Exhibit 1.2
Willow Grove Bancorp, Inc.
(a Pennsylvania corporation)
5,175,000 Shares
(Subject to an Increase Up to 3,914,418 Shares)
COMMON SHARES
(Par Value $.01 Per Share)
Subscription Price $10.00 Per Share
AGENCY AGREEMENT
February ___, 2002
Xxxxx, Xxxxxxxx & Xxxxx, Inc.
000 Xxxxxxxxx Xxxxx
Xxxxxx, Xxxx 00000-0000
Ladies and Gentlemen:
Willow Grove Bancorp, Inc., a newly formed Pennsylvania corporation (the
"Company"), Willow Grove Mutual Holding Company, a federally chartered mutual
holding company (the "MHC"), Willow Grove Bancorp, Inc., a federally chartered
stock holding corporation (the "Mid-Tier Holding Company"), and Willow Grove
Bank, a federally chartered stock savings bank (the "Bank"), hereby confirm,
jointly and severally, their agreement with Xxxxx, Xxxxxxxx & Xxxxx, Inc. ("KBW"
or the "Agent"), as follows:
Section 1. The Offering. In accordance with a Plan of Conversion and
Agreement and Plan of Reorganization (the "Plan" or "Plan of Conversion")
adopted by the Boards of Directors of the MHC, the Mid-Tier Holding Company and
the Bank, the Bank intends to reorganize into the fully converted stock holding
company form of organization and issue all of its stock to the Company pursuant
to the following steps: (i) the Bank's establishment of a Pennsylvania-chartered
corporation; (ii) the conversion of the MHC to an interim federal stock savings
bank ("Interim One"); (iii) the conversion of the MHC's subsidiary stock holding
company, the Mid-Tier Holding Company, to an interim federal stock savings bank
("Interim Two") and its simultaneous merger with and into the Bank; (iv) the
merger of Interim One (formerly the MHC) with and into the Bank, whereupon the
outstanding common stock of the Mid-Tier Holding Company held by the MHC will be
cancelled; (v) the establishment by the Company of a third interim federal stock
savings bank
("Interim Three"); (vi) the merger of Interim Three with and into the Bank, with
the Bank as the surviving entity; and (vii) the sale and exchange of the Common
Shares (as herein defined) of the Company pursuant to the Plan of Conversion and
Office of Thrift Supervision (the "OTS") regulations. As a result of the merger
of Interim Three with and into the Bank, the Bank will become a wholly owned
subsidiary of the Company. The outstanding shares of common stock par value per
share $0.01 of the Mid-Tier Holding Company ("Mid-Tier Holding Company Common
Stock") by persons other than the MHC will be converted into the Common Shares
of the Company pursuant to an exchange ratio as defined in the Plan, which will
result in the holders of such shares receiving and owning in the aggregate
approximately the same percentage of the Common Shares to be outstanding upon
the completion of the Conversion (as herein defined) as the percentage of
Mid-Tier Holding Company Common Stock owned by them in the aggregate immediately
prior to the consummation of the conversion.
In addition, pursuant to the Plan, the Company will offer and sell up to
5,175,000 of its Common Shares, in a subscription offering (the "Subscription
Offering") to: (1) depositors of the Bank with Qualifying Deposits, as defined
in the Plan, as of June 30, 2000 ("Eligible Account Holders"); (2) Tax-Qualified
Employee Stock Benefit Plans of the Bank (as defined in the Plan); (3)
depositors of the Bank with Qualifying Deposits as of December 31, 2001
("Supplemental Eligible Account Holders"); (4) Voting Members, as defined in the
Plan, who are not an Eligible Account Holders or a Supplemental Eligible Account
Holders ("Other Members"); (5) any director, officer or employee of the MHC, the
Mid-Tier Holding Company, the Bank or any subsidiary thereof ("Directors,
Officers and Employees"); and (6) persons who own shares of Mid-Tier Holding
Company Common Stock, excluding the MHC, as of the Voting Record Date, as
defined in the Plan ("Public Shareholders"). The Common Shares to be sold by the
Company in the Offering (as defined below) are hereinafter called the "Shares."
Subject to the prior subscription rights of the above-listed parties, the
Company is offering for sale in a community offering (the "Community Offering,"
or "Direct Community Offering," and when referred to together with the
Subscription Offering, the "Subscription and Community Offering") which may be
commenced concurrently with, during, or after the Subscription Offering, the
Shares not subscribed for or ordered in the Subscription Offering to members of
the general public to whom a copy of the Prospectus (as hereinafter defined) is
delivered with a preference given to natural persons residing in the counties in
Pennsylvania in which the Bank has a branch office ("Preferred Subscribers"). 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 agreement (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 "Conversion."
The Company has filed with the United States Securities and Exchange
Commission (the "SEC") a registration statement on Form S-1 (File No. 333-_____)
(the "Registration Statement")
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containing a prospectus relating to the Offering for the registration of the
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 any documents
incorporated by reference therein and all financial schedules and exhibits
thereto, as amended, including post-effective amendments. The prospectus, as
amended, on file with the SEC 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 SEC 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 SEC.
In accordance with Title 12, Parts 575 and 563b of the Code of Federal
Regulations (the "Conversion Regulations"), the MHC filed with the OTS an
Application for Approval of Conversion on Form AC, and has filed such amendments
thereto and supplementary materials as may have been required to the date hereof
and amendments thereto as required by the OTS including applications to form and
merge Interim One, Interim Two and Interim Three (the "Conversion Application").
The Company has also filed with the OTS an application for approval to acquire
the Bank and to become a registered savings and loan holding company on Form
H-(e) 1-S (the "Holding Company Application") under the Home Owners' Loan Act of
1933, as amended, and the regulations promulgated thereunder (the "HOLA").
Section 2. Retention of Agent; Compensation; Sale and Delivery of the
Shares. Subject to the terms and conditions herein set forth, the Company, the
MHC, the Mid-Tier Holding Company and the Bank hereby appoint the Agent as their
exclusive financial advisor and marketing agent to utilize its best efforts to
solicit subscriptions for Shares and to advise and assist the Company, the MHC,
the Mid-Tier Holding Company and the Bank with respect to the Company's sale of
the Shares in the Offering.
On the basis of the representations, warranties, and agreements herein
contained, but subject to the terms and conditions herein set forth, the Agent
accepts such appointment and agrees to consult with and advise the Company, the
MHC, the Mid-Tier Holding Company and the Bank as to the matters set forth in
the letter agreement, dated [______, 2001], between the MHC, the Mid-Tier
Holding Company, the Bank and KBW. It is acknowledged by the Company, the MHC,
the Mid-Tier Holding Company and the Bank that the Agent shall not be required
to purchase any Shares or be obligated to take any action that is inconsistent
with all applicable laws, regulations, decisions or orders.
The obligations of the Agent pursuant to this Agreement shall terminate
upon the completion or termination or abandonment of the Plan by the Company,
the MHC, the Mid-Tier Holding Company, or the Bank or upon termination of the
Offering, but in no event later than 45 days after the completion of the
Subscription Offering (the "End Date"). All fees or expenses due to the Agent
but unpaid will be payable to the Agent in next day funds at the earlier of the
Closing Date (as
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hereinafter defined) or the End Date. In the event the Offering is extended
beyond the End Date, the Company, the MHC, the Mid-Tier Holding Company, the
Bank and the Agent may agree to renew this Agreement under mutually acceptable
terms.
In the event the Company is unable to sell a minimum of 3,825,000 Shares
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 that it may have received from them plus accrued interest, as
set forth in the Prospectus, and none of the parties to this Agreement shall
have any obligation to the other parties hereunder, except as set forth in this
Section 2 and in Sections 6, 8 and 9 hereof.
In the event the Offering is terminated for any reason not attributable to
the action or inaction of the Agent, the Agent shall be paid the fees due to the
date of such termination pursuant to subparagraphs (a) and (d) below.
If all conditions precedent to the consummation of the Conversion,
including, without limitation, the sale of all Shares required by the Plan to be
sold, are satisfied, the Company agrees to issue, or have issued, the Shares
sold in the Offering and to release for delivery certificates for such Shares on
the Closing Date (as hereinafter defined) against payment to the Company by any
means authorized by the Plan; provided, however, that no funds shall be released
to the Company until the conditions specified in Section 7 hereof shall have
been complied with to the reasonable satisfaction of the Agent and its counsel.
The release of Shares against payment therefor shall be made on a date and at a
place acceptable to the Company, the MHC, the Mid-Tier Holding Company, the Bank
and the Agent. Certificates for Shares shall be delivered directly to the
purchasers in accordance with their directions. The date upon which the Company
shall release or deliver the Shares sold in the Offering, in accordance with the
terms herein, is called the "Closing Date."
The Agent shall receive the following compensation for its services
hereunder:
(a) A management fee of $______, payable in four consecutive monthly
installments of $______ of which $________ has been paid. Such
fees shall be deemed to have been earned when due. Should the
Conversion be terminated for any reason not attributable to the
action or inaction of the Agent, the Agent shall have earned and
be entitled to be paid fees accruing through the stage at which
the termination occurred, including any accrued legal fees
expended by the Agent.
(b) A Success Fee upon completion of the Offering of 1.25% of the
aggregate purchase price of the Common Stock sold in the
Subscription Offering and Community Offering excluding shares
purchased by the officers, directors or employees (or members of
their immediate families) of the Company, the MHC, the Mid-Tier
Holding Company or the Bank plus any ESOP, tax-qualified or stock
based compensation plans (except IRAs) or similar plan created by
the Bank for some or
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all of its directors or employees. The management fee described
in subparagraph 2(a) shall be applied against the Success Fee
described in this subparagraph 2(b).
(c) If any of the Common Shares remain available after the
Subscription Offering, at the request of the Company, KBW will
seek to form a syndicate of registered broker- dealers ("Selected
Dealers") to assist in the sale of such Common Shares on a best
efforts basis, subject to the terms and conditions set forth in
the selected dealers agreement. KBW will endeavor to distribute
the Common Shares among the Selected Dealers in a fashion which
best meets the distribution objectives of the Company, the MHC,
the Mid-Tier Holding Company, the Bank and the Plan. KBW will be
paid a fee not to exceed ___% of the aggregate purchase price of
the shares sold by the Selected Dealers. From this fee, KBW will
pass onto the Selected Dealers who assist in the Syndicated
Community Offering an amount competitive with gross underwriting
discounts charged at such time for comparable amounts of stock
sold at a comparable price per share in a similar market
environment. Fees with respect to purchases affected with the
assistance of Selected Dealers other than KBW shall be
transmitted by KBW to such Selected Dealers. The decision to
utilize Selected Dealers will be made by the Company, the MHC,
the Mid-Tier Holding Company and the Bank upon consultation with
KBW. In the event, with respect to any stock purchases, fees are
paid pursuant to this subparagraph 2(c), such fees shall be in
lieu of, and not in addition to, payment pursuant to
subparagraphs 2(a) and 2(b).
(d) The Agent shall be reimbursed for reasonable out-of-pocket
expenses, including costs of travel, meals and lodging,
photocopying, telephone, facsimile and couriers. Reimbursement of
the Agent's total out-of-pocket expenses shall not exceed _____
without the prior consent of the Bank. In addition, the Bank will
reimburse KBW for the fees and expenses of its counsel, which
will not exceed _____]. The Company, the MHC, the Mid-Tier
Holding Company and the Bank will bear the expenses of the
Offering customarily borne by issuers including, without
limitation, regulatory filing fees, SEC, "Blue Sky," and NASD
filing and registration fees; the fees of the Company, the MHC's,
the Mid-Tier Holding Company's and Bank's accountants, attorneys,
appraiser, transfer agent and registrar, printing, mailing and
marketing and syndicate expenses associated with the Conversion;
the fees set forth under this Section 2; and fees for "Blue Sky"
legal work. The Company, the MHC, the Mid-Tier Holding Company
and the Bank will reimburse KBW for such expenses incurred by KBW
on their behalf.
Full payment of Agent's fees and expenses, as described above, shall be
made in next day funds on the earlier of the Closing Date or a determination by
the Company, the MHC, the Mid-Tier Holding Company or the Bank to terminate or
abandon the Plan.
Section 3. Prospectus; Offering. The Shares are to be initially offered in
the Offering at the purchase price set forth on the cover page of the
Prospectus.
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Section 4. Representations and Warranties.
(a) The Company, the MHC, the Mid-Tier Holding Company and the Bank
jointly and severally represent and warrant to and agree with the Agent as
follows:
(i) The Registration Statement, which was prepared by the Company,
the MHC, the Mid-Tier Holding Company and the Bank and filed with
the SEC, was declared effective by the SEC on __________, 2002.
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,
the MHC, the Mid-Tier Holding Company or the Bank contained in
Sales Information (as such term is defined in Section 8 hereof)
authorized by the Company, the MHC, the Mid-Tier Holding Company
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 SEC 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 Mid-Tier Holding Company or the Bank contained in
the Sales Information authorized by the Company, the MHC, the
Mid-Tier Holding Company 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)(i)
shall not apply to statements or omissions made in reliance upon
and in conformity with written information furnished to the
Company, the MHC, the Mid-Tier Holding Company or the Bank by the
Agent or its counsel expressly regarding the Agent for use in the
Prospectus under the caption "The Conversion Marketing
Arrangements" or in any Sales Information.
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(ii) The Conversion Application has been approved by the OTS. The
Prospectus and the proxy statement for the solicitation of
proxies from members of the MHC for the special meeting to
approve the Plan (the "Members' Proxy Statement") and the proxy
statement for the solicitation of proxies from stockholders of
the Mid-Tier Holding Company for the special meeting to approve
the Plan (the "Stockholders' Proxy Statement"), all included as
part of the Conversion Application, which was prepared by the
Company, the MHC, the Mid-Tier Holding Company and the Bank and
filed with the OTS was approved on ______________, 2002 and the
Prospectus and Members' Proxy Statement have been authorized for
use by the OTS. At the time of the approval of the Conversion
Application, including the Prospectus, the Members' Proxy
Statement and the Stockholders' Proxy Statement (including any
amendment or supplement thereto), by the OTS and at all times
subsequent thereto until the Closing Date, the Conversion
Application, including the Prospectus, the Members' Proxy
Statement and the Stockholders' Proxy Statement (including any
amendment or supplement thereto), will comply in all material
respects with the Conversion Regulations, except to the extent
waived in writing by the OTS and with all applicable provisions
of the Securities Exchange Act of 1934, as amended (the "1934
Act") and the regulations of the SEC under the 1934 Act (the
"1934 Act Regulations"). The Conversion Application, including
the Prospectus, the Members' Proxy Statement and the
Stockholders' Proxy Statement (including any amendment or
supplement thereto), does 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(a)(ii) shall not apply to statements
or omissions made in reliance upon and in conformity with written
information furnished to the Company, the MHC, the Mid-Tier
Holding Company or the Bank by the Agent or its counsel expressly
regarding the Agent for use in the Prospectus contained in the
Conversion Application under the caption "The Conversion -
Marketing Arrangements" or in any Sales Information.
(iii) The Holding Company Application has been prepared by the Company
in material conformity with the requirements of the OTS and
approved by the OTS. A conformed copy of the Holding Company
Application has been delivered to the Agent and its counsel.
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(iv) No order has been issued by the OTS, the SEC, any state
securities administrator or the Federal Deposit Insurance
Corporation (the "FDIC") preventing or suspending the use of the
Prospectus or any supplemental sales literature authorized by the
Company, the MHC, the Mid-Tier Holding Company or the Bank for
use in connection with the offering and no action by or before
any such government entity to revoke any approval, authorization
or order of effectiveness related to the Conversion is pending
or, to the best knowledge of the Company, the MHC, the Mid-Tier
Holding Company or the Bank, threatened.
(v) Pursuant to the Conversion Regulations, the Plan has been
approved by the Boards of Directors of the MHC, the Mid-Tier
Holding Company and the Bank; at the Closing Date, the offer and
sale of the Shares will have been conducted in all material
respects in accordance with the Plan, the Conversion Regulations,
and all other applicable laws, regulations, decisions and orders,
including all terms, conditions, requirements and provisions
precedent to the Conversion imposed upon the MHC, the Mid-Tier
Holding Company or the Bank by the OTS, the SEC or any other
regulatory authority, other than those which the regulatory
authority permits to be completed after the Conversion and in the
manner described in the Prospectus. No person has sought to
obtain review of the final action of the OTS in approving the
Plan or in approving the Conversion or the Holding Company
Application pursuant to HOLA or any other statute or regulation.
(vi) The Bank has been duly organized and is a validly existing
federally chartered savings bank in the stock form of
organization and upon the Conversion will become a wholly-owned
subsidiary of the Company, 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 obtained
all licenses, permits and other governmental authorizations
currently required for the conduct of its business, except those
that individually or in the aggregate would not materially
adversely affect the financial condition, earnings, capital,
assets, properties or business of the Company, the MHC, the
Mid-Tier Holding Company and the Bank, taken as a whole; all such
licenses, permits and governmental authorizations are in full
force and effect, and the Bank is in compliance with all material
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 individually or in the aggregate have a material
adverse effect on the
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financial condition, earnings, capital, assets, properties or
business of the Bank. The Bank does not own equity securities or
any equity interest in any other active business enterprise
except as described in the Prospectus or as would not be material
to the operations of the Bank. Upon completion of the Conversion,
(i) all of the authorized and outstanding capital stock of the
Bank will be owned by the Company and (ii) the Company will have
no direct subsidiaries other than the Bank. At the Closing Date,
the Conversion 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-Conversion reports, and documents in
compliance with the 1933 Act Regulations, all terms, conditions,
requirements and provisions with respect to the Conversion
imposed by the OTS, if any, will have been complied with by the
Company, the MHC, the Mid-Tier Holding Company 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.
(vii) The Mid-Tier Holding Company has been duly incorporated and is
validly existing as a corporation in good standing under the laws
of the United States of America with corporate power and
authority to own, lease and operate its properties and to conduct
its business as described in the Registration Statement and the
Prospectus; the Mid-Tier Holding Company is 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 financial condition, earnings, capital, assets,
properties or business of the Mid-Tier Holding Company. The
Mid-Tier Holding Company has obtained all licenses, permits and
other governmental authorizations currently required for the
conduct of its business except those that individually or in the
aggregate would not materially adversely affect the financial
condition, earnings, capital, assets, properties or business of
the Company, the MHC, the Mid-Tier Holding Company and the Bank,
taken as a whole; all such licenses, permits and governmental
authorizations are in full force and effect, and the Mid-Tier
Holding Company is in all material respects complying with all
laws, rules, regulations and orders applicable to the operation
of its business; upon consummation of the Conversion, the
Mid-Tier Holding Company will convert into Interim Two, which
will merge with and into the Bank, with the Bank as the surviving
institution.
(viii) The authorized capital stock of the Mid-Tier Holding Company
consists of 35,000,000 shares of common stock, par value $.01 per
share (the "Mid-
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Tier Holding Company Common Stock") and 10,000,000 shares of
preferred stock, [no par value](the "Mid-Tier Preferred Stock"),
of which _______ shares of Mid-Tier Holding Company Common Stock
and no shares of Mid-Tier Holding Company Preferred Stock are
issued and outstanding as of the date hereof; no additional
shares of Mid-Tier Holding Company and no shares of Mid-Tier
Holding Company Preferred Stock will be issued and outstanding
shares of Mid-Tier Holding Company Common Stock have been duly
authorized and validly issued and are fully paid and
nonassessable and have been issued in compliance with all federal
and state securities laws; the MHC owns 2,812,974 shares of
Mid-Tier Holding Company Common Stock beneficially and of record
free and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equity; the terms and provisions of the
Mid-Tier Holding Company Common Stock conform to all statements
relating thereto contained in the Prospectus; at the time of the
consummation of the Conversion, immediately following the mergers
of Interim One and Interim Two with and into the Bank, the Bank
shall merge with Interim Three, with the Bank being the surviving
institution, and the shares of common stock of Interim Three held
by the Company shall be converted into shares of Bank common
stock on a one-to-one basis, and all such Bank common stock will
be owned beneficially and of record by the Company free and clear
of any security interest, mortgage, pledge, lien, encumbrance,
claim or equity.
(ix) The MHC has been duly chartered and is validly existing as a
mutual holding company in good standing under the laws of the
United States of America with corporate power and authority to
own, lease and operate its properties and to conduct its business
as described in the Registration Statement and the Prospectus;
the MHC is 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 financial condition,
earnings, capital, assets, properties or business of the MHC. The
MHC has obtained all licenses, permits and other governmental
authorizations currently required for the conduct of its business
except those that individually or in the aggregate would not
materially adversely affect the financial condition, earnings
capital, assets, properties or business of the Company, the MHC,
the Mid-Tier Holding Company and the Bank, taken as a whole; all
such licenses, permits and governmental authorizations are in
full force and effect, and the MHC is in all material respects
complying with all laws, rules, regulations and orders applicable
to the operation of its business; upon consummation of the
Conversion, the MHC will convert into Interim One, which will
merge with and into the Bank, with the Bank being the surviving
institution.
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(x) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the Commonwealth
of Pennsylvania 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; the
Company is 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 financial condition,
earnings, capital, assets, properties or business of the Company.
The Company has obtained all licenses, permits and other
governmental authorizations currently required for the conduct of
its business except those that individually or in the aggregate
would not materially adversely affect the financial condition,
earnings, capital, assets, properties or business of the Company,
the MHC, the Mid Tier Holding Company and the Bank, taken as a
whole; 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.
(xi) The Bank is a member of the Federal Home Loan Bank of Pittsburgh
("FHLB-Pittsburgh"). 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, the MHC and the Mid-Tier
Holding Company or the Bank, threatened. Upon consummation of the
Conversion, the liquidation account for the benefit of Eligible
Account Holders and Supplemental Eligible Account Holders will be
duly established in accordance with the requirements of the
Conversion Regulations.
(xii) The only direct subsidiary of the MHC is the Mid-Tier Holding
Company. The only direct subsidiary of the Mid-Tier Holding
Company is the Bank. The only active subsidiary of the Bank is
Willow Grove Investment Corporation (the "Subsidiary"). The
Subsidiary is organized, validly existing and in good standing
under the laws of the Commonwealth of of Delaware; with full
power and authority to own its property and conduct its business;
the Subsidiary is duly qualified as a foreign corporation to
transact business in each jurisdiction in which failure to so
qualify would have a material adverse effect on the financial
condition, earnings, capital, assets or properties of the Bank
and the Subsidiary, taken as a whole; the Subsidiary holds all
licenses, certificates and permits from governmental authorities
necessary for the conduct of its business, except where failure
to hold such licences, permit or authorizations would not have a
material adverse effect on the financial
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condition, earnings, capital, assets or properties of the Bank
and the Subsidiary, taken as a whole; all of the outstanding
capital stock of the Subsidiary has been duly authorized and is
fully paid and non-assessable, and is owned directly or
indirectly by the Bank, free and clear of any liens or
encumbrances.
(xiii) The Company, the MHC, the Mid-Tier Holding Company 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, the Mid-Tier Company and the Bank, taken as a
whole, and to those properties and assets described in the
Registration Statement and Prospectus as owned by them, in each
case 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, the Mid-Tier Holding Company 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 Mid-Tier Holding
Company and the Bank, taken as a whole, under which the Company,
the MHC, the Mid-Tier Holding Company or the Bank hold
properties, including those described in the Registration
Statement and Prospectus, are in full force and effect.
(xiv) The Company, the MHC, the Mid-Tier Holding 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 Conversion and an opinion from KPMG LLP with
respect to the Pennsylvania income tax consequences of the
Conversion; all material aspects of the opinions of Elias, Matz,
Xxxxxxx & Xxxxxxx and KPMG LLP are accurately summarized in the
Registration Statement and Prospectus; the facts upon which such
opinions are based are truthful, accurate and complete.
(xv) The Company, the MHC, the Mid-Tier Holding Company 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 as provided herein and as
described in the Prospectus, except approval or confirmation by
the OTS of the final appraisal of the Bank. The consummation of
the Conversion, 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,
the Mid-Tier Holding Company and the Bank and this Agreement has
been validly executed and delivered by the Company, the MHC, the
Mid-Tier Holding
-12-
Company and the Bank and is the valid, legal and binding
agreement of the Company, the MHC, the Mid-Tier Holding Company
and the Bank enforceable in accordance with its terms (except as
the enforceability thereof may be limited by bankruptcy,
insolvency, moratorium, the Conversion or similar laws relating
to or affecting the enforcement of creditors' rights generally or
the rights of creditors of 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).
(xvi) None of the Company, the MHC, the Mid-Tier Holding Company or the
Bank is in violation of any directive received from OTS, the SEC,
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 OTS or the SEC) and, except as set forth in the
Registration Statement and the Prospectus, there is no suit,
proceeding, charge or action before or by any court, regulatory
authority or governmental agency or body, pending or, to the best
knowledge of the Company, the MHC, the Mid-Tier Holding Company
or the Bank, threatened, which might materially and adversely
affect the Conversion, 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
financial condition, earnings, capital, assets, properties or
business of the Company, the MHC, the Mid-Tier Holding Company
and the Bank, taken as a whole.
(xvii) The financial statements, schedules and notes related thereto
that are included in the Prospectus fairly present the financial
condition, results of operations, equity and cash flows of the
Company, the MHC, the Mid-Tier Holding Company and 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 Title 12 of the
Code of Federal Regulations, Regulation S-X of the SEC 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
-13-
financial statements and other reports filed by the Company, the
MHC, the Mid-Tier Holding Company and the Bank with the OTS and
the SEC, and any other applicable regulatory authority, except
that accounting principles employed in such regulatory filings
conform to the requirements of the OTS and the SEC and not
necessarily to GAAP. 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 MHC, the Mid-Tier Holding Company and the Bank included in
the Prospectus, and as to the pro forma adjustments, the
adjustments made therein have been properly applied on the basis
described therein.
(xviii) 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 in the financial
condition, earnings, capital, assets, properties or business of
the Company, the MHC, the Mid-Tier Holding Company and the Bank,
taken as a whole, 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 that 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
equity capital or total assets of the Bank, nor has the Company,
the MHC, the Mid-Tier Holding Company or the Bank issued any
securities 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, the Mid-Tier Holding Company or the Bank; (iv) there has
not been any material adverse change in the aggregate dollar
amount of the Bank's deposits or its consolidated net worth; (v)
there has been no material adverse change in the Company's, the
MHC's, the Mid-Tier Holding Company's or the Bank's relationship
with its insurance carriers, including, without limitation,
cancellation or other termination of the Company's, the MHC's,
the Mid-Tier Holding Company'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, the Mid-Tier Holding Company or the
Bank, neither of which has any material undisclosed liability of
any kind, contingent or otherwise; (vii) none of the Company, the
MHC, the Mid-Tier Holding Company, or the Bank has 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) none
of the Company, the MHC, the Mid-Tier Holding Company, or the
Bank is in default in the
-14-
payment of principal or interest on any outstanding debt
obligations; (ix) the capitalization, liabilities, assets,
properties and business of the Company, the MHC, the Mid-Tier
Holding Company and the Bank conform in all material respects to
the descriptions thereof contained in the Prospectus; and (x)
none of the Company, the MHC, the Mid-Tier Holding Company, or
the Bank has any material contingent liabilities, except as set
forth in the Prospectus.
(xix) All documents made available to or delivered or to be made
available to or delivered by the Company, the MHC, the Mid-Tier
Holding Company or the Bank or their representatives in
connection with the issuance and sale of the Shares, including
records of account holders, depositors and borrowers of the Bank,
or in connection with the Agent's exercise of due diligence,
except for those documents which were prepared by parties other
than the Company, the MHC, the Mid-Tier Holding Company or the
Bank or their representatives, to the best knowledge of the
Company, the MHC, the Mid-Tier Holding Company and the Bank, 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.
(xx) None of the Company, the MHC, the Mid-Tier Holding Company, or
the Bank is (i) in violation of their respective articles of
incorporation, charters or bylaws, as applicable 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 execution and delivery of this
Agreement and 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 upon any of the assets of the
Company, the MHC, the Mid-Tier Holding Company or the Bank
pursuant to their respective articles of incorporation, charter
or bylaws, as applicable, or any material contract, lease or
other instrument in which the Company, the MHC, the Mid-Tier
Holding Company 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, the Mid-Tier
Holding Company or the Bank, except for such violations which
would not have a material adverse effect on the financial
condition and results of operations of the Company, the MHC, the
Mid-Tier Holding Company and the Bank on a consolidated
-15-
basis; or (iii) result in the creation of any material lien,
charge or encumbrance upon any property of the Company, the MHC,
the Mid-Tier Holding Company or the Bank.
(xxi) 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, the Mid-Tier Holding Company 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, the Mid-Tier Holding Company 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 effect on the financial condition or results of
operations of the Company, the MHC, the Mid-Tier Holding Company
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, the
Mid-Tier Holding Company and the Bank, threatened any action or
proceeding wherein the Company, the MHC, the Mid-Tier Holding
Company or the Bank would or might be alleged to be in default
thereunder, where such action or proceeding, if determined
adversely to the Company, the MHC, the Mid-Tier Holding Company
or the Bank, would have a material adverse effect on the
financial condition, earnings, capital, assets, properties or
business of the Company, the MHC, the Mid-Tier Holding Company
and the Bank, taken as a whole.
(xxii) Upon consummation of the Conversion, 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 Common Shares have been or will be
issued and outstanding prior to the Closing Date; the 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
Tax-Qualified Employee Stock Benefit Plans 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; and the terms and provisions of the Common Shares
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, the Mid-Tier Holding
Company and the Bank, upon the issuance of the Shares,
-16-
good title to the Shares will be transferred from 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.
(xxiii) No approval of any regulatory or supervisory or other public
authority is required in connection with the execution and
delivery of this Agreement or the issuance of the Shares, except
for the approval of the OTS and the SEC, 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 National Association of Securities
Dealers, Inc. ("NASD") and/or The Nasdaq Stock Market.
(xxiv) KPMG LLP, which has certified the audited financial statements
and schedules of the Mid-Tier Holding Company and the Bank
included in the Prospectus, has advised the Company, the MHC, the
Mid-Tier Holding Company and the Bank in writing that they are,
with respect to the Company, the MHC, the Mid-Tier Holding
Company 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 SEC and the OTS.
(xxv) RP Financial, which has prepared the Bank's Independent Appraisal
as of ____________, 2001 (as amended or supplemented, if so
amended or supplemented) (the "Appraisal"), has advised the
Company in writing that it is independent of the Company, the
MHC, the Mid-Tier Holding Company and the Bank within the meaning
of the Conversion Regulations.
(xxvi) The Company, the MHC, the Mid-Tier Holding Company and the Bank
have timely filed all required federal, state and local tax
returns; the Company, the MHC, the Mid-Tier Holding Company 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.
(xxvii) 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.
(xviii) To the knowledge of the Company, the MHC, the Mid-Tier Holding
Company and the Bank, with the exception of the ESOP to purchase
-17-
securities in an amount up to 8.0% of the securities sold in the
Conversion, none of the Company, the MHC, the Mid-Tier Holding
Company, the Bank or employees of the Company, the MHC, the
Mid-Tier Holding Company or the Bank has made any payment of
funds of the Company, the MHC, the Mid-Tier Holding 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.
(xxix) None of the Company, the MHC and the Mid-Tier Holding Company or
the Bank has: (i) issued any securities within the last 18 months
(except for (a) notes to evidence bank loans and reverse
repurchase agreements or other liabilities in the ordinary course
of business or as described in the Prospectus, and (b) shares
issued in connection with the incorporation of the Company; (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 to the proposed Offering and routine purchases and sales
of United States government and agency and other securities in
the ordinary course of business; (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, the Mid-Tier Holding Company 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
Conversion is not completed for whatever reason or for delivery
to the Company if all Shares are sold.
(xxx) The Company, the MHC, the Mid-Tier Holding Company 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 Conversion.
(xxxi) The Company is not required to be registered under the Investment
Company Act of 1940, as amended.
(xxxii) Any certificates signed by an officer of the Company, the MHC,
the Mid-Tier Holding Company 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, the Mid-Tier
Holding Company 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.
-18-
(b) The Agent represents and warrants to the Company that:
(i) KBW is a corporation validly existing in good standing under the
laws of the State of New York and licensed to conduct business in
the Commonwealth of Pennsylvania with full power and authority to
provide the services to be furnished to the Company, the MHC, the
Mid-Tier Holding Company and the Bank hereunder.
(ii) The execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby have been duly and validly
authorized by all necessary action on the part of the Agent, and
this Agreement has been duly and validly executed and delivered by
the Agent and is a legal, valid and binding agreement of the Agent,
enforceable in accordance with its terms (except as the
enforceability thereof may be limited by bankruptcy, insolvency,
moratorium, the Conversion or similar laws relating to or affecting
the enforcement of creditors' rights generally, 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, with
respect to the Agent, be unenforceable as against public policy).
(iii) Each of the Agent and its employees, agents and representatives who
shall perform any of the services hereunder shall be duly authorized
and empowered, and shall have all licenses, approvals and permits
necessary to perform such services; and the Agent is a registered
selling agent in each of the jurisdictions in which the Shares are
to be offered by the Company in reliance upon the Agent as a
registered selling agent as set forth in the blue sky memorandum
prepared with respect to the Offering.
(iv) The execution and delivery of this Agreement by the Agent, the
consummation of the transactions contemplated hereby and compliance
with the terms and provisions hereof will not conflict with, or
result in a breach of, any of the terms, provisions or conditions
of, or constitute a default (or an event which with notice or lapse
of time or both would constitute a default) under, the Articles of
Incorporation or Bylaws of the Agent or any material agreement,
indenture or other instrument to which the Agent is a party or by
which it or its property is bound.
(v) No approval of any regulatory or supervisory or other public
authority is required in connection with the Agent's execution and
delivery of this Agreement, except as may have been received.
-19-
(vi) There is no suit or proceeding or charge or action before or by any
court, regulatory authority or government agency or body or, to the
knowledge of the Agent, pending or threatened, which might
materially adversely affect the Agent's performance of this
Agreement.
Section 5. Covenants of the Company, the MHC, the Mid-Tier Holding Company
and the Bank. The Company, the MHC, the Mid-Tier Holding Company and the Bank
hereby jointly and severally covenant with the Agent as follows:
(a) The Company will not 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 will not file any amendment or supplement to the Conversion
Application 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 file any amendment or supplement to the 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, the Mid-Tier Holding Company and the Bank will
use their best efforts to cause any post-effective amendment to the
Registration Statement to be declared effective by the SEC and any
post-approval amendment to the Conversion Application to be approved
by the OTS and will immediately upon receipt of any information
concerning the events listed below notify the Agent: (i) when the
Registration Statement, as amended, has become effective; (ii) when
the Conversion Application, as amended, has been approved by the
OTS; (iii) when the Company, the MHC, the Mid-Tier Holding Company
or the Bank receives any comments from the OTS, the SEC, or any
other governmental entity with respect to the Conversion or the
transactions contemplated by this Agreement; (iv) when the OTS, the
SEC, or any other governmental entity requests any amendment or
supplement to the Registration Statement, the Conversion Application
or any additional information; (v) the issuance by the OTS, the SEC,
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
-20-
other filing of the Company, the MHC, the Mid-Tier Holding Company
or the Bank under the Conversion Regulations, or other applicable
law, or the threat of any such action; (vi) the issuance by the OTS,
the SEC, 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) the occurrence of any event mentioned in paragraph (h)
below. The Company, the MHC, the Mid-Tier Holding Company and the
Bank will make every reasonable effort (i) to prevent the issuance
by the OTS, the SEC or any other regulatory 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, the Mid-Tier Holding Company and the Bank will
deliver to the Agent and to its counsel two conformed copies of the
Registration Statement, the Conversion Application and the Holding
Company Application, as originally filed and of each amendment or
supplement thereto, including all exhibits. Further, the Company,
the MHC, the Mid-Tier Holding Company and the Bank will deliver such
additional copies of the foregoing documents to counsel to the Agent
as may be required for any NASD filings.
(f) The Company, the MHC, the Mid-Tier Holding Company 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 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, 1934 Act or 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, the Mid-Tier Holding Company and the Bank will
comply with any and all material terms, conditions, requirements and
provisions with respect to the Conversion and the transactions
contemplated thereby imposed by the OTS, SEC or the Conversion
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,
the Mid-Tier Holding Company and the Bank will comply, at their own
expense, with all material requirements imposed upon them by the
OTS, the SEC or the Conversion Regulations, and by the 1933 Act, the
1933 Act Regulations, the 1934 Act and the 1934 Act
-21-
regulations, including, without limitation, Rule 10b-5 under the
1934 Act, in each case as from time to time in force, so far as
necessary to permit the continuance of sales or dealing in the
Common Shares during such period in accordance with the provisions
hereof and the Prospectus.
(h) If, at any time during the period when the Prospectus is required to
be delivered, any event relating to or affecting the Company, the
MHC, the Mid-Tier Holding Company or the Bank shall occur, as a
result of which it is necessary or appropriate, 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, the
Company, the MHC, the Mid-Tier Holding Company and the Bank will at
their own expense, prepare and file with the OTS, the SEC 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, the Mid-Tier
Holding Company 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, the Mid-Tier Holding Company 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, directors 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 Conversion Regulations to be sold or as the Agent and the
Company, the MHC, the Mid-Tier Holding Company 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 directors 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
-22-
make and file such statements and reports in each fiscal period as
are or may be required by the laws of such jurisdiction.
(j) The Company and the Bank shall duly establish and maintain the
liquidation account for the benefit of Eligible Account Holders and
Supplemental Eligible Account Holders in accordance with the
requirements of the Conversion Regulations and such Eligible Account
Holders and Supplemental Eligible Account Holders who continue to
maintain their savings accounts in the Bank will have an inchoate
interest in their pro rata portion of the liquidation account, which
shall have a priority superior to that of the holders of the Common
Shares in the event of a complete liquidation of the Company or the
Bank.
(k) The Company and the Bank will not sell or issue, contract to sell or
otherwise dispose of, for a period of [180] days after the Closing
Date, without the Agent's prior written consent, any of their
capital stock, other than in connection with any plan or arrangement
described in the Prospectus.
(l) The Company shall register its Common Shares under Section 12(g) of
the 1934 Act concurrently with the Offering and shall request that
such registration be effective prior to or upon completion of the
Conversion. The Company shall maintain the effectiveness of such
registration for not less than three years or such shorter period as
may be required by applicable law.
(m) During the period during which the Common Shares are 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 in accordance with the 1934 Act
Regulations (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).
(n) 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 SEC 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
shareholders or filed with the OTS, the SEC or any other supervisory
or regulatory authority or any
-23-
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 or the Bank as the Agent may reasonably
request; and (iii) from time to time, such other nonconfidential
information concerning the Company or the Bank as the Agent may
reasonably request.
(o) The Company 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 Our Net Proceeds Will Be Used."
(p) Other than as permitted by the Conversion Regulations, the HOLA, the
1933 Act, the 1933 Act Regulations and its rules and regulations and
the laws of any state in which the Shares are registered or
qualified for sale or exempt from registration, none of the Company,
the MHC, the Mid-Tier Holding Company or the Bank will distribute
any prospectus, offering circular or other offering material in
connection with the offer and sale of the Shares.
(q) The Company will use its best efforts to list and maintain its
listing of the Shares on the Nasdaq National Market effective on or
prior to the Closing Date.
(r) 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.
(s) The Company will promptly take all necessary action to register as
an unitary savings and loan holding company under HOLA.
(t) The Company, the MHC, the Mid-Tier Holding Company and the Bank will
take such actions and furnish such information as are reasonably
requested
-24-
by the Agent in order for the Agent to ensure compliance with the
NASD's "Interpretation Relating to Free Riding and Withholding."
(u) None of the Company, the MHC, the Mid-Tier Holding Company or the
Bank will amend the Plan of Conversion without notifying the Agent
prior thereto.
(v) 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 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.
(w) Prior to the Closing Date, the Company, the MHC, the Mid-Tier
Holding Company 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.
(x) Subsequent to the date the Registration Statement is declared
effective by the SEC and prior to the Closing Date, except as
otherwise may be indicated or contemplated therein or set forth in
an amendment or supplement thereto, none of the Company, the MHC,
the Mid-Tier Holding Company or 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, the
MHC, the Mid-Tier Holding Company and the Bank, taken as a whole.
Section 6. Payment of Expenses. Whether or not the Conversion is completed
or the sale of the Shares by the Company is consummated, the Company, the MHC,
the Mid-Tier Holding Company and the Bank jointly and severally agree to pay or
reimburse the Agent for: (a) all filing fees in connection with all filings
related to the Offering with the NASD; (b) any stock issue or transfer taxes
which may be payable with respect to the sale of the Shares; (c) all reasonable
expenses of the Conversion, including but not limited to the Company's, the
MHC's, the Mid-Tier Holding Company's and the Bank's and the Agent's attorneys'
fees (subject to Section 2 of this Agreement) and expenses, blue sky fees,
transfer agent, registrar and other agent charges, fees relating to auditing and
accounting or other advisors and costs of printing all documents necessary in
connection with the Conversion. In the event the Company is unable to sell a
minimum of ___ Shares or the Conversion is terminated or otherwise abandoned,
the Company, the MHC, the Mid-
-25-
Tier Holding Company and the Bank shall promptly reimburse the Agent in
accordance with Section 2(d) hereof.
Section 7. Conditions to the Agent's Obligations. The obligations of the
Agent hereunder 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, the Mid-Tier Holding Company 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, the Mid-Tier
Holding Company 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, the Mid-Tier Holding
Company and the Bank shall have conducted the Conversion in all
material respects in accordance with the Plan, the Conversion
Regulations and all other applicable laws, regulations, decisions
and orders, including all terms, conditions, requirements and
provisions precedent to the Conversion imposed upon them by the OTS,
the SEC or any other authority government.
(b) The Registration Statement shall have been declared effective by the
SEC and the Conversion Application approved by the OTS 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 therefor
initiated or threatened by the SEC or any state authority, and no
order or other action suspending the authorization of the Prospectus
or the consummation of the Conversion shall have been issued or
proceedings therefor initiated or, to the Company's, the MHC's, the
Mid-Tier Holding Company's or the Bank's knowledge, threatened by
the OTS, the SEC or any other governmental 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, LLP, special counsel for the Company, the MHC, the
Mid-Tier Holding Company and the Bank, in form and substance to the
effect that:
(i) The Company has been duly incorporated and is
validly existing in good standing as a corporation under the
laws of the Commonwealth of Pennsylvania; the MHC has been
duly organized and is validly existing in good standing as a
federal mutual holding company under the laws of the United
States of America; the Mid-Tier Holding Company has
-26-
been duly incorporated and is validly existing as a
federally-chartered holding company in good standing under the
laws of the United States of America.
(ii) Each of the Company, the MHC and the Mid-Tier
Holding Company have full corporate power and authority to
own, lease and operate their respective properties and to
conduct their business as described in the Registration
Statement and the Prospectus.
(iii) The Bank is a validly existing federally-chartered
savings bank in stock form duly authorized to conduct its
business and own its property as described in the Registration
Statement and the Prospectus. All of the capital stock of the
Bank outstanding upon completion of the Conversion will be
duly authorized and will be validly issued, fully paid and
non-assessable and will be owned by the Company, to such
counsel's Actual Knowledge, free and clear of any liens,
encumbrances, claims or other restrictions.
(iv) The Bank is a member in good standing of the
FHLB-Pittsburgh. 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 "The Conversion -
Effects of the Conversion on Depositors, Borrowers and Members
- Effect on Liquidation Rights" and "Liquidation Rights" 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.
(v) Immediately following the consummation of the
Conversion, the authorized, issued and outstanding Common
Shares of the Company will be within the range set forth in
the Prospectus under the caption "Capitalization," and no
Common Shares have been issued prior to the Closing Date; the
Shares subscribed for pursuant to the Offering 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
the Prospectus, will be duly and validly issued and fully paid
and non-assessable, except for Shares purchased by the
Tax-Qualified Employee Stock Benefit Plans 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, the issuance of the Shares is not
subject to preemptive rights and the terms and provisions of
the Common Shares conform in all material respects to the
description thereof contained in the Prospectus. The form of
certificate used to evidence the Common Shares
-27-
complies with applicable laws. To such counsel's Actual
Knowledge, upon the issuance of the Shares, good title to the
Shares will be transferred from 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.
(vi) The Company, the MHC, the Bank and the Mid-Tier
Holding Company have full corporate power and authority to
enter into this Agreement and to consummate the transactions
contemplated hereby and by the Plan. The execution and
delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly
authorized by all necessary action on the part of the Company,
the MHC, the Mid-Tier Holding Company and the Bank; and this
Agreement is a valid and binding obligation of the Company,
the MHC, the Mid-Tier Holding Company and the Bank,
enforceable against the Company, the MHC, the Mid-Tier Holding
Company and the Bank 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, (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, including without limitation the provisions
of Sections 23A and 23B of the Federal Reserve Act and except
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).
(vii) The Conversion Application and Holding Company
Application have been approved by OTS and the Prospectus and
Members' Proxy Statement have been authorized for use by the
OTS, and the Prospectus and Stockholders' Proxy Statement have
been authorized for use by SEC, and no action has been taken
or is pending, or to the best of such counsel's Actual
Knowledge, none is pending or threatened to revoke any such
authorization or approval.
(viii) Pursuant to the Conversion Regulations, the Plan
has been approved by the MHC's members and duly adopted by the
required vote of the directors of the Company, the MHC, the
Mid-Tier Holding Company and Bank.
(ix) Subject to the satisfaction of the conditions to
the OTS of the Conversion, no further approval, registration,
authorization, consent or
-28-
other order of any federal or state regulatory agency is
required in connection with the execution and delivery of this
Agreement, the issuance of the Common Shares and the
consummation of the Conversion, except as may be required
under the securities or blue sky laws of various jurisdictions
(as to which no opinion need be rendered) 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 by
rendered).
(x) The Registration Statement is effective under the
1933 Act and no stop order suspending the effectiveness has
been issued under the 1933 Act or proceedings therefor
initiated or, to such counsel's Actual Knowledge, threatened
by the SEC.
(xi) At the time the Conversion Application, including
the Prospectus and Members' Proxy Statement and Stockholders'
Proxy Statement contained therein, was approved by the OTS,
the Conversion Application, including the Prospectus and
Members' Proxy Statement and Stockholders' Proxy Statement
contained therein, complied as to form in all material
respects with the requirements of the Conversion Regulations,
the 1934 Act Regulations, federal and state 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).
(xii) 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 Conversion Regulations
and federal law.
(xiii) To such counsel's Actual Knowledge, 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.
(xiv) To such counsel's Actual Knowledge, there are no
material contracts, indentures, mortgages, loan agreements,
notes, leases or other
-29-
instruments required to be described or referred to in the
Conversion 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
exhibits thereto in the Conversion Application, the
Registration Statement or the Prospectus. The description in
the Conversion 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.
(xv) The Plan complies in all material respects with all
applicable laws, rules, regulations, decisions and orders
including, but not limited to, the Conversion Regulations; no
order has been issued by the OTS, the SEC or any other
governmental 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 OTS, the SEC or any other governmental authority and,
to such counsel's Actual Knowledge, no person has sought to
obtain regulatory or judicial review of the final action of
the OTS approving the Plan, the Conversion Application, the
Holding Company Application or the Prospectus.
(xvi) To such counsel's Actual Knowledge, the Company,
the MHC, the Mid-Tier Holding Company 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, the Mid-Tier Holding Company and the
Bank are in all material respects complying therewith.
(xvii) To such counsel's Actual Knowledge, none of the
Company the MHC, the Mid-Tier Holding Company or the Bank is
in violation of its Articles of Organization 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 not have a material adverse impact on the
financial condition or results of operations of the Company,
the MHC, the Mid-Tier Holding Company and the Bank on a
consolidated basis; the execution and delivery of this
Agreement, the incurrence of the obligations herein set forth
and the consummation of the transactions contemplated herein
do not (a), to such counsel's Actual Knowledge, 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
-30-
Company, the MHC, the Mid-Tier Holding Company or the Bank
pursuant to any material contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which the
Company, the MHC, the Mid-Tier Holding Company 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, the
Mid-Tier Holding Company or the Bank are subject (other than
the establishment of the liquidation account), (b) result in
any violation of the provisions of the Articles of
Incorporation or Bylaws of the Company or the Charter or the
Bylaws of the MHC, the Mid-Tier Holding Company or the Bank
or, (c) result in any violation of any applicable federal or
state 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 and/or
The Nasdaq Stock Market need be rendered) or order or court
order, writ, injunction or decree.
(xviii) The Company's Articles of Incorporation and
Bylaws comply in all material respects with the laws of the
Commonwealth of Pennsylvania. The MHC's, the Mid-Tier Holding
Company's and the Bank's respective Charter and Bylaws comply
in all material respects with federal law.
(xix) To such counsel's Actual Knowledge, none of the
Company, the MHC, the Mid-Tier Holding Company or the Bank is
in violation of any directive from the OTS and the SEC to make
any material change in the method of conducting its respective
business.
(xx) The information in the Prospectus under the
captions "We Intend to Pay Quarterly Cash Dividends,"
"Regulation," "Taxation," "The Conversion," "Restrictions on
Acquisition of Us and Willow Grove Bank and Related
Anti-Takeover Provisions," and "Description of Our Capital
Stock" 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
Conversion process in the Prospectus under the caption "The
Conversion" 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 fairly describes such process in all material
respects. The descriptions in the Prospectus of statutes or
regulations are accurate summaries and fairly present the
information required to be shown. The information under the
caption "The Conversion - Effects of the Conversion on
Depositors, Borrowers and Members - Tax Effects" has been
reviewed by such counsel and fairly describes the opinions
-31-
rendered by them to the Company, the MHC, the Mid-Tier Holding
Company and the Bank with respect to such matters.
In addition, such counsel shall state that during the
preparation of the Conversion Application, the Registration
Statement, the Prospectus, the Members' Proxy Statement and
the Stockholders' Proxy Statement, they participated in
conferences with certain officers of, the independent public
and internal accountants for, and other representatives of,
the Company, the MHC, the Mid-Tier Holding Company and the
Bank, at which conferences the contents of the Conversion
Application, the Registration Statement, the Prospectus, the
Members' Proxy Statement and Stockholders' Proxy Statement,
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 Conversion
Application, the Registration Statement, the Prospectus,
Members' Proxy Statement, or the Stockholders' Proxy
Statement, 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
opinion (relying as to materiality as to factual matters on
certificates of officers and other factual representations by
the Company, the MHC, the Mid-Tier Holding and the Bank),
nothing has come to their attention that would lead them to
believe that the Conversion Application, the Registration
Statement, the Prospectus, the Members' Proxy Statement or the
Stockholders' Proxy Statement, 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 directors of
the Company, the MHC, the Mid-Tier Holding Company and the
Bank and certificates of public officials. Such counsel's
opinion shall be limited to matters governed by federal laws
and by the laws of the Commonwealth of Pennsylvania. The term
"Actual Knowledge" as used herein shall have the meaning set
forth in the Legal Opinion Accord of the American Bar
Association Section of Business Law. 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 trustee, director or executive officer of either of the
Company, the MHC, the Mid-Tier Holding Company 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,
-32-
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 Conversion
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 each of the Company, the MHC, the
Mid-Tier Holding Company or the Bank.
(d) At the Closing Date, the Agent shall receive a certificate of
the Chief Executive Officer and the principal accounting
officer of each of the Company, the MHC, the Mid-Tier Holding
Company 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 examined the
Prospectus, the Members' Proxy Statement and the Stockholders'
Proxy Statement, and, in their opinion, at the time the
Prospectus and the Members' Proxy Statement and the
Stockholders' Proxy Statement became authorized for final use,
the Prospectus and the Members' Proxy Statement and the
Stockholders' Proxy Statement 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, the Mid-Tier
Holding Company 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,
the Mid-Tier Holding Company or the Bank independently, or of
the Company, the MHC, the Mid-Tier Holding Company 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, the MHC, the Mid-Tier Holding
Company 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
-33-
respects with all obligations to be satisfied by them after
the Conversion; (vi) no stop order suspending the
effectiveness of the Registration Statement has been initiated
or, to the best knowledge of the Company the MHC, the Mid-Tier
Holding Company or the Bank, threatened by the OTS, the SEC or
any state authority; (vii) no order suspending the Offering,
the Conversion, the acquisition of all of the outstanding
capital stock 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 Company, the MHC, the Mid-Tier Holding Company or the
Bank, threatened by the SEC, or any governmental authority;
and (viii) to the best knowledge of the Company, the MHC, the
Mid-Tier Holding Company and the Bank, no person has sought to
obtain review of the final action of the OTS approving the
Plan.
(e) 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, the Mid-Tier
Holding Company or the Bank independently, or of the Company,
the MHC, the Mid-Tier Holding Company 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, the Mid-Tier Holding Company or the Bank
shall not have received from the OTS any direction (oral or
written) to 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, the Mid-Tier Holding Company and the Bank
taken as a whole; (iii) none of the Company, the MHC, the
Mid-Tier Holding Company or the Bank shall have been in
default (nor shall an event have occurred which, with notice
or lapse of time or both, would constitute a default) under
any provision of any agreement or instrument relating to any
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, the
Mid-Tier Holding Company or the Bank, threatened against the
Company, the MHC, the Mid-Tier Holding Company 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, the Mid-Tier Holding Company and the
Bank taken as a whole; and (v) the Shares shall have been
qualified or registered for offering and sale or exempted
therefrom under the securities or blue sky laws of the
jurisdictions
-34-
as the Agent shall have reasonably requested and as agreed to
by the Company, the MHC, the Mid-Tier Holding Company and the
Bank.
(f) 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 accountants 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 SEC and stating in effect that
in their opinion the financial statements, schedules and
related notes of the MHC, the Mid-Tier Holding Company and the
Bank as of June 30, 2001 and 2000, and for each of the three
years in the period ended June 30, 2001, 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 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 MHC, the Mid-Tier Holding
Company and the Bank prepared by the MHC, the Mid-Tier Holding
Company and the Bank, a reading of the minutes of the meetings
of the Boards of Directors of the MHC, the Mid-Tier Holding
Company and the Bank and consultations with officers of the
MHC, the Mid-Tier Holding Company and 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, 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
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
MHC, the Mid-Tier Holding Company and the Bank; or (C) there
was any decrease in the net assets or retained earnings of the
MHC, the Mid-Tier Holding Company and the Bank at the date of
such letter as compared with amounts shown in the latest
unaudited balance sheets included in the Prospectus or there
was any decrease in net income or net interest income of the
MHC, the Mid-Tier Holding Company and the Bank for the number
of full months commencing immediately after the period covered
by the latest audited income statement included in the
Prospectus and ended on the latest month end prior to the date
of the Prospectus as compared to the corresponding period in
the preceding year; and (iii) stating that, in addition to the
audit referred to in their opinion included in the Prospectus
and the
-35-
performance of the procedures referred to in clause (ii) of
this subsection (f), they have compared with the general
accounting records of the MHC, the Mid-Tier Holding Company
and the Bank, which are subject to the internal controls of
the MHC, the Mid-Tier Holding Company and the Bank, the
accounting system and other data prepared by the MHC, the
Mid-Tier Holding Company and 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 found such
amounts and percentages to be in agreement therewith.
(g) 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 (f) of this Section 7, the "specified
date" referred to in clause (ii) of subsection (f) to be a
date specified in the letter required by this subsection (g)
which for purposes of such letter shall not be more than three
business days prior to the Closing Date.
(h) At the Closing Date, the Agent shall receive a letter from RP
Financial, dated the Closing Date and addressed to the Agent
(i) confirming that said firm is independent of the Company,
the MHC, the Mid-Tier Holding Company and the Bank and is
experienced and expert in the area of corporate appraisals
within the meaning of the Conversion Regulations stating in
effect that the Appraisal prepared by such firm complies in
all material respects with the applicable requirements of the
Conversion Regulations, and (iii) further stating that its
opinion of the aggregate pro forma market value of the
Company, the MHC, the Mid-Tier Holding Company and the Bank
expressed in its Appraisal, as most recently updated, remains
in effect.
(i) The Company, the MHC, the Mid-Tier Holding Company 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,
the Mid-Tier Holding Company 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 the general affairs,
management, financial position, shareholders' equity or
results of operations of the Company, the MHC, the Mid-Tier
Holding Company or the
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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 KBW'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.
(j) At or prior to the Closing Date, the Agent shall receive: (i)
a copy of the letters from the OTS approving the Conversion
Application and authorizing the use of the Prospectus; (ii) a
copy of the order from the SEC declaring the Registration
Statement effective; (iii) a certificate of good standing from
the Secretary of the Commonwealth of Pennsylvania evidencing
the good standing of the Company; (iv) a certificate of good
standing from the OTS evidencing the good standing of the MHC,
the Mid-Tier Holding Company and the Bank; (v) a certificate
from the FDIC evidencing the Bank's insurance of accounts;
(vi) a certificate from the FHLB-Pittsburgh evidencing the
Bank's membership in good standing therein; (viii) a copy of
the letter from the OTS approving the Company's Holding
Company Application; (ix) a certified copy of the Company's
Articles of Incorporation and Bylaws and the MHC's, the
Mid-Tier Holding Company's and the Bank's Charter and Bylaws
and (x) any other documents that the Agent shall reasonably
request.
(k) Subsequent to the date hereof, there shall not have occurred
any of the following: (i) a suspension or limitation in
trading in securities generally on the New York Stock
Exchange, American Stock Exchange or in the over-the-counter
market, or quotations halted generally on The Nasdaq Stock
Market, or minimum or maximum prices for trading have been
fixed, or maximum ranges for prices for securities have been
required by either of such exchanges or the NASD or by order
of the SEC or any other governmental authority; (ii) a general
moratorium on the operations of commercial banks, or federal
savings institutions or a general moratorium on the withdrawal
of deposits from commercial banks or federal 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.
(l) 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 as herein
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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, the Mid-Tier Holding Company or the Bank in
connection with the Conversion and the sale of the Shares as
herein contemplated shall be satisfactory in form and
substance to KBW and its counsel.
Section 8. Indemnification.
(a) The Company, the MHC, the Mid-Tier Holding Company and the
Bank jointly and severally agree to indemnify and hold
harmless the Agent, its officers and directors, 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, 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 expenses (including
reasonable fees and disbursements of counsel) incurred by the
Agent or any of them in connection with investigating,
preparing to defend 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 related to the Conversion or any action taken by the
Agent where acting as agent of the Company, the MHC, the
Mid-Tier Holding Company and the Bank; (ii) 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 Conversion Application (or any
amendment or supplement thereto), the Holding Company
Application or any instrument or document executed by the
Company, the MHC, the Mid-Tier Holding Company or the Bank or
based upon written information supplied by the Company, the
MHC, the Mid-Tier Holding Company 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, directors 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, the
Mid-Tier Holding Company or the Bank with their consent or
based upon written or oral information furnished
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by or on behalf of the Company, the MHC, the Mid-Tier Holding
Company 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; (iii)
arise out of or are based upon the omission or alleged
omission to state in any of the foregoing documents or
information a material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; or
(iv) 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
Conversion Application, including the Members' Proxy Statement
and the Stockholders' Proxy Statement, (or any amendment or
supplement thereto), any Blue Sky Application or Sales
Information or other documentation distributed in connection
with the Conversion; provided, however, that no
indemnification is required under this paragraph (a) to the
extent such losses, claims, damages, liabilities or actions
arise out of or are based upon any untrue material 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
Conversion 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, the
Mid-Tier Holding Company 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, the Mid-Tier Holding Company or the Bank
by the Agent regarding the Agent is set forth in the
Prospectus under the caption "The Conversion- Marketing
Arrangements"; and, provided further, that the Company, the
MHC, the Mid-Tier Holding Company and the Bank shall not be
liable under clause (i) of the foregoing indemnification
provision to the extent that any loss, claim, damage,
liability or action is found in a final judgment by a court of
competent jurisdiction to have resulted from the Agent's bad
faith or gross negligence. Notwithstanding anything to the
contrary in this Agreement, the Company, the MHC, the Mid-Tier
Holding Company and/or the Bank shall not provide any
indemnification under this Agreement to the extent prohibited
by applicable law, rule, order or directive by the OTS or the
SEC.
(b) The Agent agrees to indemnify and hold harmless, the Company
and the Bank, their directors and officers and each person, if
any, who controls the Company 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
-39-
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 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 to defend 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), the
Conversion Application (or any amendment or supplement
thereto), 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 Conversion Application
(or any amendment or supplement thereto), or any Blue Sky
Application or Sales Information or other documentation
distributed in connection with the Conversion; provided,
however, that the Agent's obligations under this Section 8(b)
shall exist only if and only to the extent that such untrue
statement or alleged untrue statement was made in, or such
material fact or alleged material fact was omitted from, the
Registration Statement (or any amendment or supplement
thereto), the preliminary or final Prospectus (or any
amendment or supplement thereto), the Conversion Application
(or any amendment or supplement thereto), any Blue Sky
Application or Sales Information in reliance upon and in
conformity with information furnished in writing to the
Company, the MHC, the Mid-Tier Holding Company 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, the Mid-Tier
Holding Company or the Bank by the Agent regarding the Agent
is set forth in the Prospectus under the caption "The
Conversion- Marketing Arrangements."
(c) Each indemnified party shall give prompt written notice to
each indemnifying party of any action, proceeding, claim
(whether commenced or threatened), or suit instituted against
it in respect of which indemnity may be sought hereunder, but
failure to so notify an indemnifying party shall not relieve
it from any liability which it may have on account of this
Section 8 or otherwise. An indemnifying party may participate
at its own expense in the
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defense of such action. In addition, if it so elects within a
reasonable time after receipt of such notice, an indemnifying
party, jointly with any other indemnifying parties receiving
such notice, may assume defense of such action with counsel
chosen by it and approved by the indemnified parties that are
defendants in such action, unless such indemnified parties
reasonably object to such assumption on the ground that there
may be legal defenses available to them that are different
from or in addition to those available to such indemnifying
party. If an indemnifying party assumes the defense of such
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) The agreements contained in this Section 8 and in Section 9
hereof and the representations and warranties of the Company,
the MHC, the Mid-Tier Holding Company 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 the Agent or its officers, directors or controlling
persons, agent or employees or by or on behalf of the Company,
the MHC, the Mid-Tier Holding Company or the Bank or any
officers, directors, trustees or controlling persons, agent or
employees of the Company, the MHC, the Mid-Tier Holding
Company 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 Mid-Tier Holding Company,
the Bank or the Agent, the Company, the MHC, the Mid-Tier Holding Company, 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, but after deducting any contribution received by the Company, the
MHC, the Mid-Tier Holding Company, the Bank or the Agent from persons other than
the other parties 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,
the Mid-Tier Holding Company and the Bank shall be responsible for the balance.
If, however, the allocation provided above is not permitted by applicable law,
then each indemnifying
-41-
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, the Mid-Tier Holding Company 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, the Mid-Tier Holding Company 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, the Mid-Tier Holding Company 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 Mid-Tier Holding Company, 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 pursuant to Section 8(b) or this Section
9 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,
the Mid-Tier Holding Company, the Bank and the Agent under this Section 9 and
under Section 8 shall be in addition to any liability which the Company, the
MHC, the Mid-Tier Holding Company, the Bank and the Agent may otherwise have.
For purposes of this Section 9, each of the Agent's, the Company's, the MHC's,
the Mid-Tier Holding Company's or the Bank's officers, trustees and directors
and each person, if any, who controls the Agent or the Company, the MHC, the
Mid-Tier Holding Company 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, the Mid-Tier Holding Company 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. Notwithstanding anything to the contrary in this Agreement, the Company, the
MHC, the Mid-Tier Holding Company and/or the Bank shall not provide any
contribution under this Agreement to the extent prohibited by applicable law,
rule, order or directive by the OTS or the SEC.
-42-
Section 10. Survival of Agreements, Representations and Indemnities. The
respective indemnities of the Company, the MHC, the Mid-Tier Holding Company,
the Bank and the Agent and the representations and warranties and other
statements of the Company, the MHC, the Mid-Tier Holding Company, 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 Mid-Tier Holding Company, 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 Mid-Tier
Holding Company, the Bank, and any such controlling person shall be entitled to
the benefit of the respective agreements, indemnities, warranties and
representations.
Section 11. Termination. The Agent may terminate this Agreement by giving
the notice indicated below in this Section 11 at any time after this Agreement
becomes effective as follows:
(a) In the event the Company fails to sell the required minimum
number of the Shares by ________, 2002, and in accordance with
the provisions of the Plan or as required by the Conversion
Regulations, and applicable law, this Agreement shall
terminate upon refund by the Company to each person who has
subscribed for or ordered any of the Shares the full amount
which it may have received from such person, together with
interest as provided in the Prospectus, and no party to this
Agreement shall have any obligation to the other hereunder,
except as set forth in Sections 2(a), 6, 8 and 9 hereof.
(b) If any of the conditions specified in Section 7 shall not have
been fulfilled when and as required by this Agreement, unless
waived in writing, or by the Closing Date, this Agreement and
all of the Agent's obligations hereunder may be canceled by
the Agent by notifying the Company, the MHC, the Mid-Tier
Holding Company and the Bank of such cancellation in writing
or by telegram at any time at or prior to the Closing Date,
and any such cancellation shall be without liability of any
party to any other party except as otherwise provided in
Sections 2(a), 6, 8 and 9 hereof.
(c) In the event one of the Company, the MHC, the Mid-Tier Holding
Company or the Bank is in material breach of the
representations and warranties or covenants contained in
Sections 4 and 5 and such breach has not been cured after the
Agent has provided the Company, the MHC, the Mid-Tier Holding
Company and the Bank with notice of such breach.
-43-
If the Agent elects to terminate this Agreement as provided in this
Section, the Company, the MHC and the Mid-Tier Holding Company and the Bank
shall be notified promptly by telephone or telegram, confirmed by letter.
The Company, the MHC, the Mid-Tier Holding Company and the Bank may
terminate this Agreement in the event the Agent is in material breach of the
representations and warranties or covenants contained in Section 5 and such
breach has not been cured after the Company, the MHC, the Mid-Tier Holding
Company and the Bank have provided the Agent with notice of such breach.
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 Xxxxx, Xxxxxxxx
& Xxxxx, Inc., 000 Xxxxxxxxx Xxxxx, Xxxxxx, Xxxx 00000-0000, Attention: Xx.
Xxxxxxxx X. XxXxxxx (with a copy to Xxxxxxx Xxxxxxxx & Xxxx, Attention: Xxxxxxx
X. Xxxxxxxx, Esq..), and, if sent to the Company, the MHC, the Mid-Tier Holding
Company and the Bank, shall be mailed, delivered or telegraphed and confirmed to
the Company, the MHC, the Mid-Tier Holding Company and the Bank at Willow Grove
Bancorp, Inc., Welsh and Xxxxxxxxxx Xxxxx, Xxxxx Xxxx, Xxxxxxxxxxxx 00000,
Attention: Xxxxxxxxx X. Xxxxxx, Xx., President and CEO (with a copy to Elias,
Matz, Xxxxxxx & Xxxxxxx, Attention: Xxxx Xxxxxxxxx, Esq.).
Section 13. Parties. The Company, the MHC, the Mid-Tier Holding Company
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, the Mid-Tier Holding Company or the Bank, when the same
shall have been given by the undersigned or any other officer of the Company,
the MHC, the Mid-Tier Holding Company or the Bank. This Agreement shall inure
solely to the benefit of, and shall be binding upon, the Agent, the Company, the
MHC, the Mid-Tier Holding Company, 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 (except for specific references
to the letter agreement with the Agent) 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, the Mid-Tier Holding Company and the Bank. At the
closing, the Company, the MHC, the Mid-Tier Holding Company 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
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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 New York.
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.
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If the foregoing correctly sets forth the arrangement among the Company,
the MHC, the Mid-Tier Holding Company, 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.
Very truly yours,
Willow Grove Mutual Willow Grove Bancorp, Inc.
Holding Company (a Pennsylvania corporation)
By Its Authorized By Its Authorized
Representative: Representative:
_____________________________________ ______________________________________
Xxxxxxxxx X. Xxxxxxx, Xx. Xxxxxxxxx X. Xxxxxxx, Xx.
President and Chief Executive Officer President and Chief Executive Officer
Willow Grove Bank Willow Grove Bancorp, Inc.
(a federal corporation)
By Its Authorized By Its Authorized
Representative: Representative:
_____________________________________ ______________________________________
Xxxxxxxxx X. Xxxxxxx, Xx. Xxxxxxxxx X. Xxxxxxx, Xx.
President and Chief Executive Officer President and Chief Executive Officer
Accepted as of the date first above written
Xxxxx, Xxxxxxxx & Xxxxx, Inc.
By Its Authorized
Representative:
_____________________________________
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