Exhibit 1.2
OSWEGO COUNTY BANCORP, INC.
450,000 to 609,500 Shares
COMMON STOCK
(Par Value $.0l Per Share)
Subscription Price $10.00 Per Share
AGENCY AGREEMENT
___________, 1999
Friedman, Billings, Xxxxxx & Co., Inc.
0000 Xxxxxxxxxx Xxxxxx Xxxxx
00xx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
Oswego County Bancorp, Inc., a Delaware corporation (the "Company"),
Oswego County MHC, a New York State chartered mutual holding company ("MHC") and
Oswego County Savings Bank, a New York State chartered mutual savings bank (the
"Bank") (reference to the "Bank" includes the Bank in the mutual or stock form,
as indicated by the context) with its deposit accounts insured by the Bank
Insurance Fund ("BIF") administered by the Federal Deposit Insurance Corporation
("FDIC"), hereby confirm, jointly and severally, their agreement with Friedman,
Billings, Xxxxxx & Co., Inc. ("FBR" or the "Agent"), as follows:
Section 1. The Offering. The Bank, in accordance with its Plan of
Reorganization from Mutual Saving Bank to Mutual Holding Company and Stock
Issuance Plan adopted by its Board of Trustees and subsequently amended and
restated (the "Plan"), intends to convert from a New York State chartered mutual
savings bank to a New York State chartered stock savings bank, and will issue
all of its issued and outstanding capital stock to the Company. In addition,
pursuant to the Plan, the Company will offer and sell up to 609,500 shares of
its common stock, par value, $.01 per share (the "Shares" or "Common Stock"), in
a subscription offering (the "Subscription Offering") to (1) depositors of the
Bank with account balances of $100.00 or more as of September 30, 1997
("Eligible Account Holders"), (2) the Oswego County Bancorp, Inc. Employee Stock
Ownership Plan (the "ESOP"), (3) depositors of the Bank with account balances of
$100.00 or more as of March 31, 1999 ("Supplemental Eligible Account Holders"),
and (4) employees, officers and trustees of the Bank. To the extent Shares
remain unsold in the Subscription Offering, the Company is offering for sale in
a community offering (the "Community Offering" and when referred to together
with the Subscription Offering, the "Subscription and Community Offering"), the
Shares
not so subscribed for or ordered in the Subscription Offering to members of the
general public, with preference given to natural persons residing Oswego County
("Other Subscribers"), (all such offerees being referred to in the aggregate as
"Eligible Offerees"). It is anticipated that shares not subscribed for in the
Subscription and Community Offering will be offered to certain members of the
general public on a best efforts basis through a selected dealers arrangement
(the "Syndicated Community Offering") (the Subscription Offering, Community
Offering and Syndicated Community Offering are collectively referred to as the
"Offering"). It is acknowledged that the purchase of Shares in the Offering is
subject to the maximum and minimum purchase limitations as described in the Plan
and that the Company may reject, in whole or in part, any orders received in the
Community Offering or Syndicated Community Offering. Collectively, these
transactions are referred to herein as the "Reorganization." The Company will
issue the Shares at a purchase price of $10.00 per share (the "Purchase Price").
In connection with the Reorganization and pursuant to the terms of the
Plan as described in the Prospectus (as hereinafter defined), immediately
following the consummation of the Reorganization, subject to the approval of the
members of Bank and compliance with certain conditions as may be imposed by
regulatory authorities, the Company will contribute newly issued Common Stock
equal to 4% of such Shares sold in the Reorganization to the Oswego County
Charitable Foundation (the "Foundation") such shares hereinafter being referred
to as the ("Foundation Shares").
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form SB-2 (File No. 333-69959) (the
"Registration Statement") containing a prospectus relating to the Offering for
the registration of the Shares and the Foundation Shares under the Securities
Act of 1933 (the "1933 Act"), and has filed such amendments thereof and such
amended prospectuses as may have been required to the date hereof. The term
"Registration Statement" shall include all exhibits thereto, as amended,
including post-effective amendments. The prospectus, as amended, on file with
the Commission at the time the Registration Statement initially became effective
is hereinafter called the "Prospectus," except that if any Prospectus is filed
by the Company pursuant to Rule 424(b) or (c) of the rules and regulations of
the Commission under the 1933 Act (the "1933 Act Regulations") differing from
the prospectus on file at the time the Registration Statement initially becomes
effective, the term "Prospectus" shall refer to the prospectus filed pursuant to
Rule 424(b) or (c) from and after the time said prospectus is filed with the
Commission.
In accordance with the rules and regulations of the New York State Bank
Department (the "Department") and the rules and regulations of the Federal
Deposit Insurance Corporation ("FDIC") (the "MHC Regulations"), the Bank has
filed with the Department and the FDIC, a Notice of Intent to Convert to Stock
Form (the "Notice") and an Application for Approval of a Mutual Savings Bank
Holding Company Reorganization (the "MHC Application"), including the Prospectus
and the Reorganization Valuation Appraisal Report prepared by RP Financial, LC
(the "Appraisal") and has filed such amendments thereto as may have been
required by the Department and the FDIC. The Bank has also filed an Application
for Merger ("Merger Application") with the FDIC pursuant to Section 18(c) of the
Federal Deposit Insurance Act. The Notice, the MHC Application and the Merger
Application are collectively referred to as the "Reorganization Applications."
In addition,
2
the Company has filed with the Federal Reserve Bank of New York ("Federal
Reserve Bank") its application on Form Y-3 (the "Holding Company Application")
to acquire the Bank and to become a registered bank holding company under the
Bank Holding Company Act of 1956, as amended ("BHCA").
Section 2. Retention of Agent; Compensation; Sale and Delivery of the
Shares. On the basis of the representations and warranties herein contained and
subject to the terms and conditions herein set forth, the Company, the MHC and
the Bank hereby appoint FBR as their Agent to consult with and advise the Bank,
and to assist the Company with the solicitation of subscriptions and purchase
orders for Shares, in connection with the Company's sale of Common Stock in the
Subscription and Community Offering. On the basis of the representations and
warranties herein contained, and subject to the terms and conditions herein set
forth, FBR hereby accepts such appointment and agrees to use its best efforts to
assist the Company with the solicitation of subscriptions and purchase orders
for Shares 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. In connection with the
Subscription and Community Offering, FBR will render the following services: (i)
act as the financial advisor to the Bank; (ii) create marketing materials and
formulate a marketing plan; (iii) conduct training for all trustees and
employees of the Bank in connection with their role in the stock offering
process; (iv) manage the information stock center by staffing it with FBR
personnel to assist interested stock subscribers and by keeping records of all
stock orders; and (v) provide general advisory services including capital
management strategies, dividend policy and mergers and acquisitions strategies
for a period of one year following the 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
Offering, unless the Company and the Agent agree in writing to extend such
period and the FDIC and the Department agree to extend the period of time in
which the Shares may be sold, or (b) the receipt and acceptance of subscriptions
and purchase orders for all of the Shares.
If any of the Shares remain available after the expiration of the
Subscription and Community Offering, at the request of the MHC, the Company and
the Bank, the Agent will seek to form a syndicate of registered broker or
dealers ("Selected Dealers") to assist in the solicitation of purchase orders of
such Securities on a best efforts basis, subject to the terms and conditions set
forth in a selected dealers' agreement (the "Selected Dealers' Agreement"),
substantially in the form set forth in Exhibit A to this Agreement. FBR will
endeavor to limit the aggregate fees to be paid by the MHC, the Company and the
Bank under any such Selected Dealers' Agreement to an amount competitive with
gross underwriting discounts charged at such time for underwritings of
comparable amounts of stock sold at a comparable price per share in a similar
market environment. The Agent will endeavor to distribute the Shares among the
Selected Dealers in a fashion which best meets the distribution objective of the
Company and the requirements of the Plan, which may result in limiting the
allocation of stock to certain Selected Dealers. It is understood that in no
event shall the Agent be obligated to act as a Selected Dealer or to take or
purchase any Shares.
3
In the event the Company is unable to sell at least the minimum of the
Shares, as set forth on the cover page of the Prospectus (or such lesser amount
approved by the Department and the FDIC), within the period herein provided,
this Agreement shall terminate and the Company shall refund to any persons who
have subscribed for any of the Shares 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 MHC, the Company and the Bank as set forth in this Section 2
and Sections 6, 8 and 9 hereof and the obligations of the Agent as provided in
Sections 8 and 9 hereof. Appropriate arrangements for placing the funds received
from subscriptions for Shares or other offers to purchase Shares in special
interest-bearing accounts with the Bank until all Shares 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 Shares are sold.
If at least the total minimum of Shares, as set forth on the cover page
of the Prospectus (or such lesser amount approved by the Department and the
FDIC), are sold, the Company agrees to issue or have issued the Shares sold and
to release for delivery certificates for such Shares at the Closing Date 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 Elias, Matz,
Xxxxxxx & Xxxxxxx L.L.P., 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
Shares. One or more certificates for Shares shall be delivered in such
denomination or denominations and registered in such name or names as FBR
requests. Notwithstanding the foregoing, certificates for Shares purchased
through Selected Dealers shall be made available to the Agent for inspection at
least 48 hours prior to the Closing Date at such office as the Agent shall
designate. The date upon which the Company shall release for delivery all of the
Shares, in accordance with the terms hereof, is herein called the "Closing
Date."
The Company will pay any stock issue and transfer taxes which may be
payable with respect to the sale of the Shares.
In addition to reimbursement of the expenses specified in Section 6
hereof, the Agent will receive the following compensation for its services
hereunder:
(a) a management fee of $20,000 (the "Management Fee") (in recognition
of services already provided by FBR, the Bank will make advance payment to FBR
of the Management Fee, which Management Fee shall be credited against the
Marketing Fee (as defined below)); FBR is entitled to the Management Fee
irrespective of any termination or abandonment of the Plan or the Reorganization
for any reason; and
(b) a marketing fee of $100,000 payable in immediately available funds
at the Closing Date (the "Marketing Fee").
If this Agreement is terminated by the Agent in accordance with the
provisions of Section 11(a) hereof or the Plan or Reorganization is terminated
or abandoned by the Company or the Bank,
4
no fee other than the Management Fee shall be payable by the Bank to FBR;
provided, however, the Bank 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 6 hereof.
Section 3. Prospectus; Offering. The Shares are to be initially offered
in the Offering at the Purchase Price.
Section 4. Representations and Warranties of the Company, the MHC and
the Bank. The Company, the MHC and the Bank jointly and severally represent and
warrant to and agree with the Agent as follows:
(a) The Registration Statement which was prepared by the Company,
the MHC and the Bank and filed with the Commission was
declared effective by the Commission on _________, 1999. At
the time the Registration Statement, including the Prospectus
contained therein (including any amendment or supplement),
became effective, the Registration Statement contained all
statements that were required to be stated therein in
accordance with the 1933 Act and the 1933 Act Regulations,
complied in all material respects with the requirements of the
1933 Act and the 1933 Act Regulations and the Registration
Statement, including the Prospectus contained therein
(including any amendment or supplement thereto), and any
information regarding the Company or the MHC or the Bank or
the Foundation contained in Sales Information (as such term is
defined in Section 8 hereof) authorized by the Company, the
MHC or the Bank for use in connection with the Offering, did
not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, and
at the time any Rule 424(b) or (c) Prospectus was filed with
the Commission and at the Closing Date referred to in Section
2, the Registration Statement, including the Prospectus
contained therein (including any amendment or supplement
thereto), and any information regarding the Company, the MHC,
the Bank or the Foundation contained in Sales Information (as
such term is defined in Section 8 hereof) authorized by the
Company, the MHC or the Bank for use in connection with the
Offering will contain all statements that are required to be
stated therein in accordance with the 1933 Act and the 1933
Act 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 light of the
circumstances under which they were made, not misleading;
provided, however, that the representations and warranties in
this Section 4(a) shall not apply to statements or omissions
made in reliance upon and in conformity with written
information furnished to the Company, the MHC or the Bank by
the Agent or its counsel expressly regarding the Agent for use
in the Prospectus under the caption "Our Corporate Change and
Stock Offering-Marketing
5
Arrangements" or statements in or omissions from any Sales
Information or information filed pursuant to state securities
or blue sky laws or regulations regarding the Agent.
(b) The Notice and MHC Applications which were prepared by the
Company, the MHC and the Bank and filed with the Department
and the FDIC were approved by the Department on _________,
1999, including the waiver of certain provisions of the MHC
Regulations specified in such approval with respect to the
establishment of and contribution to the Foundation, and the
related Prospectus has been authorized for use by the
Department. The Merger Application was filed with the FDIC on
__________, 1999 pursuant to the Bank Merger Act, and approved
by the FDIC on _______, 1999. The FDIC has issue a letter of
intent not to object to the Notice and MHC Application. At the
time of the approval of the MHC Application, including the
Prospectus (including any amendment or supplement thereto), by
the Department and at all times subsequent thereto until the
Closing Date, the MHC Application, including the Prospectus
(including any amendment or supplement thereto), will comply
in all material respects with the MHC Regulations, except to
the extent waived in writing by the Department. The
Reorganization Applications, including the Prospectus
(including any amendment or supplement thereto), do not
include any untrue statement of a material fact or omit to
state a material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading;
provided, however, that the representations and warranties in
this Section 4(b) shall not apply to statements or omissions
made in reliance upon and in conformity with written
information furnished to the Company, the MHC or the Bank by
the Agent or its counsel expressly regarding the Agent for use
in the Prospectus contained in the Notice and MHC Application
under the caption "Our Corporate Change and Stock
Offering-Marketing Arrangements" or statements in or omissions
from any sales information.
(c) The Holding Company Application for approval pursuant to the
BHCA and the regulations promulgated thereunder, has been
prepared by the Bank, the MHC and the Company in material
conformity with the requirements of the BHCA and the
regulations promulgated thereunder and has been filed with the
Federal Reserve Bank. A conformed copy of the Holding Company
Application has been delivered to the Agent. As of the Closing
Date, approval of the Company's acquisition of the Bank will
have been obtained from the Federal Reserve Bank.
(d) No order has been issued by the Department or the FDIC
(hereinafter any reference to the FDIC shall include the BIF)
preventing or suspending the use of the Prospectus, and no
action by or before any such government entity to revoke any
approval, authorization or order of effectiveness related to
the
6
Reorganization is, to the best knowledge of the Company, the
MHC or the Bank, pending or threatened.
(e) As of the Closing Date, the MHC will be duly organized and
will be validly existing as a New York State chartered mutual
holding company under the laws of the State of New York, duly
authorized to conduct its business and own its property as
described in the Registration Statement and the Prospectus; as
of the Closing Date, the MHC will have obtained all licenses,
permits and other governmental authorizations required for the
conduct of its business except those that individually or in
the aggregate would not materially adversely affect the
financial condition, earnings, capital, assets or properties
of the Company, MHC and Bank taken as a whole; as of the
Closing Date, all such licenses, permits and governmental
authorizations will be in full force and effect and the MHC
will be in compliance therewith in all material respects; as
of the Closing Date, the MHC will be duly qualified as a
foreign corporation to transact business in each jurisdiction
in which the failure to be so qualified in one or more of such
jurisdictions would have a material adverse effect on the
financial condition, earnings, capital, assets, properties or
business of the Company, MHC and Bank considered as one
enterprise.
(f) The MHC does not own any equity securities or any equity
interest in any business enterprise except as described in the
Prospectus.
(g) At the Closing Date, the Plan will have been adopted by the
Boards of Trustees of the Company, the MHC and the Bank and
approved by the members of the Bank, and the offer and sale of
the Shares and all actions in connection with the contribution
to the Foundation will have been conducted in all material
respects in accordance with the Plan, the MHC Regulations, and
all other applicable laws, regulations, decisions and orders,
including all terms, conditions, requirements and provisions
precedent to the Reorganization imposed upon the Company, the
MHC or the Bank by the Department, the FDIC, the Commission,
the Federal Reserve Bank or any other regulatory authority and
in the manner described in the Prospectus. No person has
sought to obtain review of the final action of the Department
or the FDIC in approving the Plan or the Reorganization
Applications or of the Federal Reserve Bank in approving the
Holding Company Application pursuant to any applicable statute
or regulation.
(h) The Bank has been organized and is a validly existing New York
State chartered savings bank in mutual form of organization
and upon the Reorganization will become a duly organized and
validly existing New York State chartered savings bank in
capital stock form of organization, in both instances duly
authorized to conduct its business and own its property as
described in the Registration Statement and the Prospectus;
the Bank has
7
obtained all material licenses, permits and other governmental
authorizations currently required for the conduct of its
business; all such licenses, permits and governmental
authorizations are in full force and effect, and the Bank is
in all material respects complying with all laws, rules,
regulations and orders applicable to the operation of its
business; the Bank is existing under the laws of the federal
government and is duly qualified as a foreign corporation to
transact business and is in good standing in each jurisdiction
in which its ownership of property or leasing of property or
the conduct of its business requires such qualification,
unless the failure to be so qualified in one or more of such
jurisdictions would not have a material adverse effect on the
condition, financial or otherwise, or the business, operations
or income of the Bank. Upon completion of the sale by the
Company of the Shares contemplated by the Prospectus, (i) the
Bank will be converted pursuant to the Plan to a New York
State chartered stock savings bank, (ii) all of the issued and
outstanding capital stock of the Bank will be owned by the
Company, (iii) the Company will have no direct subsidiaries
other than the Bank, and (iv) the Company will be a
majority-owned subsidiary of the MHC. The Reorganization will
have been effected in all material respects in accordance with
all applicable statutes, regulations, decisions and orders;
and, except with respect to the filing of certain post-sale,
post-Reorganization reports, and documents in compliance with
the 1933 Act Regulations, the Department and FDIC resolutions
or letters of approval, all terms, conditions, requirements
and provisions with respect to the Reorganization imposed by
the Commission, the Department, the FDIC and the Federal
Reserve Bank, if any, will have been complied with by the
Company, the MHC and the Bank in all material respects or
appropriate waivers will have been obtained and all material
notice and waiting periods will have been satisfied, waived or
elapsed.
(i) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State
of Delaware with 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 at the Closing Date the Company will be qualified to do
business as a foreign corporation in each jurisdiction in
which the conduct of its business requires such qualification,
except where the failure to so qualify would not have a
material adverse effect on the condition, financial or
otherwise, or the business, operations or income of the
Company. The Company has obtained all material licenses,
permits and other governmental authorizations currently
required for the conduct of its business; all such licenses,
permits and governmental authorizations are in full force and
effect, and the Company is in all material respects complying
with all laws, rules, regulations and orders applicable to the
operation of its business.
8
(j) The Bank does not own equity securities or any equity interest
in any other business enterprise except as described in the
Prospectus or as would not be material to the operations of
the Bank.
(k) The Bank is a member of the Federal Home Loan Bank of New York
("FHLB-New York"). The deposit accounts of the Bank are
insured by the FDIC up to the applicable limits; and no
proceedings for the termination or revocation of such
insurance are pending or, to the best knowledge of the Company
or the Bank, threatened. Upon consummation of the
Reorganization, the liquidation account for the benefit of
Eligible Account Holders and Supplemental Eligible Account
Holders will be duly established in accordance with the
requirements of the MHC Regulations.
(l) The Company, the MHC and the Bank have good and marketable
title to all real property and good title to all other assets
material to the business of the Company, the MHC and the Bank,
taken as a whole, and to those properties and assets described
in the Registration Statement and Prospectus as owned by them,
free and clear of all liens, charges, encumbrances or
restrictions, except such as are described in the Registration
Statement and Prospectus, or are not material to the business
of the Company, the MHC and the Bank, taken as a whole; and
all of the leases and subleases material to the business of
the Company, the MHC and the Bank, taken as a whole, under
which the Company, the MHC or the Bank hold properties,
including those described in the Registration Statement and
Prospectus, are in full force and effect.
(m) The Company and the Bank have received an opinion of their
special counsel, Elias, Matz, Xxxxxxx & Xxxxxxx L.L.P., with
respect to the federal income tax consequences of the
Reorganization and the opinions of KPMG LLP with respect to
New York State income tax consequences of the Reorganization
and the federal income tax consequences of the proposed
establishment of, and contribution to, the Foundation; all
material aspects of the opinions of Elias, Matz, Xxxxxxx &
Xxxxxxx L.L.P., and KPMG LLP are accurately summarized in the
Registration Statement and will be accurately summarized in
the Prospectus; and further represent and warrant that the
facts upon which such opinions are based are truthful,
accurate and complete.
(n) The Company, the MHC and the Bank have all such power,
authority, authorizations, approvals and orders as may be
required to enter into this Agreement, to carry out the
provisions and conditions hereof and to issue and sell the
Shares to be sold by the Company, and to issue and contribute
the Foundation Shares and any related cash contribution,
subject to satisfaction of conditions imposed by the
Department, the FDIC and the Federal Reserve Bank in
connection with their respective approvals of the
Reorganization Applications and the Holding Company
Application as the case may be. The consummation of the
Reorganization, the execution, delivery and
9
performance of this Agreement and the consummation of the
transactions herein contemplated have been duly and validly
authorized by all necessary corporate action on the part of
the Company, the MHC and the Bank and this Agreement has been
validly executed and delivered by the Company, the MHC and the
Bank and is the valid, legal and binding agreement of the
Company, the MHC and the Bank enforceable in accordance with
its terms (except as the enforceability thereof may be limited
by bankruptcy, insolvency, moratorium, reorganization or
similar laws relating to or affecting the enforcement of
creditors' rights generally or the rights of creditors of
savings bank holding companies, the accounts of whose
subsidiaries are insured by the FDIC or by general equity
principles regardless of whether such enforceability is
considered in a proceeding in equity or at law, and except to
the extent if any, that the provisions of Sections 8 and 9
hereof may be unenforceable as against public policy).
(o) The Company, the MHC and the Bank are not in violation of any
directive received from the Department, the FDIC, or any other
agency to make any material change in the method of conducting
their businesses so as to comply in all material respects with
all applicable statutes and regulations (including, without
limitation, regulations, decisions, directives and orders of
the Department and the FDIC) and, except as may be set forth
in the Registration Statement and the Prospectus, there is no
suit or proceeding or charge or action before or by any court,
regulatory authority or governmental agency or body, pending
or, to the knowledge of the Company, the MHC or the Bank,
threatened, which might materially and adversely affect the
Reorganization, the performance of this Agreement or the
consummation of the transactions contemplated in the Plan and
as described in the Registration Statement and the Prospectus
or which might result in any material adverse change in the
condition (financial or otherwise), earnings, capital or
properties of the Company, the MHC and the Bank, or which
would materially affect their properties and assets.
(p) The financial statements, schedules and notes related thereto
which are included in the Prospectus fairly present the
balance sheet, income statement, statement of changes in
equity and cash flows of the Bank at the respective dates
indicated and for the respective periods covered thereby and
comply as to form in all material respects with the applicable
accounting requirements of the 1933 Act Regulations and the
Department and generally accepted accounting principles
(including those requiring the recording of certain assets at
their current market value). Such financial statements,
schedules and notes related thereto have been prepared in
accordance with generally accepted accounting principles
consistently applied through the periods involved, present
fairly in all material respects the information required to be
stated therein and are consistent with the most recent
financial statements and other reports filed by the Bank with
its supervisory and regulatory
10
authorities. 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
of the Bank included in the Prospectus, and as to the pro
forma adjustments, the adjustments described therein have been
properly applied on the basis described therein.
(q) Since the respective dates as of which information is given in
the Registration Statement including the Prospectus: (i) there
has not been any material adverse change, financial or
otherwise, in the condition of the Company, the MHC or the
Bank considered as one enterprise, or in the earnings, capital
or properties of the Company, the MHC or the Bank, whether or
not arising in the ordinary course of business; (ii) there has
not been any material increase in the long-term debt of the
Bank or in the principal amount of the Bank's assets which are
classified by the Bank as substandard, doubtful or loss or in
loans past due 90 days or more or real estate acquired by
foreclosure, by deed-in-lieu of foreclosure or deemed
in-substance foreclosure or any material decrease in retained
earnings or total assets of the Bank nor has the Company, the
MHC or the Bank issued any securities (other than in
connection with the incorporation of the Company) or incurred
any liability or obligation for borrowing other than in the
ordinary course of business; (iii) there have not been any
material transactions entered into by the Company, the MHC or
the Bank; (iv) there has not been any material adverse change
in the aggregate dollar amount of the Bank's deposits or its
net worth; (v) there has been no material adverse change in
the Company's, the MHC's or the Bank's relationship with its
insurance carriers, including, without limitation,
cancellation or other termination of the Company's, the MHC's
or the Bank's fidelity bond or any other type of insurance
coverage; (vi) except as disclosed in the Prospectus there has
been no material change in management of the Company, the MHC
or the Bank, neither of which has any material undisclosed
liability of any kind, contingent or otherwise; (vii) the
Company, the MHC or the Bank has not sustained any material
loss or interference with its respective business or
properties from fire, flood, windstorm, earthquake, accident
or other calamity, whether or not covered by insurance; (viii)
the Company, the MHC or the Bank is not in default in the
payment of principal or interest on any outstanding debt
obligations; (ix) the capitalization, liabilities, assets,
properties and business of the Company, the MHC and the Bank
conform in all material respects to the descriptions thereof
contained in the Prospectus; and (x) neither the Company, the
MHC nor the Bank has any material contingent liabilities,
except as set forth in the Prospectus. All documents made
available to or delivered or to be made available to or
delivered by the Bank, the MHC or the Company or their
representatives in connection with the issuance and sale of
the Shares, including records of account holders, depositors
and other members of the Bank, or in connection with the
Agent's
11
exercise of due diligence, except for those documents which
were prepared by parties other than the Bank, the MHC, the
Company or their representatives, to the best knowledge of the
Bank, the MHC and the Company, were on the dates on which they
were delivered, or will be on the dates on which they are to
be delivered, true, complete and correct in all material
respects.
(r) As of the date hereof and as of the Closing Date, neither the
Company, the MHC nor the Bank is (i) in violation of its
certificate of incorporation or charter or bylaws,
respectively (and the Bank will not be in violation of its
charter or bylaws in capital stock form upon consummation of
the Reorganization), or (ii) in default in the performance or
observance of any material obligation, agreement, covenant, or
condition contained in any material contract, lease, loan
agreement, indenture or other instrument to which it is a
party or by which it or any of its property may be bound; the
consummation of the Reorganization, the execution, delivery
and performance of this Agreement and the consummation of the
transactions herein contemplated have been duly and validly
authorized by all necessary corporate action on the part of
the Company, the MHC and the Bank and this Agreement has been
validly executed and delivered by the Company, the MHC and the
Bank and is a valid, legal and binding Agreement of the
Company, the MHC and the Bank enforceable in accordance with
its terms, except as the enforceability thereof may be limited
by (i) bankruptcy, insolvency, reorganization, moratorium,
conservatorship, receivership or other similar laws now or
hereafter in effect relating to or affecting the enforcement
of creditors' rights generally or the rights of creditors of
savings institutions, (ii) general equitable principles, (iii)
laws relating to the safety and soundness of insured
depository institutions, and (iv) applicable law or public
policy with respect to the indemnification and/or contribution
provisions contained herein, and except that no representation
or warranty need be made as to the effect or availability of
equitable remedies or injunctive relief (regardless of whether
such enforceability is considered in a proceeding in equity or
at law). The consummation of the transactions herein
contemplated will not: (i) conflict with or constitute a
breach of, or default under, or result in the creation of any
material lien, charge or encumbrance (with the exception of
the liquidation account established in the Reorganization)
upon any of the assets of the Company, the MHC or the Bank
pursuant to the certificate of incorporation of the Company or
the charter and bylaws of the Bank and the MHC (in either
mutual or capital stock form), or any material contract, lease
or other instrument to which the Company, the MHC or the Bank
has a beneficial interest, or any applicable law, rule,
regulation or order; (ii) violate any authorization, approval,
judgement, decree, order, statute, rule or regulation
applicable to the Company, the MHC or the Bank, except for
such violations which would not have a material adverse effect
on the financial condition and results of
12
operations of the Company, the MHC and the Bank on a
consolidated basis; or (iii) with the exception of the
liquidation account established in the Reorganization, result
in the creation of any material lien, charge or encumbrance
upon any property of the Company, the MHC or the Bank.
(s) No default exists, and no event has occurred which with notice
or lapse of time, or both, would constitute a default, on the
part of the Company, the MHC or the Bank in the due
performance and observance of any term, covenant or condition
of any indenture, mortgage, deed of trust, note, bank loan or
credit agreement or any other instrument or agreement to which
the Company, the MHC or the Bank is a party or by which any of
them or any of their property is bound or affected, except
such defaults which would not have a material adverse affect
on the financial condition or results of operations of the
Company, the MHC and the Bank on a consolidated basis; such
agreements are in full force and effect; and no other party to
any such agreements has instituted or, to the best knowledge
of the Company, the MHC and the Bank, threatened any action or
proceeding wherein the Company, the MHC or the Bank would or
might be alleged to be in default thereunder.
(t) Upon consummation of the Reorganization, the authorized,
issued and outstanding equity capital of the Company will be
within the range set forth in the Prospectus under the caption
"Capitalization," and no Shares have been or will be issued
and outstanding prior to the Closing Date; the Shares and the
Foundation Shares will have been duly and validly 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 in the Prospectus,
will be duly and validly issued, fully paid and
non-assessable, except for shares purchased by the ESOP with
funds borrowed from the Company to the extent payment therefor
in cash has not been received by the Company; except to the
extent that subscription rights and priorities pursuant
thereto exist pursuant to the Plan, no preemptive rights exist
with respect to the Shares or the Foundation Shares; and the
terms and provisions of the Shares and the Foundation Shares
will conform in all material respects to the description
thereof contained in the Registration Statement and the
Prospectus. To the best knowledge of the Company, the MHC and
the Bank, upon the issuance of the Shares and the Foundation
Shares, good title to the Shares and the Foundation Shares
will be transferred from the Company to the purchasers thereof
(or the Foundation, as appropriate) against payment therefor,
subject to such claims as may be asserted against the
purchasers thereof by third-party claimants.
(u) 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 Shares,
except for the approval of the Commission, the
13
Department, the FDIC, the Federal Reserve Bank and any
necessary qualification, notification, registration or
exemption under the securities or blue sky laws of the various
states in which the Shares are to be offered, and except as
may be required under the rules and regulations of the NASD
and or The Nasdaq Stock Market.
(v) KPMG LLP which has certified the audited financial statements
and schedules of the Bank included in the Prospectus, has
advised the Company, the MHC and the Bank in writing that they
are, with respect to the Company, the MHC and the Bank,
independent public accountants within the meaning of the Code
of Professional Ethics of the American Institute of Certified
Public Accountants and applicable regulations of the
Department and the FDIC.
(w) RP Financial LC, which has prepared the Appraisal as of
___________, 1999 (as amended or supplemented, if so amended
or supplemented), has advised the Company in writing that it
is independent of the Company, the MHC and the Bank within the
meaning of the MHC Regulations and the BHCA.
(x) The Company, the MHC and the Bank have timely filed all
required federal, state and local tax returns; the Company,
the MHC and the Bank have paid all taxes that have become due
and payable in respect of such returns, except where permitted
to be extended, have made adequate reserves for similar future
tax liabilities and no deficiency has been asserted with
respect thereto by any taxing authority.
(y) The Bank is in compliance in all material respects with the
applicable financial record-keeping and reporting requirements
of the Currency and Foreign Transactions Reporting Act of
1970, as amended, and the regulations and rules thereunder.
(z) To the knowledge of the Company, the MHC and the Bank, neither
the Company, the MHC, the Bank nor employees of the Company,
the MHC or the Bank have made any payment of funds of the MHC,
the Company or the Bank as a loan for the purchase of the
Shares 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.
(aa) Prior to the Reorganization, neither the Company, the MHC nor
the Bank has: (i) issued any securities within the last 18
months (except for notes to evidence other bank loans and
reverse repurchase agreements or other liabilities in the
ordinary course of business or as described in the
Prospectus); (ii) had any material dealings within the 12
months prior to the date hereof with any member of the NASD,
or any person related to or associated with such member, other
than discussions and meetings relating
14
to the proposed Offering and routine purchases and sales of
United States government and agency securities; (iii) entered
into a financial or management consulting agreement except as
contemplated hereunder; and (iv) engaged any intermediary
between the Agent and the Company, the MHC and the Bank in
connection with the offering of the Shares, and no person is
being compensated in any manner for such service. Appropriate
arrangements have been made for placing the funds received
from subscriptions for Shares in a special interest-bearing
account with the Bank until all Shares are sold and paid for,
with provision for refund to the purchasers in the event that
the Reorganization is not completed for whatever reason or for
delivery to the Company if all Shares are sold.
(bb) The Company, the MHC and the Bank have not relied upon the
Agent or its legal counsel or other advisors for any legal,
tax or accounting advice in connection with the
Reorganization.
(cc) The Company is not required to be registered under the
Investment Company Act of 1940, as amended.
(dd) Any certificates signed by an officer of the Company, the MHC
or the Bank pursuant to the conditions of this Agreement and
delivered to the Agent or their counsel that refers to this
Agreement shall be deemed to be a representation and warranty
by the Company, the MHC or the Bank to the Agent as to the
matters covered thereby with the same effect as if such
representation and warranty were set forth herein.
(ee) The Foundation has been or will be duly incorporated and is or
will be validly existing as a private charitable foundation in
good standing under the laws of the State of Delaware with
corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the
Prospectus; the Foundation will not be a bank holding company
within the meaning of 12 C.F.R. Section 1841 as a result of
the issuance of the Foundation Shares to it in accordance with
the terms of the Plan and in the amounts as described in the
Prospectus; to the knowledge of the Bank, the MHC and the
Company, all approvals required to establish the Foundation
and to contribute the Foundation Shares thereto and cash in an
amount equal to 4.0% of the Shares sold in the Offering have
been obtained as described in the Prospectus; except as
specifically disclosed in the Prospectus, there are no
agreements and/or understandings, written or oral or
otherwise, between the Company, the MHC, and/or the Bank and
the Foundation with respect to the control, directly or
indirectly, over the voting and the acquisition or disposition
of the shares of Common Stock to be contributed by the Company
to the Foundation; the Foundation Shares to be issued to the
Foundation in accordance with the Plan and as described in the
Prospectus will have been duly authorized for issuance and,
when issued and contributed
15
by the Company pursuant to the Plan, will be duly and validly
issued and fully paid and non-assessable.
Section 5. Covenants of the Company, the MHC and the Bank. The Company,
the MHC and the Bank hereby jointly and severally covenant with FBR as follows:
(a) The Company will not, at any time after the date the
Registration Statement is declared effective, file any
amendment or supplement to the Registration Statement without
providing the Agent and its counsel an opportunity to review
such amendment or supplement or file any amendment or
supplement to which amendment or supplement the Agent or its
counsel shall reasonably object.
(b) The MHC and Bank will not, at any time after the
Reorganization Applications are approved by the Department and
the FDIC, file any amendment or supplement to such
Reorganization Applications without providing the Agent and
its counsel an opportunity to review such amendment or
supplement or file any amendment or supplement to which
amendment or supplement the Agent or its counsel shall
reasonably object.
(c) The Company will not, at any time before the Holding Company
Application is approved by the Federal Reserve Bank, file any
amendment or supplement to such Holding Company Application
without providing the Agent and its counsel an opportunity to
review the nonconfidential portions of such amendment or
supplement or file any amendment or supplement to which
amendment or supplement the Agent or its counsel shall
reasonably object.
(d) The Company, the MHC and the Bank will use their best efforts
to cause any post-effective amendment to the Registration
Statement to be declared effective by the Commission and any
post-effective amendment to the Reorganization Applications to
be approved by the Department and the FDIC and will
immediately upon receipt of any information concerning the
events listed below notify the Agent: (i) when the
Registration Statement, as amended, has become effective; (ii)
when the Reorganization Applications have been approved by the
Department and the FDIC; (iii) any comments from the
Commission, the Department, the FDIC or any other governmental
entity with respect to the Reorganization or the transactions
contemplated by this Agreement; (iv) of the request by the
Commission, the Department, the FDIC or any other governmental
entity for any amendment or supplement to the Registration
Statement or the Reorganization Applications or for additional
information; (v) of the issuance by the Commission, the
Department, the FDIC or any other governmental entity of any
order or other action suspending the Offering or the use of
the Registration Statement or the Prospectus or any other
filing of the Company, the MHC or the Bank under the MHC
Regulations, or other applicable law, or the threat of any
such
16
action; (vi) the issuance by the Commission, the Department,
the FDIC or any authority of any stop order suspending the
effectiveness of the Registration Statement or of the
initiation or threat of initiation or threat of any
proceedings for that purpose; or (vii) of the occurrence of
any event mentioned in paragraph (h) below. The Company, the
MHC and the Bank will make every reasonable effort (i) to
prevent the issuance by the Commission, the Department, the
FDIC or any state authority of any such order and, if any such
order shall at any time be issued, (ii) to obtain the lifting
thereof at the earliest possible time.
(e) The Company, the MHC and the Bank will deliver to the Agent
and to its counsel two conformed copies of the Registration
Statement, the MHC Application, the Notice, the Merger
Application and the Holding Company Application, as originally
filed and of each amendment or supplement thereto, including
all exhibits. Further, the Company, the MHC and the Bank will
deliver such additional copies of the foregoing documents to
counsel to the Agent as may be required for any NASD and "blue
sky" filings.
(f) The Company, the MHC and the Bank will furnish to the Agent,
from time to time during the period when the Prospectus (or
any later prospectus related to this offering) is required to
be delivered under the 1933 Act or the Securities Exchange Act
of 1934 (the "1934 Act"), such number of copies of such
Prospectus (as amended or supplemented) as the Agent may
reasonably request for the purposes contemplated by the 1933
Act, the 1933 Act Regulations, the 1934 Act or the rules and
regulations promulgated under the 1934 Act (the "1934 Act
Regulations"). The Company authorizes the Agent to use the
Prospectus (as amended or supplemented, if amended or
supplemented) in any lawful manner contemplated by the Plan in
connection with the sale of the Shares by the Agent.
(g) The Company, the MHC and the Bank will comply with any and all
material terms, conditions, requirements and provisions with
respect to the Reorganization, and the transactions
contemplated thereby, including those conditions relating to
the operation of the Foundation, imposed by the Commission,
the Department, the FDIC or the MHC Regulations, and by the
1933 Act, the 1933 Act Regulations, the 1934 Act and the 1934
Act Regulations to be complied with prior to or subsequent to
the Closing Date and when the Prospectus is required to be
delivered, and during such time period the Company, the MHC
and the Bank will comply, at their own expense, with all
material requirements imposed upon them by the Commission, the
Department, the FDIC or the Federal Reserve Bank or the MHC
Regulations, and by the 1933 Act, the 1933 Act Regulations,
the 1934 Act and the 1934 Act Regulations, including, without
limitation, Rule 10b-5 under the 1934 Act, in each case as
from time to time in force, so far as
17
necessary to permit the continuance of sales or dealing in the
Common Stock during such period in accordance with the
provisions hereof and the Prospectus.
(h) If, at any time during the period when the Prospectus relating
to the Shares is required to be delivered, any event relating
to or affecting the Company, the MHC or the Bank shall occur,
as a result of which it is necessary or appropriate, in the
opinion of counsel for the Company, the MHC and the Bank or in
the reasonable opinion of the Agent's counsel, to amend or
supplement the Registration Statement or Prospectus in order
to make the Registration Statement or Prospectus not
misleading in light of the circumstances existing at the time
the Prospectus is delivered to a purchaser, the Company, the
MHC and the Bank will immediately so inform the Agent and
prepare and file, at their own expense, with the Commission,
the Department and the FDIC and furnish to the Agent a
reasonable number of copies of an amendment or amendments of,
or a supplement or supplements to, the Registration Statement
or Prospectus (in form and substance reasonably satisfactory
to the Agent and its counsel after a reasonable time for
review) which will amend or supplement the Registration
Statement or Prospectus so that as amended or supplemented it
will not contain an untrue statement of a material fact or
omit to state a material fact necessary in order to make the
statements therein, in light of the circumstances existing at
the time the Prospectus is delivered to a purchaser, not
misleading. For the purpose of this Agreement, the Company,
the MHC and the Bank each will timely furnish to the Agent
such information with respect to itself as the Agent may from
time to time reasonably request.
(i) The Company, the MHC and the Bank will take all necessary
actions, in cooperating with the Agent, and furnish to
whomever the Agent may direct, such information as may be
required to qualify or register the Shares for offering and
sale by the Company or to exempt such Shares from
registration, or to exempt the Company as a broker-dealer and
its officers, trustees and employees as broker-dealers or
agents under the applicable securities or blue sky laws of
such jurisdictions in which the Shares are required under the
MHC Regulations to be sold or as the Agent and the Company,
the MHC and the Bank may reasonably agree upon; provided,
however, that the Company shall not be obligated to file any
general consent to service of process, to qualify to do
business in any jurisdiction in which it is not so qualified,
or to register its trustees or officers as brokers, dealers,
salesmen or agents in any jurisdiction. In each jurisdiction
where any of the Shares shall have been qualified or
registered as above provided, the Company will make and file
such statements and reports in each fiscal period as are or
may be required by the laws of such jurisdiction.
18
(j) The Company, the MHC and the Bank will not sell or issue,
contract to sell or otherwise dispose of, for a period of 90
days after the Closing Date, without the Agent's prior written
consent, any Common Stock other than the Shares or the
Foundation Shares or other than in connection with any plan or
arrangement described in the Prospectus, including existing
stock benefit plans.
(k) The Company shall register its Common Stock under Section
12(g) of the 1934 Act on or prior to the Closing Date pursuant
to the Plan and shall request that such registration be
effective prior to or upon completion of the Reorganization.
The Company shall maintain the effectiveness of such
registration for not less than three years or such shorter
period as may be required by the Department or the FDIC.
(l) During the period during which the Company's Common Stock is
registered under the 1934 Act or for three (3) years from the
date hereof, whichever period is greater, the Company will
furnish to its shareholders as soon as practicable after the
end of each fiscal year an annual report of the Company
(including a consolidated balance sheet and statements of
consolidated income, shareholders' equity and cash flows of
the Company and its subsidiaries as at the end of and for such
year, certified by independent public accountants in
accordance with Regulation S-X under the 1933 Act and the 1934
Act).
(m) During the period of three years from the date hereof, the
Company will furnish to the Agent: (i) as soon as practicable
after such information is publicly available, a copy of each
report of the Company furnished to or filed with the
Commission under the 1934 Act or any national securities
exchange or system on which any class of securities of the
Company is listed or quoted (including, but not limited to,
reports on Forms 10-K, 10-Q and 8-K and all proxy statements
and annual reports to stockholders), (ii) a copy of each other
non-confidential report of the Company mailed to its
stockholders or filed with the Commission, the Department, the
FDIC or any other supervisory or regulatory authority or any
national securities exchange or system on which any class of
securities of the Company is listed or quoted, each press
release and material news items and additional documents and
information with respect to the Company, MHC or the Bank as
the Agent may reasonably request; and (iii) from time to time,
such other non confidential information concerning the
Company, the MHC or the Bank as the Agent may reasonably
request.
(n) The Company, the MHC and the Bank will use the net proceeds
from the sale of the Shares in the manner set forth in the
Prospectus under the caption "How We Intend to Use the
Proceeds."
19
(o) Other than as permitted by the MHC Regulations, the 1933 Act,
the 1933 Act Regulations, and the laws of any state in which
the Shares are registered or qualified for sale or exempt from
registration, neither the Company, the MHC nor the Bank will
distribute any prospectus, offering circular or other offering
material in connection with the offer and sale of the Shares.
(p) The Company will use its best efforts to (i) encourage and
assist a market maker to establish and maintain a market for
the Shares and (ii) list and maintain quotation of the Shares
on a national or regional securities exchange or on the Nasdaq
Stock Market effective on or prior to the Closing Date.
(q) The Bank will maintain appropriate arrangements for depositing
all funds received from persons mailing subscriptions for or
orders to purchase Shares in the Offering on an
interest-bearing basis at the rate described in the Prospectus
until the Closing Date and satisfaction of all conditions
precedent to the release of the Bank's obligation to refund
payments received from persons subscribing for or ordering
Shares in the Offering in accordance with the Plan and as
described in the Prospectus or until refunds of such funds
have been made to the persons entitled thereto or withdrawal
authorizations canceled in accordance with the Plan and as
described in the Prospectus. The Bank will maintain such
records of all funds received to permit the funds of each
subscriber to be separately insured by the FDIC (to the
maximum extent allowable) and to enable the Bank to make the
appropriate refunds of such funds in the event that such
refunds are required to be made in accordance with the Plan
and as described in the Prospectus.
(r) The Company will promptly take all necessary action to
register as a bank holding company under the BHCA within 180
days of the Closing Date.
(s) The Company, the MHC 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
NASD's "Interpretation Relating to Free Riding and
Withholding."
(t) Neither the Company, the MHC nor the Bank will amend the Plan
without notifying the Agent prior thereto.
(u) The Company shall assist the Agent, if necessary, in
connection with the allocation of the Shares in the event of
an oversubscription and shall provide
20
the Agent with any information necessary to assist the Company
in allocating the Shares in such event and such information
shall be accurate and reliable in all material respects. The
Agent shall be entitled to rely on such information and shall
have no liability in respect of its reasonable reliance
thereon, including without limitation, no liability for or
related to any denial or grant of a subscription in whole or
in part.
(v) Prior to the Closing Date, the Company, the MHC and the Bank
will inform the Agent of any event or circumstances of which
it is aware as a result of which the Registration Statement
and/or Prospectus, as then amended or supplemented, would
contain an untrue statement of a material fact or omit to
state a material fact necessary in order to make the
statements therein not misleading.
(w) Subsequent to the date the Registration Statement is declared
effective by the Commission and prior to the Closing Date,
except as otherwise may be indicated or contemplated therein
or set forth in an amendment or supplement thereto, neither
the Company, the MHC nor the Bank will have: (i) issued any
securities or incurred any liability or obligation, direct or
contingent, for borrowed money, except borrowings from the
same or similar sources indicated in the Prospectus in the
ordinary course of its business, or (ii) entered into any
transaction which is material in light of the business and
properties of the Company and the Bank, taken as a whole.
(x) The facts and representations provided to Elias, Matz, Xxxxxxx
& Xxxxxxx L.L.P., by the Bank, the MHC and the Company and
upon which Elias, Matz, Xxxxxxx & Xxxxxxx L.L.P., will base
its opinion under Section 7(c)(1) are and will be truthful,
accurate and complete.
(y) The Company, the MHC and the Bank shall use their best efforts
to ensure that the Foundation submits within the time frames
required by applicable law a request to the Internal Revenue
Service to be recognized as a tax-exempt organization under
Section 501(c)(3) of the Internal Revenue Code of 1986, as
amended (the "Code"); the Company, the MHC and the Bank will
take no action which will result in the possible loss of the
Foundation's tax-exempt status; and neither the Company, the
MHC nor the Bank will contribute any additional assets to the
Foundation until such time that such additional contributions
will be deductible for federal and state income tax purposes.
Section 6. Payment of Expenses. Whether or not the Reorganization is
completed or the sale of the Shares by the Company is consummated, the Company,
the MHC and the Bank jointly and severally agree to pay or reimburse the Agent
for all expenses incident to the performance of their obligations under this
Agreement, including but not limited to (i) the cost of obtaining all securities
and bank regulatory approvals, (ii) the printing and filing of the Registration
Statement,
21
the Reorganization Applications and the Holding Company Application as
originally filed and of each amendment thereto, (iii) the preparation, issuance
and delivery of the certificates for the Shares to the purchasers in the
Offering, (iv) the fees and disbursements of the Company's, the MHC's and the
Bank's counsel, accountants, conversion agent, appraiser and other advisors, (v)
the qualification of the Shares under securities laws in accordance with the
provisions of Section 5(i) 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 Offering and the
Agent, (vii) the printing and delivery to the Agent of copies of a Blue Sky
Survey, and (viii) the fees and expenses incurred in connection with the listing
of the Common Stock on the Nasdaq Stock Market. In the event the Agent incurs
any such fees and expenses on behalf of the Bank, the MHC or the Company, the
Bank will reimburse the Agent for such fees and expenses whether or not the
Reorganization is consummated; provided, however, that the Agent shall not incur
any substantial expenses on behalf of the Bank, the MHC or the Company pursuant
to this Section without the prior approval of the Bank or the Company.
The Company and the Bank jointly and severally agree to pay certain
expenses incident to the performance of the Agent's obligations under this
Agreement, including (i) the filing fees paid or incurred by the Agent in
connection with all filings with the NASD, (ii) legal fees and expenses of the
Agent's counsel and (iii) all reasonable out of pocket expenses incurred by the
Agent relating to the Offerings, including, without limitation, advertising,
promotional, syndication and travel expenses and fees, provided that should the
expenses in clauses (ii) and/or (iii) above exceed $50,000 in the aggregate, the
Company must approve such expenses above that amount for FBR to be reimbursed.
All fees and expenses to which the Agent is entitled to reimbursement under this
paragraph of this Section 6 shall be due and payable upon receipt by the Company
or the Bank of a written accounting therefor setting forth in reasonable detail
the expenses incurred by the Agent.
Section 7. Conditions to the Agent's Obligations. The obligations of
the Agent hereunder, as to the Shares to be delivered at the Closing Date, are
subject, to the extent not waived in writing by the Agent, to the condition that
all representations and warranties of the Company, the MHC and the Bank herein
are, at and as of the commencement of the Offering and at and as of the Closing
Date, true and correct in all material respects, the condition that the Company,
the MHC and the Bank shall have performed all of their obligations hereunder to
be performed on or before such dates, and to the following further conditions:
(a) At the Closing Date, the Company, the MHC and the Bank shall
have conducted the Reorganization in all material respects in
accordance with the Plan, the MHC Regulations, and all other
applicable laws, regulations, decisions and orders, including
all terms, conditions, requirements and provisions precedent
to the Reorganization imposed upon them by the Department, the
FDIC and the Federal Reserve Bank.
22
(b) The Registration Statement shall have been declared effective
by the Commission and the Reorganization Applications shall be
approved by the Department and the FDIC not later than 5:30
p.m. on the date of this Agreement, or with the Agent's
consent at a later time and date; and at the Closing Date, no
stop order suspending the effectiveness of the Registration
Statement shall have been issued under the 1933 Act or
proceedings therefore initiated or threatened by the
Commission or any state authority, and no order or other
action suspending the authorization of the Prospectus or the
consummation of the Reorganization shall have been issued or
proceedings therefore initiated or, to the Company's, the
MHC's or the Bank's knowledge, threatened by the Commission,
the Department, the FDIC, the Federal Reserve Bank or any
state authority.
(c) At the Closing Date, the Agent shall have received:
(1) The favorable opinion, dated as of the Closing Date and
addressed to the Agent and for its benefit, of Elias, Matz,
Xxxxxxx & Xxxxxxx L.L.P., special counsel for the Company, the
MHC and the Bank, in form and substance to the effect that:
(i) The Company has been duly incorporated
and is validly existing as a corporation under the
laws of the State of Delaware.
(ii) The Company has 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.
(iii) The Bank has been organized and is a
validly existing New York State chartered savings
bank in capital stock form of organization,
authorized to conduct its business and own its
property as described in the Registration Statement
and the Prospectus. All of the outstanding capital
stock of the Bank upon completion of the
Reorganization will be duly authorized and, upon
payment therefor, will be validly issued, fully paid
and non-assessable and will be owned by the Company,
free and clear of any liens, encumbrances, claims or
other restrictions.
(iv) The Bank is a member of the FHLB-New
York. The deposit accounts of the Bank are insured by
the FDIC up to the maximum amount allowed under law
and no proceedings for the termination or revocation
of such insurance are pending or, to such counsel's
Actual Knowledge, threatened; the description of the
liquidation account as set forth in the Prospectus
under the captions "Our Corporate Change and Stock
Offering-Effects of the Corporate Change-Depositors
Rights if We Liquidate," to the extent that such
information constitutes matters of law and legal
conclusions, has been reviewed by such counsel and is
accurately described in all material respects.
23
(v) The MHC has been duly organized and is
validly existing as a New York State chartered mutual
holding company, duly authorized to conduct its
business and own its properties as described in the
Registration Statement and Prospectus.
(vi) Upon consummation of the Reorganization
and the issuance of Foundation Shares to the
Foundation immediately upon completion thereof
subject to compliance with all conditions imposed
upon the Foundation and the contribution thereof by
the Department and the FDIC under the terms of the
Departments approval order and the FDIC's no
objection letter, in an amount as described in the
Prospectus, the authorized, issued and outstanding
capital stock of the Company will be within the range
set forth in the Prospectus under the caption
"Capitalization," and no shares of Common Stock have
been issued prior to the Closing Date; at the time of
the Reorganization, the Shares subscribed for
pursuant to the Offering and the Foundation Shares
will have been duly and validly 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
Prospectus, will be duly and validly issued and fully
paid and non-assessable; the issuance of the Shares
and the Foundation Shares is not subject to
preemptive rights and the terms and provisions of the
Shares and the Foundation Shares conform in all
material respects to the description thereof
contained in the Prospectus. To such counsel's Actual
Knowledge, upon the issuance of the Shares and the
Foundation Shares, good title to the Shares and the
Foundation Shares will be transferred by the Company
to the purchasers thereof against payment therefor,
subject to such claims as may be asserted against the
purchasers thereof by third-party claimants.
(vii) The execution and delivery of this
Agreement and the consummation of the transactions
contemplated hereby, including the establishment of
the Foundation and the contribution thereto of the
Foundation Shares, have been duly and validly
authorized by all necessary action on the part of the
Company, the MHC and the Bank; and this Agreement is
a valid and binding obligation of the Company, the
MHC and the Bank, enforceable in accordance with its
terms, except as the enforceability thereof may be
limited by (i) bankruptcy, insolvency,
reorganization, moratorium, conservatorship,
receivership or other similar laws now or hereafter
in effect relating to or affecting the enforcement of
creditors' rights generally or the rights of
creditors of savings institutions, the deposits of
which are insured by the FDIC and their holding
companies, (ii) general equitable principles, (iii)
laws relating to the safety and soundness of insured
depository institutions and their holding companies,
and (iv) applicable law or public policy with respect
to the indemnification and/or contribution provisions
contained herein, including without limitation the
provisions of Sections 23A and 23B of the Federal
Reserve Act and except
24
that no opinion need be expressed as to the effect or
availability of equitable remedies or injunctive
relief (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
(viii) The MHC Application (including
therewith, the establishment of the Foundation and
the contribution of the Foundation Shares thereto)
and the Notice have been approved by the Department
and the FDIC, the Merger Application has been
approved by the FDIC, and the Prospectus has been
authorized for use by the Department. The Federal
Reserve Bank has approved the Holding Company
Application and issued its order of approval under
the bank holding company provisions of the BHCA, the
purchase by the Company of all of the issued and
outstanding capital stock of the Bank has been
authorized by the Department and the FDIC, and no
action has been taken, and to such counsel's Actual
Knowledge none is pending or threatened, to revoke
any such authorization or approval.
(ix) The Plan and the establishment and
funding of the Foundation has been duly adopted by
the required vote of the trustees of the Company, the
MHC and the Bank, and based upon the certificate of
the inspector of election, by the members of the
Bank.
(x) Subject to the satisfaction of the
conditions to the Department's and the FDIC's
approval of the Reorganization and the Federal
Reserve Bank's approval of the Holding Company
Application, no further approval, registration,
authorization, consent or other order of any federal
regulatory agency is required in connection with the
execution and delivery of this Agreement, the
issuance of the Shares and the Foundation Shares and
the consummation of the Reorganization, except as may
be required under the securities or blue sky laws of
various jurisdictions (as to which no opinion need be
rendered) and except as may be required under the
rules and regulations of the NASD and/or the Nasdaq
Stock Market (as to which no opinion need be
rendered). To such counsel's Actual Knowledge, the
Reorganization has been consummated in all material
respects in accordance with MHC Regulations, except
that no opinion is rendered with respect to (a) the
MHC Application, the Registration Statement or
Prospectus, which are covered by other clauses of
this opinion, (b) the satisfaction of the
post-Reorganization conditions in the MHC Regulations
or in the Department or FDIC approvals of the MHC
Application and the Federal Reserve Bank's approval
of the Holding Company Application, (c) the
securities or "blue sky" laws of various
jurisdictions, and (d) the rules and regulations of
the NASD and or the Nasdaq Stock Market.
(xi) The Registration Statement is effective
under the 1933 Act, and no stop order suspending the
effectiveness has been issued under the
25
1933 Act or proceedings therefor initiated or, to
such counsel's Actual Knowledge, threatened by the
Commission.
(xii) At the time the MHC Application,
including the Prospectus contained therein, and the
Notice and Merger Application were approved by the
Department and the FDIC, the MHC Application,
including the Prospectus contained therein, and the
Notice and Merger Application complied as to form in
all material respects with the requirements of the
MHC Regulations, federal law and all applicable rules
and regulations promulgated thereunder (other than
the financial statements, the notes thereto, and
other tabular, financial, statistical and appraisal
data included therein, as to which no opinion need be
rendered).
(xiii) At the time that the Registration
Statement became effective, (i) the Registration
Statement (as amended or supplemented, if so amended
or supplemented) (other than the financial
statements, the notes thereto, and other tabular,
financial, statistical and appraisal data included
therein, as to which no opinion need be rendered),
complied as to form in all material respects with the
requirements of the 1933 Act and the 1933 Act
Regulations, and (ii) the Prospectus (other than the
financial statements, the notes thereto, and other
tabular, financial, statistical and appraisal data
included therein, as to which no opinion need be
rendered) complied as to form in all material
respects with the requirements of the 1933 Act, the
1933 Act Regulations, the MHC Regulations and
applicable law.
(xiv) The terms and provisions of the Shares
of the Company conform, in all material respects, to
the description thereof contained in the Registration
Statement and Prospectus, and the form of certificate
used to evidence the Shares is in due and proper
form.
(xv) There are no legal or governmental
proceedings pending or threatened which are required
to be disclosed in the Registration Statement and
Prospectus, other than those disclosed therein, and
to such counsel's Actual Knowledge, all pending legal
and governmental proceedings to which the Company,
the MHC, the Bank or the Foundation is a party or of
which any of their property is the subject, which are
not described in the Registration Statement and the
Prospectus, including ordinary routine litigation
incidental to the Company's, the MHC's or the Bank's
business, are, considered in the aggregate, not
material.
(xvi) To such counsel's Actual Knowledge,
there are no material contracts, indentures,
mortgages, loan agreements, notes, leases or other
instruments required to be described or referred to
in the MHC Application, the Registration Statement or
the Prospectus or required to be filed as exhibits
thereto other than those described or referred to
therein or filed as
26
exhibits thereto in the MHC Application, the
Registration Statement or the Prospectus. The
description in the MHC Application, the Registration
Statement and the Prospectus of such documents and
exhibits is accurate in all material respects and
fairly presents the information required to be shown.
(xvii) To such counsel's Actual Knowledge,
the Company, the MHC and the Bank have conducted the
Reorganization, in all material respects, in
accordance with all applicable requirements of the
Plan and applicable law, except that no opinion is
rendered with respect to (a) the MHC Application, the
Registration Statement or Prospectus, which are
covered by other clauses of this opinion, (b) the
satisfaction of the post-Reorganization conditions in
the MHC Regulations or in the Department and FDIC
approvals of the MHC Application and the Federal
Reserve Bank's approval of the Holding Company
Application, (c) the securities or "blue sky" laws of
various jurisdictions, and (d) the rules and
regulations of the NASD and the Nasdaq Stock Market.
The Plan complies in all material respects with all
applicable federal laws, rules, regulations,
decisions and orders including, but not limited to,
the MHC Regulations; no order has been issued by the
Department, the Commission, the FDIC, the Federal
Reserve Bank or any state authority to suspend the
Offering or the use of the Prospectus, and no action
for such purposes has been instituted or, to such
counsel's Actual Knowledge, threatened by the
Department, the Commission, the FDIC, the Federal
Reserve Bank or any state authority and no person has
sought to obtain regulatory or judicial review of the
final action of the Department, the FDIC or the
Federal Reserve Bank, approving the Plan, the MHC
Application, the Holding Company Application or the
Prospectus.
(xviii) To such counsel's Actual Knowledge,
the Company, the MHC, and the Bank have obtained all
material licenses, permits and other governmental
authorizations currently required for the conduct of
their businesses and all such licenses, permits and
other governmental authorizations are in full force
and effect, and the Company, the MHC and the Bank are
in all material respects complying therewith, except
where the failure to have such licenses, permits and
other governmental authorizations or the failure to
be in compliance therewith would not have a material
adverse effect on the business or operations of the
Bank, the MHC and the Company taken as a whole.
(xix) To such counsel's Actual Knowledge,
neither the Company, the MHC nor the Bank is in
violation of its certificate of incorporation and
bylaws or its Charter and bylaws, as appropriate or,
to such counsel's Actual Knowledge, in default or
violation of any obligation, agreement, covenant or
condition contained in any contract, indenture,
mortgage, loan agreement, note, lease or other
instrument to which it is a party or by which it or
its property may be bound, except for such defaults
or violations which would
27
not have a material adverse impact on the financial
condition or results of operations of the Company,
the MHC and the Bank on a consolidated basis; to such
counsel's Actual Knowledge, the execution and
delivery of this Agreement, the occurrence of the
obligations herein set forth and the consummation of
the transactions contemplated herein 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 or the Bank pursuant
to any material contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which
the Company, the MHC or the Bank 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 or the
Bank are subject (other than the establishment of the
liquidation account); and, such action will not
result in any violation of the provisions of the
certificate of incorporation or bylaws of the Company
or the Charter or bylaws of the MHC or the Bank or,
to such counsel's Actual Knowledge, result in any
violation of any applicable federal law, act,
regulation (except that no opinion with respect to
the securities and blue sky laws of various
jurisdictions or the rules or regulations of the NASD
need be rendered) or order or court order, writ,
injunction or decree.
(xx) The Company's certificate of
incorporation and bylaws comply in all material
respects with the General Corporation Laws of the
State of Delaware. The Bank's and MHC's charter and
bylaws comply in all material respects with the rules
and regulations of the Department.
(xxi) To such counsel's Actual Knowledge,
neither the Company, the MHC nor the Bank is in
violation of any directive from the Department or the
FDIC to make any material change in the method of
conducting its respective business.
(xxii) The information in the Prospectus
under the captions "How We Are Regulated," "Our
Corporate Change and Stock Offering," "Certain
Restrictions on Acquisition of Oswego County Bancorp
and Oswego County Savings" and "Description of
Capital Stock of Oswego County Bancorp," to the
extent that such information constitutes matters of
law, summaries of legal matters, documents or
proceedings, or legal conclusions, has been reviewed
by such counsel and is correct in all material
respects. The description of the Reorganization
process under the caption "Our Corporate Change and
Stock Offering" in the Prospectus has been reviewed
by such counsel and fairly describes such process in
all material respects. The discussion of statutes or
regulations described or referred to in the
Prospectus are accurate summaries and fairly present
the information required to be shown. The information
under the caption "Our Corporate Change and Stock
Offering-Tax Effects of the Corporate Change and
Stock Offering" has been reviewed by such counsel and
fairly describes the opinions rendered by
28
Elias, Matz, Xxxxxxx & Xxxxxxx L.L.P., and KPMG LLP
to the Company, the MHC and the Bank with respect to
such matters.
(xxiii) The Foundation has been duly
incorporated and is validly existing as a non-stock
corporation in good standing under the laws of the
State of Delaware with corporate power and authority
to own, lease and operate its properties and to
conduct its business as described in the Prospectus;
the Foundation is not a bank holding company within
the meaning of BHCA as a result of the issuance of
the Foundation Shares to it in accordance with the
terms of the Plan and in the amounts as described in
the Prospectus; no approvals are required to
establish the Foundation and to contribute the
Foundation Shares and cash amounts thereto as
described in the Prospectus other than those set
forth in the Department approval order or the FDIC
non-objection letter; the Foundation Shares to be
issued to the Foundation in accordance with the Plan
and as described in the Prospectus will have been
duly authorized for issuance and, when issued and
contributed by the Company pursuant to the Plan, will
be duly and validly issued and fully paid and
non-assessable.
In addition, such counsel shall state that
during the preparation of the Reorganization
Applications, the Registration Statement and the
Prospectus, they participated in conferences with
certain officers of, the independent public and
internal accountants for, and other representatives
of the Company, the MHC and the Bank, at which
conferences the contents of the Reorganization
Applications, the Registration Statement and the
Prospectus and related matters were discussed and,
while such counsel have not confirmed the accuracy or
completeness of or otherwise verified the information
contained in the Reorganization Applications, the
Registration Statement or the Prospectus, and do not
assume any responsibility for such information, based
upon such conferences and a review of documents
deemed relevant for the purpose of rendering their
view (relying as to materiality as to factual matters
on certificates of officers and other factual
representations by the Company, the MHC and the
Bank), nothing has come to their attention that would
lead them to believe that the Reorganization
Applications, the Registration Statement, the
Prospectus, or any amendment or supplement thereto
(other than the financial statements, the notes
thereto, and other tabular, financial, statistical
and appraisal data included therein as to which no
view need be rendered) 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, in light of the
circumstances under which they were made, not
misleading.
In giving such opinion, such counsel may rely as to all matters of
fact on certificates of officers or trustees of the Company, the MHC and the
Bank and certificates of public officials. Such counsel's opinion shall be
limited to matters governed by federal, New York and Delaware law.
29
With respect to matters involving the application of New York and Delaware law,
such counsel may rely, to the extent it deems proper and as specified in its
opinion, solely upon the opinion of local counsel. The opinion of Elias, Matz,
Xxxxxxx & Xxxxxxx L.L.P., shall be governed by the Legal Opinion Accord
("Accord") of the American Bar Association Section of Business Law (1991). The
term "Actual Knowledge" as used herein shall have the meaning set forth in the
Accord. For purposes of such opinion, no proceedings shall be deemed to be
pending, no order or stop order shall be deemed to be issued, and no action
shall be deemed to be instituted unless, in each case, a director or executive
officer of the Company, the MHC or the Bank shall have received a copy of such
proceedings, order, stop order or action. In addition, such opinion may be
limited to present statutes, regulations and judicial interpretations and to
facts as they presently exist; in rendering such opinion, such counsel need
assume no obligation to revise or supplement it should the present laws be
changed by legislative or regulatory action, judicial decision or otherwise; and
such counsel need express no view, opinion or belief with respect to whether any
proposed or pending legislation, if enacted, or any proposed or pending
regulations or policy statements issued by any regulatory agency, whether or not
promulgated pursuant to any such legislation, would affect the validity of the
Reorganization or any aspect thereof. Such counsel may assume that any agreement
is the valid and binding obligation of any parties to such agreement other than
the Company, the MHC or the Bank.
The favorable opinion, dated as of the Closing Date and addressed to
the Agent and for their benefit, of the Bank's local counsel, in form and
substance to the effect that, to the best of such counsel's knowledge, (i) the
Company, the MHC and the Bank have good and marketable title to all properties
and assets which are material to the business of the Company, the MHC and the
Bank and to those properties and assets described in the Registration Statement
and Prospectus, as owned by them, free and clear of all liens, charges,
encumbrances or restrictions, except such as are described in the Registration
Statement and Prospectus, or are not material in relation to the business of the
Company, the MHC and the Bank considered as one enterprise; (ii) all of the
leases and subleases material to the business of the Company, the MHC and the
Bank under which the Company, the MHC and the Bank hold properties, as described
in the Registration Statement and Prospectus, are in full force and effect; and
(iii) the Bank is duly qualified as a foreign corporation to transact business
and is in good standing in each jurisdiction in which its ownership of property
or leasing of property or the conduct of its business requires such
qualification, unless the failure to be so qualified in one or more of such
jurisdictions would not have a material adverse effect on the condition,
financial or otherwise, or the business, operations or income of the Bank.
(d) At the Closing Date, the Agent shall have received
the favorable opinion, dated as of the Closing Date,
of Breyer & Associates PC, the Agent's counsel, with
respect to such matters as the Agent may reasonably
require. Such opinion may rely upon the opinions of
counsel to the Company, the MHC and the Bank, and as
to matters of fact, upon certificates of officers and
trustees of the Company, the MHC and the Bank
delivered pursuant hereto or as such counsel shall
reasonably request.
(e) At the Closing Date, the Agent shall receive a
certificate of the Chief Executive Officer and the
Principal Financial and/or Accounting Officer of
30
the Company, the MHC and the Bank in form and
substance reasonably satisfactory to the Agent's
Counsel, dated as of such Closing Date, to the effect
that: (i) they have carefully reviewed the Prospectus
and, in their opinion, at the time the Prospectus
became authorized for final use, the Prospectus did
not contain any untrue statement of a material fact
or omit to state a material fact necessary in order
to make the statements therein, in light of the
circumstances under which they were made, not
misleading; (ii) since the date the Prospectus became
authorized for final use, no event has occurred which
should have been set forth in an amendment or
supplement to the Prospectus which has not been so
set forth, including specifically, but without
limitation, any material adverse change in the
condition, financial or otherwise, or in the
earnings, capital, properties or business of the
Company, the MHC or the Bank, and the conditions set
forth in this Section 7 have been satisfied; (iii)
since the respective dates as of which information is
given in the Registration Statement and the
Prospectus, there has been no material adverse change
in the condition, financial or otherwise, or in the
earnings, capital or properties of the Company, the
MHC or the Bank, independently, or of the Company,
the MHC and the Bank, considered as one enterprise,
whether or not arising in the ordinary course of
business; (iv) the representations and warranties in
Section 4 are true and correct with the same force
and effect as though expressly made at and as of the
Closing Date; (v) the Company, MHC and the Bank have
complied in all material respects with all agreements
and satisfied all conditions on their part to be
performed or satisfied at or prior to the Closing
Date and will comply in all material respects with
all obligations to be satisfied by them after the
Reorganization; (vi) no stop order suspending the
effectiveness of the Registration Statement has been
initiated or, to the best knowledge of the Company,
the MHC or the Bank, threatened by the Commission or
any state authority; (vii) no order suspending the
Offering, the Reorganization, the acquisition of all
of the shares of the Bank by the Company or the
effectiveness of the Prospectus has been issued and
no proceedings for that purpose are pending or, to
the best knowledge of the Company, the MHC or the
Bank, threatened by the Department, the Commission,
the FDIC, the Federal Reserve Bank or any state
authority; and (viii) to the best knowledge of the
Company, the MHC or the Bank, no person has sought to
obtain review of the final action of the Department
or the FDIC approving the Plan.
(f) Prior to and at the Closing Date: (i) in the
reasonable opinion of the Agent, there shall have
been no material adverse change in the condition,
financial or otherwise, or in the earnings or
business of the Company, the MHC or the Bank
independently, or of the Company, the MHC and the
Bank, considered as one enterprise, from that as of
the latest dates as of which such condition is set
forth in the Prospectus other than transactions
referred to or contemplated therein; (ii) the
Company, the MHC or the Bank shall not have received
from the Department or the FDIC any direction (oral
or written) to
31
make any material change in the method of conducting
their business with which it has not complied (which
direction, if any, shall have been disclosed to the
Agent) or which materially and adversely would affect
the business, operations or financial condition or
income of the Company, the MHC and the Bank taken as
a whole; (iii) the Company, the MHC and the Bank
shall not have been in default (nor shall an event
have occurred which, with notice or lapse of time or
both, would constitute a default) under any provision
of any agreement or instrument relating to any
outstanding indebtedness; (iv) no action, suit or
proceeding, at law or in equity or before or by any
federal or state commission, board or other
administrative agency, shall be pending or, to the
knowledge of the Company, the MHC or the Bank,
threatened against the Company, the MHC or the Bank
or affecting any of their properties wherein an
unfavorable decision, ruling or finding would
materially and adversely affect the business,
operations, financial condition or income of the
Company, the MHC and the Bank taken as a whole; and
(v) the Shares have been qualified or registered for
offering and sale or exempted therefrom under the
securities or blue sky laws of the jurisdictions as
the Agent shall have reasonably requested and as
agreed to by the Company, the MHC and the Bank.
(g) Concurrently with the execution of this Agreement,
the Agent shall receive a letter from KPMG LLP dated
as of the date of the Prospectus and addressed to the
Agent: (i) confirming that KPMG LLP is a firm of
independent public accounts within the meaning of
Rule 101 of the Code of Professional Ethics of the
American Institute of Certified Public Accountants
and applicable regulations of the Department and the
FDIC and stating in effect that in its opinion the
financial statements, schedules and related notes of
the Bank as of December 31, 1998 and 1997 and for
each of the two years in the period ended December
31, 1998, as are included in the Prospectus and
covered by their opinion included therein, comply as
to form in all material respects with the applicable
accounting requirements and related published rules
and regulations of the Department and the FDIC and
the 1933 Act; (ii) stating in effect that, on the
basis of certain agreed upon procedures (but not an
audit in accordance with generally accepted auditing
standards) consisting of a reading of the latest
available unaudited interim financial statements of
the Bank prepared by the Bank, a reading of the
minutes of the meetings of the Board of Trustees and
members of the Bank and consultations with officers
of the Bank responsible for financial and accounting
matters, nothing came to their attention which caused
them to believe that: (A) the unaudited financial
statements included in the Prospectus are not in
conformity with the 1933 Act, applicable accounting
requirements of the Department and the FDIC and
generally accepted accounting principles applied on a
basis substantially consistent with that of the
audited financial statements included in the
Prospectus; or (B) during the period from the date of
the latest unaudited financial statements included in
32
the Prospectus to a specified date not more than
three business days prior to the date of the
Prospectus, except as has been described in the
Prospectus, there was any increase in borrowings,
other than normal deposit fluctuations, by the Bank;
or (c) there was any decrease in the net assets of
the Bank at the date of such letter as compared with
amounts shown in the latest unaudited statement of
condition included in the Prospectus; and (iii)
stating that, in addition to the audit referred to in
their opinion included in the Prospectus and the
performance of the procedures referred to in clause
(ii) of this subsection (g), they have compared with
the general accounting records of the Bank, which are
subject to the internal controls of the Bank, the
accounting system and other data prepared by the
Bank, directly from such accounting records, to the
extent specified in such letter, such amounts and/or
percentages set forth in the Prospectus as the Agent
may reasonably request; and they have reported on the
results of such comparisons.
(h) At the Closing Date, the Agent shall receive a letter
dated the Closing Date, addressed to the Agent,
confirming the statements made by KPMG LLP in the
letter delivered by it pursuant to subsection (g) of
this Section 7, the "specified date" referred to in
clause (ii) of subsection (g) thereof to be a date
specified in such letter, which shall not be more
than three business days prior to the Closing Date.
(i) At the Closing Date, the Agent shall receive a letter
from RP Financial LC, dated the date thereof and
addressed to counsel for the Agent (i) confirming
that said firm is independent of the Company, the MHC
and the Bank and is experienced and expert in the
area of corporate appraisals within the meaning of
applicable regulations of the Department and the
FDIC, (ii) stating in effect that the Appraisal
prepared by such firm complies in all material
respects with the applicable requirements of the
Department and the FDIC, and (iii) further stating
that their opinion of the aggregate pro forma market
value of the Company, the MHC and the Bank expressed
in their Appraisal dated as of ___________, 1999, and
most recently updated, remains in effect.
(j) The Company, the MHC and the Bank shall not have
sustained since the date of the latest financial
statements included in the Prospectus any material
loss or interference with its business from fire,
explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or
court or governmental action, order or decree,
otherwise than as set forth or contemplated in the
Registration Statement and Prospectus and since the
respective dates as of which information is given in
the Registration Statement and Prospectus, there
shall not have been any change in the long-term debt
of the Company, the MHC or the Bank other than debt
incurred in relation to the purchase of Shares by the
Bank's Eligible Plans, or any change, or any
development involving a prospective change, in or
affecting
33
the general affairs, management, financial position,
stockholders' equity or results of operations of the
Company or the Bank, otherwise than as set forth or
contemplated in the Registration Statement and
Prospectus, the effect of which, in any such case
described above, is in FBR's reasonable judgment
sufficiently material and adverse as to make it
impracticable or inadvisable to proceed with the
Subscription Offering or the delivery of the Shares
on the terms and in the manner contemplated in the
Prospectus.
(k) At or prior to the Closing Date, the Agent shall
receive: (i) a copy of the letters from the
Department and the FDIC approving the Reorganization
Applications and authorizing the use of the
Prospectus; (ii) a copy of the order from the
Commission declaring the Registration Statement
effective; (iii) certificate from the State of
Delaware evidencing the incorporation and good
standing of the Company; (iv) a certificate from the
FDIC evidencing the Bank's insurance of accounts;
(iv) a certificate from the Department evidencing the
corporate existence of the Bank and the MHC; (v) a
certificate from the FDIC evidencing the Bank's
insurance of accounts; (vi) a certificate of the
FHLB-New York evidencing the Bank's membership
thereof; (vii) a copy of the letter from the Federal
Reserve Bank approving the Company's Holding Company
Application; (viii) a copy of the Bank's New York
State stock charter; and (ix) a copy of the Company's
Delaware certificate of incorporation; and (x) a copy
of the MHC's New York State charter.
(l) Subsequent to the date hereof, there shall not have
occurred any of the following: (i) a suspension or
limitation in trading in securities generally on the
New York Stock Exchange or in the over-the-counter
market, or quotations halted generally on the Nasdaq
Stock Market, or minimum or maximum prices for
trading have been fixed, or maximum ranges for prices
for securities have been required by either of such
exchanges or the NASD or by order of the Commission
or any other governmental authority; (ii) a general
moratorium on the operations of commercial banks,
federal or state savings institutions or a general
moratorium on the withdrawal of deposits from
commercial banks or federal or state savings
institutions declared by federal or state
authorities; (iii) the engagement by the United
States in hostilities which have resulted in the
declaration, on or after the date hereof, of a
national emergency or war; or (iv) a material decline
in the price of equity or debt securities if the
effect of such a declaration or decline, in the
Agent's reasonable judgement, makes it impracticable
or inadvisable to proceed with the Offering or the
delivery of the shares on the terms and in the manner
contemplated in the Registration Statement and the
Prospectus.
34
(m) At or prior to the Closing Date, counsel to the Agent
shall have been furnished with such documents and
opinions as they may reasonably require for the
purpose of enabling them to pass upon the sale of the
Shares and the issuance of the Foundation Shares as
herein contemplated and related proceedings or in
order to evidence the occurrence or completeness of
any of the representations or warranties, or the
fulfillment of any of the conditions, herein
contained; and all proceedings taken by the Company,
the MHC or the Bank in connection with the
Reorganization and the sale of the Shares and the
issuance of the Foundation Shares as herein
contemplated shall be satisfactory in form and
substance to FBR and its counsel.
Section 8. Indemnification.
(a) The Company, the MHC and the Bank jointly and
severally agree to indemnify and hold harmless the
Agent, its respective officers and trustees,
employees and agents, and each person, if any, who
controls the Agent within the meaning of Section 15
of the 1933 Act or Section 20(a) of the 1934 Act,
from and against any and all loss, liability, claim,
damage or expense whatsoever (including but not
limited to settlement expenses), joint or several,
that the Agent or any of them may suffer or to which
the Agent and any such persons may become subject
under all applicable federal or state laws or
otherwise, and to promptly reimburse the Agent and
any such persons upon written demand for any expense
(including reasonable fees and disbursements of
counsel) incurred by the Agent or any of them in
connection with investigating, preparing or defending
any actions, proceedings or claims (whether commenced
or threatened) to the extent such losses, claims,
damages, liabilities or actions: (i) arise out of or
are based upon any untrue statement or alleged untrue
statement of a material fact contained in the
Registration Statement (or any amendment or
supplement thereto), preliminary or final Prospectus
(or any amendment or supplement thereto), the
Reorganization Applications (or any amendments or
supplements thereto), the Holding Company Application
or any instrument or document executed by the
Company, the MHC or the Bank or based upon written
information supplied by the Company, the MHC or the
Bank filed in any state or jurisdiction to register
or qualify any or all of the Shares or to claim an
exemption therefrom, or provided to any state or
jurisdiction to exempt the Company as a broker-dealer
or its officers, trustees and employees as
broker-dealers or agent, under the securities laws
thereof (collectively, the "Blue Sky Application"),
or any document, advertisement, oral statement or
communication ("Sales Information") prepared, made or
executed by or on behalf of the Company, the MHC or
the Bank with their consent or based upon written or
oral information furnished by or on behalf of the
Company, the MHC or the Bank, whether or not filed in
any jurisdiction, in order to qualify or register the
Shares or to claim an exemption therefrom under the
securities laws thereof; (ii) arise out of or are
35
based upon the omission or alleged omission to state
in any of the foregoing documents or information, a
material fact required to be stated therein or
necessary to make the statements therein, in light of
the circumstances under which they were made, not
misleading; or (iii) arise from any theory of
liability whatsoever relating to or arising from or
based upon the Registration Statement (or any
amendment or supplement thereto), preliminary or
final Prospectus (or any amendment or supplement
thereto), the Reorganization Applications (or any
amendments or supplements thereto), the Holding
Company Application, any Blue Sky Application or
Sales Information or other documentation distributed
in connection with the Reorganization; provided,
however, that no indemnification is required under
this paragraph (a) to the extent (1) such losses,
claims, damages, liabilities or actions arise out of
or are based upon any untrue material statement or
alleged untrue material statement in, or material
omission or alleged material omission from, the
Registration Statement (or any amendment or
supplement thereto), preliminary or final Prospectus
(or any amendment or supplement thereto), the
Reorganization Applications (or any amendments or
supplements thereto), the Holding Company
Application, any Blue Sky Application or Sales
Information made in reliance upon and in conformity
with information furnished in writing to the Company,
the MHC or the Bank by the Agent or its counsel
regarding the Agent provided, that it is agreed and
understood that the only information furnished in
writing to the Company, the MHC or the Bank by the
Agent regarding the Agent is set forth in the
Prospectus under the caption "Our Corporate Change
and Stock Offering-Marketing Arrangements", (2) any
settlement by the Agent is effected without the prior
written consent of the Company, the MHC or the Bank,
and (3) that any loss, claim, damage or liability is
found in a final judgment by a court to have resulted
primarily from the Agent's gross negligence or
willful misconduct; and, provided further, that such
indemnification shall be to the extent permitted by
the Commissioner, the Department, the FDIC and the
Federal Reserve Bank.
(b) The Agent agrees to indemnify and hold harmless the
Company, the MHC and the Bank, their trustees and
officers and each person, if any, who controls the
Company, the MHC or the Bank within the meaning of
Section 15 of the 1933 Act or Section 20(a) of the
1934 Act against any and all loss, liability, claim,
damage or expense whatsoever (including but not
limited to settlement expenses), joint or several,
which they, or any of them, may suffer or to which
they, or any of them may become subject under all
applicable federal and state laws or otherwise, and
to promptly reimburse the Company, the MHC, the Bank,
and any such persons upon written demand for any
expenses (including reasonable fees and disbursements
of counsel) incurred by them, or any of them, in
connection with investigating, preparing or defending
any actions, proceedings or claims (whether commenced
or threatened) to the extent such losses, claims,
damages, liabilities or actions:
36
(i) arise out of or are based upon any untrue
statement or alleged untrue statement of a material
fact contained in the Registration Statement (or any
amendment or supplement thereto), the Reorganization
Applications (or any amendments or supplements
thereto), the Holding Company Application, the
preliminary or final Prospectus (or any amendment or
supplement thereto), any Blue Sky Application or
Sales Information, (ii) are based upon the omission
or alleged omission to state in any of the foregoing
documents a material fact required to be stated
therein or necessary to make the statements therein,
in the light of the circumstances under which they
were made, not misleading, or (iii) arise from any
theory of liability whatsoever relating to or arising
from or based upon the Registration Statement (or any
amendment or supplement thereto), preliminary or
final Prospectus (or any amendment or supplement
thereto), the Reorganization Applications (or any
amendments or supplements thereto), the Holding
Company Application, or any Blue Sky Application or
Sales Information or other documentation distributed
in connection with the Reorganization; provided,
however, that the Agent's obligations under this
Section 8(b) shall exist only if and only to the
extent (i) that such untrue statement or alleged
untrue statement was made in, or such material fact
or alleged material fact was omitted from, the
Registration Statement (or any amendment or
supplement thereto), the preliminary or final
Prospectus (or any amendment or supplement thereto),
the Reorganization Applications (or any amendments or
supplements thereto), or any Blue Sky Application or
Sales Information in reliance upon and in conformity
with information furnished in writing to the Company,
the MHC or the Bank by the Agent or its counsel
regarding the Agent, provided, that it is agreed and
understood that the only information furnished in
writing to the Company, the MHC or the Bank by the
Agent regarding the Agent is set forth in the
Prospectus under the caption "Our Corporate Change
and Stock Offering-Marketing Arrangements". The
indemnification provided for in this Section 8 (b)
shall not be applicable (1) with respect to any loss,
liability, claim, damage, or expense whatsoever if it
is determined by final judgment of a court having
jurisdiction over the matter that such loss,
liability, claim, damage or expense was primarily a
result of the Company's, the MHC's or the Bank's
willful misconduct or gross negligence or (2) to any
settlement by any such party effected without the
prior written consent of the Agent.
(c) Each indemnified party shall give prompt written
notice to each indemnifying party of any action,
proceeding, claim (whether commenced or threatened),
or suit instituted against it in respect of which
indemnity may be sought hereunder, but failure to so
notify an indemnifying party shall not relieve it
from any liability which it may have on account of
this Section 8 or otherwise. An indemnifying party
may participate at its own expense in the defense of
such action. In addition, if it so elects within a
reasonable time after receipt of such notice, an
indemnifying party, jointly with any other
indemnifying parties receiving such notice, may
assume defense of
37
such action with counsel chosen by it and approved by
the indemnified parties that are defendants in such
action, unless such indemnified parties reasonably
object to such assumption on the ground that there
may be legal defenses available to them that are
different from or in addition to those available to
such indemnifying party. If an indemnifying party
assumes the defense of such action, the indemnifying
parties shall not be liable for any fees and expenses
of counsel for the indemnified parties incurred
thereafter in connection with such action, proceeding
or claim, other than reasonable costs of
investigation. In no event shall the indemnifying
parties be liable for the fees and expenses of more
than one separate firm of attorneys (and any special
counsel that said firm may retain) for each
indemnified party in connection with any one action,
proceeding or claim or separate but similar or
related actions, proceedings or claims in the same
jurisdiction arising out of the same general
allegations or circumstances.
(d) In addition to, and without limiting, the provisions
of Section (8)(a) hereof, in the event that any
Agent, any person, if any, who controls the Agent
within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act or any of its partners,
directors, officers and employees 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 Bank, the Agent or any of their
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 and the Bank jointly and
severally agree to reimburse the Agent for all
reasonable and necessary out-of-pocket expenses
incurred by it in connection with preparing or
appearing as a witness or otherwise giving testimony
and to compensate the Agent in an amount to be
mutually agreed upon.
(e) The agreements contained in this Section 8 and in
Section 9 hereof and the representations and
warranties of the Company, the MHC and the Bank set
forth in this Agreement shall remain operative and in
full force and effect regardless of: (i) any
investigation made by or on behalf of agent or their
officers, trustees or controlling persons, agent or
employees or by or on behalf of the Company, the MHC
or the Bank or any officers, trustees or controlling
persons, agent or employees of the Company, the MHC
or the Bank; (ii) delivery of and payment hereunder
for the Shares; or (iii) any termination of this
Agreement.
Section 9. Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnification provided for in
Section 8 is due in accordance with its terms but is for any reason held by a
court to be unavailable from the Company, the MHC, the Bank or the Agent, the
Company, the MHC, the Bank and the Agent shall contribute to the aggregate
losses, claims, damages and liabilities (including any investigation, legal and
other expenses incurred in connection with, and any amount paid in settlement
of, any action, suit or proceeding
38
of any claims asserted, but after deducting any contribution received by the
Company, the MHC, the Bank or the Agent from persons other than the other party
thereto, who may also be liable for contribution) in such proportion so that the
Agent is responsible for that portion represented by the percentage that the
fees paid to the Agent pursuant to Section 2 of this Agreement (not including
expenses) bears to the gross proceeds received by the Company from the sale of
the Shares in the Offering, and the Company, the MHC and the Bank shall be
responsible for the balance. If, however, the allocation provided above is not
permitted by applicable law or if the indemnified party failed to give the
notice required under Section 8 above, then each indemnifying party shall
contribute to such amount paid or payable by such indemnified party in such
proportion as is appropriate to reflect not only such relative fault of the
Company, the MHC and the Bank on the one hand and the Agent on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities (or actions, proceedings or claims in respect
thereto), but also the relative benefits received by the Company, the MHC and
the Bank on the one hand and the Agent on the other from the Offering (before
deducting expenses). The relative fault shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Company, the MHC and/or the Bank on the one hand or
the Agent on the other and the parties' relative intent, good faith, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The Company, the MHC, the Bank and the Agent agree that it would not
be just and equitable if contribution pursuant to this Section 9 were determined
by pro-rata allocation or by any other method of allocation which does not take
into account the equitable considerations referred to above in this Section 9.
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions, proceedings or claims in respect
thereof) referred to above in this Section 9 shall be deemed to include any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action, proceeding or claim.
It is expressly agreed that the Agent shall not be liable for any loss,
liability, claim, damage or expense or be required to contribute any amount
which in the aggregate exceeds the amount paid (excluding reimbursable expenses)
to the Agent under this Agreement. It is understood that the above stated
limitation on the Agent's liability is essential to the Agent and that the Agent
would not have entered into this Agreement if such limitation had not been
agreed to by the parties to this Agreement. No person found guilty of any
fraudulent misrepresentation (within the meaning of Section 11(f) of the 0000
Xxx) shall be entitled to contribution from any person who was not found guilty
of such fraudulent misrepresentation. The obligations of the Company, the MHC
and the Bank under this Section 9 and under Section 8 shall be in addition to
any liability which the Company and the Bank may otherwise have. For purposes of
this Section 9, each of the Agent's, the Company's, the MHC or the Bank's
officers and trustees and each person, if any, who controls the Agent or the
Company or the MHC or the Bank within the meaning of the 1933 Act and the 1934
Act shall have the same rights to contribution as the Agent, the Company, the
MHC or the Bank. Any party entitled to contribution, promptly after receipt of
notice of commencement of any action, suit, claim or proceeding against such
party in respect of which a claim for contribution may be made against another
party under this Section 9, will notify such party from whom contribution may be
sought, but the omission to so notify such party shall not relieve the party
from whom contribution may be sought from any other obligation it may have
hereunder or otherwise than under this Section 9.
39
Section 10. Survival of Agreements, Representations and Indemnities.
The respective indemnities of the Company, the MHC, the Bank and the Agent and
the representations and warranties and other statements of the Company, the MHC,
the Bank and the Agent set forth in or made pursuant to this Agreement shall
remain in full force and effect, regardless of any termination or cancellation
of this Agreement or any investigation made by or on behalf of the Agent, the
Company, the MHC, the Bank or any controlling person referred to in Section 8
hereof, and shall survive the issuance of the Shares, and any successor or
assign of the Agent, the Company, the MHC, the Bank, and any such controlling
person shall be entitled to the benefit of the respective agreements,
indemnities, warranties and representations.
40
Section 11. Termination.
(a) The Agent may terminate this Agreement, by notice to
the Company, the MHC and the Bank, at any time at or
prior to Closing Time (i) if there has been, since
the date of this Agreement or since the respective
dates as of which information is given in the
Registration Statement, any material adverse change
in the financial condition, results of operations or
business affairs of the Company, the MHC or the Bank,
or the Company, the MHC and the Bank 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 Shares or to
enforce contracts, including subscriptions or orders,
for the sale of the Shares; (iii) or if trading
generally on either the New York Stock Exchange or
Nasdaq-Amex Stock Market 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 or New York authorities;
(iv) if any condition specified in Section 7 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 MHC 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 Shares; (vi) if in
the Agent's good faith opinion, the price for the
Shares established by the Company is not reasonable
or equitable under then prevailing market conditions;
or (vii) if the Reorganization is not consummated on
or prior to ____________, 1999.
(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, 6, 8 and 9 hereof and the provisions of
Sections 8 and 9 hereof shall survive any termination
of this Agreement.
(c) If the Agent elects to terminate this Agreement as
provided in this Section, the Company, the MHC and
the Bank shall be notified promptly by telephone,
confirmed in writing.
This Agreement may also be terminated by mutual written consent of the
parties hereto.
Section 12. Notices. All communications hereunder, except as herein
otherwise specifically provided, shall be mailed in writing and if sent to the
Agent shall be mailed, delivered or telegraphed and confirmed to Friedman,
Billings, Xxxxxx & Co., Inc., 0000 Xxxxxxxxxx Xxxxxx
00
Xxxxx, 00xx Xxxxx, Xxxxxxxxx, Xxxxxxxx 00000, Attention: [NAME], [TITLE] (with a
copy to Breyer & Associates PC, Attention: Xxxx X. Xxxxxx, Esq.) and, if sent to
the Company, the MHC and the Bank, shall be mailed, delivered or telegraphed and
confirmed to the Company, the MHC and the Bank at 00 Xxxx Xxxxxx Xxxxxx, Xxxxxx,
Xxx Xxxx 00000, Attention: [NAME], [TITLE] (with a copy to Elias, Matz, Xxxxxxx
& Xxxxxxx L.L.P., Attention: Xxxx Xxxxxxxx, Esq.).
Section 13. Parties. The Company, the MHC and the Bank shall be
entitled to act and rely on any request, notice, consent, waiver or agreement
purportedly given on behalf of the Agent when the same shall have been given by
the undersigned. The Agent shall be entitled to act and rely on any request,
notice, consent, waiver or agreement purportedly given on behalf of the Company,
the MHC or the Bank, when the same shall have been given by the undersigned or
any other officer of the Company, the MHC or the Bank. This Agreement shall
inure solely to the benefit of, and shall be binding upon, the Agent, the
Company, the MHC, the Bank, and their respective successors and assigns, and no
other person shall have or be construed to have any legal or equitable right,
remedy or claim under or in respect of or by virtue of this Agreement or any
provision herein contained. It is understood and agreed that this Agreement is
the exclusive agreement among the parties hereto, and supersedes any prior
agreement among the parties and may not be varied except in writing signed by
all the parties.
Section 14. Closing. The closing for the sale of the Shares shall take
place on the Closing Date at such location as mutually agreed upon by the Agent
and the Company, the MHC and the Bank. At the closing, the Company, the MHC and
the Bank shall deliver to the Agent in next day funds the commissions, fees and
expenses due and owing to the Agent as set forth in Sections 2 and 6 hereof and
the opinions and certificates required hereby and other documents deemed
reasonably necessary by the Agent shall be executed and delivered to effect the
sale of the Shares as contemplated hereby and pursuant to the terms of the
Prospectus.
Section 15. Partial Invalidity. In the event that any term, provision
or covenant herein or the application thereof to any circumstance or situation
shall be invalid or unenforceable, in whole or in part, the remainder hereof and
the application of said term, provision or covenant to any other circumstances
or situation shall not be affected thereby, and each term, provision or covenant
herein shall be valid and enforceable to the full extent permitted by law.
Section 16. Construction. This Agreement shall be construed in
accordance with the laws of the State of ___________.
Section 17. Counterparts. This Agreement may be executed in separate
counterparts, each of which so executed and delivered shall be an original, but
all of which together shall constitute but one and the same instrument.
If the foregoing correctly sets forth the arrangement among the
Company, the MHC, the Bank and the Agent, please indicate acceptance thereof in
the space provided below for that purpose, whereupon this letter and the Agent's
acceptance shall constitute a binding agreement.
42
Section 18. Entire Agreement. This Agreement, including schedules and
exhibits hereto, which are integral parts hereof and incorporated as though set
forth in full, constitutes the entire agreement between the parties pertaining
to the subject matter hereof superseding any and all prior or contemporaneous
oral or prior written agreements, proposals, letters of intent and
understandings, and cannot be modified, changed, waived or terminated except by
a writing which expressly states that it is an amendment, modification or
waiver, refers to this Agreement and is signed by the party to be charged. No
course of conduct or dealing shall be construed to modify, amend or otherwise
affect any of the provisions hereof.
43
Very truly yours,
OSWEGO COUNTY BANCORP, INC. OSWEGO COUNTY SAVINGS BANK
By Its Authorized By Its Authorized
Representative: Representative:
_________________________________________ ________________________
Xxxxxxx X. Xxxxx Xxxxxxx X. Xxxxx
Director, President and Chief Executive Director, President and
Officer Chief Executive
Officer
OSWEGO COUNTY MHC
By Its Authorized
Representative:
_________________________________________
Xxxxxxx X. Xxxxx
Director, President and Chief Executive
Officer
Accepted as of the date first above written
FRIEDMAN, BILLINGS, XXXXXX & CO., INC.
By Its Authorized
Representative:
_________________________________________
44
EXHIBIT A
SELECTED DEALERS' AGREEMENT
OSWEGO COUNTY BANCORP, INC.
Up to 609,500 Shares (Anticipated Maximum)
(Par Value $.01 Per Share)
______________, 1999
Gentlemen:
We have agreed to Oswego County Bancorp, Inc., a Delaware corporation
(the "Company"), Oswego County MHC, a New York State chartered mutual holding
company ("MHC") and Oswego County Savings Bank, a New York State chartered
mutual savings bank (the "Bank"), in connection with the offer and sale of up to
609,500 shares of the Company's common stock, $.01 par value per share (the
"Common Stock"), to be issued in connection with the Plan (as defined herein).
The total number of shares of Common Stock to be offered may be decreased to a
minimum of 450,500 shares, or increased to a maximum of 700,925 shares. The
price per share has been fixed at $10.00. The Common Stock, the number of shares
to be issued, and certain of the terms on which they are being offered, are more
fully described in the enclosed prospectus dated __________, 1999 (the
"Prospectus").
The Common Stock is being offered in accordance in accordance with the
Plan of Reorganization from Mutual Saving Bank to Mutual Holding Company and
Stock Issuance Plan adopted by the Board of Trustees of the Bank and
subsequently amended and restated (the "Plan"), pursuant to which the Bank
intends to convert from a New York State chartered mutual savings bank to a New
York State chartered stock savings bank, and will issue all of its issued and
outstanding capital stock to the Company. Pursuant to the Plan, the Company is
offering to certain of the Bank's depositors, its tax qualified employee benefit
plans and trustees, and officers and employees of the Bank the right to
subscribe for the Common Stock in a subscription offering (the "Subscription
Offering"). To the extent Common Stock is not subscribed for in the Subscription
Offering, such Common Stock may be offered to certain members of the general
public, in a public offering and/or direct community offering (the "Public
Offering," and together with the Subscription Offering, as each may be extended
or reopened from time to time, the "Subscription/Public Offering") to be
commenced concurrently with the Subscription Offering. It is currently
anticipated by the Bank, the Company and the MHC that any Common Stock not
subscribed for in the Subscription/Public Offering will be offered in a
syndicated public offering (the "Syndicated Public Offering"). The
Subscription/Public Offering and the Syndicated Public Offering are hereinafter
referred to collectively as the "Offerings," and the conversion of the Bank from
mutual to stock form, the formation of the mutual holding company, the
acquisition of all of the capital stock of the Bank by the Company and the
Offerings are hereinafter referred to collectively as the "Reorganization." The
Offering is further being conducted in accordance with the regulations of the
New York State Department of Bank, the Federal Deposit Insurance Corporation and
the Federal Reserve Bank, subject to the restrictions contained in the Plan.
The Common Stock is being offered in the Syndicated Public Offering by
broker/ dealers licensed by the National Association of Securities Dealers, Inc.
("NASD") which have been approved by the Company ("Approved Brokers").
We are offering the selected dealers (of which you are one) the
opportunity to participate in the solicitation of offers to buy the Common Stock
in the Syndicated Public Offering and we will pay you a fee in the amount of up
to ____________ percent (___%) of the dollar amount of the Common Stock sold on
behalf of the Company by you, as evidenced by the authorized-designation of your
firm on the order form or forms or summary record, in the event indications of
interest are solicited (the "Purchase Record") accompanying funds transmitted
for payment therefor 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 Common Stock
sold on behalf of the Company by you, as evidenced in accordance with the
preceding sentence. As soon as practicable after the Closing Date of the
offering, we will remit to you, only out of our compensation as provided above,
the fees to which you are entitled hereunder.
Each order form for the purchase of Common Stock or the Purchase Record
must set forth the identity and address of each person to whom the certificates
for such Common Stock should be issued and delivered. Such order form for the
Purchase Record should clearly identify your firm. You shall instruct any
subscriber who elects to send his order form to you to make any accompanying
check payable to "Oswego County Bancorp, Inc."
This offer is made subject to the terms and conditions herein set forth
and is made only to selected dealers who are (i) members in good standing of the
NASD who are to comply with all applicable rules of the NASD, including, without
limitation, the NASD's Interpretation on Free-Riding and Withholding and Rule
2740 of the NASD's Rules of the Association, or (ii) foreign dealers not
eligible for membership in the NASD who agree (A) not to sell any Common Stock
within the United States, its territories or possessions or to persons who are
citizens thereof or resident therein and (B) in making other sales to comply
with the above-mentioned NASD Interpretation, Rules 2730, 2740 and 2750 of the
above-mentioned Rules as if they were NASD members, and Rule 2420 of such Rules
as it applies to non-member brokers or dealers in a foreign country.
Orders for Common Stock will be strictly subject to confirmation and
we, acting on behalf of the Company, reserve the right in our unfettered
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, or by us to give any information or
make any representations other than those contained in the Prospectus in
connection with the sale of any of the Common Stock. No selected dealer is
authorized to act as agent for us when soliciting offers to buy the Common Stock
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) with respect to the Company's Common Stock during the offering.
2
We and each selected dealer assisting in selling Common Stock pursuant
hereto agree to comply with the applicable requirements of the Securities
Exchange Act of 1934 and applicable state rules and regulations. Each selected
dealer that is not a $______ net capital reporting broker/dealer agrees that it
will not use a sweep arrangement and that it will transmit all customer checks
by noon of the next business day after receipt thereof. In addition, we and each
selected dealer confirm that the Securities and Exchange Commission interprets
Rule 15c2-8 promulgated under the Securities Exchange Act of 1934 as requiring
that a Prospectus be supplied to each person who is expected to receive a
confirmation of sale 48 hours prior to delivery of such person's order form or
mailing of such confirmation in the event indications of interest are solicited.
We and each selected dealer further agree that to the extent that your
customers desire to pay for shares with funds held by or to be deposited with
us, in accordance with the interpretation of the Securities and Exchange
Commission of Rule 15c2-4 promulgated under the Securities Exchange Act of 1934,
either (a) upon receipt of an executed order form or direction to execute an
order form on behalf of a customer to forward the offering price of the Common
Stock ordered on or before twelve noon Eastern time of the next business day
following receipt or execution of an order form by us to the Company for deposit
in a segregated account or (b) to solicit indications of interest in which event
(i) we will subsequently contact any customer indicating interest to confirm the
interest and give instructions to execute and return an order form or to receive
authorization to execute the order form on the customer's behalf, (ii) we will
mail acknowledgments of receipt of orders to each customer confirming interest
on the business day following such conformation, (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 the Purchase
Record together with such funds to the Company on or before twelve noon on the
next business day and each selected dealer acknowledges that if the procedure in
(b) is adopted, our customers' funds are not required to be in their accounts
until the debit date.
Unless earlier terminated by us, this Agreement shall terminate upon
the Closing Date of the Offering. 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 Reorganization.
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 of
Common Stock 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 of 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 Common Stock has 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 Common Stock in any
state.
3
Additional copies of the Prospectus and any supplements thereto will be
supplied in reasonable quantities upon request.
Any notice from us to you shall be deemed to have been duly given if
mailed, telephoned, or telegraphed to you at the address to which this Agreement
is mailed.
This Agreement shall be construed in accordance with the laws of the
State of New York.
Please confirm your agreement hereto by signing and returning the
confirmation accompanying this letter at once to us at Friedman, Billings,
Xxxxxx & Co., Inc., 0000 Xxxxxxxxxx Xxxxxx Xxxxx, 00xx Xxxxx, Xxxxxxxxx,
Xxxxxxxx 00000. The enclosed duplicate copy will evidence the agreement between
us.
FRIEDMAN, BILLINGS, XXXXXX & CO., INC.
By: __________________________________
Xxxxx X. Xxxxxxxxx
Managing Director
CONFIRMED AS OF:
______________, 1999.
__________________________________
(Name of Dealer)
By: __________________________________
Its: __________________________________
4
