Exhibit 1.2
Willow Grove Bancorp, Inc.
(a Pennsylvania Corporation)
2,116,000 Shares
(Subject to Increase up to 2,433,000 Shares)
COMMON STOCK ($.01 Par Value)
Subscription Price $10.00 Per Share
AGENCY AGREEMENT
_________________, 1998
Xxxxxxx Xxxx & Company
000 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxx 00000
Ladies and Gentlemen:
Willow Grove Bancorp, a federal corporation in formation (the
"Holding Company"), Willow Grove, M.H.C., a federal mutual holding company in
formation (the "MHC") and Willow Grove Bank (the "Bank") (collectively, the
"Primary Parties") hereby confirm, jointly and severally, their agreement with
Xxxxxxx Xxxx & Company (the "Agent"), as follows:
Section 1. The Offering. The Holding Company is offering up to
2,116,000 shares of common stock, par value $.01 per share (the "Common Stock")
(subject to an increase up to 2,433,400 shares), in (i) a subscription offering
(the "Subscription Offering"), and, if necessary, (ii) a direct community
offering (the "Direct Community Offering") and (iii) a syndicated community
offering (the "Syndicated Community Offering"), in connection with the
conversion and reorganization of the Bank from a mutual savings bank to a stock
savings bank and wholly-owned subsidiary of the Holding Company (the
"Reorganization"), all pursuant to the Plan of Reorganization from a Mutual
Savings Bank to Mutual Holding Company and Stock Issuance Plan (the "Plan").
References to the Bank herein shall include the Bank in its current mutual form
or post-Reorganization stock form as a wholly-owned subsidiary of the Holding
Company.
Pursuant to the Plan, the Holding Company will offer and sell shares of
its Common Stock (the "Conversion Shares" or "Shares") in the Subscription
Offering, Direct Community Offering, and Syndicated Community Offering
(collectively, the "Conversion Offerings" or "Offering") so that, upon
completion of the Conversion Offerings, the purchasers of Conversion Shares in
the Conversion Offerings will own 45.3% of the outstanding Common Stock and the
MHC will own 54.7% of the outstanding Common Stock. The Holding Company will
issue the Shares at a purchase price of $10.00 per share (the "Purchase Price").
If the number of
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Conversion Shares is increased or decreased in accordance with the Plan, the
term "Shares" shall mean such greater or lesser number, where applicable.
In the Subscription Offering, non-transferable rights to subscribe for
between 1,564,000 and 2,116,000 shares (subject to an increase up to 2,433,400
shares) of the Common Stock ("Subscription Rights") will be granted, in the
following priority: (1) the Bank's depositors with account balances of $50.00 or
more as of June 30, 1997 ("Eligible Account Holders"); (2) the Bank's
tax-qualified Employee Stock Ownership Plan ("ESOP"); (3) the Bank's depositors
with account balances of $50.00 or more as of September 30, 1998 ("Supplemental
Eligible Account Holders"); (4) depositors (other than Eligible Account Holders
and Supplemental Eligible Account Holders) and borrowers of the Bank as of the
date for determining members entitled to vote on the approval of the Plan (the
"Voting Record Date") (collectively, "Other Members") and (5) employees,
officers and directors of the Bank, subject to the priorities and purchase
limitations set forth in the Plan. The Holding Company may offer all shares of
Common Stock offered but not subscribed for in the Subscription Offering, if
any, in the Direct Community Offering to members of the general public. In the
event a Direct Community Offering is held, it may be held at any time during or
immediately after the Subscription Offering. Depending on market conditions,
shares not subscribed for in the Subscription Offering or purchased in the
Direct Community Offering may be offered in the Syndicated Community Offering to
eligible members of the general public on a best efforts basis by approved
broker-dealer firms ("Assisting Brokers") which are members of the National Bank
of Securities Dealers, Inc. ("NASD").
The Holding Company has filed with the U.S. Securities and Exchange
Commission (the "Commission") a Registration Statement on Form S-1 (File No.
333-63737) in order to register the Shares under the Securities Act of 1933, as
amended (the "1933 Act"), and has filed such amendments thereto as have been
required to the date hereof (the "Registration Statement"). The prospectus, as
amended, included in the Registration Statement at the time it initially became
effective is hereinafter called the "Prospectus," except that if any prospectus
is filed by the Holding Company pursuant to Rule 424(b) or (c) of the
regulations of the Commission under the 1933 Act differing from the prospectus
included in the Registration Statement at the time it initially becomes
effective, the term "Prospectus" shall refer to the prospectus filed pursuant to
Rule 424(b) or (c) from and after the time said prospectus is filed with the
Commission and shall include any supplements and amendments thereto from and
after their dates of effectiveness or use, respectively.
In connection with the Reorganization, the Bank filed with the Office
of Thrift Supervision, Department of the Treasury (the "OTS"), pursuant to Title
12, Parts 575 and 563b of the Code of Federal Regulations (the "MHC
Regulations"), a Notice of Mutual
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Holding Company Reorganization and Application for Approval of an Issuance by a
Subsidiary of a Mutual Holding Company, including exhibits and the Prospectus,
and has filed amendments thereto as required by the OTS (as so amended, the "MHC
Notice and Application"). The Holding Company filed with the OTS its application
on Form H-(e)1 (the "Holding Company Application") to acquire the Bank under the
Home Owners Loan Act and the regulations promulgated thereunder ("HOLA"). The
Bank's application with the OTS for approval of the formation of Interim Two and
the merger of Interim Two with and into the Bank (the "Merger Application") was
filed as an exhibit to the Holding Company Application. The MHC Notice and
Application and the Holding Company Application (including the Merger
Application) shall collectively be hereinafter referred to as the "OTS
Applications."
Section 2. Appointment of the Agent. Subject to the terms and
conditions of this Agreement, the Primary Parties hereby appoint Xxxx as their
financial advisor and marketing agent to utilize its best efforts to solicit
subscriptions for Shares of the Company's Common Stock and to advise and assist
the Company and the Bank with respect to the Company's sale of the Shares in the
Offering.
On the basis of the representations and warranties and subject to the
terms and conditions of this Agreement, the Agent accepts such appointment and
agrees to consult with and advise the Primary Parties as to the matters set
forth in the letter agreement ("Letter Agreement"), dated July 14, 1998 between
the Bank and Xxxx (a copy of which is attached hereto as Exhibit A). It is
acknowledged by the Primary Parties that the Agent shall not be obligated to
purchase any Shares and shall not be obligated to take any action which is
inconsistent with any applicable law, regulation, decision or order.
Subscriptions will be offered by means of Order Forms as described in the
Prospectus. Except as provided in the paragraph below, the appointment of the
Agent hereunder shall terminate upon completion of the Offerings.
Xxxx agrees to act as financial advisor to the Primary Parties for a
period of one year following the consummation of the Conversion for no
additional fee to render general advice on financial matters, including dividend
policy, and share repurchase programs, assistance with shareholder reporting and
shareholder relations matters, general advice on mergers and acquisitions, and
other related financial matters which are brought to the attention of the
Primary Parties. Thereafter, if the parties wish to continue the relationship, a
fee will be negotiated and an agreement with respect to specific advisory
services will be entered into at that time. Should discussions commence for a
specific acquisition transaction by, or a sale of, the Primary Parties during
the period in which the Agent is acting as financial advisor, the general
financial advisory relationship as set forth in this paragraph will terminate
with
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respect to the specific transaction. If the Primary Parties and the Agent wish
to have the Agent initiate, negotiate and/or process a specific transaction, an
appropriate fee will be negotiated at that time.
Section 3. Refund of Purchase Price. In the event that the Conversion
is not consummated for any reason, including but not limited to the inability to
sell the Common Stock during the Offerings (including any permitted extension
thereof), this Agreement shall terminate and any persons who have subscribed for
any of the shares of Common Stock shall have refunded to them the full amount
which has been received from such person, together with interest at the Bank's
current passbook rate, from the date payment is received as provided in the
Prospectus. Upon termination of this Agreement, neither the Agent nor the
Primary Parties shall have any obligation to the other except that (i) the
Primary Parties, as applicable, shall remain liable for any amounts due pursuant
to Sections 4(a), 8, 10 and 11 hereof, unless the transaction is not consummated
due to the breach by the Agent of a warranty, representation or covenant; and
(ii) the Agent shall remain liable for any amount due pursuant to Sections 10
and 11 hereof, unless the transaction is not consummated due to the breach by
the Primary Parties of a warranty, representation or covenant.
Section 4. Fees. In addition to the expenses specified in Section 8
hereof, as compensation for the Agent's services as agents under this Agreement,
the Agent will receive the following fees from the Primary Parties.
(a) A management fee to Xxxx in the amount of $40,000 payable
in four consecutive monthly installments of $10,000, commencing with the signing
of the Letter Agreement. Such fees shall be deemed to be 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 point the termination occurred. Xxxx
acknowledges receipt of $_________ as of the date hereof.
(b) A fee of 1.5% of the aggregate Purchase Price of the
Shares sold in the Subscription Offering and the Community Offering, excluding
those shares purchased by the Bank's officers, directors or employees (or
members of their immediate families) or by any Tax-Qualified Employee Plan
(except IRA's) created by the Primary Parties for some or all of its directors
or employees. The management fee described in Section 4(a) shall be deducted
from the fee in this section.
(c) A fee not to exceed 5.5% of the aggregate Purchase Price
of the Shares sold by Assisting Brokers in any extension of the Offerings and
the Agent will pay Assisting Brokers which assisted in the subscription or
purchase of Shares in the
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Syndicated Public Offering, a fee 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. The decision to utilize Assisting
Brokers will be made jointly by the Agent on the one hand, and the Primary
Parties, on the other hand. In the event, with respect to any stock purchases,
fees are paid pursuant to subsection 4(c), such fees shall be paid in lieu of,
and not in addition to, payments to the Agent pursuant to subsections 4(a) and
4(b).
The fees specified in subsections (b), (c) and (d) shall be payable in
same-day funds on the Closing Date.
Section 5. Closing. If the minimum number of the shares of Common Stock
permitted to be sold-in the Conversion on the basis of the most recent updated
Conversion appraisal are subscribed for at or before the termination of the
Offerings and the other conditions to the completion of the Conversion are
satisfied, the Holding Company agrees to issue on the Closing Date the shares of
Common Stock which have been sold against payment therefor from the escrow or
other accounts maintained for the subscribers as set forth in the Plan and to
deliver certificates evidencing ownership of such shares of Common Stock in such
authorized denominations and registered in such names as may be indicated on the
subscription Order Forms directly to the purchasers thereof as promptly as
practicable after the Closing Date. The Closing shall be held at the offices of
counsel to the Holding Company, or at such other place as shall be agreed upon
among the Holding Company, the Bank and the Agent at 10:00 a.m. on a business
day selected by the Holding Company which business day shall be no less than two
business days following the giving of prior notice by the Holding Company to the
Agent or at such other time as shall be agreed upon by the Holding Company, the
Bank and the Agent. At the Closing, the Primary Parties shall deliver to the
Agent in same-day funds the commissions, fees and expenses owing to the Agent as
set forth in Sections 4 and 8 hereof and the opinions required hereby and other
documents deemed reasonably necessary by the Agent shall be executed and
delivered to effect the sale of the shares as contemplated hereby and pursuant
to the terms of the Prospectus. The Holding Company shall notify the Agent by
telephone, confirmed in writing, when funds shall have been received for the
minimum number of shares of the Common Stock. The date upon which the Holding
Company shall release the Shares for delivery in accordance with the terms
hereof is referred to herein as the "Closing Date."
Section 6.A. Representations and Warranties of the Primary
Parties. The Primary Parties jointly and severally represent and
warrant to the Agent that:
(a) The Primary Parties have all such power, authority,
authorizations, approvals and orders as may be
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required to enter into this Agreement, to carry out the provisions and
conditions hereof and to issue and sell the capital stock of the Bank to the
Holding Company and the Shares to be sold by the Holding Company as provided
herein and as described in the Prospectus. 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 Holding Company and the Bank
and this Agreement has been validly executed and delivered by the Holding
Company and the Bank and is the valid, legal and binding agreement of the
Holding Company and the Bank enforceable in accordance with its terms, except to
the extent, if any, that the provisions of Sections 10 and 11 hereof may be
unenforceable as against public policy, and except to the extent that such
enforceability may be limited by bankruptcy laws, insolvency laws, or other laws
affecting the enforcement of creditors' rights generally, or the rights of
creditors of savings institutions insured by the FDIC (including the laws
relating to the rights of the contracting parties to equitable remedies).
(b) As of the Closing Date, the Bank shall have completed all
conditions precedent to the Conversion in accordance with the Plan and shall
have complied in all material respects with applicable laws, regulations (except
as modified or waived in writing by the OTS), decisions and orders, including
all terms, conditions, requirements and provisions precedent to the Conversion
imposed upon it by the OTS as set forth in correspondence received from the OTS.
The Plan has been approved by the OTS, and to the best knowledge of the Bank, no
person has challenged or sought to obtain judicial review of the actions of the
OTS in approving the Conversion pursuant to Section 5(i)(2)(B) of the HOLA or
any other statute or regulation.
(c) As of the Closing Date, the MHC will be duly organized and
will be validly existing as a federally chartered mutual holding company under
the laws of the United States, duly authorized to conduct its business and own
its property as described in the Registration Statement and the Prospectus; as
of the Closing Date, the MHC will have obtained all licenses, permits and other
governmental authorizations required for the conduct of its business except
those that individually or in the aggregate would not materially adversely
affect the financial condition, earnings, capital, assets or properties of the
Primary Parties taken as a whole; as of the Closing Date, all such licenses,
permits and governmental authorizations will be in full force and effect and the
MHC will be in compliance therewith in all material respects; as of the Closing
Date, the MHC will be duly qualified as a foreign corporation to transact
business in each jurisdiction in which the failure to be so qualified in one or
more of such jurisdictions would have a material adverse effect on the financial
condition, earnings, capital, assets properties or business of the Primary
Parties.
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(d) The MHC does not own any equity securities or any equity
interest in any business enterprise except as described in the Prospectus.
(e) The MHC is not authorized to issue any shares of capital
stock.
(f) The Registration Statement was declared effective by the
Commission on _____________________; and no stop order has been issued with
respect thereto and no proceedings therefor have been initiated or to the best
knowledge of the Bank threatened by the Commission. At the time the Registration
Statement, including the Prospectus contained therein (including any amendment
or supplement thereto), became effective, the Registration Statement complied as
to form in all material respects with the requirements of the 1933 Act and the
regulations promulgated thereunder and the Registration Statement including the
Prospectus contained therein (including any amendment or supplement thereto),
any blue sky application or any Sales Information (as such terms are defined in
Section 10 hereof) authorized by the Holding Company or the Bank for use in
connection with the Offerings did not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading, and at the time any Rule 424(b) or (c) Prospectus was
filed with or mailed to the Commission for filing and at the Closing Date
referred to in Section 5, the Registration Statement including the Prospectus
contained therein (including any amendment or supplement thereto) and any Blue
Sky Application or any Sales Information authorized by the Holding Company or
the Bank for use in connection with the Offerings will not contain an untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in light of the circumstances under which they
were made, not misleading; provided, however, that the representations and
warranties in this Section 6A shall not apply to statements or omissions made in
reliance upon and in conformity with written information furnished to the
Holding Company or the Bank by the Agent expressly regarding the Agent for use
under the caption "The Conversion - Marketing Arrangements" or written
statements or omissions from any sales information or information filed pursuant
to state securities or blue sky laws or regulations regarding the Agent.
(g) The MHC Application, including the Prospectus, was
approved by the OTS on ___________________; and the Proxy Statement of the Bank
and the Prospectus have been approved for use by the OTS. At the time of the
approval of the Application, including the Prospectus, by the OTS (including any
amendment or supplement thereto) and at all times subsequent thereto until the
Closing Date, the Application, including the Prospectus, will comply as to form
in all material respects with the Conversion Regulations and any other
applicable rules and regulations of the
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OTS (except as modified or waived in writing by the OTS). The Application,
including the Prospectus (including any amendment or supplement thereto), does
not include any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading; provided, however, that representations or warranties in this
subsection shall not apply to statements or omissions made in reliance upon and
in conformity with written information furnished to the Bank by the Agent
expressly regarding the Agent for use in the Prospectus contained in the
Application under the caption "The Conversion -- Marketing Arrangements" or
written statements or omissions from any sales information or information filed
pursuant to state securities or blue sky laws or regulations regarding the
Agent.
(h) No order has been issued by the OTS, the Commission or the
FDIC (and hereinafter reference to the FDIC shall include the SAIF), or any
state regulatory authority, preventing or suspending the use of the Prospectus
and no action by or before any such government entity to revoke any approval,
authorization or order of effectiveness related to the Conversion is, to the
best knowledge of the Primary Parties, pending or threatened.
(i) At the Closing Date, the Plan will have been adopted by
the Board of Directors of the Primary Parties, the Primary Parties will have
completed all conditions precedent to the Conversion specified in the Plan and
the offer and sale of the Shares will have been conducted in all material
respects in accordance with the Plan, the Conversion Regulations (except as
modified or waived in writing by the OTS) and with all other applicable laws,
regulations, decisions and orders, including all terms, conditions, requirements
and provisions precedent to the Conversion imposed upon the Holding Company or
the Bank by the OTS, the Commission or any other regulatory authority and in the
manner described in the Prospectus. At the Closing Date, to the best knowledge
of the Primary Parties, no person will have 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 the HOLA or any other statute or
regulation.
(j) The Holding Company has filed with the OTS the Holding
Company Application and has received, as of the Closing Date, approval of its
acquisition of the Bank from the OTS.
(k) RP Financial, which prepared the appraisal, has advised
the Holding Company and the Bank in writing that it is independent with respect
to each within the meaning of the Conversion Regulations.
(l) KPMG Peat Marwick, LLP which certified the financial
statements filed as part of the Registration Statement
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and the Application, have advised the Holding Company and the Bank in writing
that they are, with respect to the Holding Company and the Bank, independent
certified public accountants within the meaning of 12 C.F.R. Sections 563c.3 and
571.2(c)(3) and under the 1933 Act and the regulations promulgated thereunder.
(m) The financial statements and the schedules and notes
thereto which are included in the Registration Statement and which are a part of
the Prospectus present fairly the financial position and retained earnings of
the Bank as of the dates indicated and the results of operations and cash flows
for the periods specified. The financial statements comply in all material
respects with the applicable accounting requirements of Title 12 of the Code of
Federal Regulations and generally accepted accounting principles ("GAAP")
applied on a consistent basis during the periods presented except as otherwise
noted therein and present fairly in all material respects the information
required to be stated therein and are consistent with the most recent financial
statements and other reports filed by the Bank with the OTS and the FDIC except
that accounting principles employed in such filings conform to requirements of
such authorities and not necessarily to GAAP. The other financial, statistical
and pro forma information and related notes included in the Prospectus fairly
present the information shown therein on a basis consistent with the audited and
unaudited financial statements included in the Prospectus, and as to the pro
forma adjustments, the adjustments made therein have been properly applied on
the basis described therein.
(n) 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 or in the earnings,
capital, properties or business affairs of the Holding Company or the Bank or of
the Holding Company and the Bank considered as one enterprise, whether or not
arising in the ordinary course of business; (ii) there has not been any material
increase in the aggregate amount of loans past due ninety (90) days or more,
real estate acquired by foreclosure or loans characterized as "in substance
foreclosure" or any change in total assets of the Bank in an amount greater than
$10.0 million; nor has the Bank issued any securities or incurred any liability
or obligation for borrowings other than in the ordinary course of business;
(iii) there have not been any material transactions entered into by the Holding
Company or the Bank, other than those in the ordinary course of business; and
(iv) the capitalization, liabilities, assets, properties and business of the
Holding Company and the Bank conform in all material respects to the
descriptions thereof contained in the Prospectus and, neither the Bank nor the
Holding Company has any material liabilities of any kind, contingent or
otherwise, except as set forth in or contemplated by the Registration Statement
and the Prospectus.
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(o) The Holding Company is a corporation duly organized and in
good standing under the laws of the State of Delaware, with corporate power and
authority to own its properties and to conduct its business as described in the
Prospectus, and is duly qualified to transact business and is in good standing
in each jurisdiction in which the conduct of its business requires such
qualification unless the failure to qualify in one or more of such jurisdictions
would not have a material adverse effect on the financial condition, earnings,
capital, properties or business affairs of the Holding Company and the Bank
considered as a whole.
(p) The Bank is a duly organized and validly existing
federally chartered savings bank in mutual form and upon the Conversion will
become a duly organized and validly existing federally chartered savings bank in
stock form, in both instances duly authorized to conduct its business as
described in the Prospectus; the activities of the Bank are permitted by the
rules, regulations and practices of the OTS; the Bank has obtained all licenses,
permits and other governmental authorizations currently required for the conduct
of its business except those that individually or in the aggregate would not
materially adversely affect the financial condition of the Holding Company and
the Bank taken as a whole; all such licenses, permits and other governmental
authorizations are in full force and effect and the Bank is in good standing
under the laws of the United States and is duly qualified as a foreign
corporation to transact business in each jurisdiction in which failure to so
qualify would have a material adverse effect upon the financial condition,
earnings, capital, properties or business affairs of the Bank; all of the issued
and outstanding capital stock of the Bank after the Conversion will be duly and
validly issued and fully paid and nonassessable; and the Holding Company will
directly own all of such capital stock free and clear of any mortgage, pledge,
lien, encumbrance, claim or restriction. The Bank does not own equity securities
or any equity interest in any other business enterprise except as described in
the Prospectus.
(q) The Bank is a member of the Federal Home Loan Bank of
Pittsburgh ("FHLB of Pittsburgh"); the deposit accounts of the Bank are insured
by the FDIC up to applicable limits; and upon 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 Conversion
Regulations.
(r) Upon Conversion, the authorized, issued and outstanding
equity capital of the Holding Company will be as described in the Prospectus
under the caption "Capitalization," and no shares of Common Stock have been or
will be issued and outstanding prior to the Closing Date; the shares of Common
Stock to be subscribed for in the Offerings have been duly and validly
authorized for issuance, and when issued and delivered by the Holding Company
pursuant to the Plan against payment of the
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consideration calculated as set forth in the Plan and the Prospectus, will be
duly and validly issued and fully paid and nonassessable; the issuance of the
shares of Common Stock is not subject to preemptive rights; and the terms and
provisions of the shares of Common Stock will conform in all material respects
to the description thereof contained in the Prospectus. Upon issuance of the
Shares, good title to the Shares will be transferred from the Holding Company to
the purchaser thereof against payment therefor, subject to such claims as may be
asserted against the purchasers thereof by third party claimants.
(s) As of the date hereof and as of the Closing Date, neither
the MHC, the Holding Company nor the Bank is in violation of its certificate of
incorporation or charter, respectively, or its bylaws (and the Bank will not be
in violation of its charter or bylaws in capital stock form as of the Closing
Date) or in material default in the performance or observance of any obligation,
agreement, covenant, or condition contained in any contract, lease, loan
agreement, indenture or other instrument to which it is a party or by which it,
or any of its property, may be bound which would result in a material adverse
change in the condition (financial or otherwise), earnings, capital, properties
or business affairs of the Primary Parties considered as one enterprise or which
would materially affect their properties or assets. The consummation of the
transactions herein contemplated will not (i) conflict with or constitute a
breach of, or default under, the certificate of incorporation and bylaws of the
Holding Company, the charter and bylaws of the Bank (in either mutual or capital
stock form), the certificate of incorporation and bylaws of the MHC or
materially conflict with or constitute a material breach of, or default under
any material contract, lease or other instrument to which the Primary Parties
have a beneficial interest, or any applicable law, rule, regulation or order
that is material to the financial condition of the Primary Parties on a
consolidated basis; (ii) violate any authorization, approval, judgment, decree,
order, statute, rule or regulation applicable to the Primary Parties except for
such violations which would not have a material adverse effect on the financial
condition and results of operations of the Primary Parties on a consolidated
basis; or (iii) with the exception of the liquidation account established in the
Conversion, result in the creation of any material lien, charge or encumbrance
upon any property of the Primary Parties.
(t) No material default exists, and no event has occurred
which with notice or lapse of time, or both, would constitute a material default
on the part of the Primary Parties, in the due performance and observance of any
term, covenant or condition of any indenture, mortgage, deed of trust, note,
bank loan or credit agreement or any other material instrument or agreement to
which the Primary Parties are a party or by which any of them or any of their
property is bound or affected in any respect which, in any such case, is
material to the Primary Parties considered as one enterprise, and such
agreements are in
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full force and effect; and no other party to any such agreements has instituted
or, to the best knowledge of the Primary Parties, threatened any action or
proceeding wherein the Holding Company, the Bank, or the MHC is alleged to be in
default thereunder under circumstances where such action or proceeding, if
determined adversely to the Primary Parties, as the case may be, would have a
material adverse effect upon the Primary Parties considered as one enterprise.
(u) The Primary Parties have good and marketable title to all
assets which are material to the business of the Primary Parties and to those
assets described in the Prospectus as owned by them free and clear of all
material liens, charges, encumbrances, restrictions or other claims, except such
as are described in the Prospectus or which do not have a material adverse
effect on the business of the Primary Parties taken as a whole; and all of the
leases and subleases which are material to the business of the Primary Parties,
as described in the Registration Statement or Prospectus, are in full force and
effect.
(v) The Primary Parties are not in material violation of any
directive from the OTS, the FDIC, the Commission or any other agency to make any
material change in the method of conducting their respective businesses; the
Primary Parties have conducted and are conducting their respective businesses so
as to comply in all material respects with all applicable statutes and
regulations (including, without limitation, regulations, decisions, directives
and orders of the OTS, the Commission and the FDIC) and, except as set forth in
the Prospectus, there is no charge, investigation, action, suit or proceeding
before or by any court, regulatory authority or governmental agency or body
pending or, to the best knowledge of either of the Primary Parties, threatened,
which would reasonably be expected to materially and adversely affect the
Conversion, the performance of this Agreement, or the consummation of the
transactions contemplated in the Plan as described in the Registration
Statement, or which would reasonably be expected to result in any material
adverse change in the financial condition or in the earnings, capital,
properties or business affairs of the Primary Parties considered as one
enterprise.
(w) Bank has received an opinion of its special counsel, Xxxxx
Xxxx Xxxxxxx & Xxxxxxx LLP ("Xxxxx Xxxx") with respect to the federal income tax
consequences of the Conversion of the Bank from mutual to stock form, as
described in the Registration Statement and the Prospectus, and an opinion from
KPMG Peat Marwick, LLP with respect to the Commonwealth of Pennsylvania tax
consequences of the proposed transaction; and the facts and representations upon
which such opinions are based are truthful, accurate and complete, and neither
the Bank, the MHC, nor the Holding Company will take any action inconsistent
therewith.
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(x) The Primary Parties have timely filed all required federal
and state tax returns, have paid all taxes that have become due and payable in
respect of such returns, except where permitted to be extended, have made
adequate reserves for similar future tax liabilities and no deficiency has been
asserted with respect thereto by any taxing authority.
(y) No approval, authorization, consent or other order of any
regulatory or supervisory or other public authority is required for the
execution and delivery by the Primary Parties of this Agreement, or the issuance
of the Shares, except for the approval of the OTS and the Commission (which have
been received) and any necessary qualification, notification, or registration or
exemption under the securities or blue sky laws of the various states in which
the shares are to be offered and except as may be required under the rules and
regulations of the NASD and/or the Nasdaq.
(z) The Primary Parties have made appropriate arrangements for
placing the funds received from subscriptions for Shares in special interest
bearing accounts 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 Holding Company if all
Shares are sold.
(aa) Prior to the Conversion, the Bank was not authorized to
issue shares of capital stock and neither the Holding Company, the MHC, nor the
Bank has: (i) issued any securities within the last 18 months (except for notes
to evidence other bank loans and reverse repurchase agreements or other
liabilities); (ii) had any material dealings with respect to sales of securities
within the 12 months prior to the date hereof with any member of the NASD, or
any person related to or associated with such member, other than discussions and
meetings relating to the proposed offerings and routine purchases and sales of
U.S. government and agency and other securities; (iii) entered into a financial
or management consulting agreement except as contemplated hereunder; or (iv)
engaged any intermediary between the Agent and the Primary Parties in connection
with the offering of Shares, and no person is being compensated in any manner
for such service.
(ab) To the best knowledge of the Primary Parties, neither the
Primary Parties nor the employees of the Primary Parties have made any payment
of funds of the Primary Parties as a loan to any person for the purchase of the
Shares.
Any certificates signed by an officer of the Primary Parties and
delivered to the Agent or its counsel that refer to this Agreement shall be
deemed to be a representation and warranty by the Primary Parties to the Agent
as to the matters covered thereby with the same effect as if such representation
and warranty were set forth herein.
13
Section 6.B. Representations and Warranties of the Agent.
Xxxx represents and warrants to the Company and the Bank that:
(a) Xxxx is a corporation and is validly existing in good
standing under the laws of the State of Ohio with full power and authority to
provide the services to be furnished to the Primary Parties hereunder.
(b) The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly and validly
authorized by all necessary action on the part of Xxxx, and this Agreement has
been duly and validly executed and delivered by Xxxx and is the legal, valid and
binding agreement of Xxxx, enforceable in accordance with its terms.
(c) Each of Xxxx 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.
(d) The execution and delivery of this Agreement by Xxxx, 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 event
which with notice or lapse of time or both would constitute a default) under,
the certificate of incorporation of Xxxx or any agreement, indenture or other
instrument to which Xxxx is a party or by which it or its property is bound.
(e) No action, suit, charge or proceeding is pending, or to
the knowledge of Xxxx threatened, against Xxxx which, if determined adversely to
Xxxx, would have a material adverse effect upon the ability of Xxxx to perform
obligations under this Agreement.
(f) No approval, authorization, consent or other order of any
regulatory or supervisory or other public authority is required for the
execution and delivery by Xxxx of this Agreement, except as may have been
received.
Section 7.A. Covenants of the Primary Parties. The Primary
Parties hereby jointly and severally covenant with the Agent as
follows:
(a) The Holding Company has filed the Registration Statement
with the Commission. The Holding Company will not, at any time after the date
the Registration Statement is declared effective, file any amendment or
supplement to the Registration Statement without providing the Agent and its
counsel an opportunity to review such amendment or file any amendment or
14
supplement to which amendment the Agent or its counsel shall
reasonably object.
(b) The Primary Parties have filed the OTS Applications. The
Primary Parties will not, at any time after the date the OTS Applications are
approved, file any amendment or supplement to the OTS Applications without
providing the Agent and its counsel an opportunity to review such amendment or
supplement or file any amendment or supplement to which amendment or supplement
the Agent or its counsel shall reasonably object.
(c) The Primary Parties will use their best efforts to cause
any post-effective amendment to the Registration Statement to be declared
effective by the Commission and any post-effective amendment to the 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 Applications, as
amended, have been approved by the OTS; (iii) of the receipt of any comments
from the Commission, the OTS, the FDIC or any other governmental entity with
respect to the Conversion or the transactions contemplated by this Agreement;
(iv) of any request by the Commission, the OTS, the FDIC or any other
governmental entity for any amendment or supplement to the Registration
Statement or the Application or for additional information; (v) of the issuance
by the Commission, the OTS, the FDIC or any other governmental agency of any
order or other action suspending the Offerings or the use of the Registration
Statement or the Prospectus or any other filing of the Holding Company and the
Bank under the Conversion Regulations or other applicable law, or the threat of
any such action; (vi) of the issuance by the Commission, the OTS, the FDIC or
any state authority of any stop order suspending the effectiveness of the
Registration Statement or of the initiation or threat of initiation or threat of
any proceedings for that purpose; or (vii) of the occurrence of any event
mentioned in paragraph (g) below. The Primary Parties will make every reasonable
effort to prevent the issuance by the Commission, the OTS, the FDIC or any state
authority of any such order and, if any such order shall at any time be issued,
to obtain the lifting thereof at the earliest possible time.
(d) The Primary Parties will provide the Agent and its counsel
notice of its intention to file, and reasonable time to review prior to filing
any amendment or supplement to the Primary Parties' Applications and will not
file any such amendment or supplement to which the Agent shall reasonably object
or which shall be reasonably disapproved by its counsel.
(e) The Primary Parties will deliver to the Agent and to its
counsel conformed copies of each of the following documents, with all exhibits:
the Application, the Holding Company Application and the MHC Application, as
originally filed and of each amendment or supplement thereto, and the
Registration
15
Statement, as originally filed and each amendment thereto. Further, the 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. In
addition, the Primary Parties will also deliver to the Agent such number of
copies of the Prospectus, as amended or supplemented, as the Agent may
reasonably request.
(f) The Primary Parties will comply in all material respects
with any and all terms, conditions, requirements and provisions with respect to
the Conversion and the transactions contemplated thereby imposed by the
Commission, by applicable state law and regulations, and by the 1933 Act, the
Securities Exchange Act of 1934 (the "1934 Act") and the rules and regulations
of the Commission promulgated under such statutes, to be complied with prior to
or subsequent to the Closing Date; and when the Prospectus is required to be
delivered, the Primary Parties will comply in all material respects, at their
own expense, with all material requirements imposed upon them by the OTS, the
Conversion Regulations (except as modified or waived in writing by the OTS), the
FDIC, the Commission, by applicable state law and regulations and by the 1933
Act, the 1934 Act and the rules and regulations of the Commission promulgated
under such statutes, in each case as from time to time in force, so far as
necessary to permit the continuance of sales or dealing in shares of Common
Stock during such period in accordance with the provisions hereof and the
Prospectus.
(g) If any event relating to or affecting the Primary Parties
shall occur, as a result of which it is necessary, in the reasonable opinion of
counsel for the Primary Parties or for the Agent, to amend or supplement the
Registration Statement or the Prospectus in order to make them not misleading in
light of the circumstances existing at the time of their use, the Primary
Parties will, at their expense, forthwith prepare, file with the Commission and
the OTS, and furnish to the Agent, a reasonable number of copies of an amendment
or amendments of, or a supplement or supplements to, the Registration Statement
and the Prospectus (in form and substance satisfactory to counsel for the Agent
after a reasonable time for review) which will amend or supplement the
Registration Statement and/or the Prospectus so that as amended or supplemented
it will not contain an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in light of the
circumstances existing at the time, not misleading. For the purpose of this
subsection, the Primary Parties each will furnish such information with respect
to itself as the Agent may from time to time reasonably request.
(h) Pursuant to the terms of the Plan, the Holding Company
will endeavor in good faith, in cooperation with the Agent, to register or to
qualify the Shares for offering and sale under the applicable securities laws of
the jurisdictions in which the Subscription Offering and Public Offering will be
16
conducted; provided, however, that the Holding Company shall not be obligated to
file any general consent to service of process or to qualify to do business in
any jurisdiction in which it is not so qualified. In each jurisdiction where any
of the Shares shall have been registered or qualified as above provided, the
Holding Company will make and file such statements and reports in each year as
are or may be required by the laws of such jurisdictions.
(i) The liquidation account for the benefit of account holders
as of June 30, 1997 and September 30, 1998 will be duly established and
maintained in accordance with the requirements of the OTS, 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 shares of Common Stock in the event of a
complete liquidation of the Bank.
(j) The Primary Parties will not sell or issue, contract to
sell or otherwise dispose of, for a period of 90 days after the date hereof,
without the Agent's prior written consent, which consent shall not be
unreasonably withheld, any shares of Common Stock other than in connection with
any plan or arrangement described in the Prospectus.
(k) For the period of three years from the date of this
Agreement, the Holding Company and the MHC will furnish to the Agent upon
request (i) a copy of each report of the Holding Company and MHC furnished to or
filed with the Commission under the 1934 Act or any national securities exchange
or system on which any class of securities of the Holding Company is listed or
quoted, (ii) a copy of each report of the Holding Company and MHC mailed to
holders of Common Stock or non-confidential report filed with the Commission or
the OTS or any other supervisory or regulatory authority or any national
securities exchange or system on which any class of the securities of the
Holding Company is listed or quoted, and (iii) from time to time, such other
publicly available information concerning the Primary Parties as the Agent may
reasonably request.
(l) The Primary Parties will use the net proceeds from the
sale of the Common Stock in the manner set forth in the Prospectus under the
caption "Use of Proceeds."
(m) Prior to the Closing Date, Primary Parties 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 supplemented or amended,
would include an untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein not misleading.
(n) The Primary Parties will distribute the Prospectus or
other offering materials in connection with the offering and
17
sale of the Common Stock only in accordance with the Conversion Regulations, the
1933 Act and the 1934 Act and the rules and regulations promulgated under such
statutes, and the laws of any state in which the shares are qualified for sale.
(o) The Holding Company shall register its Common Stock under
Section 12(g) of the 1934 Act, concurrent with the effective date of the
Registration Statement. The Holding Company shall maintain the effectiveness of
such registration for not less than three years or such shorter period as
permitted by the OTS.
(p) For so long as the Holding Company's Common Stock is
registered under the 1934 Act, the Holding Company will furnish to its
stockholders as soon as practicable after the end of each fiscal year such
reports and other information as are required to be furnished to its
stockholders under the 1934 Act (including consolidated financial statements of
the Holding Company and its subsidiaries, certified by independent public
accountants).
(q) The Holding Company will comply with the provisions of
Rule 158 of the 1933 Act.
(r) The Holding Company will file with the Commission such
reports on Form SR as may be required pursuant to Rule 463 under the 1933 Act.
(s) The Holding Company will use its best efforts to obtain
approval for and maintain quotation of the Common Stock on the Nasdaq National
Market effective on or prior to the Closing Date.
(t) The Bank will maintain appropriate arrangements for
depositing all funds received from persons mailing subscriptions for or orders
to purchase Shares in the Offerings 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 Offerings in
accordance with the Plan as described in the Prospectus or until refunds of such
funds have been made to the persons entitled thereto or withdrawal
authorizations canceled in accordance with the Plan and as described in the
Prospectus. The 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.
(u) The Holding Company and the MHC will each promptly
register as a savings and loan holding company under the HOLA.
18
(v) The Primary Parties will take such actions and furnish
such information as are reasonably requested by the Agent in order for the Agent
to ensure compliance with the "Interpretation of the Board of Governors of the
NASD on Free Riding and Withholding."
(w) The Primary Parties will conduct their businesses in
compliance in all material respects with all applicable federal and state laws,
rules, regulations, decisions, directives and orders including, all decisions,
directives and orders of the Commission, the OTS and the FDIC.
(x) The Primary Parties will not amend the Plan of Conversion
without notifying the Agent prior thereto.
(y) The Holding Company shall provide the Agent with any
information necessary to carry out the allocation of the Shares in the event of
an oversubscription and such information shall be accurate and reliable in all
material respects.
(z) The Holding Company will not deliver the Shares until the
Holding Company and the Bank have satisfied or caused to be satisfied each
condition set forth in Section 9A hereof, unless such condition is waived in
writing by the Agent.
Section 7.B. Covenants of Agent. Xxxx hereby covenants
with the Company and the Bank as follows:
(a) During the period when the Prospectus is used, Xxxx will
comply, in all material respects and at its own expense, with all requirements
imposed upon it by the OTS and, to the extent applicable, by the 1933 Act and
the rules and regulations promulgated thereunder.
(b) Xxxx will distribute any Prospectus or offering materials
in connection with the offering and sale of the Common Stock only in accordance
with the Conversion Regulations and the requirements of the 1933 Act and 1934
Act and the rules and regulations promulgated thereunder; and
(c) Xxxx shall perform the calculations process in connection
with the allocation of shares in the event of an over-subscription.
Section 8. Payment of Expenses. Whether or not the Conversion is
completed or the sale of the Shares by the Holding Company is consummated, the
Primary Parties will pay for all expenses incident to the performance of this
Agreement, including without limitation: (a) the preparation and filing of the
Application; (b) the preparation, printing, filing, delivery and shipment of the
Registration Statement, including the Prospectus, and all amendments and
supplements thereto; (c) all filing fees and expenses in connection with the
qualification or registration
19
of the Shares for offer and sale by the Holding Company under the securities or
"blue sky" laws, including without limitation filing fees, reasonable legal fees
and disbursements of counsel in connection therewith, and in connection with the
preparation of a blue sky law survey; (d) the filing fees of the NASD; and (e)
the reasonable expenses of the Agent, including without limitation, accounting,
communications, and travel expenses. Any such expense incurred by the Agent
shall be reimbursed by the Primary Parties. If this Agreement is terminated in
accordance with the provisions of Sections 3, 9, or 13, the Bank will pay the
Agent the fees earned pursuant to Section 4 and will reimburse the Agent for the
reasonable expenses of the Agent, including without limitation accounting,
communication, and travel expenses. Non-legal expenses shall not exceed $5,000
without the prior approval of the Holding Company or the Bank.
Section 9.A. Conditions to the Agent's Obligations. The obligations of
the Agent hereunder and the occurrence of the Closing and the Conversion are
subject to the condition that all representations and warranties and other
statements of the Primary Parties herein contained are at and as of the
commencement of the Offerings and at and as of the Closing Date, true and
correct in all material respects, the condition that the Primary Parties shall
have performed in all material respects all of their obligations hereunder to be
performed on or before such dates and to the following further conditions:
(a) The Registration Statement shall have been declared
effective by the Commission and the Application approved by the OTS not later
than 5:30 p.m. on the date of this Agreement, and no stop order or other action
suspending the effectiveness of the Registration Statement shall have been
issued under the 1933 Act or proceedings therefor initiated or, to the Company's
or the Bank's best knowledge, threatened by the Commission or any state
authority and no order or other action suspending the authorization for use of
the Prospectus or the consummation of the Conversion shall have been issued or
proceedings therefor initiated or, to the Company's or Bank's best knowledge,
threatened by the OTS, the Commission, or any other governmental body.
(b) At the Closing Date, the Agent shall have received:
(1) The favorable opinion, dated as of the Closing
Date, of Xxxxx Xxxx, special counsel for the Primary Parties, in form and
substance satisfactory to counsel for the Agent to the effect that:
(i) The Holding Company is a corporation
duly organized and validly existing and in good standing under the laws of the
Commonwealth of Pennsylvania, with corporate power and authority to own its
properties and to conduct its business as described in the Prospectus, and to
such counsel's
20
knowledge is duly qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business requires such qualification
and in which the failure to qualify would have a material adverse effect on the
financial condition, earnings, capital, properties or business affairs of the
Holding Company.
(ii) The Bank is a duly organized and
validly existing federally chartered mutual savings bank and, at the Closing
Date, upon satisfaction of the conditions set forth in the Plan, will become a
duly organized and validly existing federally chartered stock savings bank with
full power and authority to own its properties and to conduct its business as
described in the Prospectus and to enter into this Agreement and perform its
obligations hereunder; the activities of the Bank as described in the Prospectus
are permitted by the rules, regulations and practices of the OTS; the issuance
and sale of the capital stock of the Bank to the Holding Company has been duly
and validly authorized by all necessary corporate action on the part of the
Holding Company and the Bank and, upon payment therefor in accordance with the
terms of the Plan, will be validly issued, fully paid and nonassessable; and
will be owned of record and beneficially by the Holding Company, free and clear
of any mortgage, pledge, lien, encumbrance, claim or restriction.
(iii) The Bank is a member of the FHLB of
Pittsburgh and the savings accounts of the Bank are insured by the FDIC up to
the maximum amount allowed by law and to such counsel's knowledge no proceedings
for the termination or revocation of such insurance are pending or threatened;
and the description of the liquidation account as set forth in the Prospectus
under the caption "The Conversion - Effects of Conversion to Stock Form on
Depositors and Borrowers of the Bank - Liquidation Rights" has been reviewed by
such counsel and, to the extent that such information constitutes matters of law
or legal conclusions, is accurate in all material respects.
(iv) The MHC has been duly organized and is
validly existing as a federally chartered mutual holding company, duly
authorized to conduct its business and own its properties as described in the
Registration Statement and Prospectus.
(v) Upon Conversion, the authorized, issued
and outstanding capital stock of the Holding Company and the Bank will be as set
forth in the Prospectus under the caption "Capitalization," and no shares of
Common Stock have been or will be issued and outstanding prior to the Closing
Date, the shares of Common Stock of the Holding Company to be subscribed for in
the Offerings have been duly and validly authorized for issuance, and when
issued and delivered by the Holding Company pursuant to the Plan against payment
of the consideration calculated as set forth in the Plan, will be fully paid and
nonassessable; and the issuance of the shares of Common Stock is not subject to
21
preemptive rights, except for the subscription rights under the Plan.
(vi) The execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby have been
duly authorized by all necessary action on the part of the Primary Parties; and
this Agreement constitutes a valid, legal and binding obligation of each of the
Primary Parties, enforceable in accordance with its terms, except to the extent
that the provisions of Sections 10 and 11 hereof may be unenforceable as against
public policy, and except to the extent that such enforceability may be limited
by bankruptcy laws, insolvency laws, or other laws affecting the enforcement of
creditors' rights generally, or the rights of creditors of savings institutions
insured by the FDIC (including the laws relating to the rights of the
contracting parties to equitable remedies).
(vii) The Plan has been duly adopted as
required by the directors of the Bank and members of the Bank.
(viii) Subject to the satisfaction of the
conditions to the OTS's approval of the Conversion, the MHC Application and the
Holding Company Application to acquire the Bank, no further approval,
registration, authorization, consent or other order of any federal regulatory
agency, public board or body is required in connection with the execution and
delivery of this Agreement, the offer, sale and issuance of the Shares and the
consummation of the Conversion (other than compliance with state securities or
Blue Sky laws as to which such counsel need express no opinion and other than as
may be required under the rules and regulations of the NASD or the Nasdaq
System).
(ix) The Application, including the
Prospectus as filed with the OTS, has been approved by the OTS. The OTS has
issued its order of approval under the savings and loan holding company
provisions of the HOLA, and the purchase by the Holding Company of all of the
issued and outstanding capital stock of the Bank has been authorized by the OTS
and no action has been taken, or, to such counsel's knowledge, is pending or
threatened, to revoke any such authorization or approval.
(x) The Registration Statement has become
effective under the 1933 Act, no stop order suspending the effectiveness of the
Registration Statement has been issued, and, to the best of such counsel's
knowledge, no proceedings for that purpose have been instituted or threatened.
(xi) The material tax consequences of the
Conversion are set forth in the Prospectus under the caption "The
Conversion-Income Tax Consequences." The information in the Prospectus under the
caption "The Conversion-Income Tax Consequences" has been reviewed by such
counsel and fairly
22
describes such opinions rendered by Xxxxx Xxxx and KPMG Peat Marwick, LLP to the
Primary Parties with respect to such matters.
(xii) The terms and provisions of the shares
of Common Stock conform to the description thereof contained in the Registration
Statement and the Prospectus and such description describes in all material
respects the rights of the holders thereof, the information in the Prospectus
under the captions "Restrictions on Acquisitions of Stock and Related Takeover
Defensive Provisions" and "Description of Capital Stock," to the extent that
they constitute matters of law or legal conclusions, has been prepared by such
counsel and is accurate in all material respects; and the forms of certificates
proposed to be used to evidence the shares of Common Stock are in due and proper
form.
(xiii) At the time the Application,
including the Prospectus contained therein, was approved, the Application (as
amended or supplemented) complied as to form in all material respects with the
requirements of the Conversion Regulation and all applicable laws, rules and
regulations and decisions and orders of the OTS, except as modified or waived in
writing by the OTS, (other than the financial statements, notes to financial
statements, financial tables and other financial and statistical data included
therein and the appraisal valuation as to which counsel need express no
opinion). To such counsel's knowledge, no person has sought to obtain regulatory
or judicial review of the final action of the OTS approving the Application or
in approving the Holding Company Application.
(xiv) At the time that the Registration
Statement became effective (i) the Registration Statement (as amended or
supplemented) (other than the financial statements, notes to financial
statements, financial tables or other financial and statistical data included
therein and the appraisal valuation as to which counsel need express no
opinion), complied as to form in all material respects with the requirements of
the 1933 Act and the rules and regulations promulgated thereunder; and (ii) the
Prospectus (other than the financial statements, notes to financial statements,
financial tables and other financial and statistical data included therein and
the appraisal valuation, as to which counsel need express no opinion) complied
as to form in all material respects with the requirements of the 1933 Act and
the rules and regulations promulgated thereunder, the Conversion Regulations,
the rules, regulations and decisions and orders of the OTS, except as modified
or waived in writing by the OTS.
(xv) To the best of such counsel's
knowledge, there are no legal or governmental proceedings pending, or threatened
(i) asserting the invalidity of this Agreement or (ii) seeking to prevent the
Conversion or the offer, sale or issuance of the Shares.
23
(xvi) The information in the Prospectus
under the captions "Regulation," "The Conversion" and "Legal Matters," to the
extent that it constitutes matters of law, summaries of legal matters, documents
or proceedings, or legal conclusions, has been prepared by such counsel and is
accurate in all material respects (except as to the financial statements and
other financial data included therein as to which such counsel need express no
opinion).
(xvii) To the best of counsel's knowledge,
the Primary Parties have obtained all material licenses, permits and other
governmental authorizations required for the conduct of their respective
businesses as described in the Registration Statement and the Prospectus, except
where the failure to obtain such licenses, permits and other governmental
authorizations would not have a material adverse effect on the financial
condition of the Primary Parties considered as one enterprise, or on the
earnings, capital, properties or business affairs of the Primary Parties
considered as one enterprise, and all such licenses, permits and other
governmental authorizations are in full force and effect and the Primary Parties
are in all material respects complying therewith.
(xviii) The Holding Company, the MHC nor the
Bank is in violation of its certificate of incorporation or its charter,
respectively, or its bylaws (and the Bank will not be in violation of its
charter or bylaws in stock form upon consummation of the Conversion) or to the
best of such counsel's knowledge, in violation of any material obligation,
agreement, covenant or condition contained in any material 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, which violation would have a
material adverse effect on the financial condition of the Primary Parties
considered as one enterprise, or on the earnings, capital, properties or
business affairs of the Primary Parties considered as one enterprise; the
execution and delivery of this Agreement by the Primary Parties, the incurrence
of the obligations herein set forth and the consummation of the transactions
contemplated herein, will not materially conflict with, constitute a material
breach of, or default under, or result in the creation or imposition of any
material lien, charge or encumbrance upon any property or assets of the Primary
Parties which are material to their business considered as one enterprise,
pursuant to any contract, indenture, mortgage, loan agreement, note, lease or
other instrument to which the Primary Parties are a party or by which any of
them may be bound, or to which any of the property or assets of the Primary
Parties are subject. In addition, such action will not result in any material
violation of the provisions of the certificate of incorporation or bylaws of the
Primary Parties or any material violation of any applicable law, act, regulation
or to such counsel's knowledge, order or court order, writ, injunction or
decree.
24
(xix) To the best of counsel's knowledge,
the Primary Parties are not in violation in any material respect of any
directive from the OTS or the FDIC to make any material change in the method of
conducting their business.
(2) The letter of Xxxxx Xxxx, special counsel for the
Holding Company and the Bank, in form and substance to the effect that:
In addition, during the preparation of the Registration Statement and
the Prospectus, Xxxxx Xxxx participated in conferences with certain officers of
and other representatives of the Primary Parties, counsel to the Agent,
representatives of the independent public accountants for the Primary Parties
and representatives of the Agent at which the contents of the Registration
Statement and the Prospectus and related matters were discussed and, although
Xxxxx Xxxx is not passing upon and does not assume the accuracy of the
statements contained in the Registration Statement and Prospectus, on the basis
of the foregoing without independent verification (relying as to materiality as
to factual matters on certificates of officers and other factual representations
by the Primary Parties), nothing has come to the attention of Xxxxx Xxxx that
caused Xxxxx Xxxx to believe that the Registration Statement at the time it was
declared effective by the SEC or the Prospectus as of its date, contained or
contains any untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading (it being understood that counsel need express no comment or opinion
with respect to the financial statements, schedules and other financial and
statistical data included, or statistical or appraisal methodology employed, in
the Registration Statement or Prospectus).
The opinion shall be limited to matters governed by the laws of the
United States or the Commonwealth of Pennsylvania. In rendering such opinion,
such counsel may rely (A) as to matters involving the application of laws of any
jurisdiction other than the United States or the Commonwealth of Pennsylvania,
to the extent such counsel deems proper and specified in such opinion, upon the
opinion of other counsel of good standing, as long as such other opinion
indicates that the Agent may rely on the opinion, and (B) as to matters of fact,
to the extent such counsel deems proper, on certificates of responsible officers
of the Company and the Bank and public officials; provided copies of any such
opinion(s) or certificates of public officials are delivered to you together
with the opinion to be rendered hereunder by special counsel to the Company and
the Bank. The opinion of such counsel for the Company shall state that it has no
reason to believe that the Agent is not justified in relying thereon.
25
(3) The favorable opinion, dated as of the Closing
Date, of Xxxxxxx & Xxx, P.C., counsel for the Agent, with respect to such
matters as the Agent may reasonably require, such opinion may rely as to matters
of fact, upon certificates of officers and directors of the Holding Company and
the Bank delivered pursuant hereto or as such counsel may reasonably request.
(c) Concurrently with the execution of this Agreement, the
Agent shall receive a letter from KPMG Peat Marwick, LLP, dated the date hereof
and addressed to the Agent, (i) such letter confirming that KPMG Peat Marwick,
LLP is a firm of independent public accountants within the meaning of the Code
of Professional Ethics of the American Institute of Certified Public
Accountants, the 1933 Act and the regulations promulgated thereunder and 12
C.F.R. Section 571.2(c)(3), and no information concerning its relationship with
or interests in the Primary Parties is required by the Application or Item 10 of
the Registration Statement, and stating in effect that in KPMG Peat Marwick,
LLP's opinion the financial statements of the Bank included in the Prospectus
comply as to form in all material respects with the applicable accounting
requirements of the 1933 Act, the 1934 act and the related published rules and
regulations of the Commission thereunder and the Conversion Regulations and
generally accepted accounting principles; (ii) stating in effect that, on the
basis of certain agreed upon procedures (but not an audit examination in
accordance with generally accepted auditing standards) consisting of a reading
of the latest available unaudited interim financial statements of the Bank
prepared by the Bank, a reading of the minutes of the meetings of the Board of
Directors and members of the Bank, a review of interim financial information in
accordance with Statement on Auditing Standards No. 71, and consultations with
officers of the Bank responsible for financial and accounting matters, nothing
came to their attention which caused them to believe that: (A) such unaudited
financial statements, including Recent Developments, if any, are not in
conformity with generally accepted accounting principles applied on a basis
substantially consistent with that of the audited financial statements included
in the Prospectus; or (B) during the period from the date of the latest
unaudited consolidated financial statements included in the Prospectus to a
specified date not more than five business days prior to the date hereof, there
was any material increase in borrowings (defined as advances from the Federal
Home Loan Bank of Pittsburgh, securities sold under agreements to repurchase and
any other form of debt other than deposits) of the Primary Parties (other than
as disclosed in the Prospectus or in the ordinary course of business); or (C)
there was any decrease in retained earnings of the Bank at the date of such
letter as compared with amounts shown in the latest unaudited statement of
condition included in the Prospectus or there was any decrease in net income or
net interest income of the Bank for the number of full months commencing
immediately after the period covered by the latest unaudited income statement
included in the Prospectus and ended
26
on the latest month end prior to the date of the Prospectus or in such letter as
compared to the corresponding period in the preceding year; and (iii) stating
that, in addition to the audit examination referred to in its opinion included
in the Prospectus and the performance of the procedures referred to in clause
(ii) of this subsection (f), they have compared with the general accounting
records of the Holding Company and/or the Bank, as applicable, which are subject
to the internal controls of the Holding Company and/or the Bank, as applicable,
accounting system and other data prepared by the Holding Company and/or the
Bank, as applicable, directly from such accounting records, to the extent
specified in such letter, such amounts and/or percentages set forth in the
Prospectus as the Agent may reasonably request, and they have found such amounts
and percentages to be in agreement therewith (subject to rounding).
(d) At the Closing Date, the Agent shall receive letters from
KPMG Peat Marwick, LLP dated the Closing Date, addressed to the Agent,
confirming the statements made by its letter delivered by it pursuant to
subsection (f) of this Section 9A, the "specified date" referred to in clause
(ii)(B) thereof to be a date specified in such letter, which shall not be more
than five business days prior to the Closing Date.
(e) At the Closing Date, counsel to the Agent shall have been
furnished with such documents and opinions as counsel for the Agent may require
for the purpose of enabling them to advise the Agent with respect to the
issuance and sale of the Common Stock as herein contemplated and related
proceedings, or in order to evidence the accuracy of any of the representations
and warranties, or the fulfillment of any of the conditions herein contained.
(f) At the Closing Date, the Agent shall receive a certificate
of the Chief Executive Officer and Chief Financial Officer of each of the
Holding Company, the MHC and the Bank, dated the Closing Date, to the effect
that (i) they have carefully examined the Prospectus and at the time the
Prospectus became authorized for final use, the Prospectus did not contain an
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading; (ii) there has not been, since the
respective dates as of which information is given in the Prospectus, any
material adverse change in the financial condition or in the earnings, capital,
properties, business prospects or business affairs of the Holding Company or the
Bank, considered as one enterprise, whether or not arising in the ordinary
course of business; (iii) the representations and warranties contained in
Section 6A of this Agreement are true and correct with the same force and effect
as though made at and as of the Closing Date; (iv) the Primary Parties have
complied in all material respects with all material agreements and satisfied all
conditions on its part to be performed or satisfied at or prior to the Closing
Date
27
including the conditions contained in this Section 9A; (v) no stop order has
been issued or, to the best of their knowledge, is threatened, by the Commission
or any other governmental body; (vi) no order suspending the Offerings, the
Conversion, the acquisition of all of the shares of the Bank by the Holding
Company or the effectiveness of the Prospectus has been issued and to the best
of their knowledge, no proceedings for any such purpose have been initiated or
threatened by the OTS, the Commission, the FDIC, or any other federal or state
authority; (vii) to the best of their knowledge, no person has sought to obtain
regulatory or judicial review of the action of the OTS in approving the Plan or
to enjoin the Conversion.
(g) At the Closing Date, the Agent shall receive a letter from
RP Financial dated as of the Closing Date, confirming its appraisal.
(h) The Primary Parties shall not have sustained since the
date of the latest audited financial statements included in the Registration
Statement and Prospectus, any material loss or interference with its business
from fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action, order or
decree, otherwise than as set forth in the Registration Statement and the
Prospectus, and since the respective dates as of which information is given in
the Registration Statement and the Prospectus, there shall not have been any
material change in the long-term debt of the Primary Parties other than debt
incurred in relation to the purchase of Shares by the Holding Company's or
Bank's tax-qualified employee plans, or any material change, or any development
involving a prospective material change in, or affecting the general affairs of,
management, financial position, stockholders' equity or results of operations of
the Primary Parties, otherwise than as set forth or contemplated in the
Registration Statement and the Prospectus, the effect of which, in any such case
described above, is in the Agent's reasonable judgment sufficiently material and
adverse as to make it impracticable or inadvisable to proceed with the Offerings
or the delivery of the Shares on the terms and in the manner contemplated in the
Prospectus.
(i) Prior to and at the Closing Date: (i) in the reasonable
opinion of the Agent, there shall have been no material adverse change in the
financial condition or in the earnings, capital, properties or business affairs
of the Primary Parties independently, or of the Primary Parties, considered as
one enterprise, from that as of the latest dates as of which such condition is
set forth in the Prospectus, except as referred to therein; (ii) there shall
have been no material transaction entered into by the Primary Parties,
considered as one enterprise, from the latest date as of which the financial
condition of the Primary Parties is set forth in the Prospectus other than
transactions referred to or contemplated therein; (iii) the Primary Parties
shall not have received from the OTS or
28
the FDIC any direction (oral or written) to make any material change in the
method of conducting their business with which it has not complied in all
material respects (which direction, if any, shall have been disclosed to the
Agent) and which would reasonably be expected to have a material and adverse
effect on the condition (financial or otherwise) or on the earnings, capital,
properties or business affairs of the Primary Parties considered as one
enterprise; (iv) the Primary Parties shall have been in default (nor shall an
event have occurred which, with notice or lapse of time or both, would
constitute a default) under any provision of any agreement or instrument
relating to any material outstanding indebtedness; (v) no action, suit or
proceeding, at law or in equity or before or by any federal or state commission,
board or other administrative agency, shall be pending or, to the knowledge of
the Primary Parties, threatened against the Primary Parties or affecting any of
their properties wherein an unfavorable decision, ruling or finding would
reasonably be expected to have a material and adverse effect on the financial
condition or on the earnings, capital, properties or business affairs of the
Primary Parties, considered as one enterprise; and (vi) the Shares have been
qualified or registered for offering and sale under the securities or blue sky
laws of the jurisdictions as to which the Primary Parties shall have agreed.
(j) At or prior to the Closing Date, the Agent shall receive
(i) a copy of the letter from the OTS authorizing the use of the Prospectus and
approving the Application, (ii) a copy of the order from the Commission
declaring the Registration Statement effective, (iii) a copy of certificate of
existence for the Bank from the OTS, (iv) a certificate of good standing from
the Commonwealth of Pennsylvania evidencing the good standing of the Holding
Company, (v) a copy of the letter from the OTS approving the Holding Company
Application, and (vi) a copy of the letter from the OTS approving the MHC
application.
(k) As soon as available after the Closing Date, the Agent
shall receive a certified copy of the Bank's stock charter.
(l) Subsequent to the date hereof, there shall not have
occurred any of the following: (i) a suspension or limitation in trading in
securities generally on the New York Stock Exchange or American Stock Exchange
or in the over-the-counter market, or quotations halted generally on the Nasdaq
Stock Market, or minimum or maximum prices for trading have been fixed, or
maximum ranges for prices for securities have been required by either of such
exchanges or the NASD or by order of the Commission or any other governmental
authority; (ii) a general moratorium on the operations of commercial banks or
other federally-insured financial institutions or general moratorium on the
withdrawal of deposits from commercial banks or other federally-insured
financial institutions declared by either federal or state authorities; (iii)
the engagement by the United States in hostilities which have resulted in the
declaration, on
29
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 any of (i)
through (iv) herein, in the Agent's reasonable judgment, makes it impracticable
or inadvisable to proceed with the Offerings or the delivery of the Shares on
the terms and in the manner contemplated in the Registration Statement and the
Prospectus.
Section 9.B. Conditions to the Holding Company and the Bank's
Obligations. The obligations of the Primary Parties hereunder are subject to the
accuracy of the representations, warranties and covenants of the Agent, to the
performance by the Agent of its obligations hereunder and to the satisfaction of
the conditions contained in Paragraph (a) of Section 9A hereunder.
Section 10. Indemnification.
(a) The Primary Parties agree to indemnify and hold harmless
the Agent, its officers, directors, agents, servants and employees and each
person, if any, who controls the Agent within the meaning of Section 15 of the
1933 Act or Section 20(a) of the 1934 Act, against any and all loss, liability,
claim, damage or expense whatsoever (including but not limited to settlement
expenses), 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 and state laws or otherwise, and to promptly reimburse the Agent and any
such persons upon written demand for any reasonable expenses (including fees and
disbursements of counsel) incurred by the Agent or any of them in connection
with investigating, preparing or defending any actions, proceedings or claims
(whether commenced or threatened) to the extent such losses, claims, damages,
liabilities or actions (i) arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact contained in the Registration
Statement (or any amendment or supplement thereto), preliminary or final
Prospectus (or any amendment or supplement thereto), the Application, or any
blue sky application or other instrument or document of the Primary Parties or
based upon written information supplied by the Primary Parties filed in any
state or jurisdiction to register or qualify any or all of the Shares under the
securities laws thereof (collectively, the "Blue Sky Application"), or any
application or other document, advertisement, or communication ("Sales
Information") prepared, made or executed by or on behalf of the Primary Parties
with its consent or based upon written information furnished by or on behalf of
the Holding Company or the Bank, whether or not filed in any jurisdiction in
order to qualify or register the Shares under the securities laws thereof, (ii)
arise out of or based upon the omission or alleged omission to state in any of
the foregoing documents or information, a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; (iii) arise from any
theory of liability whatsoever
30
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 Application, 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 statements or alleged untrue
material statements in, or material omission or alleged material omission from,
the Registration Statement (or any amendment or supplement thereto) or the
preliminary or final Prospectus (or any amendment or supplement thereto) the
Application, the Blue Sky Application or Sales Information or other
documentation distributed in connection with the Conversion made in reliance
upon and in conformity with written information furnished to the Holding Company
or the Bank by the Agent with respect to the Agent expressly for use in the
Registration Statement (or any amendment or supplement thereto) or Prospectus
(or any amendment or supplement thereto) under the caption "The Conversion -
Marketing Arrangements" therein or statistical information regarding the Holding
Company prepared by the Agent for use in the Sales Information except for
information derived from the Prospectus. Provided further, that the Primary
Parties will not be responsible for any loss, liability, claim, damage or
expense to the extent they result primarily from actions taken or omitted to be
taken by the Agent in bad faith or from the Agent's gross negligence, and the
Agent agrees to repay to the Holding Company any amounts advanced by it to the
Agent in connection with matters as to which the Agent is found not to be
entitled to indemnification hereunder. Notwithstanding the foregoing, the
indemnification provided for in this paragraph (a) shall not apply to the Bank
to the extent that such indemnification by the Bank would constitute a covered
transaction under Section 23A of the Federal Reserve Act.
(b) The Agent agrees to indemnify and hold harmless the
Holding Company, its directors and officers, agents, servants and employees and
each person, if any, who controls the Holding Company within the meaning of
Section 15 of the 1933 Act or Section 20(a) of the 1934 Act against any and all
loss, liability, claim, damage or expense whatsoever (including but not limited
to settlement expenses), joint or several which they, or any of them, in
connection with investigating, preparing or defending any actions, proceedings
or claims (whether commenced or threatened) to the extent such losses, claims,
damages, liabilities or actions arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment of supplement thereto), the
Application, the Holding Company Application or any Blue Sky Application or
Sales Information or are based upon the omission or alleged omission to state in
any of the foregoing documents a material fact required to be stated therein or
necessary to make the statements therein, in the light
31
of the circumstances under which they were made, not misleading; provided,
however, that the Agent's obligations under this Section 10(b) shall exist only
if and only to the extent that such untrue statement or alleged untrue statement
was made in, or such material fact or alleged material fact was omitted from,
the Registration Statement (or any amendment or supplement thereto) or the
Prospectus (or any amendment or supplement thereto) in reliance upon and in
conformity with written information furnished to the Holding Company by the
Agent expressly for use under the caption "The Conversion -- Marketing
Arrangements" therein or statistical information regarding the Holding Company
prepared by the Agent for use in the Sales information except for information
derived from the Prospectus.
(c) The Agent agrees to indemnify and hold harmless the MHC,
its directors and officers, agents, servants and employees and each person, if
any, who controls the MHC within the meaning of Section 15 of the 1933 Act or
Section 20(a) of the 1934 Act against any and all loss, liability, claim, damage
or expense whatsoever (including but not limited to settlement expenses), joint
or several which they, or any of them, in connection with investigating,
preparing or defending any actions, proceedings or claims (whether commenced or
threatened) to the extent such losses, claims, damages, liabilities or actions
arise out of or are based upon any untrue statement or alleged untrue statement
of a material fact contained in the Registration Statement (or any amendment of
supplement thereto), the Application, the MHC Application or any Blue Sky
Application or Sales Information or are based upon the omission or alleged
omission to state in any of the foregoing documents a material fact required to
be stated therein or necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading; provided, however,
that the Agent's obligations under this Section 10(b) shall exist only if and
only to the extent that such untrue statement or alleged untrue statement was
made in, or such material fact or alleged material fact was omitted from, the
Registration Statement (or any amendment or supplement thereto) or the
Prospectus (or any amendment or supplement thereto) in reliance upon and in
conformity with written information furnished to the MHC by the Agent expressly
for use under the caption "The Conversion -- Marketing Arrangements" therein or
statistical information regarding the MHC prepared by the Agent for use in the
Sales information except for information derived from the Prospectus.
(d) Each indemnified party shall give prompt written notice to
each indemnifying party of any action, proceeding, claim (whether commenced or
threatened), or suit instituted against it in respect of which indemnity may be
sought hereunder, but failure to so notify an indemnifying party shall not
relieve it from any liability which it may have on account of this Section 10 or
otherwise. An indemnifying party may participate at its own expense in the
defense of such action. In addition, if it so elects within a reasonable time
after receipt of such
32
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 all
indemnified parties in connection with any one action, proceeding or claim or
separate but similar or related actions, proceedings or claims in the same
jurisdiction arising out of the same general allegations or circumstances.
(e) The agreements contained in this Section 10 and in Section
11 hereof and the representations and warranties of the Primary Parties set
forth in this Agreement shall remain operative and in full force and effect
regardless of (i) any investigation made by or on behalf of the Agent or its
officers, directors or controlling persons, agents or employees or by or on
behalf of the Primary Parties or any officers, directors or controlling persons,
agents or employees of the Primary Parties or any controlling person, director
or officer of the Primary Parties; (ii) delivery of and payment hereunder for
the Shares; or (iii) any termination of this Agreement.
Section 11. Contribution.
(a) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in Section 10 is due in
accordance with its terms but is for any reason held by a court to be
unavailable from the Primary Parties, or the Agent, as the case may be, the
Primary Parties, or the Agent, as the case may be, shall contribute to the
aggregate losses, claims, damages and liabilities (including any investigation,
legal and other expenses incurred in connection therewith and any amount paid in
settlement of any action, suit or proceeding of any claims asserted, but after
deducting any contribution received by the Primary Parties or the Agent, as the
case may be from persons other than the other party thereto, who may also be
liable for contribution) in such proportion so that the Agent is responsible for
that portion represented by the percentage that the fees paid to the Agent
pursuant to Section 4 of this Agreement (not including expenses) bears to the
gross proceeds received by the Primary Parties from the sale of the Shares in
the Offerings and the Primary Parties shall be responsible for the balance. If,
however, the allocation provided above is not permitted by applicable law or
33
if the indemnified party failed to give the notice required under Section 10
above, then each indemnifying party shall contribute to such amount paid or
payable by such indemnified party in such proportion as is appropriate to
reflect not only such relative fault of the Primary Parties on the one hand and
the Agent on the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities (or actions, proceedings
or claims in respect thereof), but also the relative benefits received by the
Primary Parties on the one hand and the Agent on the other from the offering, as
well as any other relevant equitable considerations. The relative benefits
received by the Primary Parties on the one hand and the Agent on the other shall
be deemed to be in the same proportion as the total gross proceeds from the
Offerings (before deducting expenses) received by the Holding Company bear to
the total fees (not including expenses) received by the Agent. 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 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 Holding
Company and the Agent agree that it would not be just and equitable if
contribution pursuant to this Section 11 were determined by pro-rata allocation
or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 11. The amount paid
or payable by an indemnified party as a result of the losses, claims, damages or
liabilities (or action, proceedings or claims in respect thereof) referred to
above in this Section 11 shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action, proceeding or claim. It is expressly agreed that
the Agent shall not be liable for any loss, liability, claim, damage or expense
or be required to contribute any amount which in the aggregate exceeds the
amount paid (excluding reimbursable expenses) to the Agent under this Agreement.
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 Primary Parties, and the Agent under this Section 11 and
under Section 10 shall be in addition to any liability which the Primary
Parties, and the Agent may otherwise have. For purposes of this Section 11, each
of the Agent's, the Primary Parties' officers and directors and each person, if
any, who controls the Agent or the Primary Parties within the meaning of the
1933 Act and the 1934 Act shall have the same rights to contribution as the
Primary Parties and the Agent. Any party
34
entitled to contribution, promptly after receipt of notice of commencement of
any action, suit, claim or proceeding against such party in respect of which a
claim for contribution may be made against another party under this Section 11,
will notify such party from whom contribution may be sought, but the omission to
so notify such party shall not relive the party from whom contribution may be
sought from any other obligation it may have hereunder or otherwise than under
this Section 11.
Section 12. Representations, Warranties and Indemnities to Survive
Delivery. All representations, warranties and indemnities and other statements
contained in this Agreement, or contained in certificates of officers of the
Primary Parties or the Agent submitted pursuant hereto, shall remain operative
and in full force and effect, regardless of any termination or cancellation of
this Agreement or any investigation made by or on behalf of the Agent or
controlling person, or by or on behalf of the Primary Parties and shall survive
the issuance of the Shares, and any legal representative, successor or assign of
the Agent, the Primary Parties, and any indemnified person shall be entitled to
the benefit of the respective agreements, indemnities, warranties and
representations.
Section 13. Termination. Xxxx may terminate this Agreement
by giving the notice indicated below in this Section at any time
after this Agreement becomes effective as follows:
(a) In the event the Holding Company fails to sell the minimum
number of the Shares within the period specified 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 Bank 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 in accordance with
Section 3, and no party to this Agreement shall have any obligation to the other
hereunder, except as set forth in Sections 3, 4, 8, 10 and 11 hereof.
(b) If any of the conditions specified in Section 9A shall not
have been fulfilled when and as required by this Agreement, or by the Closing
Date, or waived in writing by the Agent, this Agreement and all of the Agent's
obligations hereunder may be canceled by the Agent by notifying the Bank of such
cancellation in writing 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 3, 4, 8, 10 and 11 hereof.
(c) If Xxxx elects to terminate this Agreement as provided in
this Section, the Primary Parties shall be notified by the Agent as provided in
Section 14 hereof.
35
Section 14. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to Xxxx shall be
directed to Xxxxxxx Xxxx & Company at 000 Xxxxxxxxx Xxxxxx, Xxxxxx, Xxxx 00000,
Attention: Xx. Xxxxxxx X. Xxxx (with a copy to Xxxxxxx X. Xxxxxxx, Esquire,
Xxxxxxx & Xxx, One Glenhardie Corporate Center, 0000 Xxxxxxxx Xxxx, X.X. Xxx
000, Xxxxx, Xxxxxxxxxxxx 00000-0000), and notices to the Primary Parties shall
be directed to Willow Grove Bank, Welsh and Xxxxxxxxxx Xxxxx, Xxxxx Xxxx,
Xxxxxxxxxxxx 00000-0000, Attention: Xxxxxxxxx X. Xxxxxxx, Xx., Chairman of the
Board and Chief Executive Officer (with a copy to Xxxx Xxxxxxxxx, Esquire,
Elias, Matz, Xxxxxxx & Xxxxxxx L.L.P., 000 00xx Xxxxxx X.X., 00xx Xxxxx,
Xxxxxxxxxx, X.X. 00000.)
Section 15. Parties. This Agreement shall inure to the benefit of and
be binding upon the Agent and the Primary Parties, and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
parties hereto and their respective successors and the controlling persons and
officers and directors referred to in Sections 10 and 11 and their heirs and
legal representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provisions herein contained. It is understood
and agreed that this Agreement is the exclusive agreement among the parties,
supersedes any prior Agreement among the parties and may not be varied except by
a writing signed by all parties.
Section 16. Partial Invalid. In the event that any term, provision or
covenant herein or the application thereof to any circumstances or situation
shall be invalid or unenforceable, in whole or in part, the remainder hereof and
the application of said term, provision or covenant to any other circumstance or
situation shall not be affected thereby, and each term, provision or covenant
herein shall be valid and enforceable to the full extent permitted by law.
Section 17. Construction. This Agreement shall be
construed in accordance with the laws of the Commonwealth of
Pennsylvania.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us a counterpart hereof, whereupon this
instrument along with all counterparts will become
36
a binding agreement between you and us in accordance with its terms.
Very truly yours,
WILLOW GROVE BANK WILLOW GROVE BANCORP (Information)
By: By:
---------------------------- -----------------------------
Xxxxxxxxx X. Xxxxxxx, Xx. Xxxxxxxxx X. Xxxxxxx, Xx.
Chairman of the Board Chairman of the Board
and Chief Executive Officer and Chief Executive Officer
Date:
--------------------------
The foregoing Agency WILLOW GROVE M.H.C. (Information)
Agreement is hereby confirmed
and accepted as of the date By:
first set and above written. -----------------------------
Xxxxxxxxx X. Xxxxxxx, Xx.
Chairman of the Board
and Chief Executive Officer
XXXXXXX XXXX & COMPANY
By:
-----------------------------
Xxxxxxxx X. XxXxxxx,
Executive Vice President and
Chief Operating Officer
Date:
---------------------------
37
Willow Grove Bancorp, Inc.
(A Pennsylvania Corporation)
Up to 2,443,400 Shares
(Par Value $.01 Per Share)
SELECTED DEALERS' AGREEMENT
_______________, 1997
Ladies and Gentlemen:
We have agreed to assist Willow Grove Bancorp, Inc. (the "Company"), a
Pennsylvania corporation, in connection with the offer and sale of up to
2,443,400 shares of the Company's common stock, $0.01 par value (the "Common
Stock"). These shares are to be issued in connection with the reorganization of
the Bank from a mutual savings bank to a stock savings bank and wholly-owned
subsidiary of the Holding Company (the "Reorganization") in accordance with the
Plan of Reorganization from a Mutual Savings Bank to Mutual Holding Company and
Agreement and Stock Issuance Plan (the "Plan"). Under the Plan, the Holding
Company will become, upon consummation of the reorganization, a majority owned
subsidiary of Willow Grove, M.H.C., a federally chartered mutual holding
company. The offering price per share has been fixed at $10.00. The Common Stock
and certain of the terms on which it is being offered are more fully described
in the enclosed prospectus dated September 17, 1998 (the "Prospectus").
Capitalized terms not otherwise defined herein shall have the meaning ascribed
to them in the Prospectus.
In connection with the Conversion, the Company is offering the Common
Stock in a Subscription Offering (to the Eligible Account Holders, Tax-qualified
Employee Plans, Supplemental Eligible Account Holders, Other Members of the
Bank, and to directors, officers and employees of the Bank) and in a Public
Offering to members of the general public (Other Subscribers). The Common Stock
is also being offered in accordance with the Plan by a selling group of
broker-dealers.
We are offering the selected dealers (of which you are one) the
opportunity to participate in the solicitation of offers to buy the Common Stock
and we will pay you a fee in the amount of _______ percent (______%) of the
dollar amount of the Common Stock sold on behalf of the Company by you, as
evidenced by the authorized designation of your firm on the order form or forms
for such Common Stock accompanying the funds transmitted for payment therefor to
the special account established by the Bank for the purpose of holding such
funds. Any purchase of Common Stock made pursuant to this Agreement is subject
to a maximum
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purchase limitation of $200,000 of the Common Stock offered in the Conversion
exclusive of an increase in the total number of shares issued pursuant to an
increase in the Estimated Valuation Range (as defined in the Plan). It is
understood, of course, that payment of your fee will be made to you directly by
the Company for the Common Stock sold on behalf of the Company by you, as
evidenced in accordance with the preceding sentence. As soon as practicable
after the closing date of the offering, the Company will remit to you the fees
to which you are entitled hereunder.
Each order form for the purchase of Common Stock must set forth the
identity and address of each person to whom the certificates for such Common
Stock should be issued and delivered. Such order form should clearly identify
your firm. You shall instruct any subscriber who elects to send his order form
to you to make any accompanying check payable to the Bank.
This offer is made subject to the terms and conditions herein set forth
and contained in the Plan and is made only to selected dealers who are (i)
members in good standing of the National Association of Securities Dealers, Inc.
(the "NASD") who are to comply with all applicable rules of the NASD, including,
without limitation, the NASD's Interpretation With Respect to Free-Riding and
Withholding and Section 24 of Article III of the NASD's Rules of Fair Practice,
or (ii) foreign dealers not eligible for membership in the NASD who agree (A)
not to sell any Common Stock within the United States, its territories or
possessions or to persons who are citizens thereof or resident therein and (B)
in making other sales to comply with the above-mentioned NASD Interpretation,
Sections 8, 24 and 36 of the above-mentioned Article III as if they were NASD
members and Section 25 of such Article III as it applies to non-member brokers
or dealers in a foreign country.
Orders for Common Stock will be strictly subject to confirmation and
we, acting on behalf of the Company, reserve the right in our uncontrolled
discretion to reject any order in whole or in part, to accept or reject orders
in the order of their receipt or otherwise, and to allot. Neither you nor any
other person is authorized by the Company or by us to give any information or
make any representations other than those contained in the Prospectus in
connection with the sale of any of the Common Stock. No selected dealer is
authorized to act as agent for us when soliciting offers to buy the Common Stock
from the public or otherwise. No selected dealer shall engage in any stabilizing
(as defined in Rule 10b-7 promulgated under the Securities Exchange Act of 1934)
with respect to the Company's Common Stock during the offering.
We and each selected dealer assisting in selling Common Stock pursuant
hereto agree to comply with the applicable requirements of the Securities
Exchange Act of 1934 and applicable state rules and regulations. In addition, we
and each
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selected dealer confirm that the Securities and Exchange Commission interprets
Rule 15c2-8 promulgated under the Securities Exchange Act of 1934 as requiring
that a Prospectus be supplied to each person who is expected to receive a
confirmation of sale 48 hours prior to delivery of such person's order form.
We and each selected dealer within the meaning of Rule 15c3-1(a)(1)
further agree to the extent that our customers desire to pay for shares with
funds held by or to be deposited with us, in accordance with the interpretation
of the Securities and Exchange Commission of Rule 15c2-4 promulgated under the
Securities Exchange Act of 1934, either (a) upon receipt of an executed order
form or direction to execute an order form on behalf of a customer to forward
the offering price for the Common Stock ordered on or before twelve noon of the
business day following receipt or execution of an order form by us to the Bank
for deposit in a segregated account or (b) to solicit indications of interest in
which event (i) we will subsequently contact any customer indicating interest to
confirm the interest and give instructions to execute and return an order form
or to receive authorization to execute the order form on the customer's behalf,
(ii) we will mail acknowledgements of receipt of orders to each customer
confirming interest on the business day following such confirmation, (iii) we
will debit accounts of such customers on the fifth business day (the "debit
date") following receipt of the confirmation referred to in (i), and (iv) we
will forward completed order forms together with such funds to the Bank on or
before twelve noon on the next business day following the debit date for deposit
in a segregated account. We and each selected dealer acknowledge that if the
procedure in (b) is adopted, our customers' funds are not required to be in
their accounts until the debit date.
Unless earlier terminated by us, this Agreement shall terminate upon
the closing date of this offering. We may terminate this Agreement or any
provisions hereof at any time by written or telegraphic notice to you. Of
course, our obligations hereunder are subject to the successful completion of
the offering.
You agree that at any time or times prior to the termination of this
Agreement you will, upon our request, report to us the number of shares of
Common Stock sold on behalf of the Company by you under this Agreement.
We shall have full authority to take such actions as we may deem
advisable in respect of all matters pertaining to the offering. We shall be
under no liability to you except for lack of good faith and for obligations
expressly assumed by us in this Agreement.
Upon application to us, we will inform you as to the states in which we
believe the Common Stock has been qualified for sale
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under, or are exempt from the requirements of, the respective blue sky laws of
such states, but we assume no responsibility or obligation as to your rights to
sell Common Stock in any state.
Additional copies of the Prospectus and any supplements thereto will be
supplied in reasonable quantities upon request.
Any notice from us to you shall be deemed to have been duly given if
mailed, telephoned, or telegraphed to you at the address to which this Agreement
is mailed.
This Agreement shall be construed in accordance with the laws of the
State of Ohio.
Please confirm your agreement hereto by signing and returning the
confirmation accompanying this letter at once to us at Xxxxxxx Xxxx & Company,
000 Xxxxxxxxx, Xxxxxx, Xxxx 00000-0000. The enclosed duplicate copy will
evidence the agreement between us.
XXXXXXX XXXX & COMPANY
By:
--------------------------
Xxxxxxxx X. XxXxxxx
Executive Vice President
Agreed and accepted as of ________________, 1997
---------------------------------
By:
----------------------
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