Exhibit 1.2
21,275,000 Shares
(subject to increase up to 24,466,250 shares
in the event of an oversubscription)
Richmond County Financial Corp.
(a Delaware corporation)
Common Stock
(par value $0.01 per share)
AGENCY AGREEMENT
November __, 0000
Xxxxxxx X'Xxxxx & Partners, L.P.
Two World Trade Center, 000xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Richmond County Financial Corp., a Delaware corporation (the "Company"),
and Richmond County Savings Bank, a New York State chartered 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 21,275,000 shares (subject to increase up to 24,466,250 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 in the Offering (as hereinafter defined) are hereinafter called the
"Securities." In addition, as described herein, the Company expects to
contribute shares of Common Stock in an amount equal to 8% of the shares of
Common Stock sold in the Offerings (as hereinafter defined) to the Richmond
County Savings 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 Trustees of the Bank pursuant to which the Bank intends to
convert from a New York State chartered mutual savings bank to a New York State
chartered stock savings bank and issue all of its stock to the Company.
Pursuant to the Plan, the Company is offering to certain of the Bank's
depositors and to the Bank's tax qualified employee benefit plans (the "Employee
Plans"), including The Richmond County Savings Bank Employee Stock Ownership
Plan (the "ESOP"), rights to subscribe for the Securities in a subscription
offering (the "Subscription Offering"). To the extent Securities are not
subscribed for in the Subscription Offering, such Securities may be offered to
certain members of the general public 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/Community
Offering") [to be commenced concurrently with the Subscription Offering.] It is
currently anticipated by the Company and the Bank that any Securities not
subscribed for in the Subscription/Community Offering will be offered, subject
to Section 2 hereof, in a syndicated community offering (the "Syndicated
Community Offering"). The Subscription/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 all of the outstanding capital stock of the Bank by the Company
and the Offerings are hereinafter referred to, collectively, as the
"Conversion." It is acknowledged that the number of Securities to be sold in
the Offerings 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 the
approval of the establishment of the Foundation by the depositors of the Bank]
and subject to compliance with certain conditions as may be imposed by
regulatory authorities, the Company will contribute newly issued shares of
Common Stock in an amount equal to 8% of the Securities sold in the Offering, or
between 1,258,000 and 1,702,000 shares of Common Stock (subject to increase in
certain circumstances to 1,957,300 shares).
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-1 (No. 333-37009) including a
prospectus for the registration of the Securities and the Foundation Shares
under the Securities Act of 1933, as amended (the "1933 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
prospectus 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 part thereof pursuant to the rules and
regulations of the Commission under the 1933 Act, as from time to time amended
or supplemented pursuant to the 1933 Act or otherwise (the "1933 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/Community Offering or
the Syndicated Community Offering which differs from the Prospectus on file with
the Commission at the time the Registration Statement becomes effective (whether
or not such revised prospectus is required to be filed by the
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Company pursuant to Rule 424(b) of the 1933 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/Community Offering. Such 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 1933 Act and the
1933 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
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
Prospectus (the "Agent Information," which the Company and
the Bank acknowledge appears only in the first two
paragraphs and the last paragraph of the section captioned
"The Conversion--Marketing and Underwriting Arrangements"
of the Prospectus).
(ii) The Company has filed with the Office of Thrift
Supervision, Department of the Treasury (the "OTS") the
Company's application for approval of its acquisition of
the Bank (the "Holding Company Application") on Form H-
(e)1-S promulgated under the savings and loan holding
company provisions of the Home Owners' Loan Act, as
amended ("HOLA") and the regulations promulgated
thereunder. The Company has received written notice from
the OTS 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 OTS suspending or revoking
such approval and no proceedings therefor have been
initiated or, to the knowledge of the Company or the Bank,
threatened
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by the OTS. At the date of such approval and the Closing
Time, the Holding Company Application complied in all
material respects with the applicable provisions of HOLA
and the regulations promulgated thereunder.
(iii) Pursuant to the General Regulations of the Banking Board
of the State of New York and the rules and regulations of
the Federal Deposit Insurance Corporation (the "FDIC")
governing the conversion of New York State chartered
mutual savings banks to stock form (the "Conversion
Regulations"), the Bank has filed with the Superintendent
of Banks of the State of New York (the "Superintendent")
an application for conversion on Form 86-AC, and filed
with the FDIC a Notice of Conversion, including the Form
86-AC, and has filed such amendments thereto and
supplementary materials as may have been required to the
date hereof (such application, as amended to date, if
applicable, and as from time to time amended or
supplemented hereafter, is hereinafter referred to as the
"Conversion Application"), including copies of the Bank's
Proxy Statement, to be dated _______________, 1997,
relating to the Conversion (the "Proxy Statement"), and
the Prospectus. The Superintendent has, by order dated
_____________, 1997, approved the Conversion Application,
such order remains in full force and effect and no order
has been issued by the Superintendent suspending or
revoking such order and no proceedings therefor have been
initiated or, to the knowledge of the Company or the Bank,
threatened by the Superintendent. The FDIC has, by letter
dated _______________, 1997, issued a letter of intent not
to object to the Conversion, such letter remains in full
force and effect and no letter or order has been issued by
the FDIC suspending or revoking such letter 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 Superintendent,
at the date of the FDIC letter of intent not to object and
at the Closing Time referred to in Section 2, the
Conversion Application 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 supplemental sales literature
with the Commission, the Superintendent 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,
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will have received all required authorizations of the
Superintendent and the FDIC for use in final form.
(v) Neither the Commission, the Superintendent, nor the FDIC
has, by order or otherwise, prevented or suspended the use
of the Prospectus or any supplemental sales literature
authorized by the Company or the Bank for use in
connection with the Offerings.
(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 and requirements precedent to the Conversion
imposed upon the Company or the Bank by the OTS, the
Superintendent, the FDIC or any other regulatory
authority, other than those which the regulatory authority
permits to be completed after the Conversion.
(vii) Xxxxxx & Company, which prepared the valuation of the Bank
as part of the Conversion, satisfies all requirements for
an appraiser set forth in the Conversion Regulations and
any interpretations or guidelines issued by the
Superintendent and the FDIC with respect thereto; and
Xxxxxxx X. Xxxxxx, Incorporated, which prepared the
opinion filed as Exhibit 9(f) of the Conversion
Application as required by the Conversion Regulations,
satisfies all requirements for an "independent executive
compensation expert" within the meaning of the Conversion
Regulations.
(viii) The accountants who certified the financial statements and
supporting schedules of the Bank included in the
Registration Statement have advised the Company and the
Bank that they are independent public accountants within
the meaning of the Code of Ethics of the American
Institute of Certified Public Accountants; and such
accountants are, with respect to the Company, the Bank and
each subsidiary of the Bank, independent certified public
accountants as required by the 1933 Act and the 1933 Act
Regulations.
(ix) The only subsidiaries of the Bank are RCSB Corp. and
Richmond Enterprises, Inc.(the "Subsidiaries").
(x) The consolidated financial statements and the related
notes thereto included in the Registration Statement and
the Prospectus present fairly the consolidated financial
position of the Bank and the Subsidiaries as at the dates
indicated and the results of operations, retained earnings
and cash flows for the periods specified and comply as to
form in all material respects with the applicable
accounting requirements of the 1933 Act
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Regulations and the Conversion Regulations; except as
otherwise stated in the Registration Statement, said
financial statements have been prepared in conformity with
generally accepted accounting principles 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.
(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 or business of the Company, the Bank
and the Subsidiaries, taken as a whole, whether or not
arising in the ordinary course of business, and (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 the Subsidiaries, other
than those in the ordinary course of business, which are
material with respect to the Company, the Bank and the
Subsidiaries, taken as a whole.
(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 York 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 would not
have a material adverse effect on the financial condition,
results of operations or business of the Company, the Bank
and the Subsidiaries, taken as a whole.
(xiii) Upon consummation 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 within 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 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 non-
assessable; 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
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certificates representing the shares of Common Stock will
conform with the requirements of applicable laws and
regulations; and the issuance of the Securities is not
subject to preemptive or other similar rights.
(xiv) The Bank, as of the date hereof, is a New York State
chartered savings bank in mutual form and upon
consummation of the Conversion will be a New York State
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 and the Conversion
Application, 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 or business of the
Company, the Bank or the Subsidiaries, taken as a whole;
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 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 or business
of the Company, the Bank and the Subsidiaries, taken as a
whole; and the Bank is in good standing under the laws of
the State of New York 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 or business of
the Company, the Bank and the Subsidiaries, taken as a
whole.
(xv) The deposit accounts of the Bank are insured by the FDIC
up to the applicable limits and, upon consummation of the
Conversion, the liquidation account for the benefit of
eligible account holders will be duly established in
accordance with the requirements of the Conversion
Regulations. The Bank is a "qualified thrift lender"
within the meaning of 12 U.S.C. (S) 1467a(m).
(xvi) Upon consummation of the Conversion, the authorized
capital stock of the Bank will be 75,000,000 shares of
common stock, par value $0.01 per share (the "Bank Common
Stock"), and 5,000,000 shares of preferred stock, par
value $0.01 per share (the "Bank Preferred Stock"), and
the issued and outstanding capital stock of the Bank will
be [1,000] shares of Bank Common Stock; no shares of Bank
Common Stock or Bank Preferred
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Stock have been or will be issued and outstanding prior to
the Closing Time referred to in Section 2; 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 the Bank Preferred Stock conform to all
statements relating thereto contained in the Prospectus,
and the certificates representing the shares of Bank
Common Stock will conform with the requirements of
applicable laws and regulations; and the issuance of the
Bank Common Stock is not subject to preemptive or similar
rights.
(xvii) 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 will not be a savings and loan holding company
within the meaning of 12 C.F.R. Section 574.2(q) 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 Superintendent 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 non-
assessable; and the issuance of the Foundation Shares is
not subject to preemptive or similar rights.
(xviii) Each Subsidiary 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 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 or
8
business of the Company, the Bank and the Subsidiaries,
taken as a whole; the activities of the Subsidiaries are
permitted to subsidiaries of a New York State chartered
savings bank by the rules, regulations, resolutions and
practices of the Superintendent and the FDIC; all of the
issued and outstanding capital stock of the Subsidiaries
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.
(xix) The execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated
herein have been duly authorized by all necessary
corporate action of the Company and the Bank, and this
Agreement has been duly executed and delivered by, and is
the valid and binding agreement of, the Company and the
Bank, 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) The execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated
herein do not and will not conflict with or constitute a
breach of, or default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any
property or assets of the Company, the Bank or the
Subsidiaries pursuant to, any contract, indenture,
mortgage, loan agreement, note, lease or other instrument
to which the Company, the Bank and 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 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 or business of the Company, the Bank
and the Subsidiaries, taken as whole, nor will such action
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 or any applicable law, regulation or
administrative or court decree.
(xxi) 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
specifically described or contemplated therein, none of
the Company, the Bank or the Subsidiaries will have (A)
issued any securities or incurred any liability or
obligation, direct or contingent, for borrowed money,
except borrowings in the ordinary course of business from
the same or similar sources indicated in the Prospectus,
or (B) entered
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into any transaction or series of transactions which is
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 mortgaged-backed
securities in the ordinary course of business.
(xxii) 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 (except for
the declaration of effectiveness of any required post
effective amendment to the Registration Statement by the
Commission, approval thereof by the Superintendent and
non-objection by the FDIC), which has not been obtained
and a copy of which has been delivered to the Agent,
except for the issuance of the restated organization
certificate by the Superintendent and as may be required
under the securities laws of various jurisdictions.
(xxiii) Neither the Company, the Bank nor any of the Subsidiaries
is in violation of its certificate of incorporation,
restated organization certificate, articles of
incorporation, charter or bylaws, as the case may be (and
the Bank will not be in violation of its restated
organization certificate or bylaws in stock form upon
consummation of the Conversion); 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 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 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 or business of the Company, the Bank
and the Subsidiaries, taken as a whole; 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 or the Conversion
Application which have not been so filed.
(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 threatened; and
the Company and the Bank are not aware of any existing or
threatened labor disturbance by the employees of any of
their principal suppliers or contractors which might be
expected to result in any material adverse change in the
financial condition, results of operations or business of
the Company, the Bank and the Subsidiaries, taken as a
whole.
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(xxv) Each of the Company, the Bank and the Subsidiaries has
good and marketable title to all properties and assets for
which ownership is material to its business and to those
properties and assets described in the Prospectus as owned
by it, 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, taken as a
whole; and all of the leases and subleases material to the
business of the Company, the Bank and the Subsidiaries,
taken as a whole, under which the Company, the Bank or any
of the Subsidiaries holds properties, including those
described in the Prospectus, are the legal, valid and
binding agreements of the Company, the Bank or the
Subsidiaries, enforceable in accordance with their terms.
(xxvi) Neither the Company, the Bank nor any of the Subsidiaries
is in violation of any directive from the OTS, the
Superintendent or the FDIC to make any material change in
the method of conducting its business; the Bank and the
Subsidiaries have conducted and are conducting their
businesses so as to comply with all applicable statutes,
regulations and administrative and court decrees
(including, without limitation, all regulations,
decisions, directives and orders of the Superintendent and
the FDIC).
(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 or business of the Company, the Bank and the
Subsidiaries, taken as a whole, or which might materially
and adversely affect the properties or assets thereof, or
which might materially and adversely affect performance
under this Agreement or the consummation of the
Conversion; all pending legal or governmental proceedings
to which the Company, the Bank or any of the Subsidiaries
is a party or of which any of their respective properties
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, the Bank or any of the
Subsidiaries which are required to be filed as exhibits to
the Registration Statement or the Conversion Application
which have not been so filed.
(xxviii) The Bank has obtained opinions of its counsel, Xxxxxxx,
Xxxxxx & Xxxxxxxx, with respect to the legality of the
Securities to be issued and the Foundation Shares to be
issued and the federal income tax consequences of the
Conversion, copies of which are filed as exhibits to the
Registration
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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 nor the Company has taken or will
take any action inconsistent therewith.
(xxix) The Bank has obtained an opinion of Ernst & Young, LLP,
with respect to certain New York State tax consequences of
the Conversion (relating to banking franchise tax, sales
or use tax, license fee on foreign corporations, stock
transfer tax, real property transfer gains tax and real
estate transfer tax) and the opinion of Ernst & Young, LLP
with respect to the federal income tax consequences of the
Foundation, 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 nor the
Company has taken or will take any action inconsistent
therewith which would in any way affect the aforesaid
opinions.
(xxx) The Company is not 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 consolidated selected
financial information of the Bank included in the
Prospectus meet or are exempt from all requirements of
federal, state and 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 12 C.F.R. Section 563.99), 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 or business of the
Company, the Bank and the Subsidiaries, taken as a whole.
(xxxii) With the exception of the Company's intended loan to the
ESOP for the purpose of enabling the ESOP to purchase
shares of Common Stock in an amount up to 8% of the
aggregate of the Foundation Shares and the Common Stock
sold in the Offering, none of the Company, the Bank or any
employee 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) The Company, the Bank and the Subsidiaries are in
compliance in all material respects with the applicable
financial record keeping and reporting
12
requirements of the Currency and Foreign Transaction
Reporting Act of 1970, as amended, and the rules and
regulations thereunder, and the lending practices of the
Bank are and have been in conformity with the Real Estate
Settlement Procedures Act, as amended, and the rules and
regulations thereunder.
(xxxiv) Neither 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 or business of
the Company, the Bank and the Subsidiaries, taken as a
whole. 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, 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.
(xxxv) The Company, the Bank and the Subsidiaries have filed all
federal income and state and local 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.
(xxxvi) The Company has received approval, subject to issuance, to
have the Common Stock quoted on the Nasdaq Stock Market
(the "Nasdaq National Market") effective at the Closing
Time referred to in Section 2 hereof.
(xxxvii) 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
Registration Statement") and has requested that such
13
registration statement be effective concurrent with the
effectiveness of the Registration Statement.
(b) Any certificate signed by any officer of the Company or the Bank
and delivered to either of the Agent or counsel for the Agent shall
be deemed a representation and warranty by the Company or the Bank
as to each of the matters covered thereby.
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 the Securities
in the Subscription/Community Offering 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 Bank's Board of Trustees the independent appraiser's
appraisal of the Common Stock, particularly with regard to aspects of the
appraisal involving the methodology employed; (iii) reviewing all offering
documents, including the Prospectus, stock order forms and related offering
materials (it being understood that the preparation and filing of such documents
are 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 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/Community Offering, unless the Company and the Agent agree in
writing to extend such period and the Superintendent and the FDIC agree to
extend the period of time in which the Securities may be sold, (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 the
Subscription/Community Offering, at the request of the Company and the Bank,
the Agent 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
14
set forth in a selected dealers' agreement (the "Selected Dealers' Agreement"),
in substantially the form set forth as Exhibit A to this Agreement. The Agent
will endeavor to limit the aggregate fees to be paid by the Company and the Bank
under any such Selected Dealers' Agreement to an amount competitive with gross
underwriting discounts charged at such time for underwritings of comparable
amounts of stock sold at a comparable price per share in a similar market
environment; provided, however, that the aggregate fees payable to the Agent and
Selected Dealers shall not exceed 7% of the aggregate Purchase Price (as defined
in the Prospectus) of the Securities sold by such Selected Dealers. The Agent
will endeavor to distribute the Securities among the Selected Dealers in a
fashion which best meets the distribution objectives of the Company and the Bank
and the requirements of the Plan and applicable law, which may result in
limiting the allocation of stock to certain Selected Dealers. It is understood
that in no event shall the Agent be obligated to act as a Selected Dealer or to
take or purchase any Securities.
In the event the Company is unable to sell at least the Total Minimum
of Securities, as set forth on the cover 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 set
forth 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 disclosed on the cover
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
offices of Xxxxxxx, Xxxxxx & Xxxxxxxx, 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 shall designate.
The hour and date upon which the Company shall release for delivery all of the
Securities, in accordance with the terms hereof, are 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:
15
(a) one and three quarters percent (1.75%) of the aggregate Purchase
Price (as defined in the Prospectus) of the Securities sold in the
Subscription Offering and in the 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) 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 (other
than Sandler X'Xxxxx) under the Selected Dealers' Agreement in the
Syndicated Community Offering, (i) the sales commission payable to
Selected Dealers under any Selected Dealers' Agreement, (ii) any
sponsoring dealer's fees and (iii) a management fee to Sandler
X'Xxxxx of one and one-half percent (1.5%) of the aggregate
Purchase Price of such Securities sold under such agreement. 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 one and three-quarters percent (1.75%) of the aggregate Purchase
Price of such Securities.
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
or the Bank, no fees shall be payable by the Company or the Bank to Sandler
X'Xxxxx; however, the Bank shall reimburse Sandler X'Xxxxx for its reasonable
out-of-pocket expenses incurred prior to termination, including the reasonable
fees and disbursements of counsel for the Agent, in accordance with the
provisions of Section 4 hereof.
All fees payable to the Agent hereunder shall be payable in
immediately available funds at Closing Time, or upon termination of this
Agreement, as the case may be. In recognition of the long lead times involved
in the conversion process, the Bank agrees to make advance payments to the Agent
in the aggregate amount of $50,000, $25,000 of which was paid upon execution of
the engagement letter, dated July 30, 1997, and the remaining $25,000 of which
shall be payable upon commencement of the Subscription Offering, which shall be
credited against any fees or reimbursement of expenses payable under this
Section.
Section 3. Covenants of the Company and the Bank. 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
Conversion Application and the Proxy Statement as may hereafter be
required by the 1933 Act Regulations or the Conversion Regulations
or as may hereafter be requested by the Agent. Following completion
of the Subscription/Community 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/Community Offering, any additional
16
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/Community
Offering and pricing information pursuant to Rule 424(c) of the
1933 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 or the filing of any amendment
to the Conversion Application, (ii) of the receipt of any comments
from the Superintendent, the FDIC, the OTS or the Commission with
respect to the transactions contemplated by this Agreement or the
Plan, (iii) of any request by the Commission, the Superintendent,
the FDIC or the OTS for any amendment to the Registration Statement
or the Conversion Application or the Holding Company Application or
any amendment or supplement to the Prospectus or for additional
information, (iv) of the issuance by the Superintendent 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 Conversion
Application, Holding Company Application or 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 1933 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 Conversion Application
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.
17
(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 Superintendent and the
FDIC, by the applicable Conversion Regulations, as from time to
time in force, and by the 1933 Act, the 1933 Act Regulations, the
Securities Exchange Act of 1934, as amended (the "1934 Act") and
the rules and regulations of the Commission promulgated thereunder,
including, without limitation, Regulation M, 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 neither the Company nor the Bank shall 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 Dealer 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,
18
an earnings statement (in form complying with the provisions of
Rule 158 of the 1933 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 fiscal
year in such period an annual report (including consolidated
statements of financial condition and consolidated statements of
income, stockholders' equity and cash flows of the Company, the
Bank and the Subsidiaries, certified by independent public
accountants) and, as soon as practicable after the end of each of
the first three quarters of each fiscal year (beginning with the
fiscal quarter ending after the effective date of the Registration
Statement), the Company will make available to its stockholders
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 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 1934 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) Each of the Company and the Bank will use the net proceeds received
by it from the sale of the Securities and the purchase of the
Common Stock by the Company, as the case may be, in the manner
specified in the Prospectus under "Use of Proceeds."
(l) 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 and, to the extent not waived by the
provisions of any order of the Superintendent or the FDIC, the
Conversion Regulations and all other applicable regulations,
decisions and orders thereunder, including all applicable terms,
requirements and conditions precedent to the Conversion imposed
upon the Company or the Bank by the Superintendent, the FDIC or the
OTS.
(m) The Company will maintain the effectiveness of the Exchange Act
Registration Statement for not less than three years. The Company
will file with the Nasdaq
19
Stock Market, Inc. all documents and notices required by the Nasdaq
Stock Market, Inc. of companies that have issued securities that
are traded in the over-the-counter market and quotations for which
are reported by the Nasdaq National Market.
(n) 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,
which consent shall not be unreasonably withheld, take or permit to
be taken any action that could result in the Bank Common Stock or
Bank Preferred Stock becoming subject to any security interest,
mortgage, pledge, lien or encumbrance; provided, however, that this
covenant shall be null and void if the Board of Governors of the
Federal Reserve System, or any other federal agency having
jurisdiction over the Bank, by regulation, policy statement or
general or specific interpretive release or letter, permits
indemnification of the Agent by the Bank as contemplated by Section
6(a) hereof.
(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 National Association of
Securities Dealers, Inc.'s "Interpretation Relating to Free-Riding
and Withholding."
(p) The Company or the Bank will furnish to Sandler X'Xxxxx as early as
practicable prior to the Closing Date, 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 Ernst & Young, LLP, as
part of the procedures referred to in their letters to be furnished
pursuant to subsections (e) and (f) of Section 5 hereof.
(q) The Company and the Bank will comply with the conditions imposed by
or agreed to with the OTS in connection with its approval of the
Holding Company Application and with the Superintendent or the FDIC
in connection with their approval of, or non-objection to, the
Conversion Application 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 Internal Revenue Code
of 1986, as amended (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.
20
(r) During the period ending on the first anniversary of the Closing
Time, the Bank will comply with all applicable law and regulation
necessary for the Bank to continue to be a "qualified thrift
lender" within the meaning of 12 U.S.C. (S) 1467a(m).
(s) 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 or the Foundation Shares for a
period of 180 days following the Closing Time.
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 printing and filing of the Registration Statement
and the Conversion Application 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, conversion
agent, 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 counsel in connection
therewith and in connection with the preparation of the Blue Sky Survey, (vi)
the printing and delivery to the Agent of copies of the Registration Statement
as originally filed and of each amendment thereto and the printing and delivery
of the Prospectus and any amendments or supplements thereto to the purchasers in
the Offerings and the Agent, (vii) the printing and delivery to the Agent of
copies of a Blue Sky Survey, (viii) the fees and expenses incurred in connection
with the listing of the Common Stock on the Nasdaq Stock Market and (ix) the
cost of printing and distribution the offering materials. 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 or the Company.
The Company and the Bank jointly and severally agree to pay certain
expenses incident to the performance of the Agent's obligations under this
Agreement, regardless of whether the Conversion is consummated, including (i)
the filing fees paid or secured by the Agent in connection with all filings with
the National Association of Securities Dealers, Inc., and (ii) all reasonable
out-of-pocket expenses incurred by the Agent relating to the Offerings,
including, without limitation, advertising, promotional, syndication and travel
expenses and fees and expenses of the Agent's counsel. 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.
21
Section 5. Conditions of Agent's Obligations.
The Company, the Bank and the Agent agree that the issuance and sale
of the 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 1933 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 Superintendent or the FDIC and no order
suspending the sale of the Securities in any jurisdiction shall
have been issued.
(b) At Closing Time, the Agent shall have received:
(1) The favorable opinion, dated as of Closing Time, of Xxxxxxx,
Xxxxxx & Xxxxxxxx, special 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 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 York 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 be so
qualified would not have a material adverse effect
upon the financial condition, results of operations or
business of the Company, the Bank and the
Subsidiaries, taken as a whole.
(iv) Upon consummation of the Conversion and the issuance
of Foundation Shares to the Foundation immediately
upon
22
completion thereof, the authorized, issued and
outstanding capital stock of the Company will be
within the range as set forth in the Prospectus under
"Capitalization," and no shares of Common Stock have
been issued and outstanding prior to the Closing Time.
(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 non-assessable.
(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
such counsel's knowledge, otherwise.
(vii) The Bank has been at all times since the date hereof
and prior to the Closing Time organized, and is
validly existing in good standing under the laws of
the State of New York as a New York State-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 York as a
New York State 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 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 upon the financial condition,
results of operations or business of the Bank.
(viii) The deposit accounts of the Bank are insured by the
FDIC up to the applicable limits.
(ix) Each Subsidiary 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
23
Statement and the Prospectus and is duly qualified as
a foreign corporation 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 upon the financial
condition, results of operations or business of the
Company, the Bank and the Subsidiaries, taken as a
whole; the activities of the Subsidiaries as described
in the Prospectus are permitted to subsidiaries of a
savings association holding company and of a New York
State chartered savings bank by the rules,
regulations, resolutions and practices of the OTS and
the Superintendent, as the case may be; all of the
issued and outstanding capital stock of each of the
Subsidiaries has been duly authorized and validly
issued, is fully paid and non-assessable and is owned
by the Bank free and clear of any security interest,
mortgage, pledge, lien, encumbrance or claim.
(x) 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
savings and loan holding company within the meaning of
12 C.F.R. Section 574.2(q) 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 set forth in any written notice or order of
approval or non-objection of the Conversion,
Conversion Application or the Holding Company
Application copies of which were provided to the Agent
prior to the Closing Time.
(xi) 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,
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
24
any security interest, mortgage, pledge, lien,
encumbrance, claim or equity.
(xii) The OTS has approved the Holding Company Application
and the Superintendent has approved the Conversion
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 of such counsel's knowledge,
threatened respecting the Holding Company Application
or the Conversion Application (including therewith,
the establishment of the Foundation and the
contribution of shares of Common Stock thereto) 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 in all material
respects with the applicable requirements of the OTS,
and the Conversion Application complies as to form in
all material respects with the applicable requirements
of the Superintendent and the FDIC, except as
compliance therewith is specifically waived in writing
by the Superintendent or the FDIC, as the case may be,
and include all documents required to be filed as
exhibits thereto and are complete as to form in all
material respects, excluding the Prospectus and any
related marketing materials filed as a part of the
Holding Company Application or the Conversion
Application as to which no opinion need be given; the
Company is duly authorized to become a savings
association 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.
(xiii) The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby,
including the establishment of the Foundation and the
contribution thereto of the Foundation Shares, (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 contribution 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 conflict with or
constitute a breach of, or default under, and no
default exists
25
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 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 that, individually or in the
aggregate, would have a material adverse effect on the
financial condition, results of operations or business
of the Company, the Bank and the Subsidiaries, taken
as a whole, and (C) 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 Subsidiary.
(xiv) The Prospectus has been duly authorized by the
Superintendent and the FDIC for final use pursuant to
the Conversion Regulations, and no action has been
taken or is pending, or, to the best of such counsel's
knowledge, threatened, by the Superintendent or the
FDIC to revoke such authorization.
(xv) The Registration Statement is effective under the 1933
Act, and no stop order suspending the effectiveness of
the Registration Statement has been issued under the
1933 Act or proceedings therefore initiated or, to the
best of such counsel's knowledge, threatened by the
Commission.
(xvi) 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
Foundation Shares and the consummation of the
Conversion, except as may be required under the
securities or Blue Sky laws of various jurisdictions
as to which no opinion need be rendered.
(xvii) At the time the Registration Statement became
effective, the Registration Statement (except for
financial statements and notes thereto, the appraisal
and schedules and other financial or statistical data
included in the Registration Statement, as to which
counsel need make no statement) complied as to
26
form in all material respects with the requirements of
the 1933 Act and the 1933 Act Regulations and the
Conversion Regulations.
(xviii) 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.
(xix) There are no legal or governmental proceedings pending
or threatened against or affecting the Company, the
Bank, the Subsidiaries or the Foundation 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 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.
(xx) The information in the Prospectus under "Risk
Factors--Effects of the Establishment of the
Foundation--Tax Consequences," "--Certain Anti-
Takeover Provisions," and "--Possible Adverse Income
Tax Consequences of the Distribution of Subscription
Rights," "Dividend Policy," "Business of the Bank--
Legal Proceedings," "Federal and State Taxation,"
"Regulation and Supervision," "The Conversion--
Establishment of Charitable Foundation," "--Effects of
Conversion," "--Liquidation Rights," "--Tax Aspects"
and "--Certain Restrictions on Purchase or Transfer of
Shares After Conversion," "Restrictions on Acquisition
of the Company and the Bank," "Description of Capital
Stock of the Company" and "Description of Capital
Stock of the Bank," 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.
(xxi) 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
27
therein or filed as exhibits thereto, and the
descriptions thereof or references thereto are
correct.
(xxii) The Plan has been duly authorized by the Board of
Directors of the Company and the Board of Trustees of
the Bank and the Superintendent's and the FDIC's
approval of the Plan remain in full force and effect;
the Bank's organization certificate has been amended
and restated, effective upon consummation of the
Conversion and the filing of such amended and restated
organization certificate with the Superintendent, to
authorize the issuance of permanent capital stock; to
the best of such counsel's knowledge, 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 (except as
compliance therewith is specifically waived in writing
by the Superintendent or the FDIC, as the case may
be), 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 Superintendent or
the FDIC, and no order has been issued by the
Superintendent or the FDIC to suspend the Conversion
or the Offerings, and no action for such purpose has
been instituted or, to the best of such counsel's
knowledge, threatened by the Superintendent or the
FDIC; and, to the best of such counsel's knowledge, no
person has sought to obtain review of the final action
of the Superintendent or the FDIC in approving the
Conversion Application (which includes the Plan which
provides for the establishment of the Foundation) or
of the OTS in approving the Holding Company
Application.
(xxiii) To the best of such counsel's knowledge, 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 as described in the
Registration Statement and Prospectus, except for such
licenses, approvals or authorizations the failure of
which to have would not result in a material adverse
change in the financial condition, results of
operations or the business of the Company, the Bank
and the Subsidiaries, taken as a whole, all such
licenses, permits and other governmental
authorizations are in full force and effect, and the
Company,
28
the Bank and the Subsidiaries are in all material
respects complying therewith.
(xxiv) 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
organization certificate and bylaws in stock form upon
consummation of the Conversion); and to the best of
such counsel's knowledge, the Company, the Bank and
the Subsidiaries are not 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 the
Subsidiaries is a party or by which the Company, the
Bank or the Subsidiaries or any of their property may
be bound in any respect that would have a material
adverse effect upon the financial condition, results
of operations or business of the Company, the Bank or
the Subsidiaries, taken as a whole.
(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),
(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, Xxxxxxx, Xxxxxx &
Xxxxxxxx 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 notes thereto, the appraisal and
schedules and other financial or statistical data included in
the Registration Statement, 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 notes thereto,
the appraisal and schedules and other financial or statistical
data included in the Registration Statement, 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
29
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, Xxxxxxx,
Xxxxxx & Xxxxxxxx and Xxxxxxx Xxxxxxxx & Xxxx may state that
they have not independently verified the information with
respect to the Company and the Bank contained in the
Registration Statement, the Prospectus and the Conversion
Application and 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 as to matters of
Delaware law upon the opinion of Morris, Nichols, Arsht &
Xxxxxxx and as to certain matters of New York law upon the
opinion of _________________, which opinions shall be in form
and substance satisfactory to the Agent, and Xxxxxxx Xxxxxxxx
& Wood may also rely as to certain matters on the opinion of
Xxxxxxx, Xxxxxx & Xxxxxxxx.
(c) At the Closing Time referred to in Section 2, the Company and the
Bank will 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 OTS, the Superintendent, the
FDIC, or any other regulatory authority other than those which the
OTS, the Superintendent or the FDIC permit to be completed after
the Conversion.
(d) At the 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 or business of the Company, the Bank and the
Subsidiaries, taken as a whole, whether or not arising in the
ordinary course of business, 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 or chief
accounting officer of the Company and of the Bank, dated as of
Closing Time, to the effect that (i) there has been no such
material adverse change, (ii) there has been no material
transaction entered into by the Company or the Bank from the latest
statement of financial condition of the Company or the Bank as 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, (iii) neither the Company nor
the Bank has received from the OTS, the Superintendent 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 financial
condition, results of operations or business of the Company, the
Bank and the Subsidiaries, taken as a whole, (iv) the
representations and warranties in Section 1 hereof are true and
correct with the same force and effect as though expressly
30
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 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
Superintendent or the FDIC and no person has sought to obtain
regulatory or judicial review of the action of the Superintendent
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 OTS in approving the Holding
Company Application.
(e) At the time of the execution of this Agreement, the Agent shall
have received from Ernst & Young, LLP a letter dated such date, in
form and substance satisfactory to the Agent, to the effect that
(i) they are independent certified public accountants with respect
to the Company, the Bank and the Subsidiaries within the meaning of
the Code of Ethics of the American Institute of Certified Public
Accountants, the 1933 Act, the 1933 Act Regulations and the
Conversion Regulations; (ii) it is their opinion that the
consolidated financial statements and supporting schedules included
in the Registration Statement and covered by their opinion therein
comply as to form in all material respects with the applicable
accounting requirements of the 1933 Act, the 1933 Act Regulations
and the Conversion Regulations; (iii) based upon limited procedures
as agreed upon by the Agent and Ernst & Young, LLP and 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 1933 Act, the 1933 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 included under the captions "Selected Consolidated
Financial and Other Data of the Bank" and "Recent Developments" in
the Registration Statement do not agree with the amounts set forth
in the unaudited consolidated financial statements as of and for
the dates and periods presented under such captions or such
unaudited 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 and the Prospectus, (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, allowance for loan losses, total deposits or retained
earnings of the Bank and the Subsidiaries, in each case as compared
with the amounts shown in the June 30, 1997 balance sheet included
in the Registration Statement or, (D) during the period
31
from June 30, 1997 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
opinion 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 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.
(f) At Closing Time, the Agent shall have received from Ernst & Young,
LLP a letter, dated as of Closing Time, to the effect that they
reaffirm their statements made in the letter furnished pursuant to
subsection (e) of this Section, except that the specified date
referred to shall be a date not more than five days prior to
Closing Time.
(g) At Closing Time, the Common Stock shall have been approved for
listing on the Nasdaq Stock Market upon notice of issuance.
(h) At Closing Time, the Agent shall have received a letter from Xxxxxx
& Company, dated as of the Closing Time, confirming its appraisal.
(i) 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.
(j) 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 effects 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 either the American Stock
Exchange or the New York Stock Exchange shall not have been
suspended, and minimum or maximum prices for trading shall not have
32
been fixed, or maximum ranges for prices for securities have been
required, by either of said Exchanges or by order of the Commission
or any other governmental authority, 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 1933 Act or Section
20 of the 1934 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 and the Bank or
otherwise as described in Section 2 hereof;
(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 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;
(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 or defending against any
litigation, or any investigation, proceeding or inquiry by
any governmental agency or body, commenced or threatened, or
any pending
33
or threatened claim 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 (i) to the
extent arising out of any untrue statement or alleged untrue statement of a
material fact contained in the Prospectus or omission or alleged omission of a
material fact required to be stated therein or necessary to make not misleading
any statements contained in the Prospectus (or any amendment or supplement
thereto) made in reliance upon and in conformity with the Agent Information or
(ii) found in a final judgement by a court of competent jurisdiction to have
resulted primarily from bad faith, willful misconduct or gross negligence of the
Agent seeking indemnification hereunder. Notwithstanding the foregoing, the
indemnification provided for in this paragraph (a) shall not apply to the Bank
to the extent that such indemnification by the Bank in the event that it is
found in a final judgment by a court of competent jurisdiction to constitute an
impermissible covered transaction under Section 23A of the Federal Reserve Act,
as amended.
(b) The Agent agrees to indemnify and hold harmless the Company, the
Bank, their directors and 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 1933
Act or Section 20 of the 1934 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 alleged untrue statements of a
material fact or omissions or alleged 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.
(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 judgment by a court of
34
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 1933
Act or Section 20 of the 1934 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 or the subject of an investigation or inquiry, the
Company and the Bank jointly and severally agree to reimburse the
Agent for all reasonable and necessary out-of-pocket expenses
incurred by it in connection with preparing or appearing as a
witness or otherