Exhibit 1.2
Draft Form of Agency Agreement
XXXXXXXX FINANCIAL HOLDINGS, INC.
859,625 Shares
COMMON SHARES
($.01 Par Value)
Subscription Price $10.00 Per Share
AGENCY AGREEMENT
November __, 2000
Xxxxx, Xxxxxxxx & Xxxxx, Inc.
000 Xxxxxxxxx Xxxxx
Xxxxxx, Xxxx 00000-0000
Ladies and Gentlemen:
Xxxxxxxx Financial Holdings, Inc., a Maryland corporation (the "Company"),
and Xxxxxxxx Federal Savings Bank, a federal savings bank located in Ironton,
Ohio (the "Bank") (references to the "Bank" include the Bank in the mutual or
stock form, as indicated by the context), with its deposit accounts insured by
the Savings Association Insurance Fund ("SAIF") administered by the Federal
Deposit Insurance Corporation ("FDIC"), hereby confirm their agreement with
Xxxxx, Xxxxxxxx & Xxxxx, Inc. ("the Agent"), as follows:
Section 1. The Offering. The Bank, in accordance with its plan of
conversion adopted by its Board of Directors (the "Plan"), intends to convert
from a federally chartered mutual savings bank to a federally chartered stock
savings bank, and issue all of its issued and outstanding capital stock to the
Company. In addition, pursuant to the Plan, the Company will offer and sell up
to 859,625 shares of its common shares, $.01 par value per share (the "Shares"
or "Common Shares"), in a subscription offering (the "Subscription Offering") to
(1) depositors of the Bank with Qualifying Deposits (as defined in the Plan) as
of March 31, 1999 ("Eligible Account Holders"), (2) the Xxxxxxxx Federal Savings
Bank Employee Stock Ownership Plan (the "ESOP"), (3) depositors of the Bank with
Qualifying Deposits as of September 30, 2000 ("Supplemental Eligible Account
Holders") and (4) the Bank's Other Members as defined in the Plan. Subject to
the prior subscription rights of the above-listed parties, the Company may offer
for sale in a community offering (the "Community Offering" and when referred to
together with or subsequent to the Subscription Offering, the "Subscription and
Community Offering") conducted concurrently with the Subscription Offering, the
Shares not subscribed for or ordered in the Subscription Offering to members of
the
general public to whom a copy of the Prospectus (as hereinafter defined) is
delivered with a preference given to people and trusts of people who are
residents of Xxxxxxxx and Scioto Counties, Ohio, Greenup and Xxxx Counties,
Kentucky, and Xxxxxx County, West Virginia. It is anticipated that shares not
subscribed for in the Subscription and Community Offering may be offered to
certain members of the general public on a best efforts basis through a selected
dealers agreement (the "Syndicated Community Offering") (the Subscription
Offering, Community Offering and Syndicated Community Offering are collectively
referred to as the "Offering"). It is acknowledged that the purchase of Shares
in the Offering is subject to the maximum and minimum purchase limitations as
described in the Plan and that the Company and the Bank may reject, in whole or
in part, any orders received in the Community Offering or Syndicated Community
Offering. Collectively, these transactions are referred to herein as the
"Conversion."
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form SB-2 (File No. 333-45404) (the
"Registration Statement") containing a prospectus relating to the Offering for
the registration of the Shares under the Securities Act of 1933 (the "1933
Act"), and has filed such amendments thereof and such amended prospectuses as
may have been required to the date hereof. The term "Registration Statement"
shall include any documents incorporated by reference therein and all financial
schedules and exhibits thereto, as amended, including post-effective amendments.
The prospectus, as amended, on file with the Commission at the time the
Registration Statement initially became effective is hereinafter called the
"Prospectus," except that if any Prospectus is filed by the Company pursuant to
Rule 424(b) or (c) of the rules and regulations of the Commission under the 1933
Act (the "1933 Act Regulations") differing from the prospectus on file at the
time the Registration Statement initially becomes effective, the term
"Prospectus" shall refer to the prospectus filed pursuant to Rule 424(b) or (c)
from and after the time said prospectus is filed with the Commission.
In accordance with Title 12, Part 563b of the Code of Federal Regulations
(the "Conversion Regulations"), the Bank has filed with the Office of Thrift
Supervision (the "OTS") an Application for Conversion (the "Conversion
Application"), including the Prospectus and the Conversion Valuation Appraisal
Report prepared by Xxxxxx & Company, Inc. (the "Appraisal") and has filed such
amendments thereto as may have been required by the OTS. The Conversion
Application has been approved by the OTS and the related Prospectus has been
authorized for use by the OTS. In addition, the Company has filed with the OTS
its application on Form H-(e)1-S (the "Holding Company Application") to become a
registered savings and loan holding company under the Home Owners' Loan Act, as
amended ("HOLA") and the regulations promulgated thereunder (the "Control Act
Regulations").
Section 2. Retention of Agent; Compensation; Sale and Delivery of the
Shares. Subject to the terms and conditions herein set forth, the Company and
the Bank hereby appoint the Agent as their exclusive financial advisor and
marketing agent (i) to utilize its best efforts to solicit subscriptions for
Common Shares and to advise and assist the Company and the Bank with respect to
the Company's sale of the Shares in the Offering and (ii) to participate in the
Offering in the areas of market making, research coverage and in syndicate
formation (if necessary).
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On the basis of the representations, warranties, and agreements herein
contained, but subject to the terms and conditions herein set forth, the Agent
accepts such appointment and agrees to consult with and advise the Company and
the Bank as to the matters set forth in the letter agreement, dated June 29,
2000, between the Bank and the Agent (a copy of which is attached hereto as
Exhibit A). It is acknowledged by the Company and the Bank that the Agent shall
not be required to purchase any Shares or be obligated to take any action which
is inconsistent with all applicable laws, regulations, decisions or orders.
The obligations of the Agent pursuant to this Agreement (other than those
set forth in Section 2(a) and (d) hereof) shall terminate upon the completion or
termination or abandonment of the Plan by the Company or upon termination of the
Offering, but in no event later than 45 days after the completion of the
Subscription Offering (the "End Date"). All fees or expenses due to the Agent
but unpaid will be payable to the Agent in next day funds at the earlier of the
Closing Date (as hereinafter defined) or the End Date. In the event the Offering
is extended beyond the End Date, the Company, the Bank and the Agent may agree
to renew this Agreement under mutually acceptable terms.
In the event the Company is unable to sell a minimum of 552,500 Shares
within the period herein provided, this Agreement shall terminate and the
Company shall refund to any persons who have subscribed for any of the Shares
the full amount which it may have received from them plus accrued interest, as
set forth in the Prospectus; and none of the parties to this Agreement shall
have any obligation to the other parties hereunder, except as set forth in this
Section 2 and in Sections 6, 8 and 9 hereof. In the event the Offering is
terminated for any reason not attributable to the action or inaction of the
Agent, the Agent shall be paid the fees due to the date of such termination
pursuant to subparagraphs (a) and (d) below.
If all conditions precedent to the consummation of the Conversion,
including, without limitation, the sale of all Shares required by the Plan to be
sold, are satisfied, the Company agrees to issue, or have issued, the Shares
sold in the Offering and to release for delivery certificates for such Shares on
the Closing Date (as hereinafter defined) against payment to the Company by any
means authorized by the Plan; provided, however, that no funds shall be released
to the Company until the conditions specified in Section 7 hereof shall have
been complied with to the reasonable satisfaction of the Agent and its counsel.
The release of Shares against payment therefor shall be made on a date and at a
place acceptable to the Company, the Bank and the Agent. Certificates for shares
shall be delivered directly to the purchasers in accordance with their
directions. The date upon which the Company shall release or deliver the Shares
sold in the Offering, in accordance with the terms herein, is called the
"Closing Date."
The Agent shall receive the following compensation for its services
hereunder:
(a) A management fee of $25,000, payable in four consecutive monthly
installments of $6,250. Such fees shall be deemed to have been earned when
due. Should the Conversion be terminated for any reason not attributable to
the action or inaction of the Agent, the Agent
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shall have earned and be entitled to be paid fees accruing through the
stage at which the termination occurred, including any accrued legal fees
expended by the Agent. The management fee shall be applied against the
success fee described in subparagraph 2(b).
(b) A success fee of $125,000. The management fee described in subparagraph
2(a) shall be applied against the success fee described in this
subparagraph 2(b).
(c) If any of the Common Shares remain available after the Subscription
Offering, at the request of the Bank, the Agent will seek to form a
syndicate of registered broker-dealers ("Selected Dealers") to assist in
the sale of such Common Shares on a best efforts basis, subject to the
terms and conditions set forth in the selected dealers agreement. The Agent
will endeavor to distribute the Common Shares among the Selected Dealers in
a fashion which best meets the distribution objectives of the Bank and the
Plan. The Agent will be paid a fee not to exceed 5.5% of the aggregate
Purchase Price of the Shares sold by the Selected Dealers. The Agent will
pass onto the Selected Dealers who assist in the Syndicated Community
Offering an amount competitive with gross underwriting discounts charged at
such time for comparable amounts of stock sold at a comparable price per
share in a similar market environment. Fees with respect to purchases
effected with the assistance of Selected Dealers other than the Agent shall
be transmitted by the Agent to such Selected Dealers. The decision to
utilize Selected Dealers will be made by the Bank upon consultation with
the Agent. Fees paid pursuant to subparagraph 2(b) shall be reduced pro
rata to the extent the Company pays any fee in connection with the sale of
stock pursuant to this subparagraph 2(c).
(d) The Agent will not be reimbursed for out-of-pocket expenses relating to
travel, meals and lodging, photocopying, telephone, facsimile and couriers.
The Bank and Company shall reimburse the Agent for fees and expenses of
counsel, which shall not exceed $30,000. The Bank will bear the expenses of
the Offering customarily borne by issuers including, without limitation,
regulatory filing fees, SEC, "Blue Sky," and NASD filing and registration
fees; the fees of the Bank's accountants, attorneys, appraiser, transfer
agent and registrar, printing, mailing and marketing expenses associated
with the conversion; and the fees set forth under this Section 2; and fees
for "Blue Sky" legal work. The Company or the Bank will reimburse the Agent
for any such expenses incurred by the Agent on their behalf.
Full payment of Agent's actual and accountable expenses, advisory fees and
compensation shall be made in next day funds on the earlier of the Closing Date
or a determination by the Bank to terminate or abandon the Plan.
Section 3. Prospectus; Offering. The Shares are to be initially offered in
the Offering at the Purchase Price as defined and set forth on the cover page of
the Prospectus.
