Exhibit 1.2
46,667,000 Shares
(subject to increase up to 53,667,050 shares
in the event of an oversubscription)
PROVIDENT FINANCIAL SERVICES, INC.
(a Delaware corporation)
Common Stock
(par value $0.01 per share)
AGENCY AGREEMENT
, 2002
SANDLER X'XXXXX & PARTNERS , L.P.
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Provident Financial Services, Inc., a Delaware corporation (the
"Company"), and The Provident Bank, a New Jersey chartered mutual savings bank
(the "Bank"), hereby confirm their agreement with Sandler X'Xxxxx & Partners,
L.P. ("Sandler X'Xxxxx" or the "Agent") with respect to the offer and sale by
the Company of 46,667,000 shares (subject to increase up to 53,667,050 shares in
the event of an oversubscription) of the Company's Common Stock, par value $0.01
per share (the "Common Stock"). The shares of Common Stock to be sold by the
Company are hereinafter called the "Securities." In addition, as described
herein, the Company expects to contribute shares, not to exceed 1,920,000
shares, of Common Stock to the Provident Bank Foundation (the "Foundation"),
such shares hereinafter being referred to as the "Foundation Shares."
The Securities are being offered for sale and the Foundation Shares are
being contributed in accordance with the plan of conversion (the "Plan") adopted
by the Board of Directors of the Bank pursuant to which the Bank intends to
convert from a New Jersey chartered mutual savings bank to a New Jersey
chartered stock savings bank and issue all of its stock to the Company. Pursuant
to the Plan, the Company is offering to certain of the Bank's depositors, the
Bank's Employee Stock Ownership Plan (the "ESOP"), and the Company's and the
Bank's directors, officers and employees who are not eligible depositors rights
to subscribe for the Securities in a subscription offering (the "Subscription
Offering"). To
-2-
the extent Securities are not subscribed for in the Subscription Offering, such
Securities may be offered to certain members of the general public, with
preference given to certain natural persons residing in the counties in which
the Bank's offices are located, in a direct community offering (the "Community
Offering" and together with the Subscription Offering, as each may be extended
or reopened from time to time, the "Subscription and Community Offering") to be
commenced concurrently with, during or promptly after the Subscription Offering.
It is currently anticipated by the Bank and the Company that any Securities not
subscribed for in the Subscription and Community Offering will be offered,
subject to Section 2 hereof, in a syndicated community offering (the "Syndicated
Community Offering"). The Subscription and Community Offering and the Syndicated
Community Offering are hereinafter referred to collectively as the "Offerings,"
and the conversion of the Bank from mutual to stock form, the acquisition of the
capital stock of the Bank by the Company and the Offerings are hereinafter
referred to collectively as the "Conversion." The Securities may be offered to
the general public in a public offering (the "Public Offering") in lieu of or
subsequent to the Syndicated Community Offering. If there is a Public Offering,
the Public Offering will be governed by a separate definitive purchase agreement
as described in Section 2 hereof. It is acknowledged that the number of
Securities to be sold in the Conversion may be increased or decreased as
described in the Prospectus (as hereinafter defined). If the number of
Securities is increased or decreased in accordance with the Plan, the term
"Securities" shall mean such greater or lesser number, where applicable.
In connection with the Conversion and pursuant to the terms of the Plan
as described in the Prospectus, the Company has established the Foundation.
Immediately following the consummation of the Conversion, subject to compliance
with certain conditions as may be imposed by regulatory authorities, the Company
will make a contribution to The Provident Bank Foundation valued at 6.0% of the
shares of Common Stock sold in the Offerings and the Public Offering, if
applicable, not to exceed $24 million. The form of the contribution will be 80%
shares of Common Stock (not to exceed 1,920,000 shares of Common Stock) and 20%
cash.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-1 (No. 333--98241), including a
related prospectus, for the registration of the Securities and the Foundation
Shares under the Securities Act of 1933, as amended (the "Securities Act"), has
filed such amendments thereto, if any, and such amended prospectuses as may have
been required to the date hereof by the Commission in order to declare such
registration statement effective, and will file such additional amendments
thereto and such amended prospectuses and prospectus supplements as may
hereafter be required. Such registration statement (as amended to date, if
applicable, and as from time to time amended or supplemented hereafter) and the
prospectuses constituting a part thereof (including in each case all documents
incorporated or deemed to be incorporated by reference therein and the
information, if any, deemed to be a part thereof pursuant to the rules and
regulations of the Commission under the Securities Act, as from time to time
amended or supplemented pursuant to the Securities Act or otherwise (the
"Securities Act Regulations")), are hereinafter referred to as the "Registration
Statement" and the "Prospectus," respectively, except that if any revised
prospectus shall be used by the Company in connection with the Subscription and
Community Offering or the Syndicated Community Offering which differs from the
Prospectus on file at the Commission at the time the Registration Statement
becomes effective (whether or not such revised prospectus is required to be
filed by the Company pursuant to Rule
-3-
424(b) of the Securities Act Regulations), the term "Prospectus" shall refer to
such revised prospectus from and after the time it is first provided to the
Agent for such use.
Concurrently with the execution of this Agreement, the Company is
delivering to the Agent copies of the Prospectus to be used in the Subscription
and Community Offering. The Prospectus contains information with respect to the
Bank, the Company and the Common Stock.
SECTION 1. REPRESENTATIONS AND WARRANTIES .
(a) The Company and the Bank jointly and severally represent
and warrant to the Agent as of the date hereof as follows:
(i) The Registration Statement has been declared
effective by the Commission, no stop order has been issued
with respect thereto and no proceedings therefor have been
initiated or, to the knowledge of the Company and the Bank,
threatened by the Commission. At the time the Registration
Statement became effective and at the Closing Time referred to
in Section 2 hereof, the Registration Statement complied and
will comply in all material respects with the requirements of
the Securities Act and the Securities Act Regulations and did
not and will not contain an untrue statement of a material
fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not
misleading. The Prospectus, at the date hereof does not, and
at the Closing Time referred to in Section 2 hereof will not,
include an untrue statement of a material fact or omit to
state a material fact necessary in order to make the
statements therein, in the light of the circumstances under
which they were made, not misleading; provided, however, that
the representations and warranties in this subsection shall
not apply to statements in or omissions from the Registration
Statement or Prospectus made in reliance upon and in
conformity with information with respect to the Agent
furnished to the Company in writing by the Agent expressly for
use in the Registration Statement or Prospectus (the "Agent
Information," which the Company and the Bank acknowledge
appears only in the second paragraph of the section captioned
"The Conversion and Offering - Plan of Distribution and
Marketing Arrangements" of the Prospectus).
(ii) The Company has filed with the Board of
Governors of the Federal Reserve System (the "FRB") the
Company's application for approval of its acquisition of the
Bank (the "Holding Company Application") on Form FRY-3
promulgated under the Bank Holding Company Act of 1956, as
amended (the "BHCA"), and the regulations promulgated
thereunder. The Company has received written notice from the
FRB of its approval of the acquisition of the Bank, such
approval remains in full force and effect and no order has
been issued by the FRB suspending or revoking such approval
and no proceedings therefor have been initiated or, to the
knowledge of the Company or the Bank, threatened by the FRB.
At the date of such approval and at the Closing Time referred
to in Section 2, the Holding Company Application complied and
will comply in all material respects with the applicable
provisions of the BHCA and the regulations promulgated
thereunder.
-4-
(iii) Pursuant to the New Jersey Banking Act of 1948
and the regulations promulgated thereunder and the rules and
regulations of the Federal Deposit Insurance Corporation (the
"FDIC") governing the conversion of New Jersey state chartered
mutual savings banks to New Jersey state chartered savings
banks (collectively, the "Conversion Regulations"), the Bank
has filed an application for conversion (such application, as
amended to date, if applicable, and as from time to time
amended or supplemented hereafter, is hereinafter referred to
as the "New Jersey Application") with the New Jersey
Department of Banking and Insurance (the "Department"), a
Notice of Conversion, including the New Jersey Application,
with the FDIC and such amendments thereto and supplementary
materials as may have been required to the date hereof,
including copies of the Bank's Proxy Statement, dated
______________, 2002, relating to the Conversion (the "Proxy
Statement") and the Prospectus (such Notice of Conversion, as
amended to date, if applicable, and as from time to time
amended for supplemented hereafter, is hereinafter referred to
as the "FDIC Notice"). The Department has, by order dated
__________ 2002, approved the New Jersey Application, such
approval remains in full force and effect and no order has
been issued by the Department suspending or revoking such
approval and no proceedings therefor have been initiated or,
to the knowledge of the Company or the Bank, threatened by the
Department. The FDIC has, by letter dated _________, 2002,
issued a notice of its intention not to object to the
Conversion, and such non-objection remains in full force and
effect and no order has been issued by the FDIC suspending or
revoking such approval and no proceedings therefor have been
initiated or, to the knowledge of the Company or the Bank,
threatened by the FDIC. At the date of such approval by the
Department and the issuance of such letter of non-objection by
the FDIC, and at the Closing Time referred to in Section 2,
the New Jersey Application and the FDIC Notice each complied
and will comply in all material respects with the applicable
provisions of the Conversion Regulations.
(iv) At the time of their use, the Proxy Statement
and any other proxy solicitation materials will comply in all
material respects with the applicable provisions of the
Conversion Regulations and will not contain an untrue
statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not
misleading. The Company and the Bank will promptly file the
Prospectus and any additional supplemental sales literature
with the Commission, the Department and the FDIC. The
Prospectus and all supplemental sales literature, as of the
date the Registration Statement became effective and at the
Closing Time referred to in Section 2, complied and will
comply in all material respects with the applicable
requirements of the Conversion Regulations and, at or prior to
the time of their first use, will have received all required
authorizations of the Department and the FDIC for use in final
form.
(v) Neither the Commission, the Department nor the
FDIC has, by order or otherwise, prevented or suspended the
use of the Proxy Statement, Prospectus or any supplemental
sales literature authorized by the Company or the Bank for use
in connection with the Offerings, and no action by or before
any such governmental entity to prevent or suspend the use of
the Proxy Statement, Prospectus or any supplemental sales
literature is, to the best knowledge of the Company and the
Bank, pending or threatened.
-5-
(vi) At the Closing Time referred to in Section 2,
the Company and the Bank will have completed the conditions
precedent to the Conversion and the establishment of the
Foundation in accordance with the Plan, the applicable
Conversion Regulations and all other applicable laws,
regulations, decisions and orders, including all material
terms, conditions, requirements and provisions precedent to
the Conversion imposed upon the Company or the Bank by the
FRB, the Department, the FDIC or any other regulatory
authority, other than those which the regulatory authority
permits to be completed after the Conversion.
(vii) RP Financial, LC ("RP Financial"), which
prepared the valuation of the Bank as part of the Conversion,
has advised the Company and the Bank in writing that it
satisfies all requirements for an appraiser set forth in the
Conversion Regulations and any interpretations or guidelines
issued by the Department and the FDIC with respect thereto.
(viii) The accountants who certified the consolidated
financial statements and supporting schedules of the Bank
included in the Registration Statement have advised the
Company and the Bank in writing that they are independent
public accountants within the meaning of the Code of Ethics of
the American Institute of Certified Public Accountants (the
"AICPA"), such accountants are, with respect to the Company,
the Bank and each of the Subsidiaries (as hereinafter
defined), independent certified public accountants as required
by the Securities Act and the Securities Act Regulations and
such accountants are not in violation of the auditor
independence requirements of the Xxxxxxxx-Xxxxx Act of 2002
(the "Xxxxxxxx-Xxxxx Act").
(ix) The only direct and indirect subsidiaries of the
Bank are Provident Mortgage Corporation, Provident Investment
Services, Inc., PSB Funding Corporation, Xxxxxx Investment
Corp., Beehive Investment, Inc. and Paulus Hook Corp.
(collectively, the "Subsidiaries" and, individually, each a
"Subsidiary"). Each of Xxxxxx Investment Corp., Beehive
Investment, Inc. and Paulus Hook Corp. are inactive subsidia
xxxx of the Bank. Except for the Subsidiaries, the Bank does
not, directly or indirectly, control any other corporation,
limited liability company, partnership, joint venture,
association, trust or other business organization. Upon
completion of the Conversion, the only direct subsidiary of
the Company will be the Bank.
(x) The consolidated financial statements and the
related notes thereto included in the Registration Statement
and the Prospectus present fairly the financial position of
the Company, the Bank and the Subsidiaries at the dates
indicated and the results of operations, retained earnings,
equity and cash flows for the periods specified, and comply as
to form in all material respects with the applicable
accounting requirements of the Securities Act Regulations and
the Conversion Regulations; except as otherwise stated in the
Registration Statement, said financial statements have been
prepared in conformity with accounting principles generally
accepted in the United States applied on a consistent basis;
and the supporting schedules and tables included in the
Registration Statement present fairly the information required
to be stated therein. The other financial, statistical and pro
forma information and related notes included in the Prospectus
present fairly the information shown therein on a basis
consistent with the audited and unaudited financial
-6-
statements included in the Prospectus, and as to the pro forma
adjustments, the adjustments made therein have been
consistently applied on the basis described therein.
(xi) Since the respective dates as of which
information is given in the Registration Statement and the
Prospectus, except as otherwise stated therein, (A) there has
been no material adverse change in the financial condition,
results of operations, business affairs or prospects of the
Company, the Bank and the Subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of
business, (B) except for transactions specifically referred to
or contemplated in the Prospectus, there have been no
transactions entered into by the Company, the Bank or any of
the Subsidiaries, other than those in the ordinary course of
business consistent with past practice, which are material
with respect to the Company, the Bank and the Subsidiaries,
considered as one enterprise, and (C) the capitalization,
liabilities, assets, properties and business of the Company
and the Bank conform in all material respects to the
descriptions contained in the Prospectus and, neither the
Company nor the Bank has any material liabilities of any kind,
contingent or otherwise, except as disclosed in the
Registration Statement or the Prospectus.
(xii) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of the State of Delaware with corporate power and
authority to own, lease and operate its properties and to
conduct its business as described in the Prospectus and to
enter into and perform its obligations under this Agreement;
and the Company is duly qualified as a foreign corporation to
transact business and is in good standing in the State of New
Jersey and in each other jurisdiction in which such
qualification is required, whether by reason of the ownership
or leasing of property or the conduct of business, except
where the failure to so qualify in any such other jurisdiction
would not have a material adverse effect on the financial
condition, results of operations or business affairs or
prospects of the Company, the Bank and the Subsidiaries,
considered as one enterprise.
(xiii) Upon completion of the Conversion and the
contribution of the Foundation Shares as described in the
Prospectus, the authorized, issued and outstanding capital
stock of the Company will be in the range as set forth in the
Prospectus under "Capitalization" (except for subsequent
issuances, if any, pursuant to reservations, agreements or
employee benefit plans referred to in the Prospectus); no
shares of Common Stock or other capital stock of the Company
have been or will be issued and outstanding prior to the
Closing Time referred to in Section 2; at the time of
Conversion, the Securities will have been duly authorized for
issuance and, when issued and delivered by the Company
pursuant to the Plan against payment of the consideration
calculated as set forth in the Plan and stated on the cover
page of the Prospectus, will be duly and validly issued and
fully paid and nonassessable; the terms and provisions of the
Common Stock and the capital stock of the Company conform to
all statements relating thereto contained in the Prospectus;
the certificates representing the shares of Common Stock
conform to the requirements of applicable law and regulations;
and the issuance of the Securities and the Foundation Shares
is not subject to preemptive or other similar rights.
-7-
(xiv) The Bank, as of the date hereof, is a New
Jersey chartered savings bank in mutual form and upon
consummation of the Conversion will be a New Jersey chartered
savings bank in stock form, in both instances with full
corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the
Prospectus; the Company, the Bank and the Subsidiaries have
obtained all licenses, permits and other governmental
authorizations currently required for the conduct of their
respective businesses or required for the conduct of their
respective businesses as contemplated by the Holding Company
Application, the New Jersey Application and the FDIC Notice,
except where the failure to obtain such licenses, permits or
other governmental authorizations would not have a material
adverse effect on the financial condition, results of
operations, business affairs or prospects of the Company, the
Bank and the Subsidiaries, considered as one enterprise; all
such licenses, permits and other governmental authorizations
are in full force and effect and the Company, the Bank and the
Subsidiaries are in all material respects in compliance
therewith; neither the Company, the Bank nor any of the
Subsidiaries has received notice of any proceeding or action
relating to the revocation or modification of any such
license, permit or other governmental authorization which,
singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, might have a material adverse
effect on the financial condition, results of operations,
business affairs or prospects of the Company, the Bank and the
Subsidiaries, considered as one enterprise; and the Bank is
validly existing and in good standing under the laws of the
State of New Jersey and is qualified as a foreign corporation
in any jurisdiction in which the failure to so qualify would
have a material adverse effect on the financial condition,
results of operations, business affairs or prospects of the
Company, the Bank and the Subsidiaries, considered as one
enterprise.
(xv) The deposit accounts of the Bank are insured by
the FDIC up to the applicable limits. Upon consummation of the
Conversion, the liquidation account for the benefit of
eligible account holders of the Bank will be duly established
in accordance with the Plan and the requirements of the
Conversion Regulations.
(xvi) Upon consummation of the Conversion, the
authorized capital stock of the Bank will be ________ shares
of common stock, par value $___ per share ("Bank Common
Stock") and ________ shares of preferred stock, par value
$____ per share ("Bank Preferred Stock"), and the issued and
outstanding capital stock of the Bank will be ______ shares of
Bank Common Stock and no shares of Bank Preferred Stock, and
no shares of Bank Common Stock or Bank Preferred Stock have
been or will be issued prior to the Closing Time referred to
in Section 2; and as of the Closing Time referred to in
Section 2, all of the issued and outstanding capital stock of
the Bank will be duly authorized, validly issued and fully
paid and nonassessable and have been issued in compliance with
all federal and state securities laws. The shares of Bank
Common Stock to be issued to the Company will have been duly
authorized for issuance and, when issued and delivered by the
Bank pursuant to the Plan against payment of the consideration
calculated as set forth in the Plan and as described in the
Prospectus, will be duly and validly issued and fully paid and
nonassessable, and all such Bank Common Stock will be owned
beneficially and of record by the Company free and clear of
any security interest, mortgage, pledge, lien, encumbrance or
legal or equitable claim; the terms and provisions of the Bank
Common Stock and
-8-
the Bank Preferred Stock conform to all statements relating
thereto contained in the Prospectus, and the certificates
representing the shares of the Bank Common Stock will conform
with the requirements of applicable laws and regulations; the
issuance of the Bank Common Stock is not subject to preemptive
or similar rights; and there are no other warrants, options or
rights of any kind to acquire additional shares of Bank Common
Stock or any shares of Bank Preferred Stock.
(xvii) The Foundation has been duly authorized and
incorporated and is validly existing as a non-stock
corporation in good standing under the laws of the State of
Delaware with corporate power and authority to own, lease and
operate its properties and to conduct its business as
described in the Prospectus; the Foundation will not be a bank
holding company within the meaning of 12 C.F.R. Section
225.2(c) as a result of the issuance of shares of Common Stock
to it in accordance with the terms of the Plan and in the
amounts as described in the Prospectus; no approvals are
required to establish the Foundation and to contribute the
shares of Common Stock thereto as described in the Prospectus
other than those imposed by the Department and the FDIC;
except as specifically disclosed in the Prospectus and the
Proxy Statement, there are no agreements and/or
understandings, written or oral, between the Company and/or
the Bank and the Foundation with respect to the control,
directly or indirectly, over the voting and the acquisition or
disposition of the Foundation Shares; at the time of the
Conversion, the Foundation Shares will have been duly
authorized for issuance and, when issued and contributed by
the Company pursuant to the Plan, will be duly and validly
issued and fully paid and nonassessable; and the issuance of
the Foundation Shares is not subject to preemptive or similar
rights. The issuance of the Foundation Shares to the
Foundation pursuant to the Plan has been registered pursuant
to the Registration Statement.
(xviii) Each Subsidiary of the Bank has been duly
incorporated and is validly existing as a corporation in good
standing under the laws of the jurisdiction of its
incorporation, has full corporate power and authority to own,
lease and operate its properties and to conduct its business
as described in the Registration Statement and Prospectus, and
is duly qualified to transact business and is in good standing
in each jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or
the conduct of business, except where the failure to so
qualify would not have a material adverse effect on the
financial condition, results of operations, business affairs
or prospects of the Company, the Bank and the Subsidiaries
considered as one enterprise; the activities of each
Subsidiary are permitted to subsidiaries of a New Jersey
chartered savings bank by the rules, regulations, resolutions
and practices of the Department and the FDIC; all of the
issued and outstanding capital stock of each Subsidiary has
been duly authorized and validly issued, is fully paid and
nonassessable and is owned by the Bank, directly, free and
clear of any security interest, mortgage, pledge, lien,
encumbrance or legal or equitable claim; and there are no
warrants, options or rights of any kind to acquire shares of
capital stock of any Subsidiary.
(xix) The Company and the Bank have taken all
corporate action necessary for them to execute, deliver and
perform this Agreement, and this Agreement has been duly
executed and delivered by, and is the valid and binding
agreement of, the Company and the Bank,
-9-
enforceable in accordance with its terms, except as may be
limited by bankruptcy, insolvency or other laws affecting the
enforceability of the rights of creditors generally and
judicial limitations on the right of specific performance and
except as the enforceability of indemnification and
contribution provisions may be limited by applicable
securities laws.
(xx) Subsequent to the respective dates as of which
information is given in the Registration Statement and the
Prospectus and prior to the Closing Time, except as otherwise
may be indicated or contemplated therein, none of the Company,
the Bank or any Subsidiary will have (A) issued any securities
or incurred any liability or obligation, direct or contingent,
or borrowed money, except borrowings in the ordinary course of
business consistent with past practice from the same or
similar sources and in similar amounts as indicated in the
Prospectus, or (B) entered into any transaction or series of
transactions which are material in light of the business of
the Company, the Bank and the Subsidiaries, taken as a whole,
excluding the origination, purchase and sale of loans or the
purchase or sale of investment securities or mortgage-backed
securities in the ordinary course of business consistent with
past practice.
(xxi) No approval of any regulatory or supervisory or
other public authority is required in connection with the
execution and delivery of this Agreement or the issuance of
the Securities and the Foundation Shares that has not been
obtained and a copy of which has been delivered to the Agent,
except as may be required under the "blue sky" or state
securities laws of various jurisdictions.
(xxii) Neither the Company, the Bank nor any of the
Subsidiaries is in violation of its certificate of
incorporation, organization certificate, articles of
incorporation or charter, as the case may be, or bylaws or
other written corporate governance requirements or guidelines,
including board committee charters (and the Bank will not be
in violation of its charter or bylaws in stock form upon
consummation of the Conversion); and neither the Company, the
Bank nor any of the Subsidiaries is in default (nor has any
event occurred which, with notice or lapse of time or both,
would constitute a default) in the performance or observance
of any obligation, agreement, covenant or condition contained
in any contract, indenture, mortgage, loan agreement, note,
lease or other instrument to which the Company, the Bank or
any of the Subsidiaries is a party or by which it or any of
them may be bound, or to which any of the property or assets
of the Company, the Bank or any of the Subsidiaries is
subject, except for such defaults that would not, individually
or in the aggregate, have a material adverse effect on the
financial condition, results of operations, business affairs
or prospects of the Company, the Bank and the Subsidiaries
considered as one enterprise; and there are no contracts or
documents of the Company, the Bank or any of the Subsidiaries
which are required to be filed as exhibits to the Registration
Statement, the New Jersey Application or the FDIC Notice which
have not been so filed.
(xxiii) The consummation of the Conversion, the
execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby have been
duly authorized by all necessary corporate action on the part
of the Company and the Bank and do not and will not conflict
with or constitute a breach of, or default under, or result in
-10-
the creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company, the Bank or any of
the Subsidiaries pursuant to, any contract, indenture,
mortgage, loan agreement, note, lease or other instrument to
which the Company, the Bank or any of the Subsidiaries is a
party or by which it or any of them may be bound, or to which
any of the property or assets of the Company, the Bank or any
of the Subsidiaries is subject, except for such defaults that
would not, individually or in the aggregate, have a material
adverse effect on the financial condition, results of
operations, business affairs or prospects of the Company, the
Bank and the Subsidiaries considered as one enterprise; nor
will such action result in any violation of the provisions of
the certificate of incorporation, organization certificate,
articles of incorporation or charter or bylaws of the Company,
the Bank or any of the Subsidiaries, or any applicable law,
administrative regulation or administrative or court decree.
(xxiv) No labor dispute with the employees of the
Company, the Bank or any of the Subsidiaries exists or, to the
knowledge of the Company or the Bank, is imminent or
threatened; and the Company and the Bank are not aware of any
existing or threatened labor disturbance by the employees of
any of its principal suppliers or contractors which might be
expected to result in any material adverse change in the
financial condition, results of operations, business affairs
or prospects of the Company, the Bank and the Subsidiaries
considered as one enterprise.
(xxv) Each of the Company, the Bank and the
Subsidiaries have good and marketable title to all properties
and assets for which ownership is material to the business of
the Company, the Bank or the Subsidiaries and to those
properties and assets described in the Prospectus as owned by
them, free and clear of all liens, charges, encumbrances or
restrictions, except such as are described in the Prospectus
or are not material in relation to the business of the
Company, the Bank and the Subsidiaries considered as one
enterprise; and all of the leases and subleases material to
the business of the Company, the Bank or the Subsidiaries
under which the Company, the Bank or the Subsidiaries hold
properties, including those described in the Prospectus, are
valid and binding agreements of the Company, the Bank and the
Subsidiaries, as applicable, in full force and effect,
enforceable in accordance with their terms, except as may be
limited by bankruptcy, insolvency or other laws affecting the
enforceability of the rights of creditors generally and
judicial limitations on the right of specific performance and
except as the enforceability of indemnification and
contribution provisions may be limited by applicable
securities laws.
(xxvi) None of the Company, the Bank nor the
Subsidiaries are in violation of any directive from the
Commission, the FRB, the Department or the FDIC or any other
governmental authority to make any material change in the
method of conducting their respective businesses; the Bank and
the Subsidiaries have conducted and are conducting their
business so as to comply in all material respects with all
applicable statutes, regulations and administrative and court
decrees (including, without limitation, all regulations,
decisions, directives and orders of the Commission, FRB, the
Department and the FDIC). Except as set forth in the
Prospectus, neither the Company, the Bank nor any of the
Subsidiaries is subject or is party to, or has received any
notice or advice
-11-
that any of them may become subject or party to, any
investigation with respect to any cease-and-desist order,
agreement, consent agreement, memorandum of understanding or
other regulatory enforcement action, proceeding or order with
or by, or is a party to any commitment letter or similar
undertaking to, or is subject to any directive by, or has been
a recipient of any supervisory letter from, or has adopted any
board resolutions at the request of, any Regulatory Agency (as
defined below) that currently restricts in any material
respect the conduct of their business or that in any material
manner relates to their capital adequacy, their credit
policies, their management or their business (each, a
"Regulatory Agreement"), nor has the Company, the Bank or any
of the Subsidiaries been advised by any Regulatory Agency that
it is considering issuing or requesting any such Regulatory
Agreement; and there is no unresolved violation, criticism or
exception by any Regulatory Agency with respect to any report
or statement relating to any examinations of the Company, the
Bank or any of the Subsidiaries which, in the reasonable
judgment of the Company or the Bank, is expected to result in
a Material Adverse Effect. As used herein, the term
"Regulatory Agency" means any federal or state agency charged
with the supervision or regulation of depositary institutions
or holding companies of depositary institutions, or engaged in
the insurance of depositary institution deposits, or any
court, administrative agency or commission or other
governmental agency, authority or instrumentality having
supervisory or regulatory authority with respect to the
Company, the Bank or any of the Subsidiaries.
(xxvii) There is no action, suit or proceeding before
or by any court or governmental agency or body, domestic or
foreign, now pending, or, to the knowledge of the Company or
the Bank, threatened, against or affecting the Company, the
Bank or any of the Subsidiaries which is required to be
disclosed in the Registration Statement (other than as
disclosed therein), or which might result in any material
adverse change in the financial condition, results of
operations, business affairs or prospects of the Company, the
Bank and the Subsidiaries considered as one enterprise, or
which might materially and adversely affect the properties or
assets thereof or which might materially and adversely affect
the consummation of the Conversion or the performance of this
Agreement; all pending legal or governmental proceedings to
which the Company, the Bank or any Subsidiary is a party or of
which any of their respective property or assets is the
subject which are not described in the Registration Statement,
including ordinary routine litigation incidental to the
business, are considered in the aggregate not material; and
there are no contracts or documents of the Company or any of
the Subsidiaries which are required to be filed as exhibits to
the Registration Statement, the New Jersey Application or the
FDIC Notice which have not been so filed.
(xxviii) The Bank has obtained opinions of its
outside legal and tax counsel, Xxxx Xxxxxx Xxxxxxxx & Xxxxxx,
with respect to the legality of the Securities and the
Foundation Shares to be issued and the state and local income
tax and federal income tax consequences of the Conversion
(including franchise tax, sales or use tax, license fee on
foreign corporations, stock transfer tax, real property
transfer gain tax and real estate transfer tax), copies of
which are filed as exhibits to the Registration Statement; all
material aspects of the aforesaid opinions are accurately
summarized in the Prospectus; the facts and representations
upon which such opinions are based are truthful, accurate and
complete in all material respects; and neither the Bank
-12-
(including the Subsidiaries) nor the Company has taken or will
take any action inconsistent therewith.
(xxix) The Bank has received a letter from KPMG LLP
("KPMG") with respect to the tax consequences of the
Conversion under the laws of the State of New Jersey; the
facts and representations upon which such letter is based are
truthful, accurate and complete in all material respects; and
neither the Bank (including the Subsidiaries) nor the Company
has taken or will take any action inconsistent therewith.
(xxx) The Company is not and, upon completion of the
Conversion and the Offerings and sale of the Common Stock and
the application of the net proceeds therefrom, will not be,
required to be registered under the Investment Company Act of
1940, as amended.
(xxxi) All of the loans represented as assets on the
most recent consolidated financial statements or in selected
consolidated financial and other data of the Bank included in
the Prospectus meet or are exempt from all requirements of
federal, state or local law pertaining to lending, including
without limitation truth in lending (including the
requirements of Regulations Z and 12 C.F.R. Part 226 and
Section 560.210), real estate settlement procedures, consumer
credit protection, equal credit opportunity and all disclosure
laws applicable to such loans, except for violations which, if
asserted, would not result in a material adverse effect on the
financial condition, results of operations, business affairs
or prospects of the Company, the Bank and the Subsidiaries
considered as one enterprise.
(xxxii) To the knowledge of the Company and the Bank,
with the exception of the intended loan to the Bank's ESOP by
the Company to enable the ESOP to purchase shares of Common
Stock in an amount of up to 8.0% of the Common Stock issued in
the Conversion, none of the Company, the Bank or employees of
the Bank has made any payment of funds of the Company or the
Bank as a loan for the purchase of the Common Stock or made
any other payment of funds prohibited by law, and no funds
have been set aside to be used for any payment prohibited by
law.
(xxxiii) To the knowledge of the Company, there are
no affiliations or associations (as such terms are defined by
the National Association of Securities Dealers, Inc. ("NASD"))
between any member of the NASD and any of the Company's
officers or directors.
(xxxiv) The Company, the Bank and each of the
Subsidiaries carries, or is covered by, insurance in such
amounts and covering such risks as is adequate for the conduct
of their respective businesses and the value of their
respective properties as is customary for companies engaged in
similar industries.
(xxxv) The Company, the Bank and each of the
Subsidiaries maintains a system of internal accounting
controls sufficient to provide reasonable assurance that (a)
transactions are executed in accordance with management's
general or specific authorizations; (b) transactions are
-13-
recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting
principles and to maintain asset accountability; (c) access to
assets is permitted only in accordance with management's
general or specific authorization; and (d) the recorded
accountability for assets is compared with the existing assets
at reasonable intervals and appropriate action is taken with
respect to any differences.
(xxxvi) The Company, the Bank and each of the
Subsidiaries is in compliance in all material respects with
the applicable financial recordkeeping and reporting
requirements of the Currency and Foreign Transaction Reporting
Act of 1970, as amended, and the rules and regulations
thereunder.
(xxxvii) The Company and the Bank have not relied on
Agent or its counsel for any legal, tax or accounting advice
in connection with the Conversion.
(xxxviii) The records of eligible account holders,
and other depositors are accurate and complete in all material
respects.
(xxxix) The Company, the Bank and each of the
Subsidiaries is in compliance in all material respects with
all presently applicable provisions of the Employee Retirement
Income Security Act of 1974, as amended, including the
regulations and published interpretations thereunder
("ERISA"); no "reportable event" (as defined in ERISA) has
occurred with respect to any "pension plan" (as defined in
ERISA) for which the Company, the Bank or any Subsidiary,
respectively, would have any liability; each of the Company,
the Bank and each Subsidiary has not incurred and does expect
to incur liability under (i) Title IV of ERISA with respect to
termination of, or withdrawal from, any "pension plan" or (ii)
Sections 412 or 4971 of the Internal Revenue Code of 1986, as
amended, including the regulations and published
interpretations thereunder (the "Code"); and each "pension
plan" for which the Company, the Bank and any Subsidiary would
have any liability that is intended to be qualified under
Section 401(a) of the Code is so qualified in all material
respects and nothing has occurred, whether by action or by
failure to act, which would cause the loss of such
qualification.
(xl) None of the Company, the Bank nor the
Subsidiaries nor any properties owned or operated by the
Company, the Bank or the Subsidiaries is in violation of or
liable under any Environmental Law (as defined below), except
for such violations or liabilities that, individually or in
the aggregate, would not have a material adverse effect on the
financial condition, results of operations, business affairs
or prospects of the Company, the Bank and the Subsidiaries
considered as one enterprise. There are no actions, suits or
proceedings, or demands, claims, notices or investigations
(including, without limitation, notices, demand letters or
requests for information from any environmental agency)
instituted or pending, or to the knowledge of the Company or
the Bank threatened, relating to the liability of any property
owned or operated by the Company, the Bank or the
Subsidiaries, under any Environmental Law. For purposes of
this subsection, the term "Environmental Law" means any
federal, state, local or foreign law, statute, ordinance,
rule, regulation, code, license, permit, authorization,
approval, consent, order, judgment,
-14-
decree, injunction or agreement with any regulatory authority
relating to (i) the protection, preservation or restoration of
the environment (including, without limitation, air, water,
vapor, surface water, groundwater, drinking water supply,
surface soil, subsurface soil, plant and animal life or any
other natural resource), and/or (ii) the use, storage,
recycling, treatment, generation, transportation, processing,
handling, labeling, production, release or disposal of any
substance presently listed, defined, designated or classified
as hazardous, toxic, radioactive or dangerous, or otherwise
regulated, whether by type or by quantity, including any
material containing any such substance as a component.
(xli) The Company, the Bank and the Subsidiaries have
filed all federal income and state and local income and
franchise tax returns required to be filed and have made
timely payments of all taxes shown as due and payable in
respect of such returns, and no deficiency has been asserted
with respect thereto by any taxing authority. The Company and
the Bank have no knowledge of any tax deficiency which has
been asserted or could be asserted against the Company, the
Bank or the Subsidiaries.
(xlii) The Company has received approval, subject to
regulatory approval to consummate the Offerings and issuance,
to have the Securities and the Foundation Shares listed on the
New York Stock Exchange effective as of the Closing Time
referred to in Section 2 hereof.
(xliii) The Company has filed a registration
statement for the Common Stock under Section 12(g) of the
Securities Exchange Act of 1934, as amended (the Exchange
Act"), and such registration statement was declared effective
concurrent with the effectiveness of the Registration
Statement.
(xliv) The Bank has established compliance programs
to ensure compliance with the requirements of the USA Patriot
Act and all applicable regulations promulgated thereunder. The
Bank is not in violation of the USA Patriot Act or any
applicable regulations promulgated thereunder, and there is no
charge, investigation, action, suit or proceeding before any
court, regulatory authority or governmental agency or body
pending or, to the best knowledge of the Company and the Bank,
threatened regarding the Bank's compliance with the USA
Patriot Act or any regulations promulgated thereunder.
(xlv) The Company is in compliance with the
applicable provisions of the Xxxxxxxx-Xxxxx Act and will
comply with those provisions of the Xxxxxxxx-Xxxxx Act that
will become effective in the future upon their effectiveness.
(b) Any certificate signed by any officer of the Company or
the Bank or the Subsidiaries and delivered to either of the Agent or
counsel for the Agent shall be deemed a representation and warranty by
the Company and the Bank to the Agent and, for purposes of the opinion
to be delivered to the Agent pursuant to Section 5(b)(2) hereof, to the
counsel for the Agent as to the matters covered thereby.
-15-
SECTION 2. APPOINTMENT OF SANDLER X'XXXXX; SALE AND DELIVERY OF THE
SECURITIES; CLOSING.
On the basis of the representations and warranties herein contained and
subject to the terms and conditions herein set forth, the Company hereby
appoints Sandler X'Xxxxx as its agent to consult with and advise the Company,
and to assist the Company with the solicitation of subscriptions and purchase
orders for Securities in connection with the Company's sale of Common Stock in
the Subscription and Community Offerings and the Syndicated Community Offering.
On the basis of the representations and warranties herein contained, and subject
to the terms and conditions herein set forth, Sandler X'Xxxxx accepts such
appointment and agrees to use its best efforts to assist the Company with the
solicitation of subscriptions and purchase orders for Securities in accordance
with this Agreement; provided, however, that the Agent shall not be obligated to
take any action which is inconsistent with any applicable laws, regulations,
decisions or orders. The services to be rendered by Sandler X'Xxxxx pursuant to
this appointment include the following: (i) consulting as to the securities
marketing implications of any aspect of the Plan or related corporate documents;
(ii) reviewing with the Board of Directors the financial and securities
marketing implications of the independent appraiser's appraisal of the Common
Stock; (iii) reviewing all offering documents, including the Prospectus, stock
order forms and related offering materials (it being understood that preparation
and filing of such documents is the sole responsibility of the Company and the
Bank and their counsel); (iv) assisting in the design and implementation of a
marketing strategy for the Offerings; (v) assisting the Company and the Bank in
obtaining all requisite regulatory approvals; (vi) assisting Bank management in
preparing for meetings with potential investors and broker-dealers; and (vii)
providing such other general advice and assistance as may be requested to
promote the successful completion of the Offerings.
The appointment of the Agent hereunder shall terminate upon the
earliest to occur of (a) forty-five (45) days after the last day of the
Subscription and Community Offerings, unless the Company and the Agent agree in
writing to extend such period and the Department agrees to extend the period of
time in which the Securities may be sold, or (b) the receipt and acceptance of
subscriptions and purchase orders for all of the Securities, or (c) the
completion of the Syndicated Community Offering.
If any of the Securities remain available after the expiration of both
the Subscription and Community Offerings, at the request of the Company and the
Bank and subject to the continued accuracy of the representations and warranties
of the Company and the Bank set forth herein and compliance with the covenants
and conditions set forth herein, Sandler X'Xxxxx will seek to form a syndicate
of registered brokers or dealers ("Selected Dealers") to assist in the
solicitation of purchase orders of such Securities on a best efforts basis,
subject to the terms and conditions set forth in a selected dealer's agreement
(the "Selected Dealer's Agreement"), substantially in the form set forth in
Exhibit A to this Agreement. Sandler X'Xxxxx will endeavor to limit the
aggregate fees to be paid by the Company and the Bank under any such Selected
Dealer's Agreement to an amount competitive with gross underwriting discounts
charged at such time for underwritings of comparable amounts of stock sold at a
comparable price per share in a similar market environment; provided, however,
that the aggregate fees payable to Xxxxxx X'Xxxxx and Selected Dealers shall not
exceed 5.5% of the aggregate purchase price of the Securities sold by such
Selected Dealers. Xxxxxx X'Xxxxx will endeavor to distribute the Securities
among the Selected Dealers in a fashion
-16-
which best meets the distribution objective of the Company and the requirements
of the Plan, which may result in limiting the allocation of stock to certain
Selected Dealers. It is understood that in no event shall Sandler X'Xxxxx be
obligated to act as a Selected Dealer or to take or purchase any Securities.
If any of the Securities remain available after the expiration of the
Subscription and Community Offering and the Syndicated Community Offering, the
Company agrees to offer Sandler X'Xxxxx the first right to act as lead managing
underwriter for the Public Offering. The terms of the Public Offering will be
set forth in a separate definitive purchase agreement in a form satisfactory to
Sandler X'Xxxxx and containing customary representations, warranties,
conditions, agreements and indemnities, which purchase agreement, when executed,
will supersede and replace this Agreement with respect to Securities sold
thereunder (the "Purchase Agreement"). This Agreement is not intended to
constitute, and should not be construed as, an agreement or commitment between
the Company, the Bank and Sandler X'Xxxxx relating to the firm commitment
underwriting of any securities, and Sandler X'Xxxxx may, in its sole judgment
and discretion, determine at any time not to proceed with the proposed firm
commitment underwriting. Such proposed underwriting will be subject, among other
things, to: (i) satisfactory completion by Sandler X'Xxxxx of such due diligence
investigation or inquiries as it may deem appropriate, (ii) approval of the
proposed underwriting by Sandler X'Xxxxx'x commitment committee or such other
authorization as may be required by its internal procedures, (iii) market
conditions, which, in the sole judgment of Sandler X'Xxxxx, shall be
satisfactory, and (iv) the execution and delivery of a definitive Purchase
Agreement.
In the event the Company is unable to sell at least the total minimum
of the Securities, as set forth on the cover page of the Prospectus, within the
period herein provided, this Agreement shall terminate and the Company shall
refund to any persons who have subscribed for any of the Securities the full
amount which it may have received from them, together with interest as provided
in the Prospectus, and no party to this Agreement shall have any obligation to
the others hereunder, except for the obligations of the Company and the Bank as
set forth in Sections 4, 6(a) and 7 hereof and the obligations of the Agent as
provided in Sections 6(b) and 7 hereof. Appropriate arrangements for placing the
funds received from subscriptions for Securities or other offers to purchase
Securities in special interest-bearing accounts with the Bank until all
Securities are sold and paid for were made prior to the commencement of the
Subscription Offering, with provision for refund to the purchasers as set forth
above, or for delivery to the Company if all Securities are sold.
If at least the total minimum of Securities, as set forth on the cover
page of the Prospectus, are sold, the Company agrees to issue or have issued the
Securities sold and to release for delivery certificates for such Securities at
the Closing Time against payment therefor by release of funds from the special
interest-bearing accounts referred to above. The closing shall be held at the
New York offices of Xxxxxxx Xxxxxxxx & Wood, at 10:00 a.m., local time, or at
such other place and time as shall be agreed upon by the parties hereto, on a
business day to be agreed upon by the parties hereto. The Company shall notify
the Agent by telephone, confirmed in writing, when funds shall have been
received for all the Securities. Certificates for Securities shall be delivered
directly to the purchasers thereof in accordance with their directions.
Notwithstanding the foregoing, certificates for Securities purchased through
Selected Dealers shall be made available to the Agent for inspection at least 48
hours prior to the Closing Time at such office as the Agent
-17-
shall designate. The hour and date upon which the Company shall release for
delivery all of the Securities, in accordance with the terms hereof, is herein
called the "Closing Time."
The Company will pay any stock issue and transfer taxes which may be
payable with respect to the sale of the Securities.
In addition to reimbursement of the expenses specified in Section 4
hereof, the Agent will receive the following compensation for its services
hereunder:
(a) One percent (1.0%) of the aggregate price (the "Purchase
Price") of the Securities sold in the Subscription and Community
Offering, excluding in each case shares purchased by (i) any employee
benefit plan of the Company or the Bank established for the benefit of
their respective directors, officers and employees, (ii) by any
charitable foundation established by the Bank in connection with the
Conversion, and (iii) any director, officer or employee of the Company
or the Bank or members of their immediate families (which term shall
mean parents, grandparents, spouse, siblings, children and
grandchildren); and
(b) with respect to any Securities sold by an NASD member firm
(including Sandler X'Xxxxx) under the Selected Dealer's Agreement in
the Syndicated Community Offering, (i) the compensation payable to
Selected Dealers under any Selected Dealer's Agreement, (ii) any
sponsoring dealer's fees; and (iii) a management fee to Sandler X'Xxxxx
of one percent (1.0%). Any fees payable to Sandler X'Xxxxx for
Securities sold by Sandler X'Xxxxx under any such agreement shall be
limited to an aggregate of five and one-half percent (5.5%) of the
Purchase Price of the Securities sold by Sandler X'Xxxxx and other NASD
member firms under such Selected Dealer's Agreement.
If this Agreement is terminated by the Agent in accordance with the
provisions of Section 9(a) hereof or the Conversion is terminated by the
Company, no fee shall be payable by the Company to Sandler X'Xxxxx; provided,
however, that the Company shall reimburse the Agent for all of its reasonable
out-of-pocket expenses (inclusive of fees and disbursements of counsel) incurred
prior to termination up to a maximum of $75,000. In addition, the Company shall
be obligated to pay the fees and expenses as contemplated by the provisions of
Section 4 hereof in the event of any such termination.
All fees payable to the Agent hereunder shall be payable in immediately
available funds at the Closing Time, or upon termination of this Agreement, as
the case may be.
SECTION 3. COVENANTS OF THE COMPANY. The Company and the Bank covenant
with the Agent as follows:
(a) The Company and the Bank will prepare and file such
amendments or supplements to the Registration Statement, the
Prospectus, the New Jersey Application, the FDIC Notice and the Proxy
Statement as may hereafter be required by the Securities Act
Regulations or the Conversion Regulations or as may hereafter be
requested by the Agent. Following completion of the Subscription and
Community
-18-
Offering, in the event of a Syndicated Community Offering, the Company
and the Bank will (i) promptly prepare and file with the Commission a
post-effective amendment to the Registration Statement relating to the
results of the Subscription and Community Offering, any additional
information with respect to the proposed plan of distribution and any
revised pricing information or (ii) if no such post-effective amendment
is required, will file with, or mail for filing to, the Commission a
prospectus or prospectus supplement containing information relating to
the results of the Subscription and Community Offering and pricing
information pursuant to Rule 424 of the Securities Act Regulations, in
either case in a form acceptable to the Agent. The Company and the Bank
will notify the Agent immediately, and confirm the notice in writing,
(i) of the effectiveness of any post-effective amendment of the
Registration Statement, the filing of any supplement to the Prospectus
and the filing of any amendment to the New Jersey Application or the
FDIC Notice, (ii) of the receipt of any comments from the Department,
the FDIC or the Commission with respect to the transactions
contemplated by this Agreement or the Plan, (iii) of any request by the
Department, the FDIC or the Commission for any amendment to the
Registration Statement, the New Jersey Application or the FDIC Notice
or any amendment or supplement to the Prospectus or for additional
information, (iv) of the issuance by the Department or the FDIC of any
order suspending the Offerings or the use of the Prospectus or the
initiation of any proceedings for that purpose, (v) of the issuance by
the Commission of any stop order suspending the effectiveness of the
Registration Statement or the initiation of any proceedings for that
purpose, and (vi) of the receipt of any notice with respect to the
suspension of any qualification of the Securities for offering or sale
in any jurisdiction. The Company and the Bank will make every
reasonable effort to prevent the issuance of any stop order and, if any
stop order is issued, to obtain the lifting thereof at the earliest
possible moment.
(b) The Company and the Bank will give the Agent notice of its
intention to file or prepare any amendment to the Holding Company
Application, the New Jersey Application, the FDIC Notice or the
Registration Statement (including any post-effective amendment) or any
amendment or supplement to the Prospectus (including any revised
prospectus which the Company proposes for use in connection with the
Syndicated Community Offering of the Securities which differs from the
prospectus on file at the Commission at the time the Registration
Statement becomes effective, whether or not such revised prospectus is
required to be filed pursuant to Rule 424(b) of the Securities Act
Regulations), will furnish the Agent with copies of any such amendment
or supplement a reasonable amount of time prior to such proposed filing
or use, as the case may be, and will not file any such amendment or
supplement or use any such prospectus to which the Agent or counsel for
the Agent may object.
(c) The Company and the Bank will deliver to the Agent as many
signed copies and as many conformed copies of the New Jersey
Application, the FDIC Notice and the Registration Statement as
originally filed and of each amendment thereto (including exhibits
filed therewith or incorporated by reference therein) as the Agent may
reasonably request, and from time to time such number of copies of the
Prospectus as the Agent may reasonably request.
(d) During the period when the Prospectus is required to be
delivered, the Company and the Bank will comply, at their own expense,
with all requirements imposed upon them by the Department and the FDIC,
by the applicable Conversion Regulations, as from time to time in
force, and by the New York Stock Exchange, the Securities Act, the
Securities Act Regulations, the Exchange Act,
-19-
and the rules and regulations of the Commission promulgated thereunder,
including, without limitation, Regulation M under the Exchange Act, so
far as necessary to permit the continuance of sales or dealing in
shares of Common Stock during such period in accordance with the
provisions hereof and the Prospectus.
(e) If any event or circumstance shall occur as a result of
which it is necessary, in the opinion of counsel for the Agent, to
amend or supplement the Prospectus in order to make the Prospectus not
misleading in the light of the circumstances existing at the time it is
delivered to a purchaser, the Company and the Bank will forthwith amend
or supplement the Prospectus (in form and substance satisfactory to
counsel for the Agent) so that, as so amended or supplemented, the
Prospectus will not include an untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances existing at the time it is
delivered to a purchaser, not misleading, and the Company and the Bank
will furnish to the Agent a reasonable number of copies of such
amendment or supplement. For the purpose of this subsection, the
Company and the Bank will each furnish such information with respect to
itself as the Agent may from time to time reasonably request.
(f) The Company and the Bank will take all necessary action,
in cooperation with the Agent, to qualify the Securities for offering
and sale under the applicable securities laws of such states of the
United States and other jurisdictions as the Conversion Regulations may
require and as the Agent and the Company have agreed; provided,
however, that the Company and the Bank shall not be obligated to file
any general consent to service of process or to qualify as a foreign
corporation in any jurisdiction in which it is not so qualified. In
each jurisdiction in which the Securities have been so qualified, the
Company and the Bank will file such statements and reports as may be
required by the laws of such jurisdiction to continue such
qualification in effect for a period of not less than one year from the
effective date of the Registration Statement.
(g) The Company authorizes Sandler X'Xxxxx and any Selected
Dealers to act as agent of the Company in distributing the Prospectus
to persons entitled to receive subscription rights and other persons to
be offered Securities having record addresses in the states or
jurisdictions set forth in a survey of the securities or "blue sky"
laws of the various jurisdictions in which the Offerings will be made
(the "Blue Sky Survey").
(h) The Company will make generally available to its security
holders as soon as practicable, but not later than 60 days after the
close of the period covered thereby, an earnings statement (in form
complying with the provisions of Rule 158 of the Securities Act
Regulations) covering a twelve month period beginning not later than
the first day of the Company's fiscal quarter next following the
"effective date" (as defined in said Rule 158) of the Registration
Statement.
(i) During the period ending on the third anniversary of the
expiration of the fiscal year during which the closing of the
transactions contemplated hereby occurs, the Company will furnish to
its stockholders as soon as practicable after the end of each such
fiscal year an annual report (including consolidated statements of
financial condition and consolidated statements of income,
stockholders' equity and cash flows, certified by independent public
accountants) and, as soon as practicable after the end of
-20-
each of the first three quarters of each fiscal year (beginning with
the fiscal quarter ending after the effective date of the Registration
Statement), consolidated summary financial information of the Company,
the Bank and the Subsidiaries for such quarter in reasonable detail. In
addition, such annual report and quarterly consolidated summary
financial information shall be made public through the issuance of
appropriate press releases at the same time or prior to the time of the
furnishing thereof to stockholders of the Company.
(j) During the period ending on the third anniversary of the
expiration of the fiscal year during which the closing of the
transactions contemplated hereby occurs, the Company will furnish to
the Agent (i) as soon as publicly available, a copy of each report or
other document of the Company furnished generally to stockholders of
the Company or furnished to or filed with the Commission under the
Exchange Act or any national securities exchange or system on which any
class of securities of the Company is listed, and (ii) from time to
time, such other information concerning the Company as the Agent may
reasonably request.
(k) The Company and the Bank will conduct the Conversion
including the formation and operation of the Foundation in all material
respects in accordance with the Plan, the Conversion Regulations and
all other applicable regulations, decisions and orders, including all
applicable terms, requirements and conditions precedent to the
Conversion imposed upon the Company or the Bank by the Department, the
FDIC or the FRB.
(l) The Company and the Bank will use the net proceeds
received by it from the sale of the Securities in the manner specified
in the Prospectus under "How We Intend to Use the Proceeds from the
Offering."
(m) The Company will report the use of proceeds from the
Offerings on its first periodic report filed with the Commission
pursuant to Section 13(a) or 15(d) of the Exchange Act and on any
subsequent periodic reports as may be required pursuant to Rule 463 of
the Securities Act Regulations.
(n) The Company will maintain the effectiveness of the
Exchange Act Registration Statement for not less than three years and
will comply in all material respects with its filing obligations under
the Exchange Act. The Company will use its best efforts to effect and
maintain the listing of the Common Stock on the New York Stock Exchange
and, once listed on the New York Stock Exchange, the Company will
comply with all applicable corporate governance standards required by
the New York Stock Exchange.
(o) 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."
(p) Other than in connection with any employee benefit plan or
arrangement described in the Prospectus, the Company will not, without
the prior written consent of the Agent, sell or issue, contract to sell
or otherwise dispose of, any shares of Common Stock other than the
Securities and the Foundation Shares for a period of 180 days following
the Closing Time.
-21-
(q) During the period beginning on the date hereof and ending
on the later of the third anniversary of the Closing Time or the date
on which the Agent receives full payment in satisfaction of any claim
for indemnification or contribution to which it may be entitled
pursuant to Sections 6 or 7, respectively, neither the Company nor the
Bank shall, without the prior written consent of the Agent, take or
permit to be taken any action that could result in the Bank Common
Stock becoming subject to any security interest, mortgage, pledge, lien
or encumbrance.; provided, however, that this covenant shall be null
and void if the FRB, by regulation, policy statement or interpretative
release, or by written order or written advice addressed to the Bank or
the Agent specifically addressing the provisions of Section 6(a)
hereof, permits indemnification of the Agent by the Bank as
contemplated by such provisions.
(r) The Company and the Bank will comply with the conditions
imposed by or agreed to with the FRB in connection with its approval of
the Holding Company Application and with the FDIC in connection with
their approval or non-objection of, or non-objection to, the
Conversion, including those conditions relating to the establishment
and the operation of the Foundation; the Company and the Bank shall use
their best efforts to ensure that the Foundation submits within the
time frames required by applicable law a request to the Internal
Revenue Service to be recognized as a tax-exempt organization under
Section 501(c)(3) of the Code; the Company and the Bank will take no
action which will result in the possible loss of the Foundation's tax
exempt status; and neither the Company nor the Bank will contribute any
additional assets to the Foundation until such time that such
additional contributions will be deductible for federal and state
income tax purposes.
(s) The Company shall not deliver the Securities until the
Company and the Bank have satisfied each condition set forth in Section
5 hereof, unless such condition is waived in writing by the Agent.
(t) The Company or the Bank will furnish to Sandler X'Xxxxx as
early as practicable prior to the Closing Time, but no later than two
(2) full business days prior thereto, a copy of the latest available
unaudited interim consolidated financial statements of the Bank and the
Subsidiaries which have been read by KPMG, as stated in their letters
to be furnished pursuant to subsections (e) and (f) of Section 5
hereof.
(u) The Company will promptly register as a bank holding
company under the BHCA.
(v) Each of the Company and the Bank will conduct its business
in compliance in all material respects with all applicable federal and
state laws, rules, regulations, decisions, directives and orders,
including all decisions, directives and orders of the Commission, the
New York Stock Exchange, the Department, the FDIC and the FRB.
(w) The Bank will not amend the Plan in any manner that would
affect the sale of the Securities or the terms of this Agreement.
-22-
(x) The Company and the Bank will not, prior to the Closing
Time, incur any liability or obligation, direct or contingent, or enter
into any material transaction, other than in the ordinary course of
business consistent with past practice, except as contemplated by the
Prospectus.
(y) The Company and the Bank will use all reasonable efforts
to comply with, or cause to be complied with, the conditions precedent
to the several obligations of the Agent specified in Section 5 hereof.
(z) The Company and the Bank will provide the Agent with any
information necessary to carry out the allocation of the Securities in
the event of an oversubscription, and such information will be accurate
and reliable in all material respects.
(aa) The Company and the Bank will notify the Agent when funds
have been received for the minimum number of Securities set forth in
the Prospectus.
SECTION 4. PAYMENT OF EXPENSES. The Company and the Bank jointly and
severally agree to pay all expenses incident to the performance of their
obligations under this Agreement, including but not limited to (i) the cost of
obtaining all securities and bank regulatory approvals, (ii) the preparation,
printing and filing of the Registration Statement, the New Jersey Application,
the FDIC Notice and the Holding Company Application each as originally filed and
of each amendment thereto, (iii) the preparation, issuance and delivery of the
certificates for the Securities to the purchasers in the Offerings, (iv) the
fees and disbursements of the Company's and the Bank's counsel, accountants,
appraiser and other advisors, (v) the qualification of the Securities under
securities laws in accordance with the provisions of Section 3(f) hereof,
including filing fees and the fees and disbursements of the Agent's counsel in
connection therewith and in connection with the preparation of the Blue Sky
Survey, (vi) the printing and delivery to the Agent (in such quantities as the
Agent shall reasonably request) of copies of the Registration Statement as
originally filed and of each amendment thereto and the printing and delivery of
the Prospectus and any amendments or supplements thereto to the purchasers in
the Offerings and the Agent (in such quantities as the Agent shall reasonably
request), (vii) the printing and delivery to the Agent of copies of a Blue Sky
Survey, and (viii) the fees and expenses incurred in connection with the listing
of the Securities on the New York Stock Exchange. In the event the Agent incurs
any such fees and expenses on behalf of the Bank or the Company, the Bank will
reimburse the Agent for such fees and expenses whether or not the Conversion is
consummated; provided, however, that the Agent shall not incur any substantial
expenses on behalf of the Bank or the Company pursuant to this Section without
the prior approval of the Bank.
The Company and the Bank jointly and severally agree to pay certain
expenses incident to the performance of the Agent's obligations under this
Agreement, regardless of whether the Conversion is consummated, including (i)
the filing fees paid or incurred by the Agent in connection with all filings
with the NASD, and (ii) all reasonable out of pocket expenses (including legal
fees and expenses) incurred by the Agent relating to the filings with the NASD.
All fees and expenses to which the Agent is entitled to reimbursement under this
paragraph of this Section 4 shall be due and payable upon receipt by the Company
or the Bank of a written accounting therefor setting forth in reasonable detail
the expenses incurred by the Agent.
-23-
SECTION 5. CONDITIONS OF AGENT'S OBLIGATIONS. The Company, the Bank and
the Agent agree that the issuance and the sale of Securities and all obligations
of the Agent hereunder are subject to the accuracy of the representations and
warranties of the Company and the Bank herein contained as of the date hereof
and the Closing Time, to the accuracy of the statements of officers and
directors of the Company and the Bank made pursuant to the provisions hereof, to
the performance by the Company and the Bank of their obligations hereunder, and
to the following further conditions:
(a) No stop order suspending the effectiveness of the
Registration Statement shall have been issued under the Securities Act
or proceedings therefor initiated or threatened by the Commission, no
order suspending the Offerings or authorization for final use of the
Prospectus shall have been issued or proceedings therefor initiated or
threatened by the Department or the FDIC and no order suspending the
sale of the Securities in any jurisdiction shall have been issued.
(b) At the Closing Time, the Agent shall have received:
(1) The favorable opinion, dated as of the Closing
Time, of Xxxx Xxxxxx Xxxxxxxx & Xxxxxx, counsel for the
Company and the Bank, in form and substance satisfactory to
counsel for the Agent, to the effect that:
(i) The Company has been duly incorporated
and is validly existing as a corporation in good
standing under the laws of the State of Delaware.
(ii) The Company has full corporate power
and authority to own, lease and operate its
properties and to conduct its business as described
in the Registration Statement and the Prospectus and
to enter into and perform its obligations under this
Agreement.
(iii) The Company is duly qualified as a
foreign corporation to transact business and is in
good standing in the State of New Jersey and in each
other jurisdiction in which such qualification is
required whether by reason of the ownership or
leasing of property or the conduct of business,
except where the failure to so qualify in any such
other jurisdiction would not have a material adverse
effect upon the financial condition, results of
operations, business affairs or prospects of the
Company, the Bank and the Subsidiaries, considered as
one enterprise. The Company is duly registered as a
bank holding company under the BHCA.
(iv) Upon consummation of the Conversion,
and the issuance of the Foundation Shares to the
Foundation immediately upon completion thereof, the
authorized, issued and outstanding capital stock of
the Company will be as set forth in the Prospectus
under "Capitalization" and no shares of Common Stock
have been or will be issued and outstanding prior to
the Closing Time.
-24-
(v) The Securities and the Foundation Shares
have been duly and validly authorized for issuance
and sale and, when issued and delivered by the
Company pursuant to the Plan against payment of the
consideration calculated as set forth in the Plan, or
contributed by the Company pursuant to the Plan in
the case of the Foundation Shares, will be duly and
validly issued and fully paid and nonassessable.
(vi) The issuance of the Securities and the
Foundation Shares is not subject to preemptive or
other similar rights arising by operation of law or,
to the best of their knowledge, otherwise.
(vii) Upon completion of the Conversion, the
issuance of the Securities and the Foundation Shares
will be in compliance with all conditions imposed
upon the Company and the Bank by the Department and
the FDIC under the terms of their written approval or
notice of intention not to object, as applicable.
(viii) The Bank has been at all times since
the date hereof and prior to the Closing Time duly
organized, and is validly existing and in good
standing under the laws of the State of New Jersey as
a New Jersey chartered savings bank of mutual form,
and, at Closing Time, has become duly organized,
validly existing and in good standing under the laws
of the State of New Jersey as a New Jersey chartered
savings bank of stock form, in both instances with
full corporate power and authority to own, lease and
operate its properties and to conduct its business as
described in the Registration Statement and the
Prospectus; and the Bank is duly qualified as a
foreign corporation in each jurisdiction in which the
failure to so qualify would have a material adverse
effect upon the financial condition, results of
operations, business affairs or prospects of the
Bank.
(ix) The Bank is a member in good standing
of the Federal Home Loan Bank of New York and the
deposit accounts of the Bank are insured by the FDIC
up to the applicable limits.
(x) Each Subsidiary of the Bank has been
duly incorporated and is validly existing as a
corporation in good standing under the laws of the
jurisdiction of its incorporation, and each of the
Subsidiaries has full corporate power and authority
to own, lease and operate its properties and to
conduct its business as described in the Registration
Statement and is duly qualified as a foreign
corporation to transact business and is in good
standing in each jurisdiction in which the failure to
so qualify would have a material adverse effect upon
the financial condition, results of operatio ns,
business affairs or prospects of the Company, the
Bank and the Subsidiaries, taken as a whole; the
activities of each Subsidiary are permitted to
subsidiaries of a bank holding company and of a New
-25-
Jersey chartered savings bank by the rules,
regulations, resolutions and practices of the FRB,
the Department and the FDIC; all of the issued and
outstanding capital stock of each Subsidiary has been
duly authorized and validly issued, is fully paid and
non-assessable and is owned by the Bank, directly or
through subsidiaries, free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim
or equity.
(xi) The Foundation has been duly
incorporated and is validly existing as a non-stock
corporation in good standing under the laws of the
State of Delaware with corporate power and authority
to own, lease and operate its properties and to
conduct its business as described in the Prospectus;
the Foundation is not a bank holding company within
the meaning of 12 C.F.R. Section 225.2(c) as a result
of the issuance of shares of Common Stock to it in
accordance with the terms of the Plan and in the
amounts as described in the Prospectus; no approvals
are required to establish the Foundatio n and to
contribute the shares of Common Stock thereto as
described in the Prospectus other than those set
forth in any written notice or order of approval or
non-objection of the Conversion, the New Jersey
Application, the FDIC Notice or the Holding Company
Application, copies of which were provided to the
Agent prior to the Closing Time; and the issuance of
the Foundation Shares to the Foundation is registered
pursuant to the Registration Statement.
(xii) Upon consummation of the Conversion,
all of the issued and outstanding capital stock of
the Bank when issued and delivered pursuant to the
Plan against payment of consideration calculated as
set forth in the Plan and set forth in the
Prospectus, will be duly authorized and validly
issued and fully paid and nonassessable, and all such
capital stock will be owned beneficially and of
record by the Company free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim
or equity.
(xiii) The FRB has duly approved the Holding
Company Application, the Department has duly approved
the New Jersey Application and the FDIC has issued a
letter of intent not to object to the Conversion and
no action is pending, or to the best knowledge of
such counsel after due inquiry, threatened respecting
the Holding Company Application, the New Jersey
Application, the FDIC Notice, the Conversion or the
acquisition by the Company of all of the Bank's
issued and outstanding capital stock; the Holding
Company Application complies as to form with the
applicable requirements of the FRB, the New Jersey
Application complies as to form with the applicable
requirements of the Department and the FDIC Notice
complies as to form with the applicable requirements
of the FDIC; the Holding Company Application, the New
Jersey Application and the FDIC Notice include all
documents required to be filed as exhibits thereto,
and are, to the best knowledge of such counsel after
due inquiry, truthful, accurate and complete; and
-26-
the Company is duly authorized to become a bank
holding company and is duly authorized to own all of
the issued and outstanding capital stock of the Bank
to be issued pursuant to the Plan.
(xiv) The execution and delivery of this
Agreement, the incurrence of the obligations herein
set forth and the consummation of the transactions
contemplated hereby, including the establishment of
the Foundation and the contribution thereto of the
Foundation Shares, (A) have been duly and validly
authorized by all necessary action on the part of
each of the Company and the Bank, and this Agreement
constitutes the legal, valid and binding agreement of
each of the Company and the Bank, enforceable in
accordance with its terms, except as rights to
indemnity and contrib ution hereunder may be limited
under applicable law (it being understood that such
counsel may avail itself of customary exceptions
concerning the effect of bankruptcy, insolvency or
similar laws and the availability of equitable
remedies); (B) will not result in any violation of
the provisions of the certificate of incorporation,
organization certificate, articles of incorporation
or charter, as the case may be, or bylaws of the
Company, the Bank or any of the Subsidiaries; and (C)
will not conflict with or constitute a breach of, or
default under, and no event has occurred which, with
notice or lapse of time or both, would constitute a
default under, or result in the creation or
imposition of any lien, charge or encumbrance, that,
individually or in the aggregate, would have a
material adverse effect on the financial condition,
results of operations, business affairs or prospects
of the Company, the Bank and the Subsidiaries
considered as one enterprise, upon any property or
assets of the Company, the Bank or the Subsidiaries
pursuant to any contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which
the Company, the Bank or the Subsidiaries is a party
or by which any of them may be bound, or to which any
of the property or assets of the Company, the Bank or
the Subsidiaries is subject.
(xv) The Prospectus has been duly authorized
by the Department and the FDIC for final use pursuant
to the Conversion Regulations and no action is
pending, or to the best knowledge of such counsel
after due inquiry, is threatened, by the Department
or the FDIC to revoke such authorization.
(xvi) The Registration Statement is
effective under the Securities Act and no stop order
suspending the effectiveness of the Registration
Statement has been issued under the Securities Act
or, to the best knowledge of such counsel after due
inquiry, proceedings therefor initiated or threatened
by the Commission.
(xvii) No further approval, authorization,
consent or other order of any public board or body is
required in connection with the execution and
delivery of this Agreement, the issuance of the
Securities and the consummation of the
-27-
Conversion, except as may be required under the
securities or "blue sky" laws of various
jurisdictions as to which no opinion need be
rendered.
(xviii) At the time the Registration
Statement became effective, the Registration
Statement (other than the financial statements and
statistical data included therein, as to which no
opinion need be rendered) complied as to form in all
material respects with the requirements of the
Securities Act and the Securities Act Regulations and
the Conversion Regulations.
(xix) The Common Stock conforms to the
description thereof contained in the Prospectus, and
the form of certificate used to evidence the Common
Stock is in due and proper form and complies with all
applicable statutory requirements.
(xx) There are no legal or governmental
proceedings pending or threatened against or
affecting the Company, the Bank or the Subsidiaries
which are required, individually or in the aggregate,
to be disclosed in the Registration Statement and
Prospectus, other than those disclosed therein, and
all pending legal or governmental proceedings to
which the Company, the Bank or any of the
Subsidiaries is a party or to which any of their
property is subject which are not described in the
Registration Statement, including ordinary routine
litigation incidental to the business, are,
considered in the aggregate, not material.
(xxi) The information in the Prospectus
under "Risk Factors - The Contribution of Shares and
Cash to the Charitable Foundation Will Dilute Your
Ownership Interests and Adversely Impact Net Income,"
"- Our Stock Value May Suffer Due to our Ability to
Impede Potential Takeovers, " and "- Adoption of
State Tax Legislation May Have a Negative Impact on
our Net Income," "Our Policy Regarding Dividends,"
"Business of The Provident Bank - Legal Proceedings,"
"Federal and State Taxation," "Regulation," "The
Conversion and Offering," "Restrictions on
Acquisitions of Provident Financial Services, Inc.
and The Provident Bank" and "Description of Capital
Stock," to the extent that it constitutes matters of
law, summaries of legal matters, documents or
proceedings, or legal conclusions, has been reviewed
by them and is complete and accurate in all material
respects.
(xxii) To the best of such counsel's
knowledge, there are no contracts, indentures,
mortgages, loan agreements, notes, leases or other
instruments required to be described or referred to
in the Registration Statement or to be filed as
exhibits thereto other than those described or
referred to therein or filed as exhibits thereto, the
descriptions thereof or references thereto are
correct, and no default exists, and no event has
occurred which, with notice or lapse of time or both,
would constitute a default, in the due performance or
observance of any
-28-
material obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, loan
agreement, note, lease or other instrument so
described, referred to or filed.
(xxiii) The Plan and the establishment and
funding of the Foundation have been duly authorized
by the Board of Directors of the Company and the
Board of Directors of the Bank and, the Department's
and the FDIC's approvals of the Plan remain in full
force and effect; the Bank's charter has been
amended, effective upon consummation of the
Conversion and the filing of such amended charter
with the Department, to authorize the issuance of
permanent capital stock; the Company and the Bank
have conducted the Conversion and the establishment
and funding of the Foundation in all material
respects in accordance with applicable requirements
of the Conversion Regulations, the Plan and all other
applicable regulations, decisions and orders
thereunder, including all material applicable terms,
conditions, requirements and conditions precedent to
the Conversion imposed upon the Company or the Bank
by the Department, the FDIC or the FRB and no order
has been issued by the Department, the FDIC or the
FRB to suspend the Conversion or the Offerings and no
action for such purpose has been instituted or
threatened by the Department, the FDIC or the FRB;
and, to the best knowledge of such counsel after due
inquiry, no person has sought to obtain review of the
final action of the Department, the FDIC or the FRB
in approving the New Jersey Application (including
the Plan which provides for the establishment of the
Foundation), the Conversion or the Holding Company
Application.
(xxiv) To the best knowledge of such counsel
after due inquiry, the Company and the Bank and the
Subsidiaries have obtained all licenses, permits and
other governmental authorizations currently required
for the conduct of their respective businesses as
described in the Registration Statement and the
Prospectus, and all such licenses, permits and other
governmental authorizations are in full force and
effect, and the Company and the Bank and the
Subsidiaries are in all material respects complying
therewith.
(xxv) Neither the Company, the Bank nor any
of the Subsidiaries is in violation of its
certificate of incorporation, organization
certificate, articles of incorporation or charter, as
the case may be, or bylaws (and the Bank will not be
in violation of its charter in stock form upon
consummation of the Conversion) or in default (nor
has any event occurred which, with notice or lapse of
time or both, would constitute a default) in the
performance or observance of any obligation,
agreement, covenant or condition contained in any
contract, indenture, mortgage, loan agreement, note,
lease or other instrument to which the Company, the
Bank or any of the Subsidiaries is a party or by
which the Company, the Bank or any of the
Subsidiaries or any of their property may be bound.
-29-
(xxvi) The Company is not and, upon
completion of the Conversion and the Offerings and
the sale of the Common Stock and the application of
the net proceeds therefrom, will not be required to
be registered as an investment company under the
Investment Company Act of 1940.
(2) The favorable opinion, dated as of Closing Time,
of Xxxxxxx Xxxxxxxx & Xxxx, counsel for the Agent, with
respect to the matters set forth in Section 5(b)(1)(i), (iv),
(v), (vi) (solely as to preemptive rights arising by operation
of law), (xiv), (xvi), (xvii) and (xviii) and such other
matters as the Agent may reasonably require.
(3) In giving their opinions required by subsections
(b)(l) and (b)(2), respectively, of this Section, Xxxx Xxxxxx
Xxxxxxxx & Xxxxxx and Xxxxxxx Xxxxxxxx & Xxxx shall each
additionally state that nothing has come to their attention
that would lead them to believe that the Registration
Statement (except for financial statements and schedules and
other financial or statistical data included therein, as to
which counsel need make no statement), at the time it became
effective, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading or
that the Prospectus (except for financial statements and
schedules and other financial or statistical data included
therein, as to which counsel need make no statement), at the
time the Registration Statement became effective or at Closing
Time, included an untrue statement of a material fact or
omitted to state a material fact necessary in order to make
the statements therein, in the light of the circumstances
under which they were made, not misleading. In giving their
opinions, Xxxx Xxxxxx Xxxxxxxx & Xxxxxx and Xxxxxxx Xxxxxxxx &
Wood may rely as to matters of fact on certificates of
officers and directors of the Company and the Bank and
certificates of public officials, and Xxxxxxx Xxxxxxxx & Xxxx
may also rely on the opinion of Xxxx Xxxxxx Xxxxxxxx & Xxxxxx.
(c) At the Closing Time referred to in Section 2, the Company
and the Bank shall have completed in all material respects the
conditions precedent to the Conversion in accordance with the Plan, the
applicable 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 FRB, the Department or the FDIC, or any
other regulatory authority, other than those which the FRB, the
Department or the FDIC permit to be completed after the Conversion.
(d) At Closing Time, there shall not have been, since the date
hereof or since the respective dates as of which information is given
in the Registration Statement and the Prospectus, any material adverse
change in the financial condition, results of operations, business
affairs or prospects of the Company, the Bank and the Subsidiaries
considered as one enterprise, whether or not arising in the ordinary
course of business consistent with past practice, and the Agent shall
have received a certificate of the Chief Executive Officer and
President of the Company and of the Bank and the Chief Financial
Officer of the Company and of the Bank, dated as of Closing Time, to
the effect that (i) there has been no
-30-
such material adverse change; (ii) there shall have been no material
transaction entered into by the Company, the Bank or the Subsidiaries
from the latest date as of which the financial condition of the Company
or the Bank is set forth in the Registration Statement and the
Prospectus other than transactions referred to or contemplated therein
and transactions in the ordinary course of business consistent with
past practice, (iii) neither the Company nor the Bank shall have
received from the FRB, the Department or the FDIC any direction (oral
or written) to make any material change in the method of conducting its
business with which it has not complied (which direction, if any, shall
have been disclosed to the Agent) or which materially and adversely
would affect the business affairs, financial condition, results of
operations or prospects of the Company, the Bank or the Subsidiaries,
(iv) the representations and warranties in Section 1 hereof are true
and correct with the same force and effect as though expressly made at
and as of the Closing Time, (v) the Company and the Bank have complied
with all agreements and satisfied all conditions on their part to be
performed or satisfied at or prior to the Closing Time, (vi) no stop
order suspending the effectiveness of the Registration Statement has
been issued and no proceedings for that purpose have been initiated or
threatened by the Commission and (vii) no order suspending the
Offerings or the authorization for final use of the Prospectus has been
issued and no proceedings for that purpose have been initiated or
threatened by the Department or the FDIC and no person has sought to
obtain regulatory or judicial review of the action of the Department or
the FDIC in approving the Plan in accordance with the Conversion
Regulations nor has any person sought to obtain regulatory or judicial
review of the action of the FRB in approving the Holding Company
Application.
(e) At the Closing Time, the Agent shall have received a
certificate of the Chief Executive Officer and President of the Company
and of the Bank and the Chief Financial Officer of the Company and of
the Bank, dated as of Closing Time, to the effect that (i) they have
reviewed the contents of the Registration Statement and the Prospectus;
(ii) based on each of their knowledge, the Registration Statement and
the Prospectus do not contain any untrue statement of a material fact
or omit to state a material fact necessary in order to make the
statements made therein, in light of the circumstances under which such
statements were made, not misleading; (iii) based on each of their
knowledge, the financial statements and other financial information
included in the Registration Statement and the Prospectus fairly
present the financial condition and results of operations of the Bank
and the Subsidiaries as of and for the dates and periods covered by the
Registration Statement and the Prospectus; (iv) they are responsible
for establishing and maintaining internal controls; (v) they have
designed such internal controls to ensure that material information
relating to the Company, the Bank and the Subsidiaries is made known to
them; (vi) they have evaluated the effectiveness of their internal
controls; and (vii) they have disclosed to KPMG and the audit committee
(A) all significant deficiencies in the design or operation of internal
controls which could adversely affect the Company's and the Bank's
ability to record, process, summarize, and report financial data, and
have identified for the Company's and the Bank's auditors any material
weaknesses in internal controls and (B) any fraud, whether or not
material, that involves management or other employees who have a
significant role in the Company's and the Bank's internal controls.
(f) At the time of the execution of this Agreement, the Agent
shall have received from KPMG a letter dated such date, in form and
substance satisfactory to the Agent, to the effect that (i) they are
independent public accountants with respect to the Company, the Bank
and the Subsidiaries within the meaning of the Code of Ethics of the
AICPA, the Securities Act and the Securities Act Regulations and
-31-
the Conversion Regulations and they are not in violation of the auditor
independence requirements of the Xxxxxxxx-Xxxxx Act; (ii) it is their
opinion that the consolidated financial statements and supporting
schedules included in the Registration Statement and covered by their
opinions therein comply as to form in all material respects with the
applicable accounting requirements of the Securities Act and the
Securities Act Regulations; (iii) based upon limited procedures as
agreed upon by the Agent and KPMG set forth in detail in such letter,
nothing has come to their attention which causes them to believe that
(A) the unaudited financial statements and supporting schedules of the
Bank and the Subsidiaries included in the Registration Statement do not
comply as to form in all material respects with the applicable
accounting requirements of the Securities Act, the Securities Act
Regulations and the Conversion Regulations or are not presented in
conformity with generally accepted accounting principles applied on a
basis substantially consistent with that of the audited financial
statements included in the Registration Statement and the Prospectus,
(B) the unaudited amounts of net interest income and net income set
forth under "Selected Consolidated Financial and Other Data" in the
Registration Statement and the Prospectus do not agree with the amounts
set forth in unaudited consolidated financial statements as of and for
the dates and periods presented under such captio ns or such amounts
were not determined on a basis substantially consistent with that used
in determining the corresponding amounts in the audited financial
statements included in the Registration Statement, (C) at a specified
date not more than five days prior to the date of this Agreement, there
has been any increase in the consolidated long term or short term debt
of the Bank and the Subsidiaries or any decrease in consolidated total
assets, the allowance for loan losses, total deposits or net worth of
the Bank and the Subsidiaries, in each case as compared with the
amounts shown in the _____________, 2002 balance sheet included in the
Registration Statement or, (D) during the period from ______________,
2002 to a specified date not more than five days prior to the date of
this Agreement, there were any decreases, as compared with the
corresponding period in the preceding year, in total interest income,
net interest income, net interest income after provision for loan
losses, income before income tax expense or net income of the Bank and
the Subsidiaries, except in all instances for increases or decreases
which the Registration Statement and the Prospectus disclose have
occurred or may occur; and (iv) in addition to the examination referred
to in their opinions and the limited procedures referred to in clause
(iii) above, they have carried out certain specified procedures, not
constituting an audit, with respect to certain amounts, percentages and
financial information which are included in the Registration Statement
and the Prospectus and which are specified by the Agent, and have found
such amounts, percentages and financial information to be in agreement
with the relevant accounting, financial and other records of the
Company, the Bank and the Subsidiaries identified in such letter.
(g) At Closing Time, the Agent shall have received from KPMG a
letter, dated as of Closing Time, to the effect that they reaffirm the
statements made in the letter furnished pursuant to subsection (d) of
this Section, except that the specified date referred to shall be a
date not more than five days prior to Closing Time.
(h) At Closing Time, the Securities shall have been approved
for listing on the New York Stock Exchange upon notice of issuance.
(i) At Closing Time, the Agent shall have received a letter
from RP Financial, dated as of the Closing Time, confirming its
appraisal.
-32-
(j) At Closing Time, counsel for the Agent shall have been
furnished with such documents and opinions as they may require for the
purpose of enabling them to pass upon the issuance and sale of the
Securities and the Foundation Shares as herein contemplated and related
proceedings, or in order to evidence the accuracy of any of the
representations or warranties, or the fulfillment of any of the
conditions, herein contained; and all proceedings taken by the Company
in connection with the issuance and sale of the Securities and the
Foundation Shares as herein contemplated shall be satisfactory in form
and substance to the Agent and counsel for the Agent.
(k) At any time prior to Closing Time, (i) there shall not
have occurred any material adverse change in the financial markets in
the United States or elsewhere or any outbreak of hostilities or
escalation thereof or other calamity or crisis the effect of which, in
the judgment of the Agent, are so material and adverse as to make it
impracticable to market the Securities or to enforce contracts,
including subscriptions or orders, for the sale of the Securities, and
(ii) trading generally on the American Stock Exchange, the New York
Stock Exchange or the Nasdaq Stock Market shall not have been
suspended, and minimum or maximum prices for trading shall not have
been fixed, or maximum ranges for prices for securities have been
required, by any of said exchanges or by order of the Commission or any
other governmental authority, and a banking moratorium shall not have
been declared by either Federal or New York authorities.
SECTION 6. INDEMNIFICATION.
(a) The Company and the Bank, jointly and severally, agree to
indemnify and hold harmless the Agent, each person, if any, who
controls the Agent, within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act, and its respective partners,
directors, officers, employees and agents as follows:
(i) from and against any and all loss, liability,
claim, damage and expense whatsoever, as incurred, related to
or arising out of the Conversion (including the establishment
of the Foundation and the contribution of the Foundation
Shares thereto by the Company) or any action taken by the
Agent where acting as agent of the Company or the Bank or
otherwise as described in Section 2 hereof[; provided,
however, that this indemnity agreement shall not apply to any
loss, liability, claim, damage or expense found in a final
judgment by a court of competent jurisdiction to have resulted
primarily from the bad faith, willful misconduct or gross
negligence of the Agent seeking indemnification hereunder];
(ii) from and against any and all loss, liability,
claim, damage and expense whatsoever, as incurred, based upon
or arising out of any untrue statement or alleged untrue
statement of a material fact contained in the Registration
Statement (or any amendment thereto), or the omission or
alleged omission therefrom of a material fact required to be
stated therein or necessary to make the statements therein not
misleading or arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Proxy
Statement or Prospectus (or any amendment or supplement
thereto) or the omission or alleged omission therefrom of a
material fact
-33-
necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not
misleading;
(iii) from and against any and all loss, liability,
claim, damage and expense whatsoever, as incurred, to the
extent of the aggregate amount paid in settlement of any
litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of
any claim whatsoever described in clauses (i) or (ii) above,
if such settlement is effected with the written consent of the
Company or the Bank, which consent shall not be unreasonably
withheld; and
(iv) from and against any and all expense whatsoever,
as incurred (including, subject to Section 6(c) hereof, the
fees and disbursements of counsel chosen by the Agent),
reasonably incurred in investigating, preparing for or
defending against any litigation, or any investigation,
proceeding or inquiry by any governmental agency or body,
commenced or threatened, or any claim pending or threatened
whatsoever described in clauses (i) or (ii) above, to the
extent that any such expense is not paid under (i), (ii) or
(iii) above;
provided, however, that the indemnification provided for in this
paragraph (a) shall not apply to any loss, liability, claim, damage or
expense to the extent arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Prospectus (or any
amendment or supplement thereto) or the omission or alleged omission
therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading which was made in reliance upon and in conformity with
the Agent Information. Notwithstanding the foregoing, the
indemnification provided for in this paragraph (a) shall not apply to
the Bank to the extent that such indemnification by the Bank would
constitute a "covered transaction" under Section 23A of the BHCA.
(b) The Agent agrees to indemnify and hold harmless the
Company, the Bank, their directors, their trustees, each of their
officers who signed the Registration Statement, and each person, if
any, who controls the Company within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act against any and all
loss, liability, claim, damage and expense described in the indemnity
contained in subsection (a) of this Section, as incurred, but only with
respect to untrue statements or omissions, or alleged untrue statements
or omissions, of a material fact made in the Prospectus (or any
amendment or supplement thereto) in reliance upon and in conformity
with the Agent Information.
(c) Each indemnified party shall give notice as promptly as
reasonably practicable to each indemnifying party of any action
commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not
relieve such indemnifying party from any liability which it may have
otherwise than on account of this indemnity agreement. An indemnifying
party may participate at its own expense in the defense of any such
action. In no event shall the indemnifying parties be liable for fees
and expenses of more than one counsel (in addition to no more than one
local counsel in each separate jurisdiction in which any action or
proceeding is commenced) separate from their own counsel for all
indemnified parties in connection with any one action or separate but
similar or related actions in the same jurisdiction arising out of the
same general allegations or circumstances.
-34-
(d) The Company and the Bank also agree that the Agent shall
not have any liability (whether direct or indirect, in contract or tort
or otherwise) to the Bank, the Company, its security holders or the
Bank's or the Company's creditors relating to or arising out of the
engagement of the Agent pursuant to, or the performance by the Agent of
the services contemplated by, this Agreement[, except to the extent
that any loss, claim, damage or liability is found in a final judgement
by a court of competent jurisdiction to have resulted primarily from
the Agent's bad faith, willful misconduct or gross negligence.]
(e) In addition to, and without limiting, the provisions of
Section (6)(a)(iv) hereof, in the event that the Agent, any person, if
any, who controls the Agent within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act or any of its
partners, directors, officers, employees or agents is requested or
required to appear as a witness or otherwise gives testimony in any
action, proceeding, investigation or inquiry brought by or on behalf of
or against the Company, the Bank, the Agent or any of its respective
affiliates or any participant in the transactions contemplated hereby
in which the Agent or such person or agent is not named as a defendant,
the Company and the Bank jointly and severally agree to reimburse the
Agent or such other persons for all reasonable and necessary
out-of-pocket expenses incurred by it or them in connection with
preparing or appearing as a witness or otherwise giving testimony and
to compensate the Agent in an amount to be mutually agreed upon.
SECTION 7. CONTRIBUTION. In order to provide for just and equitable
contribution in circumstances in which the indemnity agreement provided for in
Section 6 hereof is for any reason held to be unenforceable by the indemnified
parties although applicable in accordance with its terms, the Company, the Bank
and the Agent shall contribute to the aggregate losses, liabilities, claims,
damages and expenses of the nature contemplated by said indemnity agreement
incurred by the Company or the Bank and the Agent, as incurred, in such
proportions (i) that the Agent is responsible for that portion represented by
the percentage that the maximum aggregate marketing fees appearing on the cover
page of the Prospectus bears to the maximum aggregate gross proceeds appearing
thereon and the Company and the Bank are jointly and severally responsible for
the balance or (ii) if, but only if, the allocation provided for in clause (i)
is for any reason held unenforceable, in such proportion as is appropriate to
reflect not only the relative benefits to the Company and the Bank on the one
hand and the Agent on the other, as reflected in clause (i), but also the
relative fault of the Company and the Bank on the one hand and the Agent on the
other, as well as any other relevant equitable considerations; provided,
however, that no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section, each person, if any, who
controls the Agent within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act shall have the same rights to contribution as the
Agent, and each director of the Company, each director of the Bank, each officer
of the Company who signed the Registration Statement, and each person, if any,
who controls the Company or the Bank within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act shall have the same rights to
contribution as the Company and the Bank. Notwithstanding anything to the
contrary set forth herein, to the extent permitted by applicable law, in no
event shall the Agent be required to contribute an aggregate amount in excess of
the aggregate marketing fees to which the Agent is entitled and actually paid
pursuant to this Agreement.
-35-
SECTION 8. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE
DELIVERY.
All representations, warranties and agreements contained in this Agreement, or
contained in certificates of officers of the Company or the Bank submitted
pursuant hereto, shall remain operative and in full force and effect, regardless
of any investigation made by or on behalf of the Agent or any controlling
person, or by or on behalf of the Company, and shall survive delivery of the
Securities.
SECTION 9. TERMINATION OF AGREEMENT.
(a) The Agent may terminate this Agreement, by notice to the
Company, at any time at or prior to the Closing Time (i) if there has
been, since the date of this Agreement or since the respective dates as
of which information is given in the Registration Statement, any
material adverse change in the financial condition, results of
operations, business affairs or prospects of the Company or the Bank,
or the C ompany, the Bank and the Subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business,
or (ii) if there has occurred any material adverse change in the
financial markets in the United States or elsewhere or any outbreak of
hostilities or escalation thereof or other calamity or crisis the
effect of which, in the judgment of the Agent, are so material and
adverse as to make it impracticable to market the Securities or to
enforce contracts, including subscriptions or orders, for the sale of
the Securities, or (iii) if trading generally on the Nasdaq Stock
Market, the American Stock Exchange or the New York Stock Exchange has
been suspended, or minimum or maximum prices for trading have been
fixed, or maximum ranges for prices for securities have been required,
by any of said exchanges or by order of the Commission or any other
governmental authority, or if a banking moratorium has been declared by
either Federal or New York authorities, (iv) if any condition specified
in Section 5 shall not have been fulfilled when and as required to be
fulfilled; (v) if there shall have been such material adverse change in
the condition or prospects of the Company or the Bank or the
prospective market for the Company's securities as in the Agent's good
faith opinion would make it inadvisable to proceed with the offering,
sale or delivery of the Securities; (vi) if, in the Agent's good faith
opinion, the aggregate value for the Securities established by RP
Financial is not reasonable or equitable under then prevailing market
conditions; or (vii) if the Conversion is not consummated on or prior
to _____________ __, 2002.
(b) If this Agreement is terminated pursuant to this Section,
such termination shall be without liability of any party to any other
party except as provided in Sections 2 and 4 hereof relating to the
reimbursement of expenses and except that the provisions of Sections 6
and 7 hereof shall survive any termination of this Agreement.
SECTION 10. NOTICES. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the Agent
shall be directed to the Agent at 000 Xxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx
Xxxx 00000, attention of Xxxxxxxxx X. Xxxxxx, General Counsel, facsimile number
(000) 000-0000; notices to the Company and the Bank shall be directed to either
of them at 000 Xxxxxx Xxxxxx, Xxxxxx Xxxx, Xxx Xxxxxx, attention Xxxx X. Xxxxx,
Esq.
-36-
SECTION 11. PARTIES. This Agreement shall inure to the benefit of and
be binding upon the Agent, the Company and the Bank and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Agent, the Company and the Bank and their respective successors and the
controlling persons and partners, and officers and directors referred to in
Sections 6 and 7 and their heirs and legal representatives, any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision herein or therein contained. This Agreement and all conditions and
provisions hereof and thereof are intended to be for the sole and exclusive
benefit of the Agent, the Company and the Bank and their respective successors,
and said controlling persons and partners and officers and directors and their
heirs and legal representatives, and for the benefit of no other person, firm or
corporation.
SECTION 12. ENTIRE AGREEMENT; AMENDMENT. This Agreement represents the
entire understanding of the parties hereto with reference to the transactions
contemplated hereby and supersedes any and all other oral or written agreements
heretofore made, except for the engagement letter dated May 1, 2002, by and
between the Agent and the Bank, relating to the Agent's providing conversion
agent services to the Company and the Bank in connection with the Conversion. No
waiver, amendment or other modification of this Agreement shall be effective
unless in writing and signed by the parties hereto.
SECTION 13. GOVERNING LAW AND TIME. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York applicable to
agreements made and to be performed in said State without regard to the
conflicts of laws provisions thereof. Unless otherwise noted, specified times of
day refer to Eastern time.
SECTION 14. SEVERABILITY. Any term or provision of this Agreement which
is invalid or unenforceable in any jurisdiction shall, as to that jurisdiction,
be ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of this
Agreement is so broad as to be unenforceable, the provision shall be interpreted
to be only so broad as is enforceable.
SECTION 15. HEADINGS. Sections headings are not to be considered part
of this Agreement, are for convenience and reference only, and are not to be
deemed to be full or accurate descriptions of the contents of any paragraph or
subparagraph.
-37-
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
between the Agent, the Company and the Bank in accordance with its terms.
Very truly yours,
PROVIDENT FINANCIAL SERVICES, INC.
By:
-----------------------------------
Name:
Title:
THE PROVIDENT BANK
By:
-----------------------------------
Name:
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
SANDLER X'XXXXX & PARTNERS, L.P.
By: Sandler X'Xxxxx & Partners Corp.,
the sole general partner
By:
-----------------------------------
Name:
Title:
-38-
Exhibit A
PROVIDENT FINANCIAL SERVICES, INC.
______________ SHARES
(MAXIMUM OFFERED IN CONVERSION)
COMMON STOCK
(PAR VALUE $___ PER SHARE)
SELECTED DEALER'S AGREEMENT
_______________, 2002
We have agreed to assist Provident Financial Services, Inc. (the
"Company") in connection with the offer and sale of shares (the "Shares") of
common stock, par value $___ per share (the "Common Stock"), of the Company, to
be issued in connection with the conversion of The Provident Bank, a New Jersey
chartered savings bank (the "Bank"), from mutual to stock form. The Company in
connection with its plan to effect such conversion, offered _____________ Shares
for subscription by certain of the Bank's depositors, the Bank's employee stock
ownership plan and the Company's and the Bank's directors, officers and
employees who are not eligible depositors in a subscription offering, and
certain members of the general public in a concurrent direct community offering.
The Shares which were not subscribed for pursuant to such subscription and
direct community offerings are being offered to the public in a syndicated
community offering (the "Syndicated Community Offering") in accordance with the
New Jersey Banking Act of 1948 and the regulations promulgated thereunder and
the rules and regulations of the Federal Deposit Insurance Corporation (the
"FDIC"). The Shares, the bases on which the number of Shares to be issued may
change, and certain of the terms on which they are being offered are more fully
described in the enclosed Prospectus (the "Prospectus").
We are offering to Selected Dealers (of which you are one) the
opportunity to participate in the solicitation of offers to buy the Shares in
the Syndicated Community Offering and we will pay you a fee in the amount of
_____________ percent (________) of the dollar amount of the Shares sold on
behalf of the Company by you. The number of Shares sold by you shall be
determined based on the authorized designation of your firm on the order form or
forms for such Shares accompanying the funds transmitted for payment therefor
(whether in the form of a check payable
-39-
to the Bank or a withdrawal from an existing account at the Bank) to the special
account established by the Company for the purpose of holding such funds. It is
understood, of course, that payment of your fee will be made only out of
compensation received by us for the Shares sold on behalf of the Company by you,
as evidenced in accordance with the preceding sentence. The Bank has requested
us to invite you to become a "Sponsoring Dealer," that is, a Selected Dealer who
solicits offers which result in the sale on behalf of the Bank of at least
___________ Shares. You may become a Sponsoring Dealer (subject to your
fulfillment of the requirement in the preceding sentence) by checking the box on
the confirmation at the end of this letter. If you become a Sponsoring Dealer,
you shall be entitled to an additional fee in the amount of _______ percent
(______%) of the dollar amount of the Shares sold on behalf of the Company by
you as evidenced in the manner set forth above.
Each order form for the purchase of Shares must set forth the identity,
address and tax identification number of each person ordering Shares regardless
of whether the Shares will be registered in street name or in the purchaser's
name. Such order form should clearly identify your firm.
As soon as practicable after all the Shares are sold, we will remit to
you, out of our compensation as provided above, the fees to which you are
entitled hereunder, including your Sponsoring Dealer fee.
This offer is made subject to the terms and conditions herein set forth
and is made only to Selected Dealers which are (i) members in good standing of
the National Association of Securities Dealers, Inc. ("NASD") which agree to
comply with all applicable rules of the NASD, including, without limitation, the
NASD's Interpretation With Respect to Free-Riding and Withholding and Rule 2740
of the NASD's Conduct Rules, or (ii) foreign dealers not eligible for membership
in the NASD which agree (A) not to sell any Shares within the United States, its
territories or possessions or to persons who are citizens thereof or residents
therein and (B) in making other sales to comply with the above-mentioned NASD
Interpretation, Rules 2730, 2740 and 2750 of the above-mentioned Conduct Rules
as if they were NASD members and Rule 2420 of such Conduct Rules as it applies
to non-member brokers or dealers in a foreign country.
Orders for Shares will be strictly subject to confirmation and we,
acting on behalf of the Company, reserve the right in our absolute discretion to
reject any order in whole or in part, to accept or reject orders in the order of
their receipt or otherwise, and to allot. Neither you nor any other person is
authorized by the Company, the Bank or by us to give any information or make any
representations other than those contained in the Prospectus in connection with
the sale of any of the Shares. No Selected Dealer is authorized to act as agent
for us when soliciting offers to buy the Shares from the public or otherwise. No
Selected Dealer shall engage in any transaction prohibited by Regulation M
promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), with respect to the Common Stock during the offering.
-40-
We and each Selected Dealer assisting in selling Shares pursuant hereto
agree to comply with the applicable requirements of the Exchange Act and
applicable rules and regulations issued by the Board of Governors of the Federal
Reserve System, the New Jersey Department of Banking and Insurance and the FDIC.
In addition, we and each Selected Dealer confirm that the Securities and
Exchange Commission (the "Commission") interprets Rule 15c2-8 promulgated under
the Exchange Act as requiring that a prospectus be supplied to each person who
is expected to receive a confirmation of sale 48 hours prior to delivery of such
person's order form.
We and each Selected Dealer further agree to the extent that our
customers desire to pay for Shares with funds held by or to be deposited with
us, in accordance with the interpretation of the Commission of Rule 15c2-4
promulgated under the Exchange Act either (a) upon receipt of an executed order
form or direction to execute an order form on behalf of a customer to forward
the syndicated community offering price for the Shares ordered on or before
12:00 noon on the business day following receipt or execution of an order form
by us to the Bank for deposit in a segregated account or (b) to solicit
indications of interest in which event (i) we will subsequently contact any
customers indicating interest to confirm the interest and give instructions to
execute and return an order form or to receive authorization to execute an order
form on their behalf, (ii) we will mail acknowledgments of receipt of orders to
each customer confirming interest on the business day following such
confirmation, (iii) we will debit accounts of such customers on the fifth
business day (the "debit date") following receipt of the confirmation referred
to in (i), and (iv) we will forward completed order forms together with such
funds to the Bank on or before 12:00 noon on the next business day following the
debit date for deposit in a segregated account. We acknowledge that if the
procedure in (b) is adopted, our customer's funds are not required to be in
their accounts until the debit date. We and each Selected Dealer further
acknowledge that, in order to use the foregoing "sweep arrangements," we comply
with the net capital requirements for broker/dealers under Rule 15c3-1(a)(1) of
the Exchange Act.
Unless earlier terminated by us, this Agreement shall terminate 45 full
business days after the date hereof, but may be extended by us for an additional
period or periods not exceeding 30 full business days in the aggregate. We may
terminate this Agreement or any provisions hereof at any time by written or
telegraphic notice to you. Of course, our obligations hereunder are subject to
the successful completion of the offering, including the sale of all of the
Shares.
You agree that at any time or times prior to the termination of this
Agreement you will, upon our request, report to us the number of Shares sold on
behalf of the Company by you under this Agreement.
We shall have full authority to take such actions as we may deem
advisable in respect to all matters pertaining to the offering. We shall be
under no liability to you except for lack of good faith and for obligations
expressly assumed by us in this Agreement.
Upon application to us, we will inform you as to the states in which we
believe the Shares have been qualified for sale under, or are exempt from the
requirements of, the respective "blue
-41-
sky" laws of such states, but we assume no responsibility or obligation as to
your rights to sell Shares in any state.
Additional copies of the Prospectus and any supplements thereto will be
supplied in reasonable quantities upon request.
Any notice from us to you shall be deemed to have been duly given if
mailed, telephoned or telegraphed to you at the address to which this Agreement
is mailed.
This Agreement shall be construed in accordance with the laws of the
State of New York.
Please confirm your agreement hereto by signing and returning the
confirmation accompanying this letter at once to us at Sandler X'Xxxxx &
Partners, L.P., 000 Xxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000. The
enclosed duplicate copy will evidence the agreement between us.
Very truly yours,
SANDLER X'XXXXX & PARTNERS, L.P.
By:
-----------------------------------
Name:
Title:
CONFIRMED AND ACCEPTED
As of the date first above written:
[NAME OF SELECTED DEALER]
By:
-----------------------------------
Name:
Title:
