by the
OTS
19
(other than the financial statements, notes to financial statements, financial
tables and other financial and statistical data included therein and the
appraisal valuation as to which counsel need express no opinion). To such
counsel's knowledge, no person has sought to obtain regulatory or judicial
review of the final action of the OTS approving the MHC-2.
(xiv) At the time that the Registration
Statement became effective the Registration Statement, including the Prospectus
contained therein (as amended or supplemented) (other than the financial
statements, notes to financial statements, financial tables or other financial
and statistical data included therein and the appraisal valuation as to which
counsel need express no opinion), complied as to form in all material respects
with the requirements of the 1933 Act and the rules and regulations promulgated
thereunder.
(xv) To the best of such counsel's knowledge,
there are no legal or governmental proceedings pending, or threatened (i)
asserting the invalidity of this Agreement or (ii) seeking to prevent the
Offering or the offer, sale or issuance of the Shares.
(xvi) The information in the Prospectus under
the captions "Supervision and Regulation," "Federal and State Taxation,"
"Restrictions on the Acquisition of Colonial Bankshares, Inc. and Colonial Bank,
FSB," "Description of Capital Stock of Colonial Bankshares, Inc.," and "The
Offering" to the extent that it constitutes matters of law, summaries of legal
matters, documents or proceedings, or legal conclusions, has been reviewed by
such counsel and is accurate in all material respects (except as to the
financial statements and other financial data included therein as to which such
counsel need express no opinion).
(xvii) None of the Primary Parties are required
to be registered as an investment company under the Investment Company Act of
1940.
(xviii) None of the Primary Parties is in
violation of its articles of incorporation or its charter, as the case may be,
or its bylaws or, to the best of such counsel's knowledge, any material
obligation, agreement, covenant or condition contained in any material contract,
indenture, mortgage, loan agreement, note, lease or other instrument filed as an
exhibit to, or incorporated by reference in, the Registration Statement, which
violation would have a material adverse effect on the financial condition of the
Primary Parties considered as one enterprise, or on the earnings, capital,
properties or business affairs of the Primary Parties considered as one
enterprise. In addition, the execution and delivery of and performance under
this Agreement by the Primary Parties, the incurrence of the obligations set
forth herein and the consummation of the transactions contemplated herein will
not result in any material violation of the provisions of the articles of
incorporation or charter, as the case may be, or the bylaws of any of the
Primary Parties or any material violation of any applicable law, act,
regulation, or to such counsel's knowledge, order or court order, writ,
injunction or decree.
The opinion may be limited to matters governed by the laws of the United
States, the State of New Jersey. In rendering such opinion, such counsel may
rely (A) as to matters involving the application of laws of any jurisdiction
other than the United States, to the extent such counsel deems proper and
specified in such opinion, upon the opinion of other counsel of good standing,
as long as such other opinion indicates that the Agent may rely on the opinion,
and (B) as to matters of fact, to
20
the extent such counsel deems proper, on certificates of responsible officers of
the Primary Parties and public officials, provided copies of any such opinion(s)
or certificates of public officials are delivered to Agent together with the
opinion to be rendered hereunder by special counsel to the Primary Parties. The
opinion of such counsel for the Primary Parties shall state that it has no
reason to believe that the Agent is not justified in relying thereon.
(2) The letter of Xxxx Xxxxxx Xxxxxxxx & Xxxxxx,
P.C. in form and substance to the effect that during the preparation of the
Registration Statement and the Prospectus, Xxxx Xxxxxx Xxxxxxxx & Xxxxxx, P.C.
participated in conferences with certain officers of and other representatives
of the Primary Parties, counsel to the Agent, representatives of the independent
public accounting firm for the Primary Parties and representatives of the Agent
at which the contents of the Registration Statement and the Prospectus and
related matters were discussed and has considered the matters required to be
stated therein and the statements contained therein and, although (without
limiting the opinions provided pursuant to Section 9(b)(1)) Xxxx Xxxxxx Xxxxxxxx
& Xxxxxx, P.C. has not independently verified the accuracy, completeness or
fairness of the statements contained in the Registration Statement and
Prospectus, on the basis of the foregoing, nothing has come to the attention of
Xxxx Xxxxxx Xxxxxxxx & Xxxxxx, P.C. that caused Xxxx Xxxxxx Xxxxxxxx & Xxxxxx,
P.C. to believe that the Registration Statement at the time it was declared
effective by the SEC and as of the date of such letter, contained or contains
any untrue statement of a material fact or omitted to state any material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading (it being
understood that counsel need express no comment or opinion with respect to the
financial statements, schedules and other financial and statistical data
included, or statistical or appraisal methodology employed, in the Registration
Statement or Prospectus).
(3) The favorable opinion, dated as of the Closing
Date, of Xxxxxxx Xxxxxx & Aguggia LLP, counsel for the Agent, with respect to
such matters as the Agent may reasonably require; such opinion may rely, as to
matters of fact, upon certificates of officers and directors of the Primary
Parties delivered pursuant hereto or as such counsel may reasonably request and
upon the opinion of Xxxx Xxxxxx Xxxxxxxx & Xxxxxx, P.C.
(c) Concurrently with the execution of this Agreement, the
Agent shall receive a letter from (i) Xxxxx Xxxxxx Company LLP, dated the date
hereof and addressed to the Agent, such letter confirming that Xxxxx Xxxxxx
Company LLP is a firm of independent public accountants within the meaning of
the Code of Professional Ethics of the American Institute of Certified Public
Accountants, the 1933 Act and the regulations promulgated thereunder and 12
C.F.R. Section 571.2(c)(3), and no information concerning its relationship with
or interests in the Primary Parties is required by the MHC-2 or Item 13 of the
Registration Statement, and stating in effect that in Xxxxx Xxxxxx Company LLP's
opinion the financial statements of the Holding Company included in the
Prospectus comply as to form in all material respects with the applicable
accounting requirements of the 1933 Act, the 1934 Act and the related published
rules and regulations of the Commission thereunder and the Conversion
Regulations and generally accepted accounting principles consistently applied;
(ii) stating in effect that, on the basis of certain agreed upon procedures (but
not an audit examination in accordance with generally accepted auditing
standards) consisting of a reading of the minutes of the meetings of the Board
of Directors of the Primary Parties, the Audit Committee of the Holding Company,
a review of the unaudited interim financial information as of and for the
interim
21
period ending March 31, 2005 and May 13, 2005 in accordance with Statement on
Auditing Standards No. 100, and consultations with officers of the Holding
Company responsible for financial and accounting matters, nothing came to their
attention which caused them to believe that: (A) such unaudited financial
statements and financial information included in the section titled "Recent
Developments" are not in conformity with generally accepted accounting
principles applied on a basis substantially consistent with that of the audited
financial statements included in the Prospectus; or (B) during the period from
the date of the Recent Developments information included in the Prospectus to a
date not more than three business days prior to the date of the Prospectus there
was any increase in non-performing loans, special mention loans, borrowings
(defined as advances from the FHLB of New York, securities sold under agreements
to repurchase and any other form of debt other than deposits) of the Holding
Company or decrease in assets, deposits, loan losses allowances or retained
earnings of the Holding Company or there was any decrease in net income,
noninterest income, tax expense or net interest income of the Holding Company or
any increase in noninterest expense for the number of full months commencing
immediately after the Recent Developments period and ended on the last month-end
prior to the date of the Prospectus as compared to the corresponding period in
the preceding year, which was material to the financial position or results of
operations of the Primary Parties; and (iii) stating that, in addition to the
audit examination referred to in its opinion included in the Prospectus and the
performance of the procedures referred to in clause (ii) of this subsection (c),
they have compared with the general accounting records of the Holding Company,
which are subject to the internal controls of the accounting system of the
Holding Company and other data prepared by the Primary Parties directly from
such accounting records, to the extent specified in such letter, such amounts
and/or percentages set forth in the Prospectus as the Agent may reasonably
request, and they have found such amounts and percentages to be in agreement
therewith (subject to rounding).
(d) At the Closing Date, the Agent shall receive a letter
from Xxxxx Xxxxxx Company LLP dated the Closing Date, addressed to the Agent,
confirming the statements made by its letter delivered by it pursuant to
subsection (c) of this Section 9, the "specified date" referred to in clause
(ii)(B) thereof to be a date specified in such letter, which shall not be more
than three business days prior to the Closing Date.
(e) At the Closing Date, counsel to the Agent shall have
been furnished with such documents and opinions as counsel for the Agent may
require for the purpose of enabling them to advise the Agent with respect to the
issuance and sale of the Common Stock as herein contemplated and related
proceedings, or in order to evidence the accuracy of any of the representations
and warranties, or the fulfillment of any of the conditions herein contained.
(f) At the Closing Date, the Agent shall receive a
certificate of the Chief Executive Officer and Chief Financial Officer of each
of the Primary Parties, dated the Closing Date, to the effect that: (i) they
have examined the Prospectus and at the time the Prospectus became authorized
for final use, the Prospectus did not contain an untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; (ii) there has not been, since the respective dates as of which
information is given in the Prospectus, any material adverse change in the
financial condition or in the earnings, capital, properties, business prospects
or business affairs of the Primary Parties, considered as one enterprise,
whether or not arising in the ordinary course of
22
business; (iii) the representations and warranties contained in Section 6 of
this Agreement are true and correct with the same force and effect as though
made at and as of the Closing Date; (iv) each of the Primary Parties has
complied in all material respects with all material agreements and satisfied all
conditions on its part to be performed or satisfied at or prior to the Closing
Date including the conditions contained in this Section 9; (v) no stop order has
been issued or, to the best of their knowledge, is threatened, by the Commission
or any other governmental body; (vi) no order suspending the Offering, the
acquisition by the MHC of shares of the Common Stock or the effectiveness of the
Registration Statement has been issued and to the best of their knowledge, no
proceedings for any such purpose have been initiated or threatened by the OTS,
the Commission, or any other federal or state authority; (vii) to the best of
their knowledge, no person has sought to obtain regulatory or judicial review of
the action of the OTS in approving the Plan or to enjoin the Offering.
(g) At the Closing Date, the Agent shall receive a letter
from RP Financial, LC., dated as of the Closing Date, (i) confirming that said
firm is independent of the Primary Parties and is experienced and expert in the
area of corporate appraisals within the meaning of the Conversion Regulations,
(ii) stating in effect that the Appraisal complies in all material respects with
the applicable requirements of the Conversion Regulations, and (iii) further
stating that its opinion of the aggregate pro forma market value of the Primary
Parties, as converted, expressed in the Appraisal as most recently updated,
remains in effect.
(h) None of the Primary Parties shall have sustained, since
the date of the latest audited financial statements included in the Registration
Statement and Prospectus, any material loss or interference with its business
from fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action, order or
decree, otherwise than as set forth in the Registration Statement and the
Prospectus, and since the respective dates as of which information is given in
the Registration Statement and the Prospectus, there shall not have been any
material change, or any development involving a prospective material change in,
or affecting the general affairs of, management, financial position, retained
earnings, long-term debt, stockholders' equity or results of operations of any
of the Primary Parties, otherwise than as set forth or contemplated in the
Registration Statement and the Prospectus, the effect of which, in any such case
described above, is in the Agent's reasonable judgment sufficiently material and
adverse as to make it impracticable or inadvisable to proceed with the Offering
or the delivery of the Shares on the terms and in the manner contemplated in the
Prospectus.
(i) Prior to and at the Closing Date: (i) in the reasonable
opinion of the Agent there shall have been no material adverse change in the
financial condition or in the earnings, capital, properties or business affairs
of the Primary Parties considered as one enterprise, from and as of the latest
dates as of which such condition is set forth in the Prospectus, except as
referred to therein; (ii) there shall have been no material transaction entered
into by the Primary Parties, independently or considered as one enterprise, from
the latest date as of which the financial condition of the Primary Parties is
set forth in the Prospectus, other than transactions referred to or contemplated
therein; (iii) none of the Primary Parties shall have received from the OTS or
the FDIC any direction (oral or written) to make any material change in the
method of conducting their business with which it has not complied in all
material respects (which direction, if any, shall have been disclosed to the
Agent) and which would reasonably be expected to have a material and adverse
effect on the condition
23
(financial or otherwise) or on the earnings, capital, properties or business
affairs of the Primary Parties considered as one enterprise; (iv) none of the
Primary Parties shall have been in default (nor shall an event have occurred
which, with notice or lapse of time or both, would constitute a default) under
any provision of any agreement or instrument relating to any material
outstanding indebtedness; (v) no action, suit or proceeding, at law or in equity
or before or by any federal or state commission, board or other administrative
agency, shall be pending or, to the knowledge of the Primary Parties, threatened
against any of the Primary Parties or affecting any of their properties wherein
an unfavorable decision, ruling or finding would reasonably be expected to have
a material and adverse effect on the financial condition or on the earnings,
capital, properties or business affairs of the Primary Parties, considered as
one enterprise; and (vi) the Shares shall have been qualified or registered for
offering and sale under the securities or "blue sky" laws of the jurisdictions
requested by the Agent.
(j) At or prior to the Closing Date, the Agent shall receive
(i) a copy of the letter from the OTS authorizing the use of the Prospectus and
approving the MHC-2, (ii) a copy of the order from the Commission declaring the
Registration Statement effective, (iii) copies of certificates of existence for
each of the Primary Parties, (iv) a certificate from the FDIC evidencing the
Bank's insurance of accounts, (v) a certificate of the FHLB of New York
evidencing the Bank's membership therein, and (vi) any other documents that
Agent shall reasonably request.
(k) Subsequent to the date hereof, there shall not have
occurred any of the following: (i) a suspension or limitation in trading in
securities generally on the New York Stock Exchange or American Stock Exchange
or in the over-the-counter market, or quotations halted generally on the Nasdaq
Stock Market, or minimum or maximum prices for trading have been fixed, or
maximum ranges for prices for securities have been required by either of such
exchanges or the NASD or by order of the Commission or any other governmental
authority other than temporary trading halts (A) imposed as a result of intraday
changes in the Dow Xxxxx Industrial Average, (B) lasting no longer than until
the regularly scheduled commencement of trading on the next succeeding
business-day, and (C) which, when combined with all other such halts occurring
during the previous five business days, total less than three; (ii) a general
moratorium on the operations of commercial banks or other federally-insured
financial institutions or general moratorium on the withdrawal of deposits from
commercial banks or other federally-insured financial institutions declared by
either federal or state authorities; (iii) the engagement by the United States
in hostilities which have resulted in the declaration, on or after the date
hereof, of a national emergency or war; or (iv) a material decline in the price
of equity or debt securities in the United States financial markets or elsewhere
if the effect of any of (i) through (iv) herein, in the Agent's reasonable
judgment, makes it impracticable or inadvisable to proceed with the offering or
the delivery of the Shares on the terms and in the manner contemplated in the
Registration Statement and the Prospectus.
(l) All such opinions, certificates, letters and documents
will be in compliance with the provisions hereof only if they are reasonably
satisfactory in form and substance to the Agent and of counsel for the Agent.
Any certificate signed by an officer of the Holding Company or the Bank and
delivered to the Agent or to counsel for the Agent shall be deemed a
representation and warranty by the Holding Company or the Bank, as the case may
be, to the Agent as to the statements made therein. If any condition to the
Agent's obligations hereunder to be fulfilled prior to or at the Closing Date is
not fulfilled, the Agent may terminate this Agreement (provided that if this
24
Agreement is so terminated but the sale of Shares is nevertheless consummated,
the Agent shall be entitled to the compensation provided for in Section 4
hereof) or, if the Agent so elects, may waive any such conditions which have not
been fulfilled or may extend the time of their fulfillment.
10. INDEMNIFICATION.
(a) The Primary Parties jointly and severally agree to
indemnify and hold harmless the Agent, its officers, directors, agents,
attorneys, servants and employees and each person, if any, who controls the
Agent within the meaning of Section 15 of the 1933 Act or Section 20(a) of the
1934 Act, against any and all loss, liability, claim, damage or expense
whatsoever (including but not limited to settlement expenses, subject to the
limitation set forth in the last sentence of paragraph (c) below), joint or
several, that the Agent or any of such officers, directors, agents, attorneys,
servants, employees and controlling Persons (collectively, the "Related
Persons") may suffer or to which the Agent or the Related Persons may become
subject under all applicable federal and state laws or otherwise, and to
promptly reimburse the Agent and any Related Persons upon written demand for any
reasonable expenses (including reasonable fees and disbursements of counsel)
incurred by the Agent or any Related Persons in connection with investigating,
preparing or defending any actions, proceedings or claims (whether commenced or
threatened) to the extent such losses, claims, damages, liabilities or actions:
(i) arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement (or any
amendment or supplement thereto), preliminary or final Prospectus (or any
amendment or supplement thereto), the MHC-2, or any blue sky application or
other instrument or document of the Primary Parties or based upon written
information supplied by any of the Primary Parties filed in any state or
jurisdiction to register or qualify any or all of the Shares under the
securities laws thereof (collectively, the "Blue Sky Applications"), or any
application or other document, advertisement, or communication ("Sales
Information") prepared, made or executed by or on behalf of any of the Primary
Parties with its consent or based upon written information furnished by or on
behalf of any of the Primary Parties, whether or not filed in any Jurisdiction
in order to qualify or register the Shares under the securities laws thereof,
(ii) arise out of or are based upon the omission or alleged omission to state in
any of the foregoing documents or information, a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; (iii) arise from any
theory of liability whatsoever relating to or arising from or based upon the
Registration Statement (or any amendment or supplement thereto), preliminary or
final Prospectus (or any amendment or supplement thereto), the MHC-2, any Blue
Sky Applications or Sales Information or other documentation distributed in
connection with the Offering; or (iv) result from any claims made with respect
to the accuracy, reliability and completeness of the records of Eligible Account
Holders, Supplemental Eligible Account Holders and Other Members or for any
denial or reduction of a subscription or order to purchase Common Stock, whether
as a result of a properly calculated allocation pursuant to the Plan or
otherwise, based upon such records; provided, however, that no indemnification
is required under this paragraph (a) to the extent such losses, claims, damages,
liabilities or actions arise out of or are based upon any untrue material
statements or alleged untrue material statements in, or material omission or
alleged material omission from, the Registration Statement (or any amendment or
supplement thereto) or the preliminary or final Prospectus (or any amendment or
supplement thereto), the MHC-2, the Blue Sky Applications or Sales Information
or other documentation distributed in connection with the Offering made in
reliance upon and in conformity with written information furnished to the
Primary Parties by the Agent or its representatives (including counsel) with
respect to the Agent expressly for use in the
25
Registration Statement (or any amendment or supplement thereto) or Prospectus
(or any amendment or supplement thereto) under the captions "Market for the
Common Stock" and "The Offering - Plan of Distribution and Marketing
Arrangements," except for information derived from the Prospectus. Provided
further, that the Primary Parties will not be responsible for any loss,
liability, claim, damage or expense to the extent they result primarily from
material oral misstatements by the Agent to a purchaser of Shares which are not
based upon information in the Registration Statement or Prospectus, or from
actions taken or omitted to be taken by the Agent in bad faith or from the
Agent's gross negligence or willful misconduct, and the Agent agrees to repay to
the Primary Parties any amounts advanced to it by the Primary Parties in
connection with matters as to which it is found not to be entitled to
indemnification hereunder.
(b) The Agent agrees to indemnify and hold harmless the
Primary Parties, their directors and officers, agents, servants and employees
and each person, if any, who controls any of the Primary Parties within the
meaning of Section 15 of the 1933 Act or Section 20(a) of the 1934 Act against
any and all loss, liability, claim, damage or expense whatsoever (including but
not limited to settlement expenses, subject to the limitation set forth in the
last sentence of paragraph (c) below), joint or several which they, or any of
them, may suffer or to which they, or any of them, may become subject under all
applicable federal and state laws or otherwise, and to promptly reimburse the
Primary Parties and any such persons upon written demand for any reasonable
expenses (including fees and disbursements of counsel) incurred by them in
connection with investigating, preparing or defending any actions, proceedings
or claims (whether commenced or threatened) to the extent such losses, claims,
damages, liabilities or actions arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment of supplement thereto), the MHC-2 or
any Blue Sky Applications or Sales Information or are based upon the omission or
alleged omission to state in any of the foregoing documents a material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading;
provided, however, that the Agent's obligations under this Section 10(b) shall
exist only if and only to the extent that such untrue statement or alleged
untrue statement was made in, or such material fact or alleged material fact was
omitted from, the Registration Statement (or any amendment or supplement
thereto) or the Prospectus (or any amendment or supplement thereto) in reliance
upon and in conformity with written information furnished to the Primary Parties
by the Agent or its representatives (including counsel) expressly for use under
the captions "Market for the Common Stock" and "The Offering --Plan of
Distribution and Marketing Arrangements."
(c) Each indemnified party shall give prompt written notice
to each indemnifying party of any action, proceeding, claim (whether commenced
or threatened), or suit instituted against it in respect of which indemnity may
be sought hereunder, but failure to so notify an indemnifying party shall not
relieve it from any liability which it may have on account of this Section 10,
Section 11 or otherwise. An indemnifying party may participate at its own
expense in the defense of such action. In addition, if it so elects within a
reasonable time after receipt of such notice, an indemnifying party, jointly
with any other indemnifying parties receiving such notice, may assume defense of
such action with counsel chosen by it and approved by the indemnified parties
that are defendants in such action, unless such indemnified parties reasonably
object to such assumption on the ground that there may be legal defenses
available to them that are different from or in addition to those available to
such indemnifying party. If an indemnifying party assumes the defense of such
26
action, the indemnifying parties shall not be liable for any fees and expenses
of counsel for the indemnified parties incurred thereafter in connection with
such action, proceeding or claim, other than reasonable costs of investigation.
In no event shall the indemnifying parties be liable for the fees and expenses
of more than one separate firm of attorneys (unless an indemnified party or
parties shall have reasonably concluded that there may be defenses available to
it or them which are different from or in addition to those of other indemnified
parties) for all indemnified parties in connection with any one action,
proceeding or claim or separate but similar or related actions, proceedings or
claims in the same jurisdiction arising out of the same general allegations or
circumstances. The Holding Company shall be liable for any settlement of any
claim against the Agent (or its directors, officers, employees, affiliates or
controlling persons), made with the Holding Company's consent, which consent
shall not be unreasonably withheld. The Holding Company shall not, without the
written consent of the Agent, settle or compromise any claim against it based
upon circumstances giving rise to an indemnification claim against the Holding
Company hereunder unless such settlement or compromise provides that the Agent
and the other indemnified parties shall be unconditionally and irrevocably
released from all liability in respect of such claim.
(d) The agreements contained in this Section 10 and in
Section 11 hereof and the representations and warranties of the Primary Parties
set forth in this Agreement shall remain operative and in full force and effect
regardless of (i) any investigation made by or on behalf of the Agent or its
officers, directors, controlling persons, agents or employees or by or on behalf
of any of the Primary Parties or any officers, directors, controlling persons,
agents or employees of any of the Primary Parties; (ii) delivery of and payment
hereunder for the Shares; or (iii) any termination of this Agreement.
11. CONTRIBUTION.
(a) In order to provide for just and equitable contribution
in circumstances in which the indemnification provided for in Section 10 is due
in accordance with its terms but is found in a final judgment by a court to be
unavailable from the Primary Parties or the Agent, the Primary Parties and the
Agent shall contribute to the aggregate losses, claims, damages and liabilities
of the nature contemplated by such indemnification in such proportion so that
(i) the Agent is responsible for that portion represented by the percentage that
the fees paid to the Agent pursuant to Section 4 of this Agreement (not
including expenses) ("Agent's Fees"), less any portion of Agent's Fees paid by
Agent to Assisting Brokers, bear to the total proceeds received by the Primary
Parties from the sale of the Conversion Shares in the Conversion Offerings, net
of all expenses of the Offerings except Agent's Fees, and (ii) the Primary
Parties shall be responsible for the balance. If, however, the allocation
provided above is not permitted by applicable law or if the indemnified party
failed to give the notice required under Section 10 above, then each
indemnifying party shall contribute to such amount paid or payable by such
indemnified party in such proportion as is appropriate to reflect not only such
relative fault of the Primary Parties on the one hand and the Agent on the other
in connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities (or actions, proceedings or claims in respect
thereof), but also the relative benefits received by the Primary Parties on the
one hand and the Agent on the other from the Offering, as well as any other
relevant equitable considerations. The relative benefits received by the Primary
Parties on the one hand and the Agent on the other hand shall be deemed to be in
the same proportion as the total proceeds from the Conversion Offerings, net of
all expenses of the Conversion Offerings except
27
Agent's Fees, received by the Primary Parties bear, with respect to the Agent,
to the total fees (not including expenses) received by the Agent less the
portion of such fees paid by the Agent to Assisting Brokers. The relative fault
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Primary Parties
on the one hand or the Agent on the other and the parties relative intent, good
faith, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The Primary Parties and the Agent agree that it
would not be just and equitable if contribution pursuant to this Section 11 were
determined by pro-rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to above in this
Section 11. The amount paid or payable by an indemnified party as a result of
the losses, claims, damages or liabilities (or action, proceedings or claims in
respect thereof) referred to above in this Section 11 shall be deemed to include
any legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action, proceeding or claim.
It is expressly agreed that the Agent shall not be liable for any loss,
liability, claim, damage or expense or be required to contribute any amount
which in the aggregate exceeds the amount paid (excluding reimbursable expenses)
to the Agent under this Agreement less the portion of such fees paid by the
Agent to Assisting Brokers. It is understood and agreed that the above-stated
limitation on the Agent's liability is essential to the Agent and that the Agent
would not have entered into this Agreement if such limitation had not been
agreed to by the parties to this Agreement. No person found guilty of any
fraudulent misrepresentation (within the meaning of Section 11(f) of the 0000
Xxx) shall be entitled to contribution from any person who was not found guilty
of such fraudulent misrepresentation. The duties, obligations and liabilities of
the Primary Parties and the Agent under this Section 11 and under Section 10
shall be in addition to any duties, obligations and liabilities which the
Primary Parties and the Agent may otherwise have. For purposes of this Section
11, each of the Agent's and the Primary Parties' officers and directors and each
person, if any, who controls the Agent or any of the Primary Parties within the
meaning of the 1933 Act and the 1934 Act shall have the same rights to
contribution as the Primary Parties and the Agent. Any party entitled to
contribution, promptly after receipt of notice of commencement of any action,
suit, claim or proceeding against such party in respect of which a claim for
contribution may be made against another party under this Section 11, will
notify such party from whom contribution may be sought, but the omission to so
notify such party shall not relieve the party from whom contribution may be
sought from any other obligation it may have hereunder or otherwise than under
this Section 11.
12. REPRESENTATIONS, WARRANTIES AND INDEMNITIES TO SURVIVE DELIVERY.
All representations, warranties and indemnities and other statements contained
in this Agreement, or contained in certificates of officers of the Primary
Parties or the Agent submitted pursuant hereto, shall remain operative and in
full force and effect, regardless of any termination or cancellation of this
Agreement or any investigation made by or on behalf of the Agent or its
controlling persons, or by or on behalf of the Primary Parties and shall survive
the issuance of the Shares, and any legal representative, successor or assign of
the Agent, any of the Primary Parties, and any indemnified person shall be
entitled to the benefit of the respective agreements, indemnities, warranties
and representations.
13. TERMINATION. Agent may terminate this Agreement by giving the
notice indicated below in this Section at any time after this Agreement becomes
effective as follows:
28
(a) In the event the Holding Company fails to consummate the
sale of the minimum number of the Conversion Shares by __________________, 2006
in accordance with the provisions of the Plan or as required by the Conversion
Regulations and applicable law, this Agreement shall terminate upon refund by
the Primary Parties to each person who has subscribed for or ordered any of the
Conversion Shares the full amount which it may have received from such person,
together with interest in accordance with Section 3, and no party to this
Agreement shall have any obligation to the other hereunder, except as set forth
in Sections 3, 4, 8, 10 and 11 hereof.
(b) If any of the conditions specified in Section 9 shall
not have been fulfilled when and as required by this Agreement, or by the
Closing Date, or waived in writing by the Agent, this Agreement and all of the
Agent's obligations hereunder may be canceled by the Agent by notifying the Bank
of such cancellation in writing at any time at or prior to the Closing Date, and
any such cancellation shall be without liability of any party to any other party
except as otherwise provided in Sections 3, 4, 8, 10 and 11 hereof.
(c) If Agent elects to terminate this Agreement as provided
in this Section, the Bank shall be notified by the Agent as provided in Section
14 hereof.
(d) If this Agreement is terminated in accordance with the
provisions of Sections 3, 9, or 13, the Primary Parties shall pay the Agent the
fees earned pursuant to Section 4 and will reimburse the Agent for its
reasonable expenses pursuant to Section 8, including without limitation
accounting, communication, legal and travel expenses.
14. NOTICES. All notices and other communications hereunder shall be
in writing and shall be deemed to have been duly given if mailed or transmitted
by any standard form of telecommunication. Notices to Agent shall be directed to
Xxxx Xxxx & Co. Inc., 00 Xxxxxxxx Xxxxxxxx, Xxxxxxx Xxxx, Xxx Xxxxxx 00000,
Attention: Xxxxx Xxxxxxx (with a copy to Xxxx X. Xxxx, Esq., Xxxxxxx Xxxxxx &
Aguggia LLP, 5101 Wisconsin Avenue, N.W., Washington, D.C. 20016); notices to
the Primary Parties shall be directed to Colonial Bankshares, Inc., 00 Xxxx
Xxxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxxxx 00000 Attention: Xxxxxx X. Xxxxxxx,
President and Chief Executive Officer (with a copy to Xxx Xxxxx, Xxxx Xxxxxx
Xxxxxxxx & Xxxxxx, P.C. 0000 Xxxxxxxxx Xxxxxx, X.X., Xxxxx 000, Xxxxxxxxxx, X.X.
20015).
15. PARTIES. This Agreement shall inure to the benefit of and be
binding upon the Agent and the Primary Parties, and their respective successors.
Nothing expressed or mentioned in this Agreement is intended or shall be
construed to give any person, firm or corporation, other than the parties hereto
and their respective successors and the controlling persons and officers and
directors referred to in Sections 10 and 11 and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provisions herein contained. It is understood
and agreed that this Agreement is the exclusive agreement among the parties,
supersedes any prior Agreement among the parties and may not be varied except by
a writing signed by all parties.
16. PARTIAL INVALIDITY. In the event that any term, provision or
covenant herein or the application thereof to any circumstances or situation
shall be invalid or unenforceable, in whole or in
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part, the remainder hereof and the application of said term, provision or
covenant to any other circumstance or situation shall not be affected thereby,
and each term, provision or covenant herein shall be valid and enforceable to
the full extent permitted by law.
17. CONSTRUCTION. This Agreement shall be construed in accordance
with the laws of the State of New Jersey.
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If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us a counterpart hereof, whereupon this
instrument along with all counterparts will become a binding agreement between
you and us in accordance with its terms.
Very truly yours,
COLONIAL BANKSHARES, INC.
By:
-------------------------------------
Xxxxxx X. Xxxxxxx
President and Chief Executive Officer
COLONIAL BANKSHARES, MHC
By:
-------------------------------------
Xxxxxx X. Xxxxxxx
President and Chief Executive Officer
COLONIAL BANK, FSB
By:
-------------------------------------
Xxxxxx X. Xxxxxxx
President and Chief Executive Officer
The foregoing Agency Agreement is
hereby confirmed and accepted as
of the date first set and above written.
XXXX XXXX & CO., INC.
By:
-------------------------------------
Xxxxx Xxxxxxx
Managing Director
MASTER SELECTED DEALER AGREEMENT
_____________, 2005
Xxxx Xxxx & Co., Inc.
000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Gentlemen:
(1) GENERAL. We understand that Xxxx Xxxx & Co., Inc. ("Xxxx Xxxx")
is entering into this Agreement with us and other firms who may be offered the
right to purchase as principal a portion of securities being distributed to the
public. The terms and conditions of this Agreement shall be applicable to any
public offering of securities ("Securities") pursuant to a registration
statement filed under the Securities Act of 1933 (the "Securities Act") wherein
Xxxx Xxxx (acting for its own account or for the account of any underwriting or
similar group or syndicate) is responsible for managing or otherwise
implementing the sale of the Securities to selected dealers ("Selected Dealers")
and has informed us that such terms and conditions shall be applicable. Any such
offering of Securities to us as a Selected Dealer is hereinafter called an
"Offering." In the case of any Offering in which you are acting for the account
of any underwriting or similar group or syndicate ("Underwriters"), the terms
and conditions of this Agreement shall be for the benefit of, and binding upon,
such Underwriters, including, in the case of any Offering in which you are
acting with others as representatives of Underwriters, such other
representatives. The term "preliminary prospectus" means any preliminary
prospectus relating to an Offering of Securities or any preliminary prospectus
supplement together with a prospectus relating to an Offering of Securities; the
term "Prospectus" means the prospectus, together with the final prospectus
supplement, if any, relating to an Offering of Securities, filed pursuant to
Rule 424(b) or Rule 424(c) under the Securities Act or any successor or similar
rules.
(2) CONDITIONS OF OFFERING, ACCEPTANCE AND PURCHASE. Any Offering
will be subject to delivery of the Securities and their acceptance by you and
any other Underwriters, may be subject to the approval of all legal matters by
counsel and the satisfaction of other conditions, and may be made on the basis
of reservation of Securities or an allotment against subscription. You will
advise us by telegram, telex, facsimile, e-mail, or other form of written
communication ("Written Communication") of the particular method and
supplementary terms and conditions (including, without limitation, the
information as to prices and offering date referred to in Section 3(b)) of any
Offering in which we are invited to participate. To the extent such
supplementary terms and conditions are inconsistent with any provision herein,
such terms and conditions shall supersede any such provision. Unless otherwise
indicated in any such Written Communication, acceptances, and other
communications by us with respect to any Offering should be sent to Xxxx Xxxx.
You reserve the right to reject any acceptance in whole or in part. Payment for
Securities purchased by us is to be made at such office as you may designate, at
the public offering price, or, if you shall so advise us, at such price less the
concession to dealers or at the price set forth or indicated in a Written
Communication, on such date as you shall determine, on one day's prior notice to
us, by wire transfer to a Xxxx Xxxx account, against delivery of certificates or
other forms evidencing such Securities. If payment is made for Securities
purchased by us at the public offering price, the concession to which we shall
be entitled will be paid to us upon termination of the provisions of Section
3(b) with respect to such Securities.
Unless we promptly give you written instructions otherwise, if
transactions in the Securities may be settled through the facilities of The
Depository Trust Company, delivery of Securities purchased by us will be made
through such facilities if we are a member, or if we are not a member,
settlement may be made through our ordinary correspondent who is a member.
(3) REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
(a) PROSPECTUSES. You shall provide us with such number of copies of
each preliminary prospectus, the Prospectus and any supplement thereto relating
to each Offering as we may reasonably request for the purposes contemplated by
the Securities Act and the Securities Exchange Act of 1934 (Exchange Act) and
the applicable Rules and regulations of the Securities and Exchange Commission
thereunder. We represent that we are familiar with Rule 15c2-8 under the
Exchange Act relating to the distribution of preliminary and final prospectuses
and agree that we will comply therewith. We agree to keep an accurate record of
our distribution (including dates, number of copies, and persons to whom sent)
of copies of the Prospectus or any preliminary prospectus (or any amendment or
supplement to any thereof), and promptly upon request by you, to bring all
subsequent changes to the attention of anyone to whom such material shall have
been furnished. We agree to furnish to persons who receive a confirmation of
sale a copy of the Prospectus filed pursuant to Rule 424(b) or Rule 424(c) under
the Securities Act. We agree that in purchasing Securities in an Offering we
will rely upon no statements whatsoever, written or oral, other than the
statements in the Prospectus delivered to us by you. We will not be authorized
by the issuer or other seller of Securities offered pursuant to a Prospectus or
by any Underwriters to give any information or to make any representation not
contained in the Prospectus in connection with the sale of such Securities.
(b) OFFER AND SALE TO THE PUBLIC. With respect to any Offering of
Securities, you will inform us by a Written Communication of the public offering
price, the selling concession, the reallowance (if any) to dealers, and the time
when we may commence selling Securities to the public. After such public
offering has commenced, you may change the public offering price, the selling
concession, and the reallowance to dealers. With respect to each Offering of
Securities, until the provisions of this Section 3(b) shall be terminated
pursuant to Section 4, we agree to offer Securities to the public only at the
public offering price not in excess of such reallowance may be allowed as
consideration for services rendered in distribution to dealers who are actually
engaged in the investment banking or securities business, who execute the
written agreement prescribed in the investment banking or securities business,
who execute the written agreement prescribed by Rule 2740 of the Rules of
Conduct of the National Association of Securities Dealers, inc. (the "NASD") and
who are either members in good standing of the NASD or foreign brokers or
dealers not eligible for membership in the NASD who represent to us that they
will promptly reoffer such Securities at
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the public offering price and will abide by the conditions with respect to
foreign brokers and dealers set forth in Section 3(e).
(c) STABILIZATION AND OVERALLOTMENT. You may, with respect to any
Offering, be authorized to over-allot in arranging sales to Selected Dealers, to
purchase and sell Securities, any other securities of the issuer of the
Securities of the same class and series and any other securities of such issuer
that may designate for long or short account, and to stabilize or maintain the
market price of the Securities. We agree to advise you from time to time upon
request, prior to the termination of the provisions of Section 3(b) with respect
to any Offering, of the amount of Securities purchased by us hereunder remaining
unsold and we will, upon your request, sell to you, for the accounts of the
Underwriters, such amount of Securities as you may designate, at the public
offering price thereof less an amount to be determined by you not in excess of
the concession to dealers. In the event that prior to the later of (i) the
termination of the provisions of Section 3(b) with respect to any Offering, or
(ii) the covering by you of any short position created by you in connection with
such Offering for your account or the account of one or more Underwriters, you
purchase or contract to purchase for the account of any of the Underwriters, in
the open market or otherwise, any Securities theretofore delivered to us, you
reserve the right to withhold the above-mentioned concession to dealers on such
Securities if sold to us at the public offering price, or if such concession has
been allowed to us through our purchase at a net price, we agree to repay such
concession upon your demand, plus in each case any taxes on redelivery,
commissions, accrued interest, and dividends paid in connection with such
purchase or contract to purchase.
(d) OPEN MARKET TRANSACTIONS. We agree to abide by Regulation M
under the Exchange Act and we agree not to bid for, purchase, attempt to
purchase, or sell, directly or indirectly, any Securities, any other Reference
Securities (as defined in Regulation M) of the issuer, or any other securities
of such issuer as you may designate, except as brokers pursuant to unsolicited
orders and as otherwise provided in this Agreement. If the Securities are common
stock or securities convertible into common stock, we agree not to effect, or
attempt to induce others to effect, directly or indirectly, any transactions in
or relating to any stock of such issuer, except to the extent permitted by Rule
101 of Regulation M under the Exchange Act.
(e) NASD. We represent that we are actually engaged in the
investment banking or securities business and we are either a member in good
standing of the NASD, or, if not such a member, a foreign dealer not eligible
for membership. If we are such a member we agree that in making sales of the
Securities we will comply with all applicable Rules of the NASD, including,
without limitation, the NASD's Interpretation with Respect to Free-Riding and
Withholding and Rule 2740 of the Conduct Rules. If we are such a foreign dealer,
we agree not to offer or sell any Securities in the United States of America we
agree to comply as though we were a member with such Interpretation and Rule
2730, 2740 and 2750 of the Conduct Rules of the NASD and to comply with Rule
2420 of the Conduct Rules of the NASD as it applies to a nonmember broker or
dealer in a foreign country.
(f) RELATIONSHIP AMONG UNDERWRITERS AND SELECTED DEALERS. You may
buy Securities from or sell Securities to any Underwriter or Selected Dealer
and, with your consent, the
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Underwriters (if any) and the Selected Dealers may purchase Securities from and
sell Securities to each other at the public offering price less all or any part
of the concession. We are not authorized to act as agent for you or any
Underwriter or the issuer or other seller of any Securities in offering
Securities to the public or otherwise. Nothing contained herein or in any
Written Communication from you shall constitute the Selected Dealers partners
with you or any Underwriter or with one another. Neither you nor any Underwriter
shall be under any obligation to us except for obligations assumed hereby or in
any Written Communication from you in connection with any Offering. In
connection with any Offering, we agree to pay our proportionate share of any
claim, demand, or liability asserted against us, and the other Selected Dealers
or any of them, or against you or the Underwriters, if any, based on any claim
that such separate entity, including in each case our proportionate share of any
expense incurred in defending against any such claim, demand, or liability.
(g) BLUE SKY LAWS. Upon application to you, you will inform us as to
the jurisdictions in which you believe the Securities have been qualified for
sale or are exempt under the respective securities or "blue sky" laws of such
jurisdictions. We understand and agree that compliance with the securities or
"blue sky" laws in each jurisdiction in which we shall offer or sell any of the
Securities shall be our sole responsibility and that you assume no
responsibility or obligations as to the eligibility of the Securities for sale
or our right to sell the Securities in any jurisdiction.
(h) COMPLIANCE WITH LAW. We agree that in selling Securities
pursuant to any Offering (which agreement shall also be for the benefit of the
issuer or other seller of such Securities), we will comply with the applicable
provisions of the Securities Act and the Exchange Act, the applicable Rules and
regulations of the Securities and Exchange Commission thereunder, the applicable
Rules and regulations of the NASD, and the applicable Rules and regulations of
any securities exchange having jurisdiction over the Offering. You shall have
full authority to take such action as you may deem advisable in respect of all
matters pertaining to any Offering. Neither you nor any Underwriter shall be
under any liability to us, except for lack of good faith and for obligations
expressly assumed by you in this Agreement; PROVIDED, HOWEVER, that nothing in
this sentence shall be deemed to relieve you from any liability imposed by the
Securities Act.
(4) TERMINATION; SUPPLEMENTS AND AMENDMENTS. This Agreement may be
terminated by either party hereto upon five business days' written notice to the
other party; provided that with respect to any Offering for which a Written
Communication was sent and accepted prior to such notice, this Agreement as it
applies to such Offering shall remain in full force and effect and shall
terminate with respect to such Offering in accordance with the last sentence of
this Section. This Agreement may be supplemented or amended by you by written
notice thereof to us, and any such supplement or amendment to this Agreement
shall be effective with respect to any Offering to which this Agreement applies
after the date of such supplement or amendment. Each reference to "this
Agreement" herein shall, as appropriate, be to this Agreement as so amended and
supplemented. The terms and conditions set forth in Sections 3(b) and (d) with
regard to any Offering will terminate at the close of business on the thirtieth
day after the date of the initial public offering of the Securities to which
such Offering relates, but such terms and conditions, upon notice to us, may be
terminated by you at any time.
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(5) SUCCESSORS AND ASSIGNS. This Agreement shall be binding on, and
inure to the benefit of, the parties hereto and other persons specified or
indicated in Section 1, and the respective successors and assigns of each of
them.
(6) GOVERNING LAW. This Agreement and the terms and conditions set
forth herein with respect to any Offering together with such supplementary terms
and conditions with respect to such Offering as may be contained in any Written
Communication from you to us in connection therewith shall be governed by, and
construed in accordance with, the laws of the State of New York.
By signing this Agreement we confirm that our subscription to, or our
acceptance of any reservation of, any Securities pursuant to an Offering shall
constitute (i) acceptance of and agreement to the terms and conditions of this
Agreement (as supplemented and amended pursuant to Section 4) together with and
subject to any supplementary terms and conditions contained in any Written
Communication from you in connection with such Offering, all of which shall
constitute a binding agreement between us and you, individually, or as
representative of any Underwriters, (ii) in confirmation that our
representations and warranties set forth in Section 3 are true and correct at
that time and (iii) confirmation that our agreements set forth in Sections 2 and
3 have been and will be fully performed by us to the extent and at the times
required thereby.
Very truly yours,
------------------------------------
(Name of Firm)
By: ________________________________
Confirmed, as of the date first
above written.
XXXX XXXX & CO., INC.
By: _______________________________
-------------------------------
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XXXX XXXX & CO., INC.
ADDITIONAL TERMS FOR
MASTER SELECTED DEALER AGREEMENT
IF WE COMMUNICATE TO YOU THAT A PARTICULAR OFFERING IS BEING MADE ON A BEST
EFFORTS BASIS THEN THESE TERMS APPLY AND OTHER INCONSISTENT TERMS DO NOT APPLY.
1. The offering will be a best efforts offering. The offering also will be
contingent and involve a closing only after receipt of necessary
documentation from the issuer and satisfaction of other conditions, if
any, specified in the prospectus or offering circular and the agency or
engagement agreement with the issuer. The offering is designed to comply
with applicable SEC rules, including Rule 15c2-4, Rule 10b-9, and Rule
15c6-1. See NASD Notice to Members 98-4, 87-61 and 84-7.
2. The Selected Dealer represents and agrees that it shall take necessary
steps to comply with SEC Rules 15c2-4, 10b-9 and 15c6-1, including, but
not limited to, depositing funds in a complying special account if funds
are received before all closing conditions have been met.
Agreed to on __________, 2005
Date
--------------------------------
Name of Firm
By:_____________________________
Name:
Title:
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