4,711,099 Shares
(subject to increase up to 5,417,793 shares
in the event of an increase in the pro forma market
value of the Company's Common Stock)
SYNERGY FINANCIAL GROUP, INC.
(a New Jersey corporation)
Common Stock
(par value $.10 per share)
AGENCY AGREEMENT
November , 2003
SANDLER X'XXXXX & PARTNERS, L.P.
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Synergy Financial Group, Inc., a New Jersey corporation (the
"Company"), Synergy, MHC, a federal mutual holding company (the "MHC"), Synergy
Financial Group, Inc., a federally chartered stock corporation (the "Mid-Tier
HC"), and Synergy Bank, a federally chartered stock savings bank (the "Bank"),
hereby confirm their agreement with Sandler X'Xxxxx & Partners, L.P. ("Sandler
X'Xxxxx" or the "Agent") with respect to the offer and sale by the Company of up
to 4,711,099 shares (subject to increase up to 5,417,793 shares in the event of
an increase in the pro forma market value of the Company's common stock) of the
Company's common stock, par value $.10 per share (the "Common Stock"). The
shares of Common Stock to be sold by the Company in the Offerings (as defined
below) are hereinafter called the "Securities."
The Securities are being offered for sale in accordance with the Plan
of Conversion and Reorganization (the "Plan") adopted by the Boards of Directors
of the MHC, the Mid-Tier HC and the Bank pursuant to which the Bank intends to
convert from the mutual to stock holding company form of organization and issue
all of its stock to the Company pursuant to the following steps: (i) the Bank's
establishment of the Company as a New Jersey-chartered corporation; (ii) the
conversion of the MHC to an interim federal stock savings bank ("Interim No.
1"); (iii) the conversion of the MHC's subsidiary stock holding company,
Mid-Tier HC, to an interim federal stock savings bank ("Interim No. 2") and its
simultaneous merger into the Bank; (iv) the merger of Interim No. 1 (formerly
the MHC) into the Bank, whereupon the outstanding common stock of the Mid-Tier
HC held by the MHC will be canceled; (v) the establishment by the Company of a
third interim federal stock savings bank ("Interim No. 3"); (vi) the merger of
Interim No. 3 with
and into the Bank, with the Bank as the surviving entity; and (vii) the sale and
exchange of Common Stock pursuant to the Plan and Office of Thrift Supervision
("OTS") regulations. As a result of the merger of Interim No. 3 with and into
the Bank, the Bank will become a wholly owned subsidiary of the Company. The
outstanding shares of common stock of the Mid-Tier HC held by persons other than
the MHC will be converted into Common Stock pursuant to an exchange ratio as
defined in the Plan, which will result in the holders of such shares receiving
and owning in the aggregate approximately the same percentage of the Common
Stock to be outstanding upon the completion of the conversion as the percentage
of Mid-Tier HC common stock owned by them in the aggregate immediately prior to
consummation of the conversion.
Pursuant to the Plan, the Company will offer to certain depositors of
the Bank and to the Bank's tax qualified employee benefit plans, including the
Bank's employee stock ownership plan (the "ESOP") (collectively, the "Employee
Plans") rights to subscribe for the Securities in a subscription offering (the
"Subscription Offering"). To the extent Securities are not subscribed for in the
Subscription Offering, such Securities may be offered to certain members of the
general public in a community offering (the "Community Offering"), with
preference given first to persons who are Mid-Tier HC stockholders and second to
natural persons residing in counties in which the Bank has branch offices and
third to natural persons residing in New Jersey. The Community Offering, which
together with the Subscription Offering, as each may be extended or reopened
from time to time, are herein referred to as the "Subscription and Community
Offering," may be commenced concurrently with, during or after, the Subscription
Offering. It is currently anticipated by the Bank and the Company that any
Securities not subscribed for in the Subscription and Community Offering will be
offered, subject to Section 2 hereof, in a syndicated community offering (the
"Syndicated Community Offering"). The Subscription and Community Offering and
the Syndicated Community Offering are hereinafter referred to collectively as
the "Offerings." The conversion and reorganization of the Bank from mutual to
stock holding company form, the formation of the Company, Interim Xx. 0, Xxxxxxx
Xx. 0, Xxxxxxx Xx. 0 and the related mergers, the exchange of Mid-Tier HC's
public stockholders' shares for shares of Common Stock (the "Exchange Shares"),
the acquisition of the capital stock of the Bank by the Company and the
Offerings are hereinafter referred to collectively as the "Conversion." It is
acknowledged that the number of Securities to be sold in the Conversion may be
increased or decreased as described in the Prospectus (as hereinafter defined).
If the number of Securities is increased or decreased in accordance with the
Plan, the term "Securities" shall mean such greater or lesser number, where
applicable.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-1 (No. 333-108884), including a
related prospectus, for the registration of the Securities under the Securities
Act of 1933, as amended (the "Securities Act"), has filed such amendments
thereto, if any, and such amended prospectuses as may have been required to the
date hereof by the Commission in order to declare such registration statement
effective, and will file such additional amendments thereto and such amended
prospectuses and prospectus supplements as may hereafter be required. Such
registration statement (as amended to date, if applicable, and as from time to
time amended or supplemented hereafter) and the prospectuses constituting a part
thereof (including in each case all documents incorporated or deemed to be
incorporated by reference therein and the information, if any, deemed to be a
part thereof pursuant to the rules and regulations of the Commission under the
Securities Act, as from time to time amended or supplemented pursuant
2
to the Securities Act or otherwise (the "Securities Act Regulations")), are
hereinafter referred to as the "Registration Statement" and the "Prospectus,"
respectively, except that if any revised prospectus shall be used by the Company
in connection with the Subscription and Community Offering or the Syndicated
Community Offering which differs from the Prospectus on file at the Commission
at the time the Registration Statement becomes effective (whether or not such
revised prospectus is required to be filed by the Company pursuant to Rule
424(b) of the Securities Act Regulations), the term "Prospectus" shall refer to
such revised prospectus from and after the time it is first provided to the
Agent for such use.
Concurrently with the execution of this Agreement, the Company is
delivering to the Agent copies of the Prospectus of the Company to be used in
the Subscription and Community Offering. Such prospectus contains information
with respect to the Bank, the Company, the MHC, the Mid-Tier HC and the Common
Stock.
SECTION 1. REPRESENTATIONS AND WARRANTIES.
(a) The Company, the Bank, the MHC and the Mid-Tier HC jointly and
severally represent and warrant to the Agent as of the date hereof as follows:
(i) The Registration Statement has been declared
effective by the Commission, no stop order has been issued with respect
thereto and no proceedings therefor have been initiated or, to the
knowledge of the Company, the MHC, the Mid-Tier HC and the Bank,
threatened by the Commission. At the time the Registration Statement
became effective and at the Closing Time referred to in Section 2
hereof, the Registration Statement complied and will comply in all
material respects with the requirements of the Securities Act and the
Securities Act Regulations and did not and will not contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading. The Prospectus, at the date hereof does not and at the
Closing Time referred to in Section 2 hereof will not, include an
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that the representations and warranties in this subsection
shall not apply to statements in or omissions from the Registration
Statement or Prospectus made in reliance upon and in conformity with
information with respect to the Agent furnished to the Company in
writing by the Agent expressly for use in the Registration Statement or
Prospectus (the "Agent Information," which the Company, the MHC, the
Mid-Tier HC and the Bank acknowledge appears only in the last sentence
of the section "Summary - Market for Common Stock" and the third
paragraph of the section "The Stock Offering- Plan of
Distribution/Marketing Arrangements" of the Prospectus).
(ii) The Company has filed with the OTS the Company's
application for approval of its acquisition of the Bank (the "Holding
Company Application") on Form H-(e)1-S promulgated under the savings
and loan holding company provisions of the Home Owners' Loan Act, as
amended (the "HOLA") and the regulations promulgated thereunder. The
Company has received written notice from the OTS of its approval of the
acquisition of the Bank, such approval remains in full force and effect
and no order
3
has been issued by the OTS suspending or revoking such approval and no
proceedings therefor have been initiated or, to the knowledge of the
Company or the Bank, threatened by the OTS. At the date of such
approval and at the Closing Time referred to in Section 2, the Holding
Company Application complied and will comply in all material respects
with the applicable provisions of HOLA and the regulations promulgated
thereunder.
(iii) Pursuant to the rules and regulations of the OTS (the
"OTS Regulations"), the MHC has filed with the OTS an Application for
Approval of Conversion on Form AC, and has filed such amendments
thereto and supplementary materials as may have been required to the
date hereof (such application, as amended to date, if applicable, and
as from time to time amended or supplemented hereafter, is hereinafter
referred to as the "Conversion Application"). The Offerings and the
Plan have been duly adopted by the Boards of Directors of the MHC,
Mid-Tier HC and the Bank and such adoption has not since been rescinded
or revoked. The Conversion Application, which includes applications to
form and merge Interim Xx. 0, Xxxxxxx Xx. 0 and Interim No. 3, has been
approved by the OTS. The Prospectus, the proxy statement for the
solicitation of proxies from MHC members for the special meeting to
approve the Plan (the "Members' Proxy Statement") and the proxy
statement for the solicitation of proxies from Mid-Tier HC stockholders
for the special meeting to approve the Plan (the "Stockholders' Proxy
Statement") all included as part of the Conversion Application have
been approved for use by the OTS, such approval remains in full force
and effect and no order has been issued by the OTS suspending or
revoking such approval and no proceedings therefor have been initiated
or, to the knowledge of the Company, the MHC, the Mid-Tier HC or the
Bank, threatened by the OTS. At the date of such approval and at the
Closing Time referred to in Section 2, the Conversion Application
complied and will comply in all material respects with the applicable
provisions of the OTS Regulations.
(iv) At the time of their use, the Members' Proxy Statement,
the Stockholders' Proxy Statement and any other proxy solicitation
materials will comply in all material respects with the applicable
provisions of the OTS Regulations and those rules and regulations of
the Commission under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), as from time to time amended or supplemented
pursuant to the Exchange Act or otherwise (the "Exchange Act
Regulations") (the Securities Act Regulations and the Exchange Act
Regulations are collectively referred to herein as the "Commission
Regulations"), and will not contain an untrue statement of a material
fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading. The Company, the MHC, the Mid-Tier HC and
the Bank will promptly file the Prospectus and any supplemental sales
literature with the Commission and the OTS. The Prospectus and all
supplemental sales literature, as of the date the Registration
Statement became effective and at the Closing Time referred to in
Section 2, complied and will comply in all material respects with the
applicable requirements of the OTS Regulations and the Securities Act
Regulations and, at or prior to the time of their first use, will have
received all required authorizations of the OTS and Commission for use
in final form.
(v) Neither the Commission nor the OTS has, by order or
otherwise, prevented or suspended the use of the Members Proxy
Statement, the Prospectus or any
4
supplemental sales literature authorized by the Company, the MHC, the
Mid-Tier HC or the Bank for use in connection with the Offerings, and
no proceedings for such purposes are pending or threatened.
(vi) At the Closing Time referred to in Section 2, the
Company, the MHC, the Mid-Tier HC and the Bank will have completed the
conditions precedent to the Conversion in accordance with the Plan, the
applicable OTS Regulations and all other applicable laws, regulations,
decisions and orders, including all material terms, conditions,
requirements and provisions precedent to the Conversion imposed upon
the Company, the MHC, the Mid-Tier HC or the Bank by the OTS, the
Federal Deposit Insurance Corporation (the "FDIC"), or any other
regulatory authority, other than those which the regulatory authority
permits to be completed after the Conversion. The Conversion, the
Offerings and other transactions contemplated hereby do not and will
not require any material consent, approval, authorization or permit or
filing with any other governmental agency or regulatory authority,
except as disclosed in the Prospectus.
(vii) FinPro, Inc. (the "Appraiser"), which prepared the
valuation of the Bank as part of the Conversion, has advised the
Company, the MHC, the Mid-Tier HC and the Bank in writing that it
satisfies all requirements for an appraiser set forth in the OTS
Regulations and any interpretations or guidelines issued by the OTS or
its staff with respect thereto, and that it is independent with respect
to the Company, the MHC, the Mid-Tier MHC and the Bank.
(viii) Xxxxx Xxxxxxxx LLP and Xxxxxxxxxx and Babitts, the
accountants who audited and reported on the consolidated financial
statements of the Mid-Tier HC included in the Registration Statement,
have advised the Company, the MHC, the Mid-Tier HC and the Bank in
writing that they are independent public accountants within the meaning
of the Code of Ethics of the American Institute of Certified Public
Accountants (the "AICPA"), and such accountants are, with respect to
the Company, the MHC, the Mid-Tier HC and the Bank, independent
certified public accountants as required by the Securities Act, the
Securities Act Regulations and OTS Regulations and such accountants are
not in violation of the auditors independence requirements of the
Xxxxxxxx-Xxxxx Act of 2002 (the "Xxxxxxxx-Xxxxx Act").
(ix) The only direct subsidiary of the MHC is the Mid-Tier HC.
The only direct subsidiaries of the Mid-Tier HC are the Bank and
Synergy Financial Services, Inc. Synergy Financial Services, Inc. does
not have any direct subsidiaries. The only subsidiary of the Bank is
Synergy Capital Investments, Inc. Synergy Financial Services, Inc. and
Synergy Capital Investments, Inc. are each referred to herein as a
"Subsidiary" and collectively referred to herein as the "Subsidiaries".
Except for the Subsidiaries, the Mid-Tier MHC and the Bank do not,
directly or indirectly, control any other corporation, limited
liability company, partnership, joint venture, association, trust or
other business organization. Upon completion of the Conversion, the
only direct subsidiaries of the Company will be the Bank and Synergy
Financial Services, Inc.
(x) The consolidated financial statements and the related
notes thereto included in the Registration Statement and the Prospectus
present fairly the financial
5
position of the MHC, the Mid-Tier HC and the Bank at the dates
indicated and the results of operations, retained earnings, equity and
cash flows for the periods specified, and comply as to form with the
applicable accounting requirements of the Securities Act Regulations
and the OTS Regulations; except as otherwise stated in the
Registration Statement and Prospectus, said financial statements have
been prepared in conformity with generally accepted accounting
principles applied on a consistent basis; and the supporting schedules
and tables included in the Registration Statement and Prospectus
present fairly 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 consistently
applied on the basis described therein. The capitalization,
liabilities, assets, properties and business of the Company, the MHC,
the mid-Tier HC, the Bank and the Subsidiaries conform in all material
respects to the descriptions contained in the Prospectus and, neither
the Company, the MHC, the mid-Tier HC, the Bank nor the Subsidiaries
has any material liabilities of any kind, contingent or otherwise,
except as disclosed in the Registration Statement or the Prospectus.
(xi) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as
otherwise stated therein (A) there has been no material adverse change
in the financial condition, results of operations, business affairs or
prospects of the Company, the MHC, the Mid-Tier HC, the Bank and the
Subsidiaries considered as one enterprise, whether or not arising in
the ordinary course of business, and (B) except for transactions
specifically referred to or contemplated in the Registration Statement
and Prospectus, there have been no transactions entered into by the
Company, the MHC, the Mid-Tier HC, the Bank or the Subsidiaries , other
than those in the ordinary course of business, which are material with
respect to the Company, the MHC, the Mid-Tier HC, the Bank and the
Subsidiaries, considered as one enterprise.
(xii) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of New Jersey with full corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectus and to enter into and perform its obligations under this
Agreement and the transactions contemplated hereby; and the Company is
duly qualified to transact business and is in good standing in the
State of New Jersey and in each other jurisdiction in which such
qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the
failure to so qualify would not have a material adverse effect on the
financial condition, results of operations, business affairs or
prospects of the Company, the MHC, the Mid-Tier HC, the Bank or the
Subsidiaries, considered as one enterprise.
(xiii) Upon consummation of the Conversion, the authorized,
issued and outstanding capital stock of the Company will be as set
forth in the Prospectus under "Capitalization" (except for subsequent
issuances, if any, pursuant to reservations, agreements or employee
benefit plans referred to in the Prospectus); no shares of Common Stock
have been or will be issued and outstanding prior to the Closing Time
6
referred to in Section 2; at the time of Conversion, the Securities
will have been duly authorized for issuance and, when issued and
delivered by the Company pursuant to the Plan against payment of the
consideration calculated as set forth in the Plan and stated on the
cover page of the Prospectus, will be duly and validly issued and fully
paid and nonassessable; the Exchange Shares have been duly authorized
for issuance and, when issued, will be duly and validly issued and
fully paid and nonassessable; the terms and provisions of the Common
Stock and the other capital stock of the Company conform to all
statements relating thereto contained in the Prospectus; the
certificates representing the shares of Common Stock will conform to
the requirements of applicable law and regulations; and the issuance of
the Securities and the Exchange Shares is not subject to preemptive or
other similar rights.
(xiv) The MHC has been duly chartered and is validly existing
as a mutual holding company under the laws of the United States of
America with corporate power and authority to own, lease and operate
its properties and to conduct its business as described in the
Prospectus and to enter into and perform its obligations under this
Agreement; the MHC is duly qualified to transact business and in good
standing under the laws of the State of New Jersey and is qualified to
do business in each other jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or
the conduct of business, except where the failure to so qualify would
have a material adverse effect on the financial condition, results of
operations, business affairs or prospects of the Company, the MHC, the
Mid-Tier HC, the Bank and the Subsidiaries, considered as one
enterprise; upon consummation of the Conversion, the MHC will convert
into Interim No. 1, which will merge with and into the Bank, with the
Bank being the surviving institution.
(xv) The Mid-Tier HC has been duly chartered and is validly
existing as a stock holding company under the laws of the United States
of America with corporate power and authority to own, lease and operate
its properties and to conduct its business as described in the
Prospectus and to enter into and perform its obligations under this
Agreement; the Mid-Tier HC is duly qualified to transact business and
is in good standing under the laws of the State of New Jersey and is
qualified to do business in each jurisdiction in which such
qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the
failure to so qualify would have a material adverse effect on the
financial condition, results of operations or business of the Company,
the MHC, the Mid-Tier HC, the Bank and the Subsidiaries, considered as
one enterprise; upon consummation of the Conversion, the Mid-Tier HC
will convert into Interim No. 2, which will merge with and into the
Bank, with the Bank being the surviving institution.
(xvi) The authorized capital stock of the Mid-Tier HC consists
of 18,000,000 shares of common stock, par value $.10 per share (the
"Mid-Tier HC Common Stock") and 2,000,000 shares of preferred stock,
par value $.10 per share (the "Mid-Tier Preferred Stock"), of which
_________ shares of Mid-Tier HC Common Stock and no shares of Mid-Tier
HC Preferred Stock are issued and outstanding as of the date hereof; no
additional shares of Mid-Tier HC Common Stock and no shares of Mid-Tier
HC Preferred Stock will be issued prior to the Closing Time referred to
in Section 2; the
7
issued and outstanding shares of Mid-Tier HC Common Stock have been
duly authorized and validly issued and are fully paid and
nonassessable and have been issued in compliance with all federal and
state securities laws; the MHC owns __________ shares of Mid-Tier HC
Common Stock beneficially and of record free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity; the
terms and provisions of the Mid-Tier HC Common Stock conform to all
statements relating thereto contained in the Prospectus; at the time
of the consummation of the Conversion, immediately following the
mergers of Interim No. 1 and Interim No. 2 with and into the Bank, the
Bank shall merge with Interim No. 3, with the Bank being the surviving
institution, and the shares of common stock of Interim No. 3 held by
the Company shall be converted into shares of Bank Common Stock ("Bank
Common Stock") on a one-for-one basis, and all such Bank Common Stock
will be owned beneficially and of record by the Company free and clear
of any security interest, mortgage, pledge, lien, encumbrance, claim
or equity.
(xvii) Each Subsidiary has been duly incorporated and is
validly existing as a corporation in good standing under the laws of
the jurisdiction of its incorporation, has full corporate power and
authority to own, lease and operate its properties and to conduct its
business as described in the Registration Statement and Prospectus, and
is duly qualified to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by reason
of the ownership or leasing of property or the conduct of business,
except where the failure to so qualify would not have a material
adverse effect on the financial condition, results of operations,
business affairs or prospects of the Company, the MHC, the mid-Tier HC,
the Bank and the Subsidiaries considered as one enterprise; the
activities of each Subsidiary are permitted to subsidiaries of a
federally chartered mid-tier stock holding company or a federally
chartered savings bank and a savings and loan holding company, as
applicable, by the rules, regulations, resolutions and practices of the
OTS; all of the issued and outstanding capital stock of each Subsidiary
has been duly authorized and validly issued, is fully paid and
nonassessable and is owned by the Bank in the case of Synergy Capital
Investments, Inc., and the Mid-Tier HC in the case of Synergy Financial
Services, Inc., directly, free and clear of any security interest,
mortgage, pledge, lien, encumbrance or legal or equitable claim; and
there are no warrants, options or rights of any kind to acquire shares
of capital stock of any Subsidiary.
(xviii) The Bank has been duly organized and is validly
existing as a federally chartered savings bank in stock form and upon
consummation of the Conversion will continue to be a federally
chartered savings bank in stock form, in both instances with full
corporate power and authority to own, lease and operate its properties
and to conduct its business as described in the Prospectus and to enter
into and perform its obligations under this Agreement and the
transactions contemplated thereby; the Company, the MHC, the Mid-Tier
HC, the Bank and the Subsidiaries have obtained all licenses, permits
and other governmental authorizations currently required for the
conduct of their respective businesses or required for the conduct of
their respective businesses as contemplated by the Holding Company
Application and the Conversion Application, except where the failure to
obtain such licenses, permits or other governmental authorizations
would not have a material adverse effect on the financial condition,
results
8
of operations or business affairs of the Company, the MHC, the
Mid-Tier HC, the Bank, and the Subsidiaries considered as one
enterprise; all such licenses, permits and other governmental
authorizations are in full force and effect and the Company, the MHC,
the Mid-Tier HC, the Bank and the Subsidiaries are in all material
respects in compliance therewith; neither the Company, the MHC, the
Mid-Tier HC, the Bank nor the Subsidiaries has received notice of any
proceeding or action relating to the revocation or modification of any
such license, permit or other governmental authorization which, singly
or in the aggregate, if the subject of an unfavorable decision, ruling
or finding, might have a material adverse effect on the financial
condition, results of operations or business affairs of the Company,
the MHC, the Mid-Tier HC, the Bank and the Subsidiaries, considered as
one enterprise; and the Bank is duly qualified to transact business
and is in good standing under the laws of the United States and in
each jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of
business, except where the failure to so qualify would have a material
adverse effect on the financial condition, results of operations or
business affairs of the Company, the MHC, the Mid-Tier HC, the Bank
and the Subsidiaries, considered as one enterprise.
(xix) The Bank is a member in good standing of the Federal
Home Loan Bank of New York; the deposit accounts of the Bank are
insured by the FDIC up to the applicable limits and upon consummation
of the Conversion, the liquidation account for the benefit of eligible
account holders and supplemental eligible account holders will be duly
established in accordance with the requirements of the OTS Regulations.
The Bank is a "qualified thrift lender" within the meaning of 12 U.S.C.
Section 1467a(m).
(xx) The authorized capital stock of the Bank on the date
hereof is shares of common stock, par value $ per share, and million
shares of preferred stock par value $ per share, and the issued and
outstanding capital stock of the Bank is 100 shares, all of which are
owned beneficially and of record by the Mid-Tier HC free and clear of
any security interest, mortgage, pledge, lien, encumbrance or legal or
equitable claim. Upon consummation of the Conversion, the authorized
capital stock of the Bank will be million shares of common stock, par
value $ per share, and million shares of preferred stock, par value $
per share (the "Bank Preferred Stock"), and the issued and outstanding
capital stock of the Bank will be shares of Bank Common Stock; and no
additional shares of Bank Common Stock or any shares of Bank Preferred
Stock will be issued on or after the date hereof and prior to the
Closing Time referred to in Section 2 hereof. As of the Closing Time
referred to Section 2 hereof, all of the issued and outstanding capital
stock of the Bank will be duly authorized, validly issued and fully
paid and non-assessable and have been issued in compliance with all
federal and state securities laws. The shares of Bank Common Stock to
be issued to the Company will have been duly authorized for issuance
and, when issued and delivered by the Bank pursuant to the Plan against
payment of the consideration described in the Plan and in the
Prospectus, will be duly and validly issued and fully paid and
non-assessable, and all such Bank Common Stock will be owned
beneficially and of record by the Company, free and clear of any
security interest, mortgage, pledge, lien, encumbrance or legal or
equitable claim; the terms and provisions of the Bank Common Stock and
the Bank Preferred Stock conform to all statements relating thereto
contained in the
9
Prospectus, and the certificates representing the shares of the Bank
Common Stock will conform with the requirements of applicable laws and
regulations; and the issuance of the Bank Common Stock is not subject
to preemptive or similar rights.
(xxi) From the date of their formation until the Closing Time,
neither Interim Xx. 0, Xxxxxxx Xx. 0 nor Interim No. 3 will be in
violation of their respective charter or bylaws, nor will either
Interim Xx. 0, Xxxxxxx Xx. 0 nor Interim No. 3 engage in any business
other than in connection with organizational matters and actions taken
in connection with the consummation of the Conversion.
(xxii) The Company, the MHC, the Mid-Tier HC, the Bank and the
Subsidiaries have taken all corporate action necessary for them to
execute, deliver and perform this Agreement and the transactions
contemplated hereby, and this Agreement has been duly executed and
delivered by, and is the valid and binding agreement of, the Company,
the MHC, the Mid-Tier HC, the Bank and the Subsidiaries, enforceable
against each of them in accordance with its terms, except as may be
limited by bankruptcy, insolvency or other laws affecting the
enforceability of the rights of creditors generally and judicial
limitations on the right of specific performance and except as the
enforceability of indemnification and contribution provisions may be
limited by applicable securities laws.
(xxiii) Subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus
and prior to the Closing Time, except as otherwise may be indicated or
contemplated therein, none of the Company, the MHC, the Mid-Tier HC,
the Bank or the Subsidiaries will have (A) issued any securities or
incurred any liability or obligation, direct or contingent, or borrowed
money, except borrowings in the ordinary course of business from the
same or similar sources and in similar amounts as indicated in the
Prospectus, or (B) entered into any transaction or series of
transactions which is material in light of the business of the Company,
the MHC, the Mid-Tier HC, the Bank and the Subsidiaries, considered as
one enterprise, excluding the origination, purchase and sale of loans
or the purchase or sale of investment securities or mortgaged-backed
securities in the ordinary course of business consistent with past
practice.
(xxiv) No approval of any regulatory or supervisory or other
public authority is required in connection with the execution and
delivery of this Agreement or the issuance of the Securities or the
Exchange Shares that has not been obtained and a copy of which has been
delivered to the Agent, except as may be required under the securities
laws of various jurisdictions.
(xxv) None of the Company, the MHC, the Mid-Tier HC, the Bank
or the Subsidiaries is in violation of their respective charters of its
certificate of incorporation, organization certificate, articles of
incorporation or charter or bylaws; and none of the Company, the MHC,
the Mid-Tier HC, the Bank or the Subsidiaries is in default (nor has
any event occurred which, with notice or lapse of time or both, would
constitute a default) in the performance or observance of any
obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or other instrument to
which the Company, the MHC, the Mid-Tier HC, the Bank or the
Subsidiaries is a party or by which it or any of them may be bound, or
to which any of the property
10
or assets of the Company, the MHC, the Mid-Tier HC, the Bank or the
Subsidiaries is subject, except for such defaults that would not,
individually or in the aggregate, have a material adverse effect on
the financial condition, results of operations, business affairs or
prospects of the Company, the MHC, the Mid-Tier HC, the Bank and the
Subsidiaries considered as one enterprise; and there are no contracts
or documents of the Company, the MHC, the Mid-Tier HC, the Bank or the
Subsidiaries which are required to be filed as exhibits to the
Registration Statement or the Conversion Application which have not
been so filed.
(xxvi) The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated herein,
have been duly authorized by all necessary corporate action on the part
of the Company, the MHC, the mid-Tier HC, and the Bank do not and will
not conflict with or constitute a breach of, or default under, or
result in the creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company, the MHC, the Mid-Tier HC,
the Bank or the Subsidiaries pursuant to, any contract, indenture,
mortgage, loan agreement, note, lease or other instrument to which the
Company, the MHC, the Mid-Tier HC, the Bank or the Subsidiaries is a
party or by which it or any of them may be bound, or to which any of
the property or assets of the Company, the MHC, the Mid-Tier HC, the
Bank or the Subsidiaries is subject, except for such conflicts,
breaches or defaults that would not, individually or in the aggregate,
have a material adverse effect on the financial condition, results of
operations, business affairs or prospects of the Company, the MHC, the
Mid-Tier HC, the Bank and the Subsidiaries, considered as one
enterprise; nor will such action result in any violation of the
provisions of the respective the certificate of incorporation,
organization certificate, articles of incorporation or charter or
bylaws of the Company, the MHC, the Mid-Tier HC, the Bank or the
Subsidiaries, or any applicable law, administrative regulation or
administrative or court decree.
(xxvii) No labor dispute with the employees of the Company,
the MHC, the Mid-Tier HC, the Bank or the Subsidiaries exists or, to
the knowledge of the Company, the MHC, the Mid-Tier HC or the Bank, is
imminent or threatened; and the Company, the MHC, the Mid-Tier HC and
the Bank are not aware of any existing or threatened labor disturbance
by the employees of any of its principal suppliers or contractors which
might be expected to result in any material adverse change in the
financial condition, results of operations, business affairs or
prospects of the Company, the MHC, the Mid-Tier HC, the Bank and the
Subsidiaries considered as one enterprise.
(xxviii) Each of the Company, the MHC, the Mid-Tier HC, the
Bank and the Subsidiaries has good and marketable title to all
properties and assets for which ownership is material to the business
of the Company, the MHC, the Mid-Tier HC, the Bank or the Subsidiaries
and to those properties and assets described in the Prospectus as owned
by them, free and clear of all liens, charges, encumbrances or
restrictions, except such as are described in the Prospectus or are not
material in relation to the business of the Company, the MHC, the
Mid-Tier HC, the Bank and the Subsidiaries, considered as one
enterprise; and all of the leases and subleases material to the
business of the Company, the MHC, the Mid-Tier HC, the Bank or the
Subsidiaries under which the Company, the MHC, the Mid-Tier HC, the
Bank or the Subsidiaries hold properties,
11
including those described in the Prospectus, are valid and binding
agreements of the Company, the MHC, the Mid-Tier HC, the Bank or the
Subsidiaries, enforceable in accordance with their terms.
(xxix) None of the Company, the MHC, the Mid-Tier HC, the Bank
or the Subsidiaries is in violation of any order or directive from the
OTS, the Commission or any regulatory authority to make any material
change in the method of conducting its respective businesses; the MHC
and its subsidiaries have conducted and are conducting their business
so as to comply in all material respects with all applicable statutes,
regulations and administrative and court decrees (including, without
limitation, all regulations, decisions, directives and orders of the
OTS, the FDIC and the Commission). Neither the Company, the MHC, the
mid-Tier HC, the Bank nor any of the Subsidiaries is subject or is
party to, or has received any notice or advice that any of them may
become subject or party to, any investigation with respect to any
cease-and-desist order, agreement, consent agreement, memorandum of
understanding or other regulatory enforcement action, proceeding or
order with or by, or is a party to any commitment letter or similar
undertaking to, or is subject to any directive by, or has been a
recipient of any supervisory letter from, or has adopted any board
resolutions at the request of, any Regulatory Agency (as defined below)
that currently restricts in any material respect the conduct of their
business or that in any material manner relates to their capital
adequacy, their credit policies, their management or their business
(each, a "Regulatory Agreement"), nor has the Company, the MHC, the
mid-Tier HC, the Bank or any of the Subsidiaries been advised by any
Regulatory Agency that it is considering issuing or requesting any such
Regulatory Agreement; and there is no unresolved violation, criticism
or exception by any Regulatory Agency with respect to any report or
statement relating to any examinations of the Company, the MHC, the
mid-Tier HC, the Bank or any of the Subsidiaries which, in the
reasonable judgment of the Company or the Bank, is expected to result
in a material adverse change in the financial condition, results of
operations, business affairs or prospects of the Company, the MHC, the
mid-Tier HC, the Bank and the Subsidiaries considered as one
enterprise, or which might materially and adversely affect the
properties or assets thereof or which might materially and adversely
affect the consummation of the Conversion or the performance of this
Agreement. As used herein, the term "Regulatory Agency" means any
federal or state agency charged with the supervision or regulation of
depositary institutions or holding companies of depositary
institutions, or engaged in the insurance of depositary institution
deposits, or any court, administrative agency or commission or other
governmental agency, authority or instrumentality having supervisory or
regulatory authority with respect to the Company, the Bank or any of
the Subsidiaries.
(xxx) There is no action, suit or proceeding before or by any
court or governmental agency or body, domestic or foreign, now pending,
or, to the knowledge of the Company, the MHC, the Mid-Tier HC, the Bank
or the Subsidiaries, threatened, against or affecting the Company, the
MHC, the Mid-Tier HC, the Bank or the Subsidiaries which is required to
be disclosed in the Registration Statement (other than as disclosed
therein), or which might result in any material adverse change in the
financial condition, results of operations, business affairs or
prospects of the Company, the MHC, the Mid-Tier HC, the Bank and the
Subsidiaries, considered as one enterprise, or which
12
might materially and adversely affect the properties or assets
thereof, the performance of this Agreement or the consummation of the
Conversion; all pending legal or governmental proceedings to which the
Company, the MHC, the Mid-Tier HC, the Bank or the Subsidiaries is a
party or of which any of their respective property or assets is the
subject which are not described in the Registration Statement,
including ordinary routine litigation incidental to the business, are
considered in the aggregate not material; and there are no material
contracts or documents of the Company, MHC, Mid-Tier HC, Bank or the
Subsidiaries which are required to be filed as exhibits to the
Registration Statement or Conversion Application which have not been
so filed.
(xxxi) The Company, MHC, Mid-Tier HC and Bank have obtained
(i) an opinion of its counsel, Xxxxxxx Spidi & Xxxxx, PC, with respect
to the legality of the Securities and the Exchange Shares to be issued
and the federal income tax consequences of the Conversion and (ii) the
opinion of Xxxxx Xxxxxxxx LLP, with respect to the state tax
consequences of the Conversion, copies of which are filed as exhibits
to the Registration Statement; all material aspects of the aforesaid
opinions are accurately summarized in the Prospectus; the facts and
representations upon which such opinions are based are truthful,
accurate and complete in all material respects; and neither the
Company, the MHC, the Mid-Tier HC nor the Bank has taken or will take
any action inconsistent therewith.
(xxxii) The Company is not and, upon completion of the
Conversion and the Offerings and sale of the Common Stock and the
application of the net proceeds therefrom, will not be, required to be
registered under the Investment Company Act of 1940, as amended.
(xxxiii) All of the loans represented as assets on the most
recent consolidated financial statements or consolidated selected
financial information of the Mid-Tier HC included in the Prospectus
meet or are exempt from all requirements of federal, state or local law
pertaining to lending, including without limitation truth in lending
(including the requirements of Regulation Z and 12 C.F.R. Part 226 and
Section 563.99), real estate settlement procedures, consumer credit
protection, equal credit opportunity and all disclosure laws applicable
to such loans, except for violations which, if asserted, would not
result in a material adverse effect on the financial condition, results
of operations, business affairs or prospects of the Company, the MHC,
the Mid-Tier HC and the Bank, considered as one enterprise.
(xxxiv) To the knowledge of the Company, the MHC, the Mid-Tier
HC and the Bank, with the exception of the intended loan to the Bank's
ESOP by the Company to enable the ESOP to purchase securities in an
amount up to 8.0% of the Securities sold in the Conversion, none of the
Company, the MHC, the Mid-Tier HC, the Bank or their employees has made
any payment of funds of the Company, the MHC, the Mid-Tier HC or the
Bank as a loan for the purchase of the Common Stock or made any other
payment of funds prohibited by law, and no funds have been set aside to
be used for any payment prohibited by law.
(xxxv) The Company, the MHC, the Mid-Tier HC and the Bank are
in compliance in all material respects with the applicable financial
record-keeping and
13
reporting requirements of the Currency and Foreign Transaction
Reporting Act of 1970, as amended, and the rules and regulations
thereunder. The Bank has established compliance programs to ensure
compliance with the requirements of the USA Patriot Act and all
applicable regulations promulgated thereunder. The Bank is in
compliance in all material respects with the USA Patriot Act and all
applicable regulations promulgated thereunder, and there is no charge,
investigation, action, suit or proceeding before any court, regulatory
authority or governmental agency or body pending or, to the best
knowledge of the Company, the MHC, the mid-Tier HC and the Bank,
threatened regarding the Bank's compliance with the USA Patriot Act or
any regulations promulgated thereunder.
(xxxvi) None of the Company, the MHC, the Mid-Tier HC, the
Bank or the Subsidiaries nor any properties owned or operated by the
Company, the MHC, the Mid-Tier HC, the Bank or the Subsidiaries is in
violation of or liable under any Environmental Law (as defined below),
except for such violations or liabilities that, individually or in the
aggregate, would not have a material adverse effect on the financial
condition, results of operations or business affairs of the Company,
the MHC, the Mid-Tier HC, the Bank and the Subsidiaries, considered as
one enterprise. There are no actions, suits or proceedings, or demands,
claims, notices or investigations (including, without limitation,
notices, demand letters or requests for information from any
environmental agency) instituted or pending, or to the knowledge of the
Company, the MHC, the Mid-Tier HC or the Bank threatened, relating to
the liability of any property owned or operated by the Company, the
MHC, the Mid-Tier HC, the Bank or the Subsidiaries, under any
Environmental Law, except for such actions, suits or proceedings, or
demands, claims, notices or investigations that, individually or in the
aggregate, would not have a material adverse effect on the financial
condition, results of operations or business affairs of the Company,
MHC, Mid-Tier HC, the Bank and the Subsidiaries, considered as one
enterprise. For purposes of this subsection, the term "Environmental
Law" means any federal, state, local or foreign law, statute,
ordinance, rule, regulation, code, license, permit, authorization,
approval, consent, order, judgment, decree, injunction or agreement
with any regulatory authority relating to (i) the protection,
preservation or restoration of the environment (including, without
limitation, air, water, vapor, surface water, groundwater, drinking
water supply, surface soil, subsurface soil, plant and animal life or
any other natural resource), and/or (ii) the use, storage, recycling,
treatment, generation, transportation, processing, handling, labeling,
production, release or disposal of any substance presently listed,
defined, designated or classified as hazardous, toxic, radioactive or
dangerous, or otherwise regulated, whether by type or by quantity,
including any material containing any such substance as a component.
(xxxvii) The Company, the MHC, the Mid-Tier HC, the Bank and
the Subsidiaries have filed all federal, state and local income and
franchise tax returns required to be filed and have made timely
payments of all taxes shown as due and payable in respect of such
returns, and no deficiency has been asserted with respect thereto by
any taxing authority. The Company, the MHC, the mid-Tier HC and the
Bank have no knowledge of any tax deficiency which has been asserted or
could be asserted against the Company, the MHC, the mid-Tier HC, the
Bank or the Subsidiaries.
14
(xxxviii) The Company has received all approvals required to
consummate the Conversion, and to have the Securities and Exchange
Shares quoted on the Nasdaq National Market effective as of the Closing
Time referred to in Section 2 hereof.
(xxxix) The Company has filed a registration statement for the
Securities and Exchange Shares under Section 12(g) of the Exchange Act
and such registration statement was declared effective concurrent with
the effectiveness of the Registration Statement.
(xxxix) To the knowledge of the Company, there are no
affiliations or associations (as such terms are defined by the National
Association of Securities Dealers, Inc. ("NASD")) between any member of
the NASD and any of the Company's officers or directors.
(xl) The Company, the MHC, the mid-Tier HC, the Bank and each
Subsidiary carries, or is covered by, insurance in such amounts and
covering such risks as is adequate for the conduct of their respective
businesses and the value for their respective properties as is
customary for companies engaged in similar industries.
(xli) The Company, the MHC, the mid-Tier HC and the Bank have
not relied on Agent or its counsel for any legal, tax or accounting
advice in connection with the Conversion.
(xlii) The records of eligible account holders, supplemental
eligible account holders, and other depositors are accurate and
complete in all material respects.
(xliii) The Company, the MHC, the mid-Tier HC, the Bank and
each Subsidiary is in compliance in all material respects with all
presently applicable provisions of the Employee Retirement Income
Security Act of 1974, as amended, including the regulations and
published interpretations thereunder ("ERISA"); no "reportable event"
(as defined in ERISA) has occurred with respect to any "pension plan"
(as defined in ERISA) for which the Company, the Bank or any
Subsidiary, respectively, would have any liability; each of the
Company, the Bank and each Subsidiary has not incurred and does expect
to incur liability under (i) Title IV of ERISA with respect to
termination of , or withdrawal from, any "pension plan" or (ii)
Sections 412 or 4971 of the Internal Revenue Code of 1986, as amended,
including the regulations and published interpretations thereunder (the
"Code"); and each "pension plan" for which the Company, the Bank and
any Subsidiary would have any liability that is intended to be
qualified under Section 401(a) of the Code is so qualified in all
material respects and nothing has occurred, whether by action or by
failure to act, which would cause the loss of such qualification.
(xliv) The Company is in compliance with the applicable
provisions of the Xxxxxxxx-Xxxxx Act and will use its best efforts to
comply with those provisions of the Xxxxxxxx-Xxxxx Act that will become
effective in the future upon their effectiveness.
(b) Any certificate signed by any officer of the Company, the MHC, the
Mid-Tier HC or the Bank and delivered to either of the Agent or counsel for the
Agent shall be deemed a
15
representation and warranty by the Company, the MHC, the Mid-Tier HC or the Bank
to the Agent as to the matters covered thereby.
SECTION 2. APPOINTMENT OF SANDLER X'XXXXX; SALE AND DELIVERY OF THE
SECURITIES; CLOSING. On the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth, the Company
hereby appoints Sandler X'Xxxxx as its Agent to consult with and advise the
Company, and to assist the Company with the solicitation of subscriptions and
purchase orders for Securities, in connection with the Company's sale of Common
Stock in the Offerings. On the basis of the representations and warranties
herein contained, and subject to the terms and conditions herein set forth,
Sandler X'Xxxxx accepts such appointment and agrees to use its best efforts to
assist the Company with the solicitation of subscriptions and purchase orders
for Securities in accordance with this Agreement; provided, however, that the
Agent shall not be obligated to take any action which is inconsistent with any
applicable laws, regulations, decisions or orders. The services to be rendered
by Sandler X'Xxxxx pursuant to this appointment include the following: (i)
consulting as to the securities marketing implications of any aspect of the Plan
or related corporate documents; (ii) reviewing with the Board of Directors
financial and securities marketing implications of the Appraiser's appraisal of
the Common Stock; (iii) reviewing all offering documents, including the
Prospectus, stock order form and related offering materials (it being understood
that preparation and filing of such documents is the sole responsibility of the
Company and the Bank and their counsel); (iv) assisting in the design and
implementation of a marketing strategy for the Offerings; (v) assisting Bank
management in scheduling and preparing for meetings with potential investors and
broker-dealers; and (vi) providing such other general advice and assistance as
may be requested to promote the successful completion of the Offering.
The appointment of the Agent hereunder shall terminate upon the earlier
to occur of (a) forty-five (45) days after the last day of the Subscription and
Community Offering, unless the Company and the Agent agree in writing to extend
such period and the OTS agrees to extend the period of time in which the
Securities may be sold, or (b) the receipt and acceptance of subscriptions and
purchase orders for all of the Securities, or (c) the completion of the
Syndicated Community Offering.
If any of the Securities remain available after the expiration of the
Subscription and Community Offering, at the request of the Company and the Bank,
Sandler X'Xxxxx will seek to form a syndicate of registered brokers or dealers
("Selected Dealers") to assist in the solicitation of purchase orders of such
Securities on a best efforts basis, subject to the terms and conditions set
forth in a selected dealers' agreement (the "Selected Dealers' Agreement"),
substantially in the form set forth in Exhibit A to this Agreement. Sandler
X'Xxxxx will endeavor to limit the aggregate fees to be paid by the Company, the
MHC, the Mid-Tier HC and the Bank under any such Selected Dealers' Agreement to
an amount competitive with gross underwriting discounts charged at such time for
underwritings of comparable amounts of stock sold at a comparable price per
share in a similar market environment; provided, however, that the aggregate
fees payable to Sandler X'Xxxxx and Selected Dealers shall not exceed 5.5% of
the aggregate Actual Purchase Price of the Securities sold by such Selected
Dealers. Sandler X'Xxxxx will endeavor to distribute the Securities among the
Selected Dealers in a fashion which best meets the distribution objective of the
Company and the Bank and the requirements of the Plan, which may result in
limiting the allocation of stock to certain Selected Dealers. It is understood
that in no
16
event shall Sandler X'Xxxxx be obligated to act as a Selected Dealer or to take
or purchase any Securities.
In the event the Company is unable to sell at least the total minimum
of the Securities, as set forth on the cover page of the Prospectus, within the
period herein provided, this Agreement shall terminate and the Company shall
refund to any persons who have subscribed for any of the Securities the full
amount which it may have received from them, together with interest as provided
in the Prospectus, and no party to this Agreement shall have any obligation to
the others hereunder, except for the obligations of the Company, the MHC, the
Mid-Tier HC and the Bank as set forth in Sections 4, 6(a) and 7 hereof and the
obligations of the Agent as provided in Sections 6(b) and 7 hereof. Appropriate
arrangements for placing the funds received from subscriptions for Securities or
other offers to purchase Securities in special interest-bearing accounts with
the Bank until all Securities are sold and paid for were made prior to the
commencement of the Subscription Offering, with provision for refund to the
purchasers as set forth above, or for delivery to the Company if all Securities
are sold.
If at least the total minimum of Securities, as set forth on the cover
page of the Prospectus, are sold, the Company agrees to issue or have issued the
Securities sold and to release for delivery certificates for such Securities at
the Closing Time against payment therefor by release of funds from the special
interest-bearing accounts referred to above. The closing shall be held at the
offices of Xxxxxxx Spidi & Xxxxx, PC, at 10:00 a.m., local time, or at such
other place and time as shall be agreed upon by the parties hereto, on a
business day to be agreed upon by the parties hereto. The Company shall notify
the Agent by telephone, confirmed in writing, when funds shall have been
received for all the Securities. Certificates for Securities shall be delivered
directly to the purchasers thereof in accordance with their directions.
Notwithstanding the foregoing, certificates for Securities purchased through
Selected Dealers shall be made available to the Agent for inspection at least 48
hours prior to the Closing Time at such office as the Agent shall designate. The
hour and date upon which the Company shall release for delivery all of the
Securities, in accordance with the terms hereof, is herein called the "Closing
Time."
The Company will pay any stock issue and transfer taxes which may be
payable with respect to the sale of the Securities.
In addition to the reimbursement of the expenses specified in Section 4
hereof, the Agent will receive the following compensation for its services
hereunder:
(a) a financial advisory fee of $350,000 if the Conversion is
consummated; and
(b) with respect to any Securities sold by a National Association of
Securities Dealers, Inc. ("NASD") member firm (other than Sandler X'Xxxxx) under
the Selected Dealers' Agreement in the Syndicated Community Offering, (i) the
compensation payable to Selected Dealers under any Selected Dealers' Agreement,
and (ii) any sponsoring dealer's fees. Any fees payable to Sandler X'Xxxxx and
other NASD member firms in the Syndicated Community Offering for Securities sold
by Sandler X'Xxxxx or such firms under any such agreement shall be limited to an
aggregate of 5.5% of the aggregate Actual Purchase Price of such Securities. In
no
17
event will the total fees payable to Sandler X'Xxxxx and other NASD member firms
exceed 5.5% of the aggregate dollar amount of the Securities sold in the
Offerings.
If this Agreement is terminated by the Agent in accordance with the
provisions of Section 9(a) hereof or the Conversion is terminated by the
Company, no fee shall be payable by the Company to Sandler X'Xxxxx; provided,
however, that the Company shall reimburse the Agent for all of its reasonable
out-of-pocket expenses incurred prior to termination, including the reasonable
fees and disbursements of counsel for the Agent in accordance with the
provisions of Section 4 hereof, which expenses shall not exceed $100,000. In
addition, the Company shall be obligated to pay the fees and expenses as
contemplated by the provisions of Section 4 hereof in the event of any such
termination.
All fees payable to the Agent hereunder shall be payable in immediately
available funds at Closing Time, or upon the termination of this Agreement, as
the case may be. In recognition of the long lead times involved in the
conversion process, the Bank agrees to make advance payments to the Agent in the
aggregate amount of $25,000, which amount has been previously paid, which shall
be credited against any fees or reimbursement of expenses payable hereunder and
which advance shall be reimbursed to the Bank to the extent not actually
incurred.
SECTION 3. COVENANTS OF THE COMPANY, THE MHC, THE MID-TIER HC AND THE
BANK. The Company, the MHC, the Mid-Tier HC and the Bank covenant with the Agent
as follows:
(a) The Company, the MHC, the Mid-Tier HC and the Bank will prepare and
file such amendments or supplements to the Registration Statement, the
Prospectus, the Conversion Application, the Members' Proxy Statement and the
Stockholders' Proxy Statement as may hereafter be required by the Commission
Regulations or the OTS Regulations or as may hereafter be requested by the
Agent. Following completion of the Subscription and Community Offering, in the
event of a Syndicated Community Offering, the Company, the MHC, the Mid-Tier HC
and the Bank will (i) promptly prepare and file with the Commission a
post-effective amendment to the Registration Statement relating to the results
of the Subscription and Community Offering, any additional information with
respect to the proposed plan of distribution and any revised pricing information
or (ii) if no such post-effective amendment is required, will file with the
Commission a prospectus or prospectus supplement containing information relating
to the results of the Subscription and Community Offering and pricing
information pursuant to Rule 424 of the Securities Act Regulations, in either
case in a form acceptable to the Agent. The Company, the MHC, the Mid-Tier HC
and the Bank will notify the Agent immediately, and confirm the notice in
writing, (i) of the effectiveness of any post-effective amendment of the
Registration Statement, the filing of any supplement to the Prospectus and the
filing of any amendment to the Conversion Application, (ii) of the receipt of
any comments from the OTS or the Commission with respect to the transactions
contemplated by this Agreement or the Plan, (iii) of any request by the
Commission or the OTS for any amendment to the Registration Statement or the
Conversion Application or any amendment or supplement to the Prospectus or for
additional information, (iv) of the issuance by the OTS of any order suspending
the Offerings or the use of the Prospectus or the initiation of any proceedings
for that purpose, (v) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the initiation of
any proceedings
18
for that purpose, and (vi) of the receipt of any notice with respect to the
suspension of any qualification of the Securities for offering or sale in any
jurisdiction. The Company, the MHC, the Mid-Tier HC and the Bank will make every
reasonable effort to prevent the issuance of any stop order and, if any stop
order is issued, to obtain the lifting thereof at the earliest possible moment.
(b) The Company, the MHC, the Mid-Tier HC and the Bank will give the
Agent notice of its intention to file or prepare any amendment to the Conversion
Application or Registration Statement (including any post-effective amendment)
or any amendment or supplement to the Prospectus (including any revised
prospectus which the Company proposes for use in connection with the Syndicated
Community Offering of the Securities which differs from the prospectus on file
at the Commission at the time the Registration Statement becomes effective,
whether or not such revised prospectus is required to be filed pursuant to Rule
424(b) of the Securities Act Regulations), will furnish the Agent with copies of
any such amendment or supplement a reasonable amount of time prior to such
proposed filing or use, as the case may be, and will not file any such amendment
or supplement or use any such prospectus to which the Agent or counsel for the
Agent may object.
(c) The Company, the MHC, the Mid-Tier HC and the Bank will deliver to
the Agent as many signed copies and as many conformed copies of the Conversion
Application and the Registration Statement as originally filed and of each
amendment thereto (including exhibits filed therewith or incorporated by
reference therein) as the Agent may reasonably request, and from time to time
such number of copies of the Prospectus as the Agent may reasonably request.
(d) During the period when the Prospectus is required to be delivered,
the Company, the MHC, the Mid-Tier HC and the Bank will comply, at their own
expense, with all requirements imposed upon them by the OTS, by the applicable
OTS Regulations, as from time to time in force, and by the Nasdaq, Securities
Act, the Securities Act Regulations, the Exchange Act, and the rules and
regulations of the Commission promulgated thereunder, including, without
limitation, Regulation M under the Exchange Act, so far as necessary to permit
the continuance of sales or dealing in shares of Common Stock during such period
in accordance with the provisions hereof and the Prospectus.
(e) If any event or circumstance shall occur as a result of which it is
necessary, in the opinion of counsel for the Agent, to amend or supplement the
Registration Statement or Prospectus in order to make the Prospectus not
misleading in the light of the circumstances existing at the time it is
delivered to a purchaser, the Company, the MHC, the Mid-Tier HC and the Bank
will forthwith amend or supplement the Registration Statement or Prospectus (in
form and substance satisfactory to counsel for the Agent) so that, as so amended
or supplemented, the Registration Statement or Prospectus will not include an
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the circumstances
existing at the time it is delivered to a purchaser, not misleading, and the
Company, the MHC, the Mid-Tier HC and the Bank will furnish to the Agent a
reasonable number of copies of such amendment or supplement. For the purpose of
this subsection, the Company, the MHC, the Mid-Tier HC and the Bank will each
furnish such information with respect to itself as the Agent may from time to
time reasonably request.
19
(f) The Company, the MHC, the Mid-Tier HC and the Bank will take all
necessary action, in cooperation with the Agent, to qualify the Securities for
offering and sale under the applicable securities laws of such states of the
United States and other jurisdictions as the OTS Regulations may require and as
the Agent and the Company have agreed; provided, however, that neither the
Company, the MHC, the Mid-Tier HC nor the Bank shall be obligated to file any
general consent to service of process or to qualify as a foreign corporation in
any jurisdiction in which it is not so qualified. In each jurisdiction in which
the Securities have been so qualified, the Company, the MHC, the Mid-Tier HC and
the Bank will file such statements and reports as may be required by the laws of
such jurisdiction to continue such qualification in effect for a period of not
less than one year from the effective date of the Registration Statement.
(g) The Company authorizes Sandler X'Xxxxx and any Selected Dealer to
act as agent of the Company in distributing the Prospectus to persons entitled
to receive subscription rights and other persons to be offered Securities having
record addresses in the states or jurisdictions set forth in a survey of the
securities or "blue sky" laws of the various jurisdictions in which the
Offerings will be made (the "Blue Sky Survey").
(h) The Company will make generally available to its security holders
as soon as practicable, but not later than 60 days after the close of the period
covered thereby, an earnings statement (in form complying with the provisions of
Rule 158 of the Securities Act Regulations) covering a twelve month period
beginning not later than the first day of the Company's fiscal quarter next
following the "effective date" (as defined in said Rule 158) of the Registration
Statement.
(i) During the period ending on the third anniversary of the expiration
of the fiscal year during which the closing of the transactions contemplated
hereby occurs, the Company will furnish to its stockholders as soon as
practicable after the end of each such fiscal year an annual report (including
consolidated balance sheets and consolidated statements of income, stockholders'
equity and cash flows, certified by independent public accountants) and, as soon
as practicable after the end of each of the first three quarters of each fiscal
year (beginning with the fiscal quarter ending after the effective date of the
Registration Statement), consolidated summary financial information of the
Company and the Bank for such quarter in reasonable detail. In addition, such
annual report and quarterly consolidated summary financial information shall be
made public through the issuance of appropriate press releases at the same time
or prior to the time of the furnishing thereof to stockholders of the Company.
(j) During the period ending on the third anniversary of the expiration
of the fiscal year during which the closing of the transactions contemplated
hereby occurs, the Company will furnish to the Agent (i) as soon as publicly
available, a copy of each report or other document of the Company furnished
generally to stockholders of the Company or furnished to or filed with the
Commission under the Exchange Act or any national securities exchange or system
on which any class of securities of the Company is listed, and (ii) from time to
time, such other information concerning the Company as the Agent may reasonably
request.
(k) The Company, the MHC, the Mid-Tier HC and the Bank will conduct the
Conversion in all material respects in accordance with the Plan, the OTS
Regulations, the Commission Regulations and all other applicable regulations,
decisions and orders, including all
20
applicable terms, requirements and conditions precedent to the Conversion
imposed upon the Company, the MHC, the Mid-Tier HC or the Bank by the OTS and
the Commission.
(l) The Company, the MHC, the Mid-Tier HC and the Bank will comply, at
their own expense, with all requirements imposed by the Commission and the OTS,
or pursuant to the applicable Commission Regulations and OTS Regulations, as
from time to time in force.
(m) The Company will promptly inform the Agent upon its receipt of
service with respect to any material litigation or administrative action
instituted with respect to the Conversion or the Offerings.
(n) Each of the Company and the Bank will use the net proceeds received
by it from the sale of the Securities in the manner specified in the Prospectus
under "Use of Proceeds."
(o) The Company will report the use of proceeds from the Offerings on
its first periodic report filed pursuant to Sections 13(a) and 15(d) of the
Exchange Act and on any subsequent periodic reports as may be required pursuant
to Rule 463 of the Securities Act Regulations.
(p) The Company will maintain the effectiveness of the Exchange Act
Registration Statement for not less than three years and will comply in all
material respects with its filing obligations under the Exchange Act. The
Company will use its best efforts to effect and maintain the listing of the
Common Stock on the Nasdaq National Market and, once listed on the Nasdaq
National Market the Company will comply with all applicable corporate governance
standards required by the Nasdaq National Market. The Company will file with the
Nasdaq National Market all documents and notices required by the Nasdaq National
Market of companies that have issued securities that are traded in the
over-the-counter market and quotations for which are reported by the Nasdaq
National Market.
(q) The Company and the Bank will take such actions and furnish such
information as are reasonably requested by the Agent in order for the Agent to
ensure compliance with the National Association of Securities Dealers, Inc.'s
"Interpretation Relating to Free-Riding and Withholding."
(r) Other than in connection with any employee benefit plan or
arrangement described in the Prospectus, the Company will not, without the prior
written consent of the Agent, sell or issue, contract to sell or otherwise
dispose of, any shares of Common Stock other than the Securities or Exchange
Shares for a period of 180 days following the Closing Time.
(s) During the period beginning on the date hereof and ending on the
later of the fifth anniversary of the Closing Time or the date on which the
Agent receives full payment in satisfaction of any claim for indemnification or
contribution to which it may be entitled pursuant to Sections 6 or 7,
respectively, neither the Company, the MHC, the Mid-Tier HC nor the Bank shall,
without the prior written consent of the Agent, take or permit to be taken any
action that could result in the Bank Common Stock becoming subject to any
security interest, mortgage, pledge, lien or encumbrance.
21
(t) The Company, the MHC, the Mid-Tier HC and the Bank will comply with
the conditions imposed by or agreed to with the OTS in connection with its
approval of the Conversion Application.
(u) During the period ending on the first anniversary of the Closing
Time, the Bank will comply with all applicable law and regulation necessary for
the Bank to continue to be a "qualified thrift lender" within the meaning of 12
U.S.C. Section 1467a(m).
(v) The Company shall not deliver the Securities or the Exchange Shares
until the Company, the MHC, the Mid-Tier HC and the Bank have satisfied each
condition set forth in Section 5 hereof, unless such condition is waived by the
Agent.
(w) The Mid-Tier HC, Company or the Bank will furnish to Sandler
X'Xxxxx as early as practicable prior to the Closing Date, but no later than two
(2) full business days prior thereto, a copy of the latest available unaudited
interim consolidated financial statements of the Mid-Tier HC which have been
read by Xxxxx Xxxxxxxx LLP, as stated in their letters to be furnished pursuant
to subsections (e) and (f) of Section 5 hereof.
(x) Each of the Company, the MHC, the mid-Tier HC and the Bank will
conduct its business 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 Nasdaq
National Market and the OTS.
(y) The Bank will not amend the Plan in any manner that would affect
the sale of the Securities or the terms of this Agreement without the consent of
the Agent.
(z) The Company, the MHC, the mid-Tier HC and the Bank will not, prior
to the Closing Time, incur any liability or obligation, direct or contingent, or
enter into any material transaction, other than in the ordinary course of
business consistent with past practice, except as contemplated by the
Prospectus.
(aa) The Company, the MHC, the mid-Tier HC and the Bank will use all
reasonable efforts to comply with, or cause to be complied with, the conditions
precedent to the several obligations of the Agent specified in Section 5 hereof.
(ab) The Company, the MHC, the mid-Tier HC and the Bank will provide
the Agent with any information necessary to carry out the allocation of the
Securities in the event of an oversubscription, and such information will be
accurate and reliable in all material respects.
(ac) The Company, the MHC, the mid-Tier HC and the Bank will notify the
Agent when funds have been received for the minimum number of Securities set
forth in the Prospectus.
SECTION 4. PAYMENT OF EXPENSES. The Company, the MHC, the Mid-Tier HC
and the Bank jointly and severally agree to pay all expenses incident to the
performance of their obligations under this Agreement, including but not limited
to (i) the cost of obtaining all securities and bank regulatory approvals, (ii)
the preparation, printing and filing of the Registration Statement and the
Conversion Application as originally filed and of each
22
amendment thereto, (iii) the preparation, issuance and delivery of the
certificates for the Securities purchased in the Offerings and the Exchange
Shares, (iv) the fees and disbursements of the Company's, the MHC's, the
Mid-Tier HC's and the Bank's counsel, conversion agent, accountants, appraiser
and other advisors, (v) the qualification of the Securities under securities
laws in accordance with the provisions of Section 3(f) hereof, including filing
fees and the fees and disbursements of counsel in connection therewith and in
connection with the preparation of the Blue Sky Survey, (vi) the printing and
delivery to the Agent of copies of the Registration Statement as originally
filed and of each amendment thereto and the printing and delivery of the
Prospectus and any amendments or supplements thereto to the purchasers in the
Offerings and the Agent, (vii) the printing and delivery to the Agent of copies
of a Blue Sky Survey, and (viii) the fees and expenses incurred in connection
with the listing of the Securities and the Exchange Shares on the Nasdaq
National Market. In the event the Agent incurs any such fees and expenses on
behalf of the Company, the MHC, the Mid-Tier HC or the Bank, the Bank will
reimburse the Agent for such fees and expenses whether or not the Conversion is
consummated; provided, however, that the Agent shall not incur any substantial
expenses on behalf of the Company, the MHC, the Mid-Tier HC or the Bank pursuant
to this Section without the prior approval of the Bank.
The Company, the MHC, the Mid-Tier HC and the Bank jointly and
severally agree to pay certain expenses incident to the performance of the
Agent's obligations under this Agreement, regardless of whether the Conversion
is consummated, including (i) the filing fees paid or incurred by the Agent in
connection with all filings with the NASD, (ii) all reasonable out-of-pocket
expenses incurred by the Agent relating to the Offerings, including without
limitation, fees and expenses of the Agent's counsel, advertising, promotional,
syndication and travel expenses up to a maximum of $50,000 with respect to the
expenses contemplated by this clause, (ii) provided, however, that the Agent
shall document the expenses contemplated by clause (ii) to the reasonable
satisfaction of the Bank All fees and expenses to which the Agent is entitled to
reimbursement under this paragraph of this Section 4 shall be due and payable
upon receipt by the Company, the MHC, the Mid-Tier HC or the Bank of a written
accounting therefor setting forth in reasonable detail the expenses incurred by
the Agent.
SECTION 5. CONDITIONS OF AGENT'S OBLIGATIONS. The Company, the MHC, the
Mid-Tier HC, the Bank and the Agent agree that the issuance and the sale of
Securities and the issuance of the Exchange Shares and all obligations of the
Agent hereunder are subject to the accuracy of the representations and
warranties of the Company, the MHC, the Mid-Tier HC and the Bank herein
contained as of the date hereof and the Closing Time, to the accuracy of the
statements of officers and directors of the Company, the MHC, the Mid-Tier HC
and the Bank made pursuant to the provisions hereof, to the performance by the
Company, the MHC, the Mid-Tier HC and the Bank of their obligations hereunder,
and to the following further conditions:
(a) No stop order suspending the effectiveness of the Registration
Statement shall have been issued under the Securities Act or proceedings
therefor initiated or threatened by the Commission, no order suspending the
Offerings or authorization for final use of the Prospectus shall have been
issued or proceedings therefor initiated or threatened by the Commission or the
OTS and no order suspending the sale of the Securities in any jurisdiction shall
have been issued.
(b) At Closing Time, the Agent shall have received:
23
(1) The favorable opinion, dated as of Closing Time, of
Xxxxxxx Spidi & Xxxxx, PC, counsel for the Company, the MHC, the
Mid-Tier HC and the Bank, in form and substance satisfactory to counsel
for the Agent, to the effect that:
(i) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of the State of New Jersey; the MHC has been duly
incorporated and is validly existing as a federal mutual
holding company in good standing under the laws of the United
States; the Mid-Tier HC has been duly incorporated and is
validly existing as a federally-chartered holding company in
good standing under the laws of the United States.
(ii) Each of the Company, the MHC and the Mid-Tier HC
has full corporate power and authority to own, lease and
operate its properties and to conduct its business as
described in the Registration Statement and Prospectus and to
enter into and perform its obligations under this Agreement.
(iii) Each of the Company, the MHC and the Mid-Tier
HC is duly qualified as a domestic or foreign corporation to
transact business and is in good standing in the State of New
Jersey and in each other jurisdiction in which such
qualification is required, whether by reason of the ownership
or leasing of property or the conduct of business, except
where the failure to so qualify would not have a material
adverse effect upon the financial condition, results of
operations, business affairs or prospects of the Company, the
MHC, the Mid-Tier HC and the Bank, considered as one
enterprise. Each of the Company, the MHC and the Mid-Tier HC
are registered as a savings and loan holding company under
HOLA.
(iv) Upon consummation of the Conversion, the
authorized, issued and outstanding capital stock of the
Company will be within the range set forth in the Prospectus
under "Capitalization" and, no shares of Common Stock have
been or will be issued and outstanding prior to the Closing
Time.
(v) The Securities have been duly and validly
authorized for issuance and sale; the Exchange Shares have
been duly and validly authorized for issuance; the Securities,
when issued and delivered by the Company pursuant to the Plan
against payment of the consideration calculated as set forth
in the Plan, will be duly and validly issued and fully paid
and non-assessable; the Exchange Shares, when issued, will be
duly and validly issued and fully paid and non-assessable.
(vi) The issuance of the Securities and the Exchange
Shares is not subject to preemptive or other similar rights
arising by operation of law or, to such counsel's knowledge
after due inquiry, otherwise.
(vii) Upon completion of the Conversion, the issuance
of the Securities will be in compliance with all conditions
imposed upon the Company, the MHC, the mid-Tier HC and the
Bank and by the OTS under the terms of their written approval
or notice of intention not to object, as applicable.
24
(viii) The Bank has been at all times since the date
hereof and prior to the Closing Time, duly organized and
validly existing under the laws of the United States of
America as a federally chartered savings bank in stock form,
with full corporate power and authority to own, lease and
operate its properties and to conduct its business as
described in the Registration Statement and the Prospectus and
to enter into and perform its obligations under this
Agreement; and the Bank is duly qualified as a foreign
corporation in each jurisdiction in which the failure to so
qualify would have a material adverse effect upon the
financial condition, results of operations, business affairs
or prospects of the Company, the MHC, the Mid-Tier HC and the
Bank, considered as one enterprise.
(ix) The Bank is a member in good standing of the
Federal Home Loan Bank of New York and the deposit accounts of
the Bank are insured by the FDIC up to the applicable limits.
(x) Upon consummation of the Conversion, all of the
issued and outstanding capital stock of Interim No. 3 will
have been duly authorized and validly issued and fully paid
and non-assessable, and all such capital stock will be
converted into shares of Bank Common Stock upon the merger of
Interim No. 3 with the Bank and is not subject to any security
interest, mortgage, pledge, lien, encumbrance, claim or
equity.
(xi) Each Subsidiary has been duly incorporated and
is validly existing as a corporation in good standing under
the laws of the jurisdiction of its incorporation, and each of
the Subsidiaries has full corporate power and authority to
own, lease and operate its properties and to conduct its
business as described in the Registration Statement and is
duly qualified as a foreign corporation to transact business
and is in good standing in each jurisdiction in which the
failure to so qualify would have a material adverse effect
upon the financial condition, results of operations, business
affairs or prospects of the Company, the MHC, the mid-Tier HC,
the Bank and the Subsidiaries, taken as a whole; the
activities of each Subsidiary are permitted to subsidiaries of
a savings and loan holding company and of a federally
chartered savings bank, as applicable, by the rules,
regulations, resolutions and practices of the OTS; all of the
issued and outstanding capital stock of each Subsidiary has
been duly authorized and validly issued, is fully paid and
non-assessable and is owned by the Bank or the Mid-Tier MHC,
as applicable, directly or through subsidiaries, free and
clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equity.
(xii) Upon consummation of the Conversion, all of the
issued and outstanding capital stock of the Bank, will be duly
authorized and validly issued and fully paid and
non-assessable, and all such capital stock will be owned
beneficially and of record by the Company free and clear of
any security interest, mortgage, pledge, lien, encumbrance,
claim or equity.
(xiii) The OTS has duly approved the Holding Company
Application and the Conversion Application (including the
formation and merger of Xxxxxxx
00
Xx. 0, Xxxxxxx Xx. 0 and Interim No. 3); such approvals
remain in full force and effect and no action is pending, or
to the best of such counsel's knowledge, threatened
respecting the Holding Company Application or the Conversion
Application or the acquisition by the Company of all of the
Bank's issued and outstanding capital stock; the Holding
Company Application and the Conversion Application comply
with the applicable requirements of the OTS, includes all
documents required to be filed as exhibits thereto, and is,
to the best of such counsel's knowledge after due inquiry,
truthful, accurate and complete; and the Company is duly
authorized to become a savings and loan holding company and
is duly authorized to own all of the issued and outstanding
capital stock of the Bank to be issued pursuant to the Plan.
(xiv) At the time of their use, both the Members'
Proxy Statement and the Stockholders' Proxy Statement complied
as to form in all material respects with the requirements of
the OTS Regulations and the Exchange Act Regulations, and did
not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or
necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not
misleading.
(xv) The execution and delivery of this Agreement and
the consummation of the transactions contemplated hereby, (A)
have been duly and validly authorized by all necessary action
on the part of each of the Company, the MHC, the Mid-Tier HC
and the Bank, and this Agreement constitutes the legal, valid
and binding agreement of each of the Company, the MHC, the
Mid-Tier HC and the Bank, enforceable in accordance with its
terms, except as rights to indemnity and contribution
hereunder may be limited under applicable law (it being
understood that such counsel may avail itself of customary
exceptions concerning the effect of bankruptcy, insolvency or
similar laws and the availability of equitable remedies); (B)
will not result in any violation of the provisions of the
charter or bylaws of the Company, the MHC, the Mid-Tier HC or
the Bank; and, (C) will not conflict with or constitute a
breach of, or default under, and no event has occurred which,
with notice or lapse of time or both, would constitute a
default under, or result in the creation or imposition of any
lien, charge or encumbrance, that, individually or in the
aggregate, would have a material adverse effect on the
financial condition, results of operations, business affairs
or prospects of the Company, the MHC, the Mid-Tier HC, the
Bank and the Subsidiaries, considered as one enterprise, upon
any property or assets of the Company, the MHC, the Mid-Tier
HC, the Bank or the Subsidiaries pursuant to any contract,
indenture, mortgage, loan agreement, note, lease or other
instrument to which the Company, the MHC, the Mid-Tier HC, the
Bank or the Subsidiaries is a party or by which any of them
may be bound, or to which any of the property or assets of the
Company, the MHC, the Mid-Tier HC, the Bank or the
Subsidiaries is subject.
(xvi) The Prospectus has been duly authorized by the
OTS for final use pursuant to the OTS Regulations and no
action has been taken or is pending, or to
26
the best of such counsel's knowledge, is threatened, by the
OTS to revoke such authorization.
(xvii) The Registration Statement is effective under
the Securities Act and no stop order suspending the
effectiveness of the Registration Statement has been issued
under the Securities Act or, proceedings therefor initiated
or, to the best of such counsel's knowledge, threatened by the
Commission.
(xviii) No further approval, authorization, consent
or other order of any public board or body is required in
connection with the execution and delivery of this Agreement,
the issuance of the Securities and the Exchange Shares and the
consummation of the Conversion, except as may be required
under the securities or Blue Sky laws of various jurisdictions
as to which no opinion need be rendered.
(xix) At the time the Registration Statement became
effective, the Registration Statement (other than the
financial statements and statistical data included therein, as
to which no opinion need be rendered) complied as to form in
all material respects with the requirements of the Securities
Act and the Securities Act Regulations and the OTS
Regulations.
(xx) The Common Stock conforms to the description
thereof contained in the Prospectus, and the form of
certificate used to evidence the Common Stock is in due and
proper form and complies with all applicable statutory
requirements.
(xxi) There are no legal or governmental proceedings
pending or threatened against or affecting the Company, the
MHC, the Mid-Tier HC, the Bank or the Subsidiaries which are
required, individually or in the aggregate, to be disclosed in
the Registration Statement and Prospectus, other than those
disclosed therein, and all pending legal or governmental
proceedings to which the Company, the MHC, the Mid-Tier HC,
the Bank or the Subsidiaries is a party or to which any of
their property is subject which are not described in the
Registration Statement, including ordinary routine litigation
incidental to the business, are, considered in the aggregate,
not material.
(xxii) The information in the Prospectus under "Risk
Factors - We Operate in a Highly Regulated Environment and May
be Adversely Affected by Changes in Laws and Regulations"
"Dividend Policy," "Taxation," "Regulation," "The Conversion -
Effect of the Conversion on Minority Stockholders," "- Effects
of Conversion on Depositors, Borrowers and Members," and "-
Federal and State Tax Consequences of the Conversion,"
"Restrictions on Acquisition of Synergy Financial Group, Inc."
"Description of Capital Stock," and "Legal and Tax Opinions"
to the extent that it constitutes matters of law, summaries of
legal matters, documents or proceedings, or legal conclusions,
has been reviewed by them and is complete and accurate in all
material respects.
27
(xxiii) There are no contracts, indentures,
mortgages, loan agreements, notes, leases or other instruments
required to be described or referred to in the Registration
Statement and Prospectus or to be filed as exhibits thereto
other than those described or referred to therein or filed as
exhibits thereto and the descriptions thereof or references
thereto are correct, and no default exists, and no event has
occurred which, with notice or lapse of time or both, would
constitute a default, in the due performance or observance of
any material obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, loan
agreement, note, lease or other instrument so described,
referred to or filed.
(xxiv) The Plan has been duly authorized by the
Boards of Directors of the Company, the MHC, the Mid-Tier HC
and the Bank and, the OTS's approval of the Plan remains in
full force and effect; the Company, the MHC, the Mid-Tier HC
and the Bank have conducted the Conversion in all material
respects in accordance with applicable requirements of the OTS
Regulations, the Plan and all other applicable regulations,
decisions and orders thereunder, including all material
applicable terms, conditions, requirements and conditions
precedent to the Conversion imposed upon the Company, the MHC,
the Mid-Tier HC or the Bank by the OTS and, no order has been
issued by the OTS to suspend the Conversion or the Offerings
and no action for such purpose has been instituted or
threatened by the OTS; and, to the best of such counsel's
knowledge after due inquiry, no person has sought to obtain
review of the final action of the OTS in approving the Plan,
the Conversion Application or the Holding Company Application.
(xxv) To the best of such counsel's knowledge after
due inquiry, the Company, the MHC, the Mid-Tier HC, the Bank
and the Subsidiaries have obtained all licenses, permits and
other governmental approvals and authorizations currently
required for the conduct of their respective businesses as
described in the Registration Statement and Prospectus, and
all such licenses, permits and other governmental
authorizations are in full force and effect, and the Company,
the MHC, the Mid-Tier HC and the Bank and the Subsidiaries are
in all material respects complying therewith.
(xxvi) (A) Neither the Company, the MHC, the Mid-Tier
HC, the Bank nor any of the Subsidiaries is in violation of
their respective charters or bylaws and (B) to the best of
such counsel's knowledge, the Company, the MHC, the Mid-Tier
HC, the Bank and the Subsidiaries are not in default (nor has
any event occurred which, with notice or lapse of time or
both, would constitute a default) in the performance or
observance of any obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which the
Company, the MHC, the Mid-Tier HC, the Bank or the
Subsidiaries is a party or by which the Company, the MHC, the
Mid-Tier HC, the Bank or the Subsidiaries or any of their
property may be bound.
(xxvii) The Company is not and, upon completion of
the Conversion and the Offerings and the sale of the Common
Stock and the application of the net
28
proceeds therefrom, will not be required to be registered as
an investment company under the Investment Company Act of
1940.
(xxviii) The stockholders of the Mid-Tier HC do not
have dissenters' rights or any other rights to dissent from
the Conversion and receive the fair value of their shares
shares of Mid-Tier HC common stock under Federal law.
(xxix) The Company is in compliance with the
applicable provisions of the Xxxxxxxx-Xxxxx Act.
(2) The favorable opinion, dated as of Closing Time, of Xxxx
Xxxxxx Xxxxxxxx & Xxxxxx, P.C., counsel for the Agent, with respect to
the matters set forth in Section 5(b)(1)(i), (iv), (v), (vi) (solely as
to preemptive rights arising by operation of law) (ix), (x), (xiii)(A)
and (xviii) and such other matters as the Agent may reasonably require.
(3) In addition to giving their opinions required by
subsections (b)(l) and (b)(2), respectively, of this Section, Xxxxxxx
Spidi & Xxxxx, PC and Xxxx Xxxxxx Xxxxxxxx & Xxxxxx, P.C. shall each
additionally state that nothing has come to their attention that would
lead them to believe that the Registration Statement (except for
financial statements and schedules and other financial or statistical
data included therein, as to which counsel need make no statement), at
the time it became effective, contained an untrue statement of a
material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading or
that the Prospectus (except for financial statements and schedules and
other financial or statistical data included therein, as to which
counsel need make no statement), at the time the Registration Statement
became effective or at Closing Time, included an untrue statement of a
material fact or omitted to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading.
In giving their opinions, Xxxxxxx Spidi & Xxxxx, PC and Xxxx Xxxxxx
Xxxxxxxx & Xxxxxx, P.C. may rely as to matters of fact on certificates of
officers and directors of the Company, the MHC, the Mid-Tier HC and the Bank and
certificates of public officials, and Xxxx Xxxxxx Xxxxxxxx & Xxxxxx, P.C. may
also rely on the opinion of Xxxxxxx Spidi & Xxxxx, PC with respect to matters
set forth in paragraphs (i), (iv), (v), (vi), (ix), (x), (xiii) and (xviii).
(c) At Closing Time referred to in Section 2, the Company, the MHC, the
Mid-Tier HC and the Bank shall have completed in all material respects the
conditions precedent to the Conversion in accordance with the Plan, the
applicable OTS Regulations and all other applicable laws, regulations, decisions
and orders, including all terms, conditions, requirements and provisions
precedent to the Conversion imposed upon the Company, the MHC, the Mid-Tier HC
or the Bank by the OTS, or any other regulatory authority other than those which
the OTS permits to be completed after the Conversion.
29
(d) At Closing Time, there shall not have been, since the date hereof
or since the respective dates as of which information is given in the
Registration Statement and the Prospectus, any material adverse change in the
financial condition, results of operations, business affairs or prospects of the
Company, the MHC, the Mid-Tier HC, the Bank and the Subsidiaries, considered as
one enterprise, whether or not arising in the ordinary course of business
consistent with past practice, and the Agent shall have received a certificate
of the President and Chief Executive Officer of the Company, of the MHC, of the
Mid-Tier HC and of the Bank and the chief financial or chief accounting officer
of the Company, of the MHC, of the Mid-Tier HC and of the Bank, dated as of
Closing Time, to the effect that (i) there has been no such material adverse
change, (ii) there shall have been no material transaction entered into by the
Company, the MHC, the Mid-Tier HC, the Bank or the Subsidiaries from the latest
date as of which the financial condition of the Company, the MHC, the Mid-Tier
HC, the Bank or the Subsidiaries, as set forth in the Registration Statement and
the Prospectus other than transactions referred to or contemplated therein and
transactions in the ordinary course of business consistent with past practice
(iii) neither the Company, the MHC, the Mid-Tier HC, the Bank nor the
Subsidiaries shall have received from the OTS any order or direction (oral or
written) to make any material change in the method of conducting its business
with which it has not complied (which order or direction, if any, shall have
been disclosed in writing to the Agent) or which materially and adversely would
affect the business, financial condition, results of operations or prospects of
the Company, the MHC, the Mid-Tier HC, the Bank and the Subsidiaries, considered
as one enterprise, (iv) the representations and warranties in Section 1 hereof
are true and correct with the same force and effect as though expressly made at
and as of the Closing Time, (v) each of the Company, the MHC, the Mid-Tier HC
and the Bank have complied with all agreements and satisfied all conditions on
their part to be performed or satisfied at or prior to Closing Time, (vi) no
stop order suspending the effectiveness of the Registration Statement has been
issued and no proceedings for that purpose have been initiated or threatened by
the Commission and (vii) no order suspending the Subscription and Community
Offering or Syndicated Community Offering or the authorization for final use of
the Prospectus has been issued and no proceedings for that purpose have been
initiated or threatened by the OTS and no person has sought to obtain regulatory
or judicial review of the action of the OTS in approving the Plan in accordance
with the OTS Regulations nor has any person sought to obtain regulatory or
judicial review of the action of the OTS in approving the Conversion
Application.
(e) At the Closing Time, the Agent shall have received a certificate of
the Chief Executive Officer and President of the Company and of the Bank and the
Chief Financial Officer of the Company and of the Bank, dated as of Closing
Time, to the effect that (i) they have reviewed the contents of the Registration
Statement and the Prospectus; (ii) based on each of their knowledge, the
Registration Statement and the Prospectus do not contain any untrue statement of
a material fact or omit to state a material fact necessary in order to make the
statements made therein, in light of the circumstances under which such
statements were made, not misleading; (iii) based on each of their knowledge,
the financial statements and other financial information included in the
Registration Statement and the Prospectus fairly present the financial condition
and results of operations of the Company, the Bank and the Subsidiaries as of
and for the dates and periods covered by the Registration Statement and the
Prospectus; (iv) they are responsible for establishing and maintaining internal
controls; (v) they have designed such internal controls to ensure that material
information relating to the Company, the Bank and the Subsidiaries is made known
to them; (vi) they have evaluated the effectiveness of their internal controls;
and (vii) they have disclosed to Xxxxx Xxxxxxxx LLP and the audit committee (A)
all significant deficiencies in the design or operation of internal
30
controls which could adversely affect the Company's and the Bank's ability to
record, process, summarize, and report financial data, and have identified for
the Company's and the Bank's auditors any material weaknesses in internal
controls and (B) any fraud, whether or not material, that involves management or
other employees who have a significant role in the Company's and the Bank's
internal controls.
(f) At the time of the execution of this Agreement, the Agent shall
have received from Xxxxx Xxxxxxxx LLP a letter dated such date, in form and
substance satisfactory to the Agent, to the effect that: (i) they are
independent public accountants with respect to the Company, the MHC, the
Mid-Tier HC, the Bank and the Subsidiaries within the meaning of the Code of
Ethics of the AICPA, the Securities Act and the Securities Act Regulations and
the OTS Regulations and they are not in violation of the auditor independence
requirements of the Xxxxxxxx-Xxxxx Act; (ii) it is their opinion that the
consolidated financial statements and supporting schedules included in the
Registration Statement and covered by their opinions therein comply as to form
in all material respects with the applicable accounting requirements of the
Securities Act and the Securities Act Regulations; (iii) based upon limited
procedures as agreed upon by the Agent and Xxxxx Xxxxxxxx LLP set forth in
detail in such letter, nothing has come to their attention which causes them to
believe that (A) the unaudited consolidated financial statements and supporting
schedules of the Mid-Tier HC included in the Registration Statement do not
comply as to form in all material respects with the applicable accounting
requirements of the Securities Act, the Securities Act Regulations and the OTS
Regulations or are not presented in conformity with generally accepted
accounting principles applied on a basis substantially consistent with that of
the audited consolidated financial statements included in the Registration
Statement and the Prospectus, (B) the unaudited amounts of net interest income
and net income set forth under "Selected Consolidated Financial and Other Data"
in the Registration Statement and Prospectus do not agree with the amounts set
forth in unaudited consolidated financial statements as of and for the dates and
periods presented under such captions or such amounts were not determined on a
basis substantially consistent with that used in determining the corresponding
amounts in the audited financial statements included in the Registration
Statement, (C) at a specified date not more than five (5) days prior to the date
of this Agreement, there has been any increase in the consolidated long term or
short term debt of the Mid-Tier HC or any decrease in consolidated total assets,
the allowance for loan losses, total deposits or net worth of the Mid-Tier HC,
in each case as compared with the amounts shown in the June 30, 2003
consolidated balance sheet included in the Registration Statement or, (D) during
the period from June 30, 2003 to a specified date not more than five (5) days
prior to the date of this Agreement, there were any decreases, as compared with
the corresponding period in the preceding fiscal year, in total interest income,
net interest income, net interest income after provision for loan losses, income
before income tax expense or net income of the Mid-Tier HC, except in all
instances for increases or decreases which the Registration Statement and the
Prospectus disclose have occurred or may occur; and (iv) in addition to the
examination referred to in their opinions and the limited procedures referred to
in clause (iii) above, they have carried out certain specified procedures, not
constituting an audit, with respect to certain amounts, percentages and
financial information which are included in the Registration Statement and
Prospectus and which are specified by the Agent, and have found such amounts,
percentages and financial information to be in agreement with the relevant
accounting, financial and other records of the Company, the MHC, the Mid-Tier HC
and the Bank identified in such letter.
31
(g) At Closing Time, the Agent shall have received from Xxxxx Xxxxxxxx
LLP, a letter, dated as of Closing Time, to the effect that they reaffirm the
statements made in the letter furnished pursuant to subsection (e) of this
Section, except that the specified date referred to shall be a date not more
than five (5) days prior to Closing Time.
(h) At Closing Time, the Securities and Exchange Shares shall have been
approved for quotation on the Nasdaq National Market upon notice of issuance.
(i) At Closing Time, the Agent shall have received a letter from the
Appraiser, dated as of the Closing Time, confirming its appraisal.
(j) At Closing Time, counsel for the Agent shall have been furnished
with such documents and opinions as they may require for the purpose of enabling
them to pass upon the issuance and sale of the Securities and Exchange Shares as
herein contemplated and related proceedings, or in order to evidence the
accuracy of any of the representations or warranties, or the fulfillment of any
of the conditions, herein contained; and all proceedings taken by the Company in
connection with the issuance and sale of the Securities and Exchange Shares as
herein contemplated shall be satisfactory in form and substance to the Agent and
counsel for the Agent.
(k) At any time prior to Closing Time, (i) there shall not have
occurred any material adverse change in the financial markets in the United
States or elsewhere or any outbreak of hostilities or escalation thereof or
other calamity or crisis the effect of which, in the judgment of the Agent, are
so material and adverse as to make it impracticable to market the Securities or
to enforce contracts, including subscriptions or orders, for the sale of the
Securities, and (ii) trading generally on either the American Stock Exchange,
the New York Stock Exchange or the Nasdaq Stock Market shall not have been
suspended, and minimum or maximum prices for trading shall not have been fixed,
or maximum ranges for prices for securities have been required, by either of
said Exchanges or by order of the Commission or any other governmental
authority, and a banking moratorium shall not have been declared by either
Federal, New Jersey or New York authorities.
SECTION 6. INDEMNIFICATION.
(a) The Company, the MHC, the Mid-Tier HC and the Bank, jointly and
severally, agree to indemnify and hold harmless the Agent, each person, if any,
who controls the Agent, within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act, and its respective partners, directors,
officers, employees and agents as follows:
(i) from and against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, related to or arising out of the
Conversion or any action taken by the Agent where acting as agent of
the Company, the MHC, the Mid-Tier HC or the Bank or otherwise as
described in Section 2 hereof;
(ii) from and against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, based upon or arising out of any
untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement (or any amendment thereto), or
the omission or alleged omission therefrom of a material fact
32
required to be stated therein or necessary to make the statements
therein not misleading or arising out of any untrue statement or
alleged untrue statement of a material fact contained in the Members'
Proxy Statement, Stockholders' Proxy Statement or Prospectus (or any
amendment or supplement thereto) or the omission or alleged omission
therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading;
(iii) from and against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened,
or of any claim whatsoever described in clauses (i) or (ii) above, if
such settlement is effected with the written consent of the Company,
the MHC, the Mid-Tier HC or the Bank, which consent shall not be
unreasonably withheld; and
(iv) from and against any and all expense whatsoever, as incurred
(including, subject to Section 6(c) hereof, the fees and disbursements
of counsel chosen by the Agent), reasonably incurred in investigating,
preparing or defending against any litigation, or any investigation,
proceeding or inquiry by any governmental agency or body, commenced or
threatened, or any claim pending or threatened whatsoever described in
clauses (i) or (ii) above, to the extent that any such expense is not
paid under clause (i), (ii) or (iii) above;
provided, however, that the indemnification provided for in this paragraph (a)
shall not apply to any loss, liability, claim, damage or expense to the extent
arising out of any untrue statement or alleged untrue statement of a material
fact contained in the Prospectus (or any amendment or supplement thereto) or the
omission or alleged omission therefrom of a material fact necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading which was made in reliance upon and in conformity with
the Agent Information. Notwithstanding the foregoing, the indemnification
provided for in this paragraph (a) shall not apply to the Bank to the extent
that such indemnification by the Bank would constitute a covered transaction
under Section 23A of the Federal Reserve Act, as amended.
(b) The Agent agrees to indemnify and hold harmless the Company and the
Bank, their directors, each of their officers who signed the Registration
Statement, and each person, if any, who controls the Company within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange Act against
any and all loss, liability, claim, damage and expense described in the
indemnity contained in subsection (a) of this Section, as incurred, but only
with respect to untrue statements or omissions, or alleged untrue statements or
omissions, of a material fact made in the Prospectus (or any amendment or
supplement thereto) in reliance upon and in conformity with the Agent
Information.
(c) Each indemnified party shall give notice as promptly as reasonably
practicable to each indemnifying party of any action commenced against it in
respect of which indemnity may be sought hereunder, but failure to so notify an
indemnifying party shall not relieve such indemnifying party from any liability
which it may have otherwise than on account of this indemnity agreement. An
indemnifying party may participate at its own expense in the defense of any such
action. In no event shall the indemnifying parties be liable for fees and
expenses of more than one counsel (in addition to no more than one local counsel
in each separate
33
jurisdiction in which any action or proceeding is commenced) separate from their
own counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances.
(d) The Company, the MHC, the Mid-Tier HC and the Bank also agree that
the Agent shall not have any liability (whether direct or indirect, in contract
or tort or otherwise) to the MHC, the Bank, the Mid-Tier HC and its security
holders, the Company and its security holders or the MHC's, the Bank's, the
Mid-Tier HC's or the Company's creditors relating to or arising out of the
engagement of the Agent pursuant to, or the performance by the Agent of the
services contemplated by, this Agreement, except to the extent that any loss,
claim, damage or liability is found in a final judgment by a court of competent
jurisdiction to have resulted primarily from the Agent's bad faith, willful
misconduct or gross negligence.
(e) In addition to, and without limiting, the provisions of Section
(6)(a)(iv) hereof, in the event that the Agent, any person, if any, who controls
the Agent within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act or any of its partners, directors, officers, employees or
agents is requested or required to appear as a witness or otherwise gives
testimony in any action, proceeding, investigation or inquiry brought by or on
behalf of or against the Company, the MHC, the Mid-Tier HC, the Bank, the Agent
or any of its respective affiliates or any participant in the transactions
contemplated hereby in which the Agent or such person or agent is not named as a
defendant, the Company, the MHC, the Mid-Tier HC, and the Bank jointly and
severally agree to reimburse the Agent and its partners, directors, officers,
employees or agents for all reasonable and necessary out-of-pocket expenses
incurred by them in connection with preparing or appearing as a witness or
otherwise giving testimony and to compensate the Agent and its partners,
directors, officers, employees or agents in an amount to be mutually agreed
upon.
SECTION 7. CONTRIBUTION. In order to provide for just and equitable
contribution in circumstances in which the indemnity agreement provided for in
Section 6 hereof is for any reason held to be unenforceable by the indemnified
parties although applicable in accordance with its terms, the Company, the MHC,
the Mid-Tier HC, the Bank, and the Agent shall contribute to the aggregate
losses, liabilities, claims, damages and expenses of the nature contemplated by
said indemnity agreement incurred by the Company, the MHC, the Mid-Tier HC or
the Bank and the Agent, as incurred, in such proportions (i) that the Agent is
responsible for that portion represented by the percentage that the maximum
aggregate marketing fees appearing on the cover page of the Prospectus bears to
the maximum aggregate gross proceeds appearing thereon and the Company, the MHC,
the Mid-Tier HC and the Bank are jointly and severally responsible for the
balance or (ii) if, but only if, the allocation provided for in clause (i) is
for any reason held unenforceable, in such proportion as is appropriate to
reflect not only the relative benefits to the Company, the MHC, the Mid-Tier HC
and the Bank on the one hand and the Agent on the other, as reflected in clause
(i), but also the relative fault of the Company, the MHC, the Mid-Tier HC and
the Bank on the one hand and the Agent on the other, as well as any other
relevant equitable considerations; provided, however, that no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this Section, each
person, if any, who controls the Agent within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act shall have the same rights to
34
contribution as the Agent, and each director of the Company, the MHC, the
Mid-Tier HC and the Bank, each officer of the Company who signed the
Registration Statement, and each person, if any, who controls the Company, the
MHC, the Mid-Tier HC or the Bank within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act shall have the same rights to
contribution as the Company, the MHC, the Mid-Tier HC and the Bank.
Notwithstanding anything to the contrary set forth herein, to the extent
permitted by applicable law, in no event shall the Agent be required to
contribute an aggregate amount in excess of the aggregate marketing fees to
which the Agent is entitled and actually paid pursuant to this Agreement.
SECTION 8. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE
DELIVERY. All representations, warranties and agreements contained in this
Agreement, or contained in certificates of officers of the Company, the MHC, the
Mid-Tier HC or the Bank submitted pursuant hereto, shall remain operative and in
full force and effect, regardless of any investigation made by or on behalf of
any Agent or controlling person, or by or on behalf of the Company, and shall
survive delivery of the Securities and the Exchange Shares.
SECTION 9. TERMINATION OF AGREEMENT.
(a) The Agent may terminate this Agreement, by notice to the Company,
at any time at or prior to Closing Time (i) if there has been, since the date of
this Agreement or since the respective dates as of which information is given in
the Registration Statement, any material adverse change in the financial
condition, results of operations, business affairs or prospects of the Company,
the MHC, the Mid-Tier HC, the Bank or the Subsidiaries, considered as one
enterprise, whether or not arising in the ordinary course of business, (ii) if
there has occurred any material adverse change in the financial markets in the
United States or elsewhere or any outbreak of hostilities or escalation thereof
or other calamity or crisis the effect of which, in the judgment of the Agent,
are so material and adverse as to make it impracticable to market the Securities
or to enforce contracts, including subscriptions or orders, for the sale of the
Securities, (iii) if trading generally on the Nasdaq National Market, the
American Stock Exchange or the New York Stock Exchange has been suspended, or
minimum or maximum prices for trading have been fixed, or maximum ranges for
prices for securities have been required, by either of said Exchanges or by
order of the Commission or any other governmental authority, or if a banking
moratorium has been declared by either Federal, New Jersey or New York
authorities, (iv) if any condition specified in Section 5 shall not have been
fulfilled when and as required to be fulfilled; (v) if there shall have been
such material adverse change in the condition or prospects of the Company, the
MHC, the Mid-Tier HC or the Bank or the prospective market for the Company's
Securities as in the Agent's good faith opinion would make it inadvisable to
proceed with the offering, sale or delivery of the Securities; (vi) if, in the
Agent's good faith opinion, the price for the Securities established by the
Appraiser is not reasonable or equitable under then prevailing market
conditions, or (vii) if the Conversion is not consummated on or prior to
_______________ 31, 2004.
(b) If this Agreement is terminated pursuant to this Section, such
termination shall be without liability of any party to any other party except as
provided in Sections 2 and 4 hereof relating to the reimbursement of expenses
and except that the provisions of Sections 6 and 7 hereof shall survive any
termination of this Agreement.
35
SECTION 10. NOTICES. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the Agent
shall be directed to the Agent at 000 Xxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx
Xxxx 00000, attention of Xxxxxxxxx X. Xxxxxx, Principal, with a copy to Xxxxxx
X. Xxxxxxxx, Esq., at Xxxx Xxxxxx Xxxxxxxx & Xxxxxx, P.C., 0000 Xxxxxxxxx
Xxxxxx, XX, Xxxxx 000, Xxxxxxxxxx, XX 00000, notices to the Company, the MHC,
the Mid-Tier HC and the Bank shall be directed to any of them at 000 Xxxxx
Xxxxxx Xxxx, Xxxxxxxx, Xxx Xxxxxx 00000, Attention of Xx. Xxxx X. Xxxxx,
President and Chief Executive Officer, with a copy to Xxxxxx X. Xxxxxxx , Esq.
at Xxxxxxx Spidi & Xxxxx, PC, 0000 Xxx Xxxx Xxxxxx, XX, Xxxxx 000 Xxxx,
Xxxxxxxxxx, XX 00000.
SECTION 11. PARTIES. This Agreement shall inure to the benefit of and
be binding upon the Agent, the Company, the MHC, the Mid-Tier HC and the Bank
and their respective successors. Nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any person, firm or
corporation, other than the Agent, the Company, the MHC, the Mid-Tier HC and the
Bank and their respective successors and the controlling persons and the
partners, officers and directors referred to in Sections 6 and 7 and their heirs
and legal representatives, any legal or equitable right, remedy or claim under
or in respect of this Agreement or any provision herein or therein contained.
This Agreement and all conditions and provisions hereof and thereof are intended
to be for the sole and exclusive benefit of the Agent, the Company, the MHC, the
Mid-Tier HC and the Bank and their respective successors, and said controlling
persons, partners, officers and directors and their heirs, partners, legal
representatives, and for the benefit of no other person, firm or corporation.
SECTION 12. ENTIRE AGREEMENT; AMENDMENT. This Agreement represents the
entire understanding of the parties hereto with reference to the transactions
contemplated hereby and supersedes any and all other oral or written agreements
heretofore made, except for the engagement letter dated July 28, 2003, by and
between the Agent and the Bank, relating to the Agent's providing conversion
agent services to the Company and the Bank in connection with the Conversion. No
waiver, amendment or other modification of this Agreement shall be effective
unless in writing and signed by the parties hereto.
SECTION 13. GOVERNING LAW AND TIME. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York applicable to
agreements made and to be performed in said State without regard to the
conflicts of laws provisions thereof. Unless otherwise noted, specified times of
day refer to Eastern time.
SECTION 14. SEVERABILITY. Any term or provision of this Agreement which
is invalid or unenforceable in any jurisdiction shall, as to that jurisdiction,
be ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of this
Agreement is so broad as to be unenforceable, the provision shall be interpreted
to be only so broad as is enforceable.
36
SECTION 15. HEADINGS. Sections headings are not to be considered part
of this Agreement, are for convenience and reference only, and are not to be
deemed to be full or accurate descriptions of the contents of any paragraph or
subparagraph.
[The next page is the signature page]
37
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
between the Agent on the one hand, and the Company, the MHC, the Mid-Tier HC and
the Bank on the other in accordance with its terms.
Very truly yours,
SYNERGY FINANCIAL GROUP, INC. (NEW)
By:
-------------------------------------
Title:
SYNERGY BANK
By:
-------------------------------------
Title:
SYNERGY MHC
By:
-------------------------------------
Title:
CONFIRMED AND ACCEPTED, Synergy Financial Service, Inc.
as of the date first above written:
SANDLER X'XXXXX & PARTNERS, L.P. By:
-------------------------------------
Title:
By: Sandler X'Xxxxx & Partners Corp.,
the sole general partner
By:
-----------------------------------
Vice President
38
4,711,099 Shares
(Maximum Offered to be Sold and Issued in Conversion, subject
to increase up to 5,417,793 shares
under certain circumstances)
Common Stock
(Par Value $.10 Per Share)
SELECTED DEALER'S AGREEMENT
November ___, 2003
Ladies and Gentlemen:
We have agreed to assist Synergy Financial Group, Inc. (the "Company")
in connection with the offer for sale and issuance of shares (the "Shares") of
common stock, par value $.10 per share, of the Company, to be issued in
connection with the conversion and reorganization of Synergy Bank, a
federally-chartered stock savings bank (the "Bank"), from the mutual to stock
holding company form of organization. The Company, in connection with its plan
to effect such conversion, offered for sale up to 4,711,099 shares for
subscription by the Company's and the Bank's employee stock ownership plan and
certain of the Bank's depositors and borrowers, in a subscription offering, and
certain members of the general public in a concurrent direct community offering.
The shares which were not subscribed for pursuant to such subscription and
direct community offerings are being offered to the public in a syndicated
community offering (the "Syndicated Community Offering") in accordance with the
rules of the Office of Thrift Supervision. The balance of the Shares to be
issued in connection with the conversion represent the minority ownership
interest in Synergy Financial Group, Inc., the Bank's parent stock holding
company, which will be exchanged for up to shares of Company common stock (the
"Exchange Shares"). The Shares, the bases on which the number of Shares to be
issued may change, and certain of the terms on which they are being offered are
more fully described in the enclosed Prospectus (the "Prospectus").
We are offering to Selected Dealers (of which you are one) the
opportunity to participate in the solicitation of offers to buy the Shares in
the Syndicated Community Offering, and we will pay you a fee in the amount of
_____________ percent (______%) of the dollar amount of the Shares sold on
behalf of the Company by you. The number of Shares sold by you shall be
determined based on the authorized designation of your firm on the order form or
forms for such Shares accompanying the funds transmitted for payment therefor
(whether in the form of a check payable to the Bank or a withdrawal from an
existing account at the Bank) to the special account established by the Company
for the purpose of holding such funds. It is understood, of course, that payment
of your fee will be made only out of compensation received by us for the Shares
sold on behalf of the Company by you, as evidenced in accordance with the
preceding sentence. The Bank has requested us to invite you to become a
"Sponsoring Dealer," that is, a Selected Dealer who solicits offers which result
in the sale on behalf of the Bank of at least ____ shares.
You may become a Sponsoring Dealer (subject to your fulfillment of the
requirement in the preceding sentence) by checking the box on the confirmation
at the end of this letter. If you become a Sponsoring Dealer, you shall be
entitled to an additional fee in the amount of _____ percent (_____%) of the
dollar amount of the Shares sold on behalf of the Company by you as evidenced in
the manner set forth above.
Each order form for the purchase of Shares must set forth the identity,
address and tax identification number of each person ordering Shares regardless
of whether the Shares will be registered in street name or in the purchaser's
name. Such order form should clearly identify your firm.
As soon as practicable after all the Shares are sold, we will remit to
you, out of our compensation as provided above, the fees to which you are
entitled hereunder, including your Sponsoring Dealer fee.
This offer is made subject to the terms and conditions herein set forth
and is made only to Selected Dealers which are (i) members in good standing of
the National Association of Securities Dealers, Inc. ("NASD") which agree to
comply with all applicable rules of the NASD, including, without limitation, the
NASD's Interpretation with Respect to Free-Riding and Withholding and Rule 2740
of the NASD's Conduct Rules, or (ii) foreign dealers not eligible for membership
in the NASD which agree (A) not to sell any Shares within the United States, its
territories or possessions or to persons who are citizens thereof or resident
therein and (B) in making other sales to comply with the above-mentioned NASD
Rules 2730, 2740 and 2750 of the above-mentioned Conduct Rules as if they were
NASD members and Rule 2420 of such Conduct Rules as it applies to non-member
brokers or dealers in a foreign country.
Orders for Shares will be strictly subject to confirmation and we,
acting on behalf of the Company, reserve the right in our absolute discretion to
reject any order in whole or in part, to accept or reject orders in the order of
their receipt or otherwise, and to allot. Neither you nor any other person is
authorized by the Company, the Bank or by us to give any information or make any
representations other than those contained in the Prospectus in connection with
the offering and sale of any of the Shares. No Selected Dealer is authorized to
act as agent for us when soliciting offers to buy the Shares from the public or
otherwise. No Selected Dealer shall engage in any stabilizing (as defined in
Regulation M promulgated under the Securities Exchange Act of 1934, as amended
(the "Exchange Act")) with respect to the Company's common stock during the
offering.
We and each Selected Dealer assisting in selling Shares pursuant hereto
agree to comply with the applicable requirements of the Exchange Act, and
applicable rules and regulations issued by the OTS. In addition, we and each
Selected Dealer confirm that the Securities and Exchange Commission (the "SEC")
interprets Rule 15c2-8 promulgated under the Exchange Act as requiring that a
prospectus be supplied to each person who is expected to receive a confirmation
of sale at least 48 hours prior to delivery of such person's order form.
We and each Selected Dealer further agree to the extent that our
customers desire to pay for Shares with funds held by or to be deposited with
us, in accordance with the interpretation of
2
the SEC Rule 15c2-4 promulgated under the Exchange Act either (a) upon receipt
of an executed order form or direction to execute an order form on behalf of a
customer to forward the Syndicated Community Offering price for the Shares
ordered on or before 12:00 p.m. on the business day following receipt or
execution of an order form by us to the Bank for deposit in a segregated account
or (b) to solicit indications of interest in which event (i) we will
subsequently contact any customers indicating interest to confirm the interest
and give instructions to execute and return an order form or to receive
authorization to execute an order form on their behalf, (ii) we will mail
acknowledgments of receipt of orders to each customer confirming interest on the
business day following such confirmation, (iii) we will debit accounts of such
customers on the fifth business day (the "debit date") following receipt of the
confirmation referred to in (i) and (iv) we will forward completed order forms
together with such funds to the Bank on or before 12:00 p.m. on the next
business day following the debit date for deposit in a segregated account. We
acknowledge that if the procedure in (b) is adopted, our customer's funds are
not required to be in their accounts until the debit date. We and each Selected
Dealer further acknowledge that, in order to use the foregoing "sweep
arrangements," we comply with the net capital requirements for broker/dealers
under Rule 15c3-1(a)(1) of the Exchange Act.
Unless earlier terminated by us, this Agreement shall terminate 45 full
business days after the date hereof, but may be extended by us for an additional
period or periods not exceeding 30 full business days in the aggregate. We may
terminate this Agreement or any provisions hereof at any time by written or
telegraphic notice to you. Of course, our obligations hereunder are subject to
the successful completion of the offering, including the sale of all of the
Shares.
You agree that at any time or times prior to the termination of this
Agreement you will, upon our request, report to us the number of Shares sold on
behalf of the Company by you under this Agreement.
We shall have full authority to take such actions as we may deem
advisable in respect to all matters pertaining to the offering. We shall be
under no liability to you except for lack of good faith and for obligations
expressly assumed by us in this Agreement.
Upon application to us, we will inform you as to the states in which we
believe the Shares have been qualified for sale under, or are exempt from the
requirements of, the respective blue sky laws of such states, but we assume no
responsibility or obligation as to your rights to sell Shares in any state.
Additional copies of the Prospectus and any supplements thereto will be
supplied in reasonable quantities upon request.
Any notice from us to you shall be deemed to have been duly given if
mailed, telephoned or telegraphed to you at the address to which this Agreement
is mailed.
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This Agreement shall be construed in accordance with the laws of New
York.
Please confirm your agreement hereto by signing and returning the
confirmation accompanying this letter at once to us at Sandler X'Xxxxx &
Partners, L.P., 000 Xxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000. The
enclosed duplicate copy will evidence the agreement between us.
Very truly yours,
SANDLER X'XXXXX & PARTNERS, L.P.
By: ____________________________
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Sandler X'Xxxxx & Partners, L.P.
000 Xxxxx Xxxxxx - 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: _____________________
Ladies and Gentlemen:
We hereby confirm our agreement to all the terms and conditions stated
in the foregoing letter. We acknowledge receipt of the Prospectus relating to
the Shares and we further state that in agreeing thereto we have relied upon the
Prospectus and no other statement whatsoever, written or oral. We confirm that
we are (i) a member on good standing of the National Association of Securities
Dealers, Inc. ("NASD"), and agree to comply with all applicable rules of the
NASD, including, without limitation, the NASD's "Interpretation With Respect to
Free-Riding and Withholding" and Rule 2740 of the NASD's Conduct Rules, or (ii)
a foreign dealer not eligible for membership in the NASD and agree (A) not to
sell any Shares of ___________________ within the United States, its territories
or possessions or to persons who are citizens thereof or resident therein and
(B) in making other sales to comply with the above-mentioned NASD Rules 2730,
2740 and 2750 of the above-mentioned Conduct Rules as if we were an NASD member
and Rule 2420 of such Conduct Rules as it applies to a non-member broker or
dealer in a foreign country.
[__] We wish to become a "Sponsoring Dealer."
Dated: ______________________
-----------------------------------------
(Please print or type name of firm
By: ____________________________________
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