Section 4. Representations and Warranties. The Company and the Bank jointly
and severally represent and warrant to and agree with the Agent as follows:
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(a) The Registration Statement which was prepared by the Company and the
Bank and filed with the Commission was declared effective by the Commission
on November _________, 2000. At the time the Registration Statement,
including the Prospectus contained therein (including any amendment or
supplement), became effective, the Registration Statement complied in all
material respects with the requirements of the 1933 Act and the 1933 Act
Regulations and the Registration Statement, including the Prospectus
contained therein (including any amendment or supplement thereto), and any
information regarding the Company or the Bank contained in Sales
Information (as such term is defined in Section 8 hereof) authorized by the
Company or the Bank for use in connection with the Offering, did not
contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, and at the time any Rule 424(b) or (c) Prospectus is filed with
the Commission and at the Closing Date referred to in Section 2, the
Prospectus (including any amendment or supplement thereto) and any
information regarding the Company or the Bank contained in Sales
Information (as such term is defined in Section 8 hereof) authorized by the
Company or the Bank for use in connection with the Offering will contain
all statements that are required to be stated therein in accordance with
the 1933 Act and the 1933 Act Regulations and will not contain an untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements therein, in light of the circumstances under
which they were made, not misleading; provided, however, that the
representations and warranties in this Section 4(a) shall not apply to
statements or omissions made in reliance upon and in conformity with
written information furnished to the Company or the Bank by the Agent or
its counsel expressly regarding the Agent for use in the Prospectus under
the caption "The Conversion--Marketing and Underwriting Arrangements" or
statements in or omissions from any Sales Information or information filed
pursuant to state securities or blue sky laws or regulations regarding the
Agent.
(b) The Conversion Application which was prepared by the Company and the
Bank and filed with the OTS was approved on ___________, 2000 and the
related Prospectus has been authorized for use by the OTS. At the time of
the approval of the Conversion Application, including the Prospectus
(including any amendment or supplement thereto), by the OTS and at all
times subsequent thereto until the Closing Date, the Conversion
Application, including the Prospectus (including any amendment or
supplement thereto), will comply in all material respects with the
Conversion Regulations, except to the extent waived in writing by the OTS.
The Conversion Application, including the Prospectus (including any
amendment or supplement thereto), does not include any untrue statement of
a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; provided,
however, that the representations and warranties in this Section 4(b) shall
not apply to statements or omissions made in reliance upon and in
conformity with written information furnished to the Company or the Bank by
the Agent or its counsel expressly regarding the Agent for use in the
Prospectus contained in the Conversion Application under the caption "The
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Conversion--Marketing and Underwriting Arrangements" or statements in or
omissions from any sales information or information filed pursuant to state
securities or blue sky laws or regulations regarding the Agent. The Holding
Company Application has been prepared by the Bank and the Company in
material conformity with the requirements of the Control Act Regulations
and has been filed with and approved by the OTS. A conformed copy of the
Holding Company Application has been delivered to the Agent.
(c) No order has been issued by the OTS or the FDIC (hereinafter any
reference to the FDIC shall include the SAIF) 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 Company or the
Bank, pending or threatened.
(d) At the Closing Date, the Plan will have been adopted by the Boards of
Directors of both the Company and the Bank and approved by the members of
the Bank, and the offer and sale of the Shares will have been conducted in
all material respects in accordance with the Plan, the Conversion
Regulations, and all other applicable laws, regulations, decisions and
orders, including all terms, conditions, requirements and provisions
precedent to the Conversion imposed upon the Company or the Bank by the
OTS, the Commission, or any other regulatory authority and in the manner
described in the Prospectus. To the best knowledge of the Company and the
Bank, no person has sought to obtain review of the final action of the OTS
in approving the Plan or in approving the Conversion or the Holding Company
Application pursuant to the HOLA or any other statute or regulation.
(e) The Bank has been organized and is a validly existing federally
chartered savings bank in mutual form of organization and upon the
Conversion will become a duly organized and validly existing federally
chartered savings bank in permanent capital stock form of organization, in
both instances duly authorized to conduct its business and own its property
as described in the Registration Statement and the Prospectus; the Bank has
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, results of operations or business of the Company and
the Bank, taken as a whole; all such licenses, permits and governmental
authorizations are in full force and effect, and the Bank is in compliance
with all material laws, rules, regulations and orders applicable to the
operation of its business, except where failure to be in compliance would
not materially adversely affect the financial condition, results of
operations or business of the Company and the Bank, taken as a whole; the
Bank is duly qualified as a foreign corporation to transact business and is
in good standing in each jurisdiction in which its ownership of property or
leasing of property or the conduct of its business requires such
qualification, unless the failure to be so qualified in one or more of such
jurisdictions would not have a material adverse effect on the financial
condition, results of operations or business of the Bank. The Bank does not
own equity securities or any equity interest in any other business
enterprise except as described in the Prospectus or as would
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not be material to the operations of the Bank. Upon completion of the sale
by the Company of the Shares contemplated by the Prospectus, (i) all of the
authorized and outstanding capital stock of the Bank will be owned by the
Company and (ii) the Company will have no direct subsidiaries other than
the Bank. The Conversion will be effected in all material respects in
accordance with all applicable statutes, regulations, decisions and orders;
and, except with respect to the filing of certain post-sale,
post-Conversion reports, and documents in compliance with the 1933 Act
Regulations, the OTS's resolutions or letters of approval, at the time of
the Closing all terms, conditions, requirements and provisions with respect
to the Conversion imposed by the Commission, the OTS and the FDIC, if any,
will have been complied with by the Company and the Bank in all material
respects or appropriate waivers will have been obtained and all material
notice and waiting periods will have been satisfied, waived or elapsed.
(f) The Company has been duly incorporated and is validly existing as a
corporation under the laws of the State of Maryland with corporate power
and authority to own, lease and operate its properties and to conduct its
business as described in the Registration Statement and the Prospectus, and
at the Closing Date the Company will be qualified to do business as a
foreign corporation in each jurisdiction in which the conduct of its
business requires such qualification, except where the failure to so
qualify would not have a material adverse effect on the financial
condition, results of operations or business of the Company. The Company
has obtained all licenses, permits and other governmental authorizations
currently required for the conduct of its business except those that
individually or in the aggregate would not materially adversely affect the
financial condition, results of operations or business of the Company and
the Bank, taken as a whole; all such licenses, permits and governmental
authorizations are in full force and effect, and the Company is in all
material respects complying with all laws, rules, regulations and orders
applicable to the operation of its business.
(g) The Bank is a member of the Federal Home Loan Bank of Cincinnati
("FHLB-Cincinnati"). The deposit accounts of the Bank are insured by the
FDIC up to the applicable limits, and no proceedings for the termination or
revocation of such insurance are pending or, to the best knowledge of the
Company or the Bank, threatened. Upon consummation of the Conversion, the
liquidation account for the benefit of Eligible Account Holders and
Supplemental Eligible Account Holders will be duly established in
accordance with the requirements of the Conversion Regulations.
(h) The Company and the Bank have good and marketable title to all real
property and good title to all other assets material to the business of the
Company and the Bank, taken as a whole, and to those properties and assets
described in the Registration Statement and Prospectus as owned by them,
free and clear of all liens, charges, encumbrances or restrictions, except
such as are described in the Registration Statement and Prospectus, or are
not material to the business of the Company and the Bank, taken as a whole;
and all of the leases and subleases material to the business of the Company
and the Bank, taken as a whole,
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under which the Company or the Bank hold properties, including those
described in the Registration Statement and Prospectus, are in full force
and effect.
(i) The Company and the Bank have received an opinion of their special
counsel, Xxxxxxx, Xxxxxx & Xxxxxxxx LLP, with respect to the federal income
tax consequences of the Conversion, and an opinion of Xxxxx, Xxxxxx and
Company LLP with respect to the Ohio income tax consequences of the
Conversion; all material aspects of such opinions are accurately summarized
in the Registration Statement and the Prospectus. The Company and the Bank
represent and warrant that the facts upon which such opinions are based are
truthful, accurate and complete.
(j) The Company and the Bank have all such power, authority,
authorizations, approvals and orders as may be required to enter into this
Agreement, to carry out the provisions and conditions hereof and to issue
and sell the Shares to be sold by the Company as provided herein and as
described in the Prospectus, except approval or confirmation by the OTS of
the final appraisal of the Bank. The execution, delivery and performance of
this Agreement and the consummation of the transactions herein contemplated
have been duly and validly authorized by all necessary corporate action on
the part of the Company and the Bank. This Agreement has been validly
executed and delivered by the Company and the Bank and is the valid, legal
and binding agreement of the Company and the Bank enforceable in accordance
with its terms (except as the enforceability thereof may be limited by
bankruptcy, insolvency, moratorium, reorganization or similar laws relating
to or affecting the enforcement of creditors' rights generally or the
rights of creditors of savings and loan holding companies, the accounts of
whose subsidiaries are insured by the FDIC, or by general equity
principles, regardless of whether such enforceability is considered in a
proceeding in equity or at law, and except to the extent, if any, that the
provisions of Sections 8 and 9 hereof may be unenforceable as against
public policy).
(k) Neither the Company nor the Bank is in violation of any directive
received from the OTS, the FDIC, or any other agency to make any material
change in the method of conducting their businesses so as to comply in all
material respects with all applicable statutes and regulations (including,
without limitation, regulations, decisions, directives and orders of the
OTS and the FDIC) and, except as may be set forth in the Registration
Statement and the Prospectus, there is no suit or proceeding or charge or
action before or by any court, regulatory authority or governmental agency
or body, pending or, to the knowledge of the Company or the Bank,
threatened, which might materially and adversely affect the Conversion, the
performance of this Agreement or the consummation of the transactions
contemplated in the Plan and as described in the Registration Statement and
the Prospectus or which might result in any material adverse change in the
financial condition, results of operations or business of the Company or
the Bank, or which would materially affect their properties and assets.
(l) The financial statements, schedules and notes related thereto which are
included in
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the Prospectus fairly present the balance sheet, income statement,
statement of changes in equity capital and statement of cash flows of the
Bank at the respective dates indicated and for the respective periods
covered thereby and comply as to form in all material respects with the
applicable accounting requirements of Title 12 of the Code of Federal
Regulations. Such financial statements, schedules and notes related thereto
have been prepared in accordance with generally accepted accounting
principles consistently applied through the periods involved, present
fairly in all material respects the information required to be stated
therein and are consistent with the most recent financial statements and
other reports filed by the Bank with the OTS, except that accounting
principles employed in such regulatory filings conform to the requirements
of the OTS and not necessarily to GAAP. The other financial, statistical
and pro forma information and related notes included in the Prospectus
present fairly the information shown therein on a basis consistent with the
audited and unaudited financial statements of the Bank included in the
Prospectus, and as to the pro forma adjustments, the adjustments made
therein have been properly applied on the basis described therein.
(m) Since the respective dates as of which information is given in the
Registration Statement including the Prospectus: (i) there has not been any
material adverse change, financial or otherwise, in the condition of the
Company or the Bank and its subsidiaries, considered as one enterprise, or
in the earnings, capital or properties of the Company or the Bank, whether
or not arising in the ordinary course of business; (ii) there has not been
any material increase in the long-term debt of the Bank or in the principal
amount of the Bank's assets which are classified by the Bank as
substandard, doubtful or loss or in loans past due 90 days or more or real
estate acquired by foreclosure, by deed-in-lieu of foreclosure or deemed
in-substance foreclosure or any material decrease in equity capital or
total assets of the Bank, nor has the Company or the Bank issued any
securities (other than in connection with the incorporation of the Company)
or incurred any liability or obligation for borrowing other than in the
ordinary course of business; (iii) there have not been any material
transactions entered into by the Company or the Bank; (iv) there has been
no material adverse change in the Company's or the Bank's relationship with
its insurance carriers, including, without limitation, cancellation or
other termination of the Company's or the Bank's fidelity bond or any other
type of insurance coverage; (v) except as disclosed in the Prospectus,
there has been no material change in management of the Company or the Bank;
(vi) neither the Company nor the Bank has sustained any material loss or
interference with its respective business or properties from fire, flood,
windstorm, earthquake, accident or other calamity, whether or not covered
by insurance; and (vii) neither the Company nor the Bank has defaulted in
the payment of principal or interest on any outstanding debt obligations.
All documents made available to or delivered or to be made available to or
delivered by the Bank or the Company or their representatives in connection
with the issuance and sale of the Shares, including records of account
holders, depositors, borrowers and other members of the Bank, or in
connection with the Agent's exercise of due diligence, except for those
documents which were prepared by parties other than the Bank, the Company
or their representatives, to the best knowledge of the Bank and the
Company, were
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on the dates on which they were delivered, or will be on the dates on which
they are to be delivered, true, complete and correct in all material
respects.
(n) Neither the Company nor the Bank is (i) in violation of its articles of
incorporation or charter, respectively, or bylaws (and the Bank will not be
in violation of its charter or bylaws in capital stock form upon
consummation of the Conversion), or (ii) in default in the performance or
observance of any material obligation, agreement, covenant, or condition
contained in any material contract, lease, loan agreement, indenture or
other instrument to which it is a party or by which it or any of its
property may be bound. The consummation of the transactions herein
contemplated will not: (i) conflict with or constitute a breach of, or
default under, or result in the creation of any material lien, charge or
encumbrance (with the exception of the liquidation account established in
the Conversion) upon any of the assets of the Company or the Bank pursuant
to the Articles of Incorporation and Bylaws of the Company or the Charter
and Bylaws of the Bank (in either mutual or capital stock form) or any
material contract, lease or other instrument in which the Company or the
Bank has a beneficial interest, or any applicable law, rule, regulation or
order; (ii) violate any authorization, approval, judgement, decree, order,
statute, rule or regulation applicable to the Company or the Bank, except
for such violations which would not have a material adverse effect on the
financial condition and results of operations of the Company and the Bank
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 Company or
the Bank.
(o) No default exists, and no event has occurred which with notice or lapse
of time, or both, would constitute a default on the part of the Company or
the Bank in the due performance and observance of any term, covenant or
condition of any indenture, mortgage, deed of trust, note, bank loan or
credit agreement or any other instrument or agreement to which the Company
or the Bank is a party or by which any of them or any of their property is
bound or affected, except such defaults which would not have a material
adverse affect on the financial condition or results of operations of the
Company and the Bank on a consolidated basis; such agreements are in full
force and effect; and no other party to any such agreements has instituted
or, to the best knowledge of the Company and the Bank, threatened any
action or proceeding wherein the Company or the Bank would or might be
alleged to be in default thereunder, where such action or proceeding, if
determined adversely to the Company or the Bank, would have a material
adverse effect on the financial condition, results of operations, or
business of the Company or the Bank considered as one enterprise.
(p) Upon consummation of the Conversion, the authorized, issued and
outstanding equity capital of the Company will be within the range set
forth in the Prospectus under the caption "Capitalization," and no Shares
have been or will be issued and outstanding prior to the Closing Date; the
Shares will have been duly and validly authorized for issuance and, when
issued and delivered by the Company pursuant to the Plan against payment of
the consideration calculated as set forth in the Plan and in the
Prospectus, will be duly and
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validly issued, fully paid and non-assessable, except for shares purchased
by the ESOP with funds borrowed from the Company to the extent payment
therefor in cash has not been received by the Company; except to the extent
that subscription rights and priorities pursuant thereto exist pursuant to
the Plan, no preemptive rights exist with respect to the Shares; and the
terms and provisions of the Shares will conform in all material respects to
the description thereof contained in the Registration Statement and the
Prospectus. To the best knowledge of the Company and the Bank, upon the
issuance of the Shares, good title to the Shares will be transferred from
the Company to the purchasers thereof against payment therefor, subject to
such claims as may be asserted against the purchasers thereof by
third-party claimants.
(q) No approval of any regulatory or supervisory or other public authority
is required in connection with the execution and delivery of this Agreement
or the issuance of the Shares, except for the approval of the Commission
and the OTS, and any necessary qualification, notification, registration or
exemption under the securities or blue sky laws of the various states in
which the Shares are to be offered, and except as may be required under the
rules and regulations of the National Association of Securities Dealers,
Inc. ("NASD").
(r) Xxxxx Xxxxxx and Company LLP, which has certified the audited financial
statements and schedules of the Bank included in the Prospectus, has
advised the Company and the Bank in writing that they are, with respect to
the Company and the Bank, independent public accountants within the meaning
of the Code of Professional Ethics of the American Institute of Certified
Public Accountants and applicable regulations of the OTS.
(s) Xxxxxx & Company, Inc., which has prepared the Bank's Conversion
Valuation Appraisal Report as of August 15, 2000 (as amended or
supplemented, if so amended or supplemented) (the "Appraisal"), has advised
the Company in writing that it is independent of the Company and the Bank
within the meaning of the Conversion Regulations.
(t) The Company and the Bank have timely filed all required federal, state
and local tax returns; the Company and the Bank have paid all taxes that
have become due and payable in respect of such returns, except where
permitted to be extended, have made adequate reserves for similar future
tax liabilities and no deficiency has been asserted with respect thereto by
any taxing authority.
(u) The Bank is in compliance in all material respects with the applicable
financial record-keeping and reporting requirements of the Currency and
Foreign Transactions Reporting Act of 1970, as amended, and the regulations
and rules thereunder.
(v) To the knowledge of the Company and the Bank, neither the Company, the
Bank nor employees of the Company or the Bank has made any payment of funds
of the Company or the Bank as a loan for the purchase of the Shares or made
any other payment of funds prohibited by law, and no funds have been set
aside to be used for any payment prohibited by law.
11
(w) Prior to the Conversion, neither the Company nor the Bank has: (i)
issued any securities within the last 18 months (except for notes to
evidence bank loans and reverse repurchase agreements or other liabilities
in the ordinary course of business or as described in the Prospectus); (ii)
had any material dealings within the 12 months prior to the date hereof
with any member of the NASD, or any person related to or associated with
such member, other than discussions and meetings relating to the proposed
Offering and routine purchases and sales of United States government and
agency and other securities in the ordinary course of business; (iii)
entered into a financial or management consulting agreement except as
contemplated hereunder; and (iv) engaged any intermediary between the Agent
and the Company and the Bank in connection with the offering of the Shares,
and no person is being compensated in any manner for such service.
Appropriate arrangements have been made for placing the funds received from
subscriptions for Shares in a special interest-bearing account with the
Bank until all Shares are sold and paid for, with provision for refund to
the purchasers in the event that the Conversion is not completed for
whatever reason or for delivery to the Company if all Shares are sold.
(x) The Company and the Bank have not relied upon the Agent or its legal
counsel for any legal, tax or accounting advice in connection with the
Conversion.
(y) The Company is not required to be registered under the Investment
Company Act of 1940, as amended.
(z) Any certificates signed by an officer of the Company or the Bank
pursuant to the conditions of this Agreement and delivered to the Agent or
their counsel that refers to this Agreement shall be deemed to be a
representation and warranty by the Company or the Bank to the Agent as to
the matters covered thereby with the same effect as if such representation
and warranty were set forth herein.
Section 5. Representations and Warranties. The Agent represents and
warrants to the Company and the Bank as follows:
(i) The Agent is a corporation and is validly existing in good
standing under the laws of the State of New York and licensed to
conduct business in the State of Ohio with full power and authority to
provide the services to be furnished to the Bank and the Company
hereunder.
(ii) The execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby have been duly and validly
authorized by all necessary action on the part of the Agent, and this
Agreement has been duly and validly executed and delivered by the
Agent and is a legal, valid and binding agreement of the Agent,
enforceable in accordance with its terms.
(iii) Each of the Agent and its employees, agents and representatives
who shall
12
perform any of the services hereunder shall be duly authorized and
empowered, and shall have all licenses, approvals and permits
necessary to perform such services; and the Agent is a registered
selling agent in each of the jurisdictions in which the Shares are to
be offered by the Company in reliance upon the Agent as a registered
selling agent as set forth in the blue sky memorandum prepared with
respect to the Offering.
(iv) The execution and delivery of this Agreement by the Agent, the
consummation of the transactions contemplated hereby and compliance
with the terms and provisions hereof will not conflict with, or result
in a breach of, any of the terms, provisions or conditions of, or
constitute a default (or an event which with notice or lapse of time
or both would constitute a default) under, the Articles of
Incorporation or Bylaws of the Agent or any agreement, indenture or
other instrument to which the Agent is a party or by which it or its
property is bound.
(v) No approval of any regulatory or supervisory or other public
authority is required in connection with the Agent's execution and
delivery of this Agreement, except as may have been received.
(vi) There is no suit or proceeding or charge or action before or by
any court, regulatory authority or government agency or body or, to
the knowledge of the Agent, pending or threatened, which might
materially adversely affect the Agent's performance of this Agreement.
Section 5.l Covenants of the Company and the Bank. The Company and the Bank
hereby jointly and severally covenant with the Agent as follows:
(a) The Company will not, at any time after the date the Registration
Statement is declared effective, file any amendment or supplement to the
Registration Statement without providing the Agent and its counsel an
opportunity to review such amendment or supplement or file any amendment or
supplement to which amendment or supplement the Agent or its counsel shall
reasonably object.
(b) The Bank will not, at any time after the Conversion Application is
approved by the OTS, file any amendment or supplement to such Conversion
Application without providing the Agent and its counsel an opportunity to
review such amendment or supplement or file any amendment or supplement to
which amendment or supplement the Agent or its counsel shall reasonably
object.
(c) The Company will not, at any time after the Holding Company Application
is approved by the OTS, file any amendment or supplement to such Holding
Company Application without providing the Agent and its counsel an
opportunity to review the non-confidential portions of such amendment or
supplement or file any amendment or supplement to which amendment or
supplement the Agent or its counsel shall
13
reasonably object.
(d) The Company and the Bank will use their best efforts to cause any
post-effective amendment to the Registration Statement to be declared
effective by the Commission and any post-effective amendment to the
Conversion Application to be approved by the OTS and will immediately upon
receipt of any information concerning the events listed below notify the
Agent: (i) when the Registration Statement, as amended, has become
effective; (ii) when the Conversion Application, as amended, has been
approved by the OTS; (iii) of any comments from the Commission, the OTS, or
any other governmental entity with respect to the Conversion or the
transactions contemplated by this Agreement; (iv) of the request by the
Commission, the OTS, or any other governmental entity for any amendment or
supplement to the Registration Statement, the Conversion Application or for
additional information; (v) of the issuance by the Commission, the OTS, or
any other governmental entity of any order or other action suspending the
Offering or the use of the Registration Statement or the Prospectus or any
other filing of the Company or 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, or any authority of any stop order
suspending the effectiveness of the Registration Statement or of the
initiation or threat of initiation or threat of any proceedings for that
purpose; or (vii) of the occurrence of any event mentioned in paragraph (h)
below. The Company and the Bank will make every reasonable effort (i) to
prevent the issuance by the Commission, the OTS, or any other state
authority of any such order and, if any such order shall at any time be
issued, and (ii) to obtain the lifting thereof at the earliest possible
time.
(e) The Company and the Bank will deliver to the Agent and to its counsel
two conformed copies of the Registration Statement, the Conversion
Application and the Holding Company Application, as originally filed and of
each amendment or supplement thereto, including all exhibits. Further, the
Company and the Bank will deliver such additional copies of the foregoing
documents to counsel to the Agent as may be required for any NASD filings.
(f) The Company and the Bank will furnish to the Agent, from time to time
during the period when the Prospectus (or any later prospectus related to
this offering) is required to be delivered under the 1933 Act or the
Securities Exchange Act of 1934 (the "1934 Act"), such number of copies of
such Prospectus (as amended or supplemented) as the Agent may reasonably
request for the purposes contemplated by the 1933 Act, the 1933 Act
Regulations, the 1934 Act or the rules and regulations promulgated under
the 1934 Act (the "1934 Act Regulations"). The Company authorizes the Agent
to use the Prospectus (as amended or supplemented, if amended or
supplemented) in any lawful manner contemplated by the Plan in connection
with the sale of the Shares by the Agent.
14
(g) The Company and the Bank will comply with any and all material terms,
conditions, requirements and provisions with respect to the Conversion and
the transactions contemplated thereby imposed by the Commission, the OTS or
the Conversion Regulations, and by the 1933 Act, the 1933 Act Regulations,
the 1934 Act and the 1934 Act Regulations to be complied with prior to or
subsequent to the Closing Date and when the Prospectus is required to be
delivered, and during such time period the Company and the Bank will
comply, at their own expense, with all material requirements imposed upon
them by the Commission, the OTS or the Conversion Regulations, and by the
1933 Act, the 1933 Act Regulations, the 1934 Act and the 1934 Act
Regulations, including, without limitation, Rule 10b-5 under the 1934 Act,
in each case as from time to time in force, so far as necessary to permit
the continuance of sales or dealing in the Common Shares during such period
in accordance with the provisions hereof and the Prospectus.
(h) If, at any time during the period when the Prospectus relating to the
Shares is required to be delivered, any event relating to or affecting the
Company or the Bank shall occur, as a result of which it is necessary or
appropriate, in the opinion of counsel for the Company and the Bank or in
the reasonable opinion of the Agent's counsel, to amend or supplement the
Registration Statement or Prospectus in order to make the Registration
Statement or Prospectus not misleading in light of the circumstances
existing at the time the Prospectus is delivered to a purchaser, the
Company and the Bank will immediately so inform the Agent and prepare and
file, at their own expense, 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 or Prospectus
(in form and substance reasonably satisfactory to the Agent and its counsel
after a reasonable time for review) which will amend or supplement the
Registration Statement or Prospectus so that as amended or supplemented it
will not contain an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in light
of the circumstances existing at the time the Prospectus is delivered to a
purchaser, not misleading. For the purpose of this Agreement, the Company
and the Bank each will timely furnish to the Agent such information with
respect to itself as the Agent may from time to time reasonably request.
(i) The Company and the Bank will take all necessary actions in cooperating
with the Agent and furnish to whomever the Agent may direct such
information as may be required to qualify or register the Shares for
offering and sale by the Company or to exempt such Shares from
registration, or to exempt the Company as a broker-dealer and its officers,
directors and employees as broker-dealers or agents under the applicable
securities or blue sky laws of such jurisdictions in which the Shares are
required under the Conversion Regulations to be sold or as the Agent and
the Company and the Bank may reasonably agree upon; provided, however, that
the Company shall not be obligated to file any general consent to service
of process, to
15
qualify to do business in any jurisdiction in which it is not so qualified,
or to register its directors or officers as brokers, dealers, salesmen or
agents in any jurisdiction. In each jurisdiction where any of the Shares
shall have been qualified or registered as above provided, the Company will
make and file such statements and reports in each fiscal period as are or
may be required by the laws of such jurisdiction.
(j) The liquidation account for the benefit of Eligible Account Holders and
Supplemental Eligible Account Holders 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 the Common
Shares in the event of a complete liquidation of the Bank.
(k) The Company and the Bank will not sell or issue, contract to sell or
otherwise dispose of, for a period of 90 days after the Closing Date,
without the Agent's prior written consent, any of their common shares,
other than the Shares or other than in connection with any plan or
arrangement described in the Prospectus, including existing stock benefit
plans.
(l) The Company has registered its Common Shares under Section 12(g) of the
1934 Act concurrently with the Offering and such registration automatically
became effective at the time the Registration Statement was declared
effective. The Company shall maintain the effectiveness of such
registration for not less than three years or such shorter period as may be
required by the OTS.
(m) During the period during which the Common Shares are registered under
the 1934 Act or for three years from the date hereof, whichever period is
greater, the Company will furnish to its shareholders as soon as
practicable after the end of each fiscal year an annual report of the
Company (including a consolidated balance sheet and statements of
consolidated income, shareholders' equity and cash flows of the Company and
its subsidiaries as at the end of and for such year, certified by
independent public accountants in accordance with Regulation S-X under the
1933 Act and the 1934 Act).
(n) During the period of three years from the date hereof, the Company will
furnish to the Agent: (i) as soon as practicable after such information is
publicly available, a copy of each report of the Company furnished to or
filed with the Commission under the 1934 Act or any national securities
exchange or system on which any class of securities of the Company is
listed or quoted (including, but not limited to, reports on Forms 10-KSB,
10-Q or 10-QSB and 8-K and all proxy statements and annual reports to
stockholders), (ii) a copy of each other non-confidential report of the
Company mailed to its shareholders or filed with the Commission, the OTS or
any
16
other supervisory or regulatory authority or any national securities
exchange or system on which any class of securities of the Company is
listed or quoted, each press release and material news items and additional
documents and information with respect to the Company or the Bank as the
Agent may reasonably request; and (iii) from time to time, such other
nonconfidential information concerning the Company or the Bank as the Agent
may reasonably request.
(o) The Company and the Bank will use the net proceeds from the sale of the
Shares in the manner set forth in the Prospectus under the caption "Use of
Proceeds."
(p) Other than as permitted by the Conversion Regulations, the HOLA, the
1933 Act, the 1933 Act Regulations and the rules and regulations and the
laws of any state in which the Shares are registered or qualified for sale
or exempt from registration, neither the Company nor the Bank will
distribute any prospectus, offering circular or other offering material in
connection with the offer and sale of the Shares.
(q) The Company will use its best efforts to encourage and assist a
broker-dealer to maintain quotation of the Shares on the OTC-Bulletin
Board.
(r) The Bank will maintain appropriate arrangements for depositing all
funds received from persons mailing subscriptions for or orders to purchase
Shares in the Offering on an interest-bearing basis at the rate described
in the Prospectus until the Closing Date and satisfaction of all conditions
precedent to the release of the Bank's obligation to refund payments
received from persons subscribing for or ordering Shares in the Offering in
accordance with the Plan and as described in the Prospectus or until
refunds of such funds have been made to the persons entitled thereto or
withdrawal authorizations canceled in accordance with the Plan and as
described in the Prospectus. The Bank will maintain such records of all
funds received to permit the funds of each subscriber to be separately
insured by the FDIC (to the maximum extent allowable) and to enable the
Bank to make the appropriate refunds of such funds in the event that such
refunds are required to be made in accordance with the Plan and as
described in the Prospectus.
(s) The Company will promptly take all necessary action to register as a
savings and loan holding company under the HOLA.
(t) The Company and the Bank will take such actions and furnish such
information as are reasonably requested by the Agent in order for the Agent
to ensure compliance with the NASD's "Interpretation Relating to Free
Riding and Withholding."
(u) Neither the Company nor the Bank will amend the Plan of Conversion
without notifying the Agent prior thereto.
17
(v) The Company shall assist the Agent, if necessary, in connection with
the allocation of the Shares in the event of an oversubscription and shall
provide the Agent with any information necessary to assist the Company in
allocating the Shares in such event and such information shall be accurate
and reliable in all material respects.
(w) Prior to the Closing Date, the Company and the Bank will inform the
Agent of any event or circumstances of which it is aware as a result of
which the Registration Statement and/or Prospectus, as then amended or
supplemented, would contain an untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements therein
not misleading.
(x) Subsequent to the date the Registration Statement is declared effective
by the Commission and prior to the Closing Date, except as otherwise may be
indicated or contemplated therein or set forth in an amendment or
supplement thereto, neither the Company nor the Bank will have: (i) issued
any securities or incurred any liability or obligation, direct or
contingent, for borrowed money, except borrowings from the same or similar
sources indicated in the Prospectus in the ordinary course of its business,
or (ii) entered into any transaction which is material in light of the
business and properties of the Company and the Bank, taken as a whole.
(y) The facts and representations provided to Xxxxxxx, Xxxxxx & Xxxxxxxx
LLP by the Bank and the Company and upon which Xxxxxxx, Xxxxxx & Xxxxxxxx
LLP will base its opinion under Section 7(c)(1) are and will be truthful,
accurate and complete.
Section 6. Payment of Expenses. Whether or not the Conversion is completed
or the sale of the Shares by the Company is consummated, the Company the Bank
jointly and severally agree to pay or reimburse the Agent for: (a) all filing
fees in connection with all filings related to the Offering with the NASD; (b)
any stock issue or transfer taxes which may be payable with respect to the sale
of the Shares; (c) subject to Section 2(d), all reasonable expenses of the
Conversion, including out not limited to the Agent's attorneys' fees and
expenses, blue sky fees, transfer agent, registrar and other agent charges, fees
relating to auditing and accounting or other advisors and costs of printing all
documents necessary in connection with the Conversion. In the event the Company
is unable to sell the minimum number of shares necessary to complete the
offering or the Conversion is terminated or otherwise abandoned, the Company and
the Bank shall promptly reimburse the Agent in accordance with Section 2(d)
hereof.
Section 7. Conditions to the Agent's Obligations. The obligations of the
Agent hereunder, as to the Shares to be delivered at the Closing Date, are
subject, to the extent not waived in writing by the Agent, to the condition that
all representations and warranties of the Company and the Bank herein are, at
and as of the commencement of the Offering and at and as of the Closing Date,
true and correct in all material respects, the condition that the Company and
the Bank shall have performed all of their obligations hereunder to be performed
on or before such dates, and to the
18
following further conditions:
(a) At the Closing Date, the Company and the Bank shall have conducted the
Conversion in all material respects in accordance with the Plan, the
Conversion Regulations, the laws of Maryland, and all other applicable
laws, regulations, decisions and orders, including all terms, conditions,
requirements and provisions precedent to the Conversion imposed upon them
by the OTS.
(b) The Registration Statement shall have been declared effective by the
Commission and the Conversion Application approved by the OTS not later
than 5:30 p.m. on the date of this Agreement, or with the Agent's consent
at a later time and date; and at the Closing Date, no stop order suspending
the effectiveness of the Registration Statement shall have been issued
under the 1933 Act or proceedings therefore initiated or threatened by the
Commission or any state authority, and no order or other action suspending
the authorization of the Prospectus or the consummation of the Conversion
shall have been issued or proceedings therefore initiated or, to the
Company's or the Bank's knowledge, threatened by the Commission, the OTS,
the FDIC, or any other state authority.
(c) At the Closing Date, the Agent shall have received:
(1) The favorable opinion, dated as of the Closing Date and addressed
to the Agent and for its benefit, of Xxxxxxx, Xxxxxx & Xxxxxxxx LLP,
special counsel for the Company and the Bank, in form and substance to
the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation under the laws of the State of
Maryland.
(ii) The Company has corporate power and authority to own, lease
and operate its properties and to conduct its business as
described in the Registration Statement and the Prospectus.
(iii) The Bank is a validly existing federally chartered savings
bank in mutual form and immediately following the completion of
the Conversion will be a validly existing federally chartered
savings bank in permanent capital stock form of organization, in
both instances duly authorized to conduct its business and own
its property as described in the Registration Statement and the
Prospectus. All of the outstanding capital stock of the Bank upon
completion of the Conversion will be duly authorized and, upon
payment therefor, will be validly issued, fully-paid and
non-assessable and will be owned by the Company, to such
counsel's Actual Knowledge, free and clear of
19
any liens, encumbrances, claims or other restrictions.
(iv) The Bank is a member of the FHLB-Cincinnati. The deposit
accounts of the Bank are insured by the FDIC up to the maximum
amount allowed under law and to such counsel's Actual Knowledge,
no proceedings for the termination or revocation of such
insurance are pending or threatened; the description of the
liquidation account as set forth in the Prospectus under the
captions "The Conversion--Effects of Conversion to Stock
Form--Liquidation Account," to the extent that such information
constitutes matters of law and legal conclusions, has been
reviewed by such counsel and is accurately described in all
material respects.
(v) Immediately following the consummation of the Conversion, the
authorized, issued and outstanding Common Shares of the Company
will be within the range set forth in the Prospectus under the
caption "Capitalization," and no Common Shares have been issued
prior to the Closing Date; at the time of the Conversion, the
Shares subscribed for pursuant to the Offering will have been
duly and validly authorized for issuance, and when issued and
delivered by the Company pursuant to the Plan against payment of
the consideration calculated as set forth in the Plan and
Prospectus, will be duly and validly issued and fully paid and
non-assessable, except for shares purchased by the ESOP with
funds borrowed from the Company to the extent payment therefor in
cash has not been received by the Company; except to the extent
that subscription rights and priorities pursuant thereto exist
pursuant to the Plan, the issuance of the Shares is not subject
to preemptive rights and the terms and provisions of the Shares
conform in all material respects to the description thereof
contained in the Prospectus. Upon the issuance of the Shares,
good title to the Shares will be transferred from the Company to
the purchasers thereof against payment therefor, subject to such
claims as may be asserted against the purchasers thereof by
third-party claimants.
(vi) The Bank and the Company have full corporate power and
authority to enter into the Agreement and to consummate the
transactions contemplated thereby and by the Plan. The execution
and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly
authorized by all necessary action on the part of the Company and
the Bank; and this Agreement is a valid and binding obligation of
the Company and the Bank, enforceable against the Company and the
20
Bank in accordance with its terms, except as the enforceability
thereof may be limited by (i) bankruptcy, insolvency,
reorganization, moratorium, conservatorship, receivership or
other similar laws now or hereafter in effect relating to or
affecting the enforcement of creditors' rights generally or the
rights of creditors of federally chartered savings institutions,
(ii) general equitable principles, (iii) laws relating to the
safety and soundness of insured depository institutions, and (iv)
applicable law or public policy with respect to the
indemnification and/or contribution provisions contained herein,
including without limitation the provisions of Sections 23A and
23B of the Federal Reserve Act and except that no opinion need be
expressed as to the effect or availability of equitable remedies
or injunctive relief (regardless of whether such enforceability
is considered in a proceeding in equity or at law).
(vii) The Conversion Application has been approved by the OTS and
the Prospectus has been authorized for use by the OTS. The OTS
has approved the Holding Company Application and the purchase by
the Company of all of the issued and outstanding capital stock of
the Bank and no action has been taken, and to such counsel's
Actual Knowledge, none is pending or threatened, to revoke any
such authorization or approval.
(viii) The Plan has been duly adopted by the required vote of the
directors of the Company and the Bank, and based upon the
certificate of the inspectors of election, by the members of the
Bank.
(ix) Subject to the satisfaction of the conditions to the OTS's
approval of the Conversion, no further approval, registration,
authorization, consent or other order of any federal regulatory
agency is required in connection with the execution and delivery
of this Agreement, the issuance of the Shares and the
consummation of the Conversion, except as may be required under
the securities or blue sky laws of various jurisdictions (as to
which no opinion need be rendered) and except as may be required
under the rules and regulations of the NASD (as to which no
opinion need be rendered).
(x) The Registration Statement is effective under the 1933 Act
and no stop order suspending the effectiveness has been issued
under the 1933 Act or proceedings therefor initiated or, to such
counsel's Actual Knowledge, threatened by the Commission.
21
(xi) At the time the Conversion Application, including the
Prospectus contained therein, was approved by the OTS, the
Conversion Application, including the Prospectus contained
therein, complied as to form in all material respects with the
requirements of the Conversion Regulations (other than the
financial statements, the notes thereto, and other tabular,
financial, statistical and appraisal data included therein, as to
which no opinion need be rendered).
(xii) At the time that the Registration Statement became
effective, (i) the Registration Statement (as amended or
supplemented, if so amended or supplemented) (other than the
financial statements, the notes thereto, and other tabular,
financial, statistical and appraisal data included therein, as to
which no opinion need be rendered), complied as to form in all
material respects with the requirements of the 1933 Act and the
1933 Act Regulations, and (ii) the Prospectus (other than the
financial statements, the notes thereto, and other tabular,
financial, statistical and appraisal data included therein, as to
which no opinion need be rendered) complied as to form in all
material respects with the requirements of the 1933 Act and the
1933 Act Regulations.
(xiii) The terms and provisions of the Shares of the Company
conform, in all material respects, to the description thereof
contained in the Registration Statement and Prospectus, and the
form of certificate used to evidence the Shares is in due and
proper form.
(xiv) To the Actual Knowledge of such counsel, there are no legal
or governmental proceedings pending or threatened which are
required to be disclosed in the Registration Statement and
Prospectus, other than those disclosed therein.
(xv) To such counsel's Actual Knowledge, there are no material
contracts, indentures, mortgages, loan agreements, notes, leases
or other instruments required to be described or referred to in
the Conversion Application, the Registration Statement or the
Prospectus or required to be filed as exhibits thereto other than
those described or referred to therein or filed as exhibits
thereto in the Conversion Application, the Registration Statement
or the Prospectus. The description in the Conversion Application,
the Registration Statement and the Prospectus of such documents
and exhibits is accurate in all material respects and fairly
presents the information required to be shown.
22
(xvi) The Plan complies in all material respects with all
applicable federal law, rules, regulations, decisions and orders
including, but not limited to, the Conversion Regulations; to
such counsel's Actual Knowledge, no order has been issued by the
OTS, the Commission, the FDIC, or any state authority to suspend
the Offering or the use of the Prospectus, and no action for such
purposes has been instituted or threatened by the OTS, the
Commission, the FDIC, or any other state authority and, to such
counsel's Actual Knowledge, no person has sought to obtain
regulatory or judicial review of the final action of the OTS
approving the Plan, the Conversion Application, the Holding
Company Application or the Prospectus.
(xvii) To such counsel's Actual Knowledge, the Company and the
Bank have obtained all material licenses, permits and other
governmental authorizations currently required for the conduct of
their businesses and all such licenses, permits and other
governmental authorizations are in full force and effect, and the
Company and the Bank are in all material respects complying
therewith.
(xviii) Neither the Company nor the Bank is in violation of its
Articles of Incorporation and Bylaws or its Charter and Bylaws,
as appropriate or, to such counsel's Actual Knowledge, in default
or violation of any obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, loan agreement,
note, lease or other instrument to which it is a party or by
which it or its property may be bound, except for such defaults
or violations which would not have a material adverse impact on
the financial condition or results of operations of the Company
and the Bank on a consolidated basis; to such counsel's Actual
Knowledge, the execution and delivery of this Agreement, the
incurrence of the obligations herein set forth and the
consummation of the transactions contemplated herein will not
conflict with or constitute a breach of, or default under, or
result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or the
Bank pursuant to any material contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which the Company
or the Bank is a party or by which any of them may be bound, or
to which any of the property or assets of the Company or the Bank
are subject (other than the establishment of the liquidation
account); and such action will not result in any violation of the
provisions of the Articles of Incorporation or Bylaws of the
Company or the Charter or the Bylaws of the Bank or result in any
violation of any applicable federal or state law, act, regulation
23
(except that no opinion with respect to the securities and blue
sky laws of various jurisdictions or the rules or regulations of
the NASD need be rendered) or order or court order, writ,
injunction or decree.
(xix) The Company's Articles of Incorporation and Bylaws comply
in all material respects with the laws of the State of Maryland.
The Bank's Charter and Bylaws comply in all material respects
with federal law.
(xx) The information in the Prospectus under the captions
"Regulation and Supervision," "The Conversion," "Restrictions on
Acquisition of Xxxxxxxx Financial and Xxxxxxxx Federal" and
"Description of Xxxxxxxx Financial's Capital Stock," to the
extent that such information constitutes matters of law,
summaries of legal matters, documents or proceedings, or legal
conclusions, has been reviewed by such counsel and is correct in
all material respects. The description of the Conversion process
in the Prospectus under the caption "The Conversion" to the
extent that such information constitutes matters of law,
summaries of legal matters, documents or proceedings, or legal
conclusions, has been reviewed by such counsel and fairly
describes such process in all material respects. The descriptions
in the Prospectus of statutes or regulations are accurate
summaries and fairly present the information required to be
shown. The information under the caption "The Conversion--Effects
of the Conversion to Stock Form--Tax Effects" has been reviewed
by such counsel and fairly describes the federal and state tax
opinions rendered by them and Xxxxx, Xxxxxx and Company LLP,
respectively, to the Company and the Bank with respect to such
matters.
In addition, such counsel shall state that during the
preparation of the Conversion Application, the Registration
Statement and the Prospectus, they participated in conferences
with certain officers of, the independent public and internal
accountants for, and other representatives of, the Company and
the Bank, at which conferences the contents of the Conversion
Application, the Registration Statement and the Prospectus and
related matters were discussed and, while such counsel have not
confirmed the accuracy or completeness of or otherwise verified
the information contained in the Conversion Application, the
Registration Statement or the Prospectus and do not assume any
responsibility for such information, based upon such conferences
and a review of documents deemed relevant for the purpose of
rendering their opinion (relying
24
as to materiality as to factual matters on certificates of
officers and other factual representations by the Company and the
Bank), nothing has come to their attention that would lead them
to believe that the Conversion Application, the Registration
Statement, the Prospectus, or any amendment or supplement thereto
(other than the financial statements, the notes thereto, and
other tabular, financial, statistical and appraisal data included
therein as to which no view need be rendered) contained an untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were
made, not misleading.
In giving such opinion, such counsel may rely as to all
matters of fact on certificates of officers or directors of the
Company and the Bank and certificates of public officials. Such
counsel's opinion shall be limited to matters governed by federal
laws and by the laws of the State of Maryland.
The term "Actual Knowledge" as used herein shall have the
meaning set forth in the Legal Opinion Accord of the American Bar
Association Section of Business Law. For purposes of such
opinion, no proceedings shall be deemed to be pending, no order
or stop order shall be deemed to be issued, and no action shall
be deemed to be instituted unless, in each case, a director or
executive officer of the Company or the Bank shall have received
a copy of such proceedings, order, stop order or action. In
addition, such opinion may be limited to present statutes,
regulations and judicial interpretations and to facts as they
presently exist; in rendering such opinion, such counsel need
assume no obligation to revise or supplement it should the
present laws be changed by legislative or regulatory action,
judicial decision or otherwise; and such counsel need express no
view, opinion or belief with respect to whether any proposed or
pending legislation, if enacted, or any proposed or pending
regulations or policy statements issued by any regulatory agency,
whether or not promulgated pursuant to any such legislation,
would affect the validity of the Conversion or any aspect
thereof. Such counsel may assume that any agreement is the valid
and binding obligation of any parties to such agreement other
than the Company or the Bank.
(d) At the Closing Date, the Agent shall receive a certificate of the Chief
Executive Officer and the Principal Accounting Officer of the Company and
the Bank in form and substance reasonably satisfactory to the Agent's
Counsel, dated as of such Closing Date, to the effect that: (i) they have
carefully examined the Prospectus and,
25
in their opinion, at the time the Prospectus became authorized for final
use, the Prospectus did not contain any untrue statement of a material fact
or omit to state a material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading; (ii) since the date the Prospectus became authorized for final
use, no event has occurred which should have been set forth in an amendment
or supplement to the Prospectus which has not been so set forth, including
specifically, but without limitation, any material adverse change in the
condition, financial or otherwise, or in the earnings, capital, properties
or business of the Company or the Bank and the conditions set forth in this
Section 7 have been satisfied; (iii) since the respective dates as of which
information is given in the Registration Statement and the Prospectus,
there has been no material adverse change in the condition, financial or
otherwise, or in the earnings, capital or properties of the Company or the
Bank independently, or of the Company and the Bank considered as one
enterprise, whether or not arising in the ordinary course of business; (iv)
the representations and warranties in Section 4 are true and correct with
the same force and effect as though expressly made at and as of the Closing
Date; (v) the Company and the Bank have complied in all material respects
with all agreements and satisfied all conditions on their part to be
performed or satisfied at or prior to the Closing Date and will comply in
all material respects with all obligations to be satisfied by them after
the Conversion; (vi) no stop order suspending the effectiveness of the
Registration Statement has been initiated or, to the best knowledge of the
Company or the Bank, threatened by the Commission or any state authority;
(vii) no order suspending the Offering, the Conversion, the acquisition of
all of the shares of the Bank by the Company or the effectiveness of the
Prospectus has been issued and no proceedings for that purpose are pending
or, to the best knowledge of the Company or the Bank, threatened by the
OTS, the Commission, the FDIC, or any state authority; and (viii) to the
best knowledge of the Company or the Bank, no person has sought to obtain
review of the final action of the OTS approving the Plan.
(e) Prior to and at the Closing Date: (i) in the reasonable opinion of the
Agent, there shall have been no material adverse change in the financial
condition, results of operations or business of the Company and the Bank
considered as one enterprise, from that as of the latest dates as of which
such condition is set forth in the Prospectus, other than transactions
referred to or contemplated therein; (ii) the Company or the Bank shall not
have received from the OTS or the FDIC any direction (oral or written) to
make any material change in the method of conducting their business with
which it has not complied (which direction, if any, shall have been
disclosed to the Agent) or which materially and adversely would affect the
financial condition, results of operations or business of the Company and
the Bank taken as a whole; (iii) neither the Company nor the Bank shall
have been in default (nor shall an event have occurred which, with notice
or lapse of time or both, would constitute a default) under any provision
of any agreement or instrument relating to
26
any outstanding indebtedness; (iv) no action, suit or proceeding, at law or
in equity or before or by any federal or state commission, board or other
administrative agency, shall be pending or, to the knowledge of the Company
or the Bank, threatened against the Company or the Bank or affecting any of
their properties wherein an unfavorable decision, ruling or finding would
materially and adversely affect the financial condition, results of
operations or business taken as a whole; and (v) the Shares shall have been
qualified or registered for offering and sale or exempted therefrom under
the securities or blue sky laws of the jurisdictions as the Agent shall
have reasonably requested and as agreed to by the Company and the Bank.
(f) Concurrently with the execution of this Agreement, the Agent shall
receive a letter from Xxxxx Xxxxxx and Company LLP dated as of the date of
the Prospectus and addressed to the Agent: (i) confirming that Xxxxx Xxxxxx
and Company LLP is a firm of independent public accountants within the
meaning of Rule 101 of the Code of Professional Ethics of the American
Institute of Certified Public Accountants and applicable regulations of the
OTS and stating in effect that in its opinion the financial statements,
schedules and related notes of the Bank as of December 31, 1999 and 1998,
and for each of the two years in the period ended December 31, 1999,
included in the Prospectus and covered by their opinion included therein,
comply as to form in all material respects with the applicable accounting
requirements and related published rules and regulations of the OTS and the
1933 Act; (ii) stating in effect that, on the basis of certain agreed upon
procedures (but not an audit in accordance with generally accepted auditing
standards) consisting of a reading of the latest available unaudited
interim financial statements of the Bank prepared by the Bank, a reading of
the minutes of the meetings of the Board of Directors and members of the
Bank and consultations with officers of the Bank responsible for financial
and accounting matters, nothing came to their attention which caused them
to believe that: (A) the unaudited financial statements included in the
Prospectus are not in conformity with the 1933 Act, applicable accounting
requirements of the OTS and generally accepted accounting principles
applied on a basis substantially consistent with that of the audited
financial statements included in the Prospectus; or (B) during the period
from the date of the latest unaudited financial statements included in the
Prospectus to a specified date not more than three business days prior to
the date of the Prospectus, except as has been described in the Prospectus,
there was any increase in borrowings, other than normal deposit
fluctuations, by the Bank; or (C) there was any decrease in the net assets
of the Bank at the date of such letter as compared with amounts shown in
the latest unaudited balance sheets included in the Prospectus; and (iii)
stating that, in addition to the audit referred to in their opinion
included in the Prospectus and the performance of the procedures referred
to in clause (ii) of this subsection (g), they have compared with the
general accounting records of the Bank, which are subject to the internal
controls of the Bank, the accounting system and other data prepared by the
Bank, directly from such
27
accounting records, to the extent specified in such letter, such amounts
and/or percentages set forth in the Prospectus as the Agent may reasonably
request; and they have reported on the results of such comparisons.
(g) At the Closing Date, the Agent shall receive a letter dated the Closing
Date, addressed to the Agent, confirming the statements made by Xxxxx
Xxxxxx and Company LLP in the letter delivered by it pursuant to subsection
(g) of this Section 7, the "specified date" referred to in clause (ii) of
subsection (g) to be a date specified in the letter required by this
subsection (h) which for purposes of such letter shall not be more than
three business days prior to the Closing Date.
(h) At the Closing Date, the Bank shall receive a letter from Xxxxxx &
Company, Inc., dated the Closing Date (i) confirming that said firm is
independent of the Company and the Bank and is experienced and expert in
the area of corporate appraisals within the meaning of Title 12 of the Code
of Federal Regulations, Section 563b.7(f)(1)(i), (ii) stating in effect
that the Appraisal prepared by such firm complies in all material respects
with the applicable requirements of Title 12 of the Code of Federal
Regulations, and (iii) further stating that its opinion of the aggregate
pro forma market value of the Company and the Bank expressed in its
Appraisal dated as of August 15, 2000, as most recently updated, remains in
effect.
(i) The Company and the Bank shall not have sustained since the date of the
latest financial statements included in the Prospectus any material loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree, otherwise than as set forth
or contemplated in the Registration Statement and Prospectus and since the
respective dates as of which information is given in the Registration
Statement and Prospectus, there shall not have been any change in the
long-term debt of the Company or the Bank other than debt incurred in
relation to the purchase of Shares by the Bank's eligible plans, or any
change, or any development involving a prospective change, in or affecting
the general affairs, management, financial position, shareholders' equity
or results of operations of the Company or the Bank, otherwise than as set
forth or contemplated in the Registration Statement and Prospectus, the
effect of which, in any such case described above, is in the Agent's
reasonable judgment sufficiently material and adverse as to make it
impracticable or inadvisable to proceed with the Subscription Offering or
the delivery of the Shares on the terms and in the manner contemplated in
the Prospectus.
(j) At or prior to the Closing Date, the Agent shall receive: (i) a copy of
the letters from the OTS approving the Conversion Application and
authorizing the use of the Prospectus; (ii) a copy of the order from the
Commission declaring the Registration Statement effective; (iii) a
certificate from the OTS evidencing the valid existence
28
of the Bank; (iv) a certificate from the State of Maryland evidencing the
good standing of the Company; (v) a certificate from the FDIC evidencing
the Bank's insurance of accounts; (vi) a certificate from the
FHLB-Cincinnati evidencing the Bank's membership therein; (vii) a copy of
the letter from the OTS approving the Company's Holding Company
Application; and (viii) a certified copy of the Bank's Charter and Bylaws.
(k) Subsequent to the date hereof, there shall not have occurred any of the
following:
(i) a suspension or limitation in trading in securities generally on
the New York Stock Exchange (the "NYSE") 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 federal savings and loan associations or a
general moratorium on the withdrawal of deposits from commercial banks
or federal savings and loan associations declared by federal or state
authorities; (iii) the engagement by the United States in hostilities
which have resulted in the declaration, on or after the date hereof,
of a national emergency or war; or (iv) a material decline in the
price of equity or debt securities if the effect of such a declaration
or decline, in the Agent's reasonable judgement, makes it
impracticable or inadvisable to proceed with the Offering or the
delivery of the Shares on the terms and in the manner contemplated in
the Registration Statement and the Prospectus.
(l) At or prior to the Closing Date, counsel to the Agent shall have been
furnished with such documents and opinions as they may reasonably require
for the purpose of enabling them to pass upon the sale of the Shares as
herein contemplated and related proceedings or in order to evidence the
occurrence or completeness of any of the representations or warranties, or
the fulfillment of any of the conditions, herein contained; and all
proceedings taken by the Company or the Bank in connection with the
Conversion and the sale of the Shares as herein contemplated shall be
satisfactory in form and substance to the Agent and its counsel.
Section 8. Indemnification.
(a) The Company and the Bank jointly and severally agree to indemnify and
hold harmless the Agent, its respective officers and directors, employees
and agents, and each person, if any, who controls the Agent within the
meaning of Section 15 of the 1933 Act or Section 20(a) of the 1934 Act,
against any and all loss, liability, claim, damage or expense whatsoever
(including, but not limited to, settlement expenses), joint or several,
that the Agent or any of them may suffer or to which the Agent and
29
any such persons may become subject under all applicable federal or state
laws or otherwise, and to promptly reimburse the Agent and any such persons
upon written demand for any expense (including reasonable fees and
disbursements of counsel) incurred by the Agent or any of them in
connection with investigating, preparing or defending any actions,
proceedings or claims (whether commenced or threatened) to the extent such
losses, claims, damages, liabilities or actions: (i) arise out of or are
based upon any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement (or any amendment or
supplement thereto), preliminary or final Prospectus (or any amendment or
supplement thereto), the Conversion Application (or any amendment or
supplement thereto), the Holding Company Application or any instrument or
document executed by the Company or the Bank or based upon written
information supplied by the Company or the Bank filed in any state or
jurisdiction to register or qualify any or all of the Shares or to claim an
exemption therefrom or provided to any state or jurisdiction to exempt the
Company as a broker-dealer or its officers, directors and employees as
broker-dealers or agent, under the securities laws thereof (collectively,
the "Blue Sky Application"), or any document, advertisement, oral statement
or communication ("Sales Information") prepared, made or executed by or on
behalf of the Company or the Bank with their consent or based upon written
or oral information furnished by or on behalf of the Company or the Bank,
whether or not filed in any jurisdiction, in order to qualify or register
the Shares or to claim an exemption therefrom under the securities laws
thereof; (ii) arise out of or are based upon the omission or alleged
omission to state in any of the foregoing documents or information a
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading; or (iii) arise from any theory of liability
whatsoever relating to or arising from or based upon the Registration
Statement (or any amendment or supplement thereto), preliminary or final
Prospectus (or any amendment or supplement thereto), the Conversion
Application (or any amendment or supplement thereto), any Blue Sky
Application or Sales Information or other documentation distributed in
connection with the Conversion; provided, however, that no indemnification
is required under this paragraph (a) to the extent such losses, claims,
damages, liabilities or actions arise out of or are based upon any untrue
material statement or alleged untrue material statement in, or material
omission or alleged material omission from, the Registration Statement (or
any amendment or supplement thereto), preliminary or final Prospectus (or
any amendment or supplement thereto), the Conversion Application, any Blue
Sky Application or Sales Information made in reliance upon and in
conformity with information furnished in writing to the Company or the Bank
by the Agent or its counsel regarding the Agent, provided, that it is
agreed and understood that the only information furnished in writing to the
Company or the Bank by the Agent regarding the Agent is set forth in the
Prospectus under the caption "The Conversion--Marketing and Underwriting
Arrangements"; and, provided further, that such indemnification shall be to
the extent not prohibited by the Commission, the
30
OTS, the FDIC and the Board of Governors of the Federal Reserve.
(b) The Agent agrees to indemnify and hold harmless the Company and the
Bank, their directors and officers and each person, if any, who controls
the Company or the Bank within the meaning of Section 15 of the 1933 Act or
Section 20(a) of the 1934 Act against any and all loss, liability, claim,
damage or expense whatsoever (including but not limited to settlement
expenses), joint or several, which they, or any of them, may suffer or to
which they, or any of them may become subject under all applicable federal
and state laws or otherwise, and to promptly reimburse the Company, the
Bank, and any such persons upon written demand for any expenses (including
reasonable fees and disbursements of counsel) incurred by them, or any of
them, in connection with investigating, preparing or defending any actions,
proceedings or claims (whether commenced or threatened) to the extent such
losses, claims, damages, liabilities or actions: (i) arise out of or are
based upon any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement (or any amendment or
supplement thereto), the Conversion Application (or any amendment or
supplement thereto), the preliminary or final Prospectus (or any amendment
or supplement thereto), any Blue Sky Application or Sales Information, (ii)
are based upon the omission or alleged omission to state in any of the
foregoing documents a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, or (iii) arise from any theory
of liability whatsoever relating to or arising from or based upon the
Registration Statement (or any amendment or supplement thereto),
preliminary or final Prospectus (or any amendment or supplement thereto),
the Conversion Application (or any amendment or supplement thereto), or any
Blue Sky Application or Sales Information or other documentation
distributed in connection with the Conversion; provided, however, that the
Agent's obligations under this Section 8(b) shall exist only if and only to
the extent that such untrue statement or alleged untrue statement was made
in, or such material fact or alleged material fact was omitted from, the
Registration Statement (or any amendment or supplement thereto), the
preliminary or final Prospectus (or any amendment or supplement thereto),
the Conversion Application (or any amendment or supplement thereto), any
Blue Sky Application or Sales Information in reliance upon and in
conformity with information furnished in writing to the Company or the Bank
by the Agent or its counsel regarding the Agent, provided, that it is
agreed and understood that the only information furnished in writing to the
Company or the Bank by the Agent regarding the Agent is set forth in the
Prospectus under the caption "The Conversion--Marketing and Underwriting
Arrangements."
(c) Each indemnified party shall give prompt written notice to each
indemnifying party of any action, proceeding, claim (whether commenced or
threatened), or suit instituted against it in respect of which indemnity
may be sought hereunder, but failure to so notify an indemnifying party
shall not relieve it from any liability which
31
it may have on account of this Section 8 or otherwise. An indemnifying
party may participate at its own expense in the defense of such action. In
addition, if it so elects within a reasonable time after receipt of such
notice, an indemnifying party, jointly with any other indemnifying parties
receiving such notice, may assume defense of such action with counsel
chosen by it and approved by the indemnified parties that are defendants in
such action, unless such indemnified parties reasonably object to such
assumption on the ground that there may be legal defenses available to them
that are different from or in addition to those available to such
indemnifying party. If an indemnifying party assumes the defense of such
action, the indemnifying parties shall not be liable for any fees and
expenses of counsel for the indemnified parties incurred thereafter in
connection with such action, proceeding or claim, other than reasonable
costs of investigation. In no event shall the indemnifying parties be
liable for the fees and expenses of more than one separate firm of
attorneys (and any special counsel that said firm may retain) for each
indemnified party in connection with any one action, proceeding or claim or
separate but similar or related actions, proceedings or claims in the same
jurisdiction arising out of the same general allegations or circumstances.
Section 9. Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnification provided for in
Section 8 is due in accordance with its terms but is for any reason held by a
court to be unavailable from the Company, the Bank or the Agent, the Company,
the Bank and the Agent shall contribute to the aggregate losses, claims, damages
and liabilities (including any investigation, legal and other expenses incurred
in connection with, and any amount paid in settlement of, any action, suit or
proceeding, but after deducting any contribution received by the Company, the
Bank or the Agent from persons other than the other parties thereto, who may
also be liable for contribution) in such proportion so that the Agent is
responsible for that portion represented by the percentage that the fees paid to
the Agent pursuant to Section 2 of this Agreement (not including expenses) bears
to the gross proceeds received by the Company from the sale of the Shares in the
Offering, and the Company and the Bank shall be responsible for the balance. If,
however, the allocation provided above is not permitted by applicable law, then
each indemnifying party shall contribute to such amount paid or payable by such
indemnified party in such proportion as is appropriate to reflect not only such
relative fault of the Company and the Bank on the one hand and the Agent on the
other in connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities (or actions, proceedings or claims in
respect thereto), but also the relative benefits received by the Company and the
Bank on the one hand and the Agent on the other from the Offering (before
deducting expenses). The relative fault shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Company and/or the Bank on the one hand or the Agent
on the other and the parties' relative intent, good faith, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company, the Bank and the Agent agree that it would not be just and
equitable if contribution pursuant to this Section 9 were determined by pro-rata
allocation or by any other method of allocation which does not take into account
the equitable
32
considerations referred to above in this Section 9. The amount paid or payable
by an indemnified party as a result of the losses, claims, damages or
liabilities (or actions, proceedings or claims in respect thereof) referred to
above in this Section 9 shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action, proceeding or claim. It is expressly agreed that
the Agent shall not be liable for any loss, liability, claim, damage or expense
or be required to contribute any amount pursuant to Section 8(b) or this Section
9 which in the aggregate exceeds the amount paid (excluding reimbursable
expenses) to the Agent under this Agreement. It is understood that the above
stated limitation on the Agent's liability is essential to the Agent and that
the Agent would not have entered into this Agreement if such limitation had not
been agreed to by the parties to this Agreement. No person found guilty of any
fraudulent misrepresentation (within the meaning of Section 11(f) of the 0000
Xxx) shall be entitled to contribution from any person who was not found guilty
of such fraudulent misrepresentation. The obligations of the Company, the Bank
and the Agent under this Section 9 and under Section 8 shall be in addition to
any liability which the Company, the Bank and the Agent may otherwise have. For
purposes of this Section 9, each of the Agent's, the Company's or the Bank's
officers and directors and each person, if any, who controls the Agent or the
Company or the Bank within the meaning of the 1933 Act and the 1934 Act shall
have the same rights to contribution as the Agent, the Company or the Bank. Any
party entitled to contribution, promptly after receipt of notice of commencement
of any action, suit, claim or proceeding against such party in respect of which
a claim for contribution may be made against another party under this Section 9,
will notify such party from whom contribution may be sought, but the omission to
so notify such party shall not relieve the party from whom contribution may be
sought from any other obligation it may have hereunder or otherwise than under
this Section 9.
Section 10. Survival of Agreements, Representations and Indemnities. The
respective indemnities of the Company, the Bank and the Agent, the
representations and warranties and other statements of the Company, the Bank and
the Agent set forth in or made pursuant to this Agreement and the provisions
relating to contribution shall remain in full force and effect, regardless of
any termination or cancellation of this Agreement or any investigation made by
or on behalf of the Agent, the Company, the Bank or any controlling person
referred to in Section 8 hereof, and shall survive the issuance of the Shares,
and any successor or assign of the Agent, the Company, the Bank, and any such
controlling person shall be entitled to the benefit of the respective
agreements, indemnities, warranties and representations.
Section 11. Termination. The Agent may terminate this Agreement by giving
the notice indicated below in this Section 11 at any time after this Agreement
becomes effective as follows:
(a) If any domestic or international event or act or occurrence has
materially disrupted the United States securities markets such as to make
it, in the Agent's reasonable opinion, impracticable to proceed with the
offering of the Shares; or if trading on the NYSE shall have suspended
(except that this shall not apply to the imposition of NYSE trading collars
imposed on program trading); or if the United States shall have become
involved in a war or major hostilities; or if a general
33
banking moratorium has been declared by a state or federal authority which
has a material effect on the Bank or the Conversion; or if a moratorium in
foreign exchange trading by major international banks or persons has been
declared; or if there shall have been a material adverse change in the
financial condition, results of operations or business of the Company, or
if the Bank shall have sustained a material or substantial loss by fire,
flood, accident, hurricane, earthquake, theft, sabotage or other calamity
or malicious act, whether or not said loss shall have been insured; or if
there shall have been a material adverse change in the financial condition,
results of operations or business of the Company or the Bank.
(b) In the event the Company fails to sell the required minimum number of
the Shares by ___________________, and in accordance with the provisions of
the Plan or as required by the Conversion Regulations, and applicable law,
this Agreement shall terminate upon refund by the Company to each person
who has subscribed for or ordered any of the Shares the full amount which
it may have received from such person, together with interest as provided
in the Prospectus, and no party to this Agreement shall have any obligation
to the other hereunder, except as set forth in Sections 2(a), 6, 8 and 9
hereof.
(c) If any of the conditions specified in Section 7 shall not have been
fulfilled when and as required by this Agreement, unless waived in writing,
or by the Closing Date, this Agreement and all of the Agent's obligations
hereunder may be cancelled by the Agent by notifying the Company and the
Bank of such cancellation in writing or by telegram at any time at or prior
to the Closing Date, and any such cancellation shall be without liability
of any party to any other party except as otherwise provided in Sections
2(a), 6, 8 and 9 hereof.
(d) If the Agent elects to terminate this Agreement as provided in this
Section, the Company and the Bank shall be notified promptly by telephone
or telegram, confirmed by letter.
The Company and the Bank may terminate this Agreement in the event the
Agent is in material breach of the representations and warranties or
covenants contained in Section 5 and such breach has not been cured after
the Company and the Bank have provided the Agent with notice of such
breach.
This Agreement may also be terminated by mutual written consent of the
parties hereto.
Section 12. Notices. All communications hereunder, except as herein
otherwise specifically provided, shall be mailed in writing and if sent to the
Agent shall be mailed, delivered or telegraphed and confirmed to Xxxxx, Xxxxxxxx
& Xxxxx, 000 Xxxxxxxxx Xxxxx, Xxxxxx, Xxxx 00000-0000, Attention: Xxxxxx X.
Xxxxxx III (with a copy to Xxxx Xxxxxx Xxxxxx Xxxxxxxx & Xxxxxx, A
34
Professional Corporation, 0000 Xxxxxxxxx Xxxxxx, XX, Xxxxx 000, Xxxxxxxxxx, XX
00000, Attention: Xxxxxxx X. Xxxxxx and, if sent to the Company and the Bank,
shall be mailed, delivered or telegraphed and confirmed to the Company and the
Bank at 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxx, Xxxx 00000, Attention: Xxxx X. Xxxxx,
President (with a copy to Xxxxxxx, Xxxxxx & Xxxxxxxx LLP, 0000 Xxxxxxxxx Xxxxxx,
X.X., Xxxxxxxxxx, XX 00000 Attention: Xxxx X. Xxxxxxx).
Section 13. Parties. The Company and the Bank shall be entitled to act and
rely on any request, notice, consent, waiver or agreement purportedly given on
behalf of the Agent when the same shall have been given by the undersigned. The
Agent shall be entitled to act and rely on any request, notice, consent, waiver
or agreement purportedly given on behalf of the Company or the Bank, when the
same shall have been given by the undersigned or any other officer of the
Company or the Bank. This Agreement shall inure solely to the benefit of, and
shall be binding upon, the Agent, the Company, the Bank, and their respective
successors and assigns, and no other person shall have or be construed to have
any legal or equitable right, remedy or claim under or in respect of or by
virtue of this Agreement or any provision herein contained. It is understood and
agreed that this Agreement is the exclusive agreement among the parties hereto,
and supersedes any prior agreement among the parties and may not be varied
except in writing signed by all the parties.
Section 14. Closing. The closing for the sale of the Shares shall take
place on the Closing Date at such location as mutually agreed upon by the Agent
and the Company and the Bank. At the closing, the Company and the Bank shall
deliver to the Agent in next day funds the commissions, fees and expenses due
and owing to the Agent as set forth in Sections 2 and 6 hereof and the opinions
and certificates required hereby and other documents deemed reasonably necessary
by the Agent shall be executed and delivered to effect the sale of the Shares as
contemplated hereby and pursuant to the terms of the Prospectus.
Section 15. Partial Invalidity. In the event that any term, provision or
covenant herein or the application thereof to any circumstance or situation
shall be invalid or unenforceable, in whole or in part, the remainder hereof and
the application of said term, provision or covenant to any other circumstances
or situation shall not be affected thereby, and each term, provision or covenant
herein shall be valid and enforceable to the full extent permitted by law.
Section 16. Construction. This Agreement shall be construed in accordance
with the laws of the State of Ohio.
Section 17. Counterparts. This Agreement may be executed in separate
counterparts, each of which so executed and delivered shall be an original, but
all of which together shall constitute but one and the same instrument.
Section 18. Entire Agreement. This Agreement, including schedules and
exhibits hereto, which are integral parts hereof and incorporated as though set
forth in full, constitutes the entire agreement between the parties pertaining
to the subject matter hereof superseding any and all prior or contemporaneous
oral or prior written agreements, proposals, letters of intent and
understandings,
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and cannot be modified, changed, waived or terminated except by a writing which
expressly states that it is an amendment, modification or waiver, refers to this
Agreement and is signed by the party to be charged. No course of conduct or
dealing shall be construed to modify, amend or otherwise affect any of the
provisions hereof.
If the foregoing correctly sets forth the arrangement among the Company,
the Bank and the Agent, please indicate acceptance thereof in the space provided
below for that purpose, whereupon this letter and the Agent's acceptance shall
constitute a binding agreement.
Very truly yours,
XXXXXXXX FINANCIAL HOLDINGS, XXXXXXXX FEDERAL SAVINGS
INC. BANK
By Its Authorized Representative: By Its Authorized Representative:
--------------------------------- ---------------------------------
Xxxx X. Xxxxx, President Xxxx X. Xxxxx, President
Accepted as of the date first above
written
Xxxxx, Xxxxxxxx & Xxxxx, Inc.
By Its Authorized Representative:
---------------------------------
Xxxxxx X. Xxxxxx III
Managing Director
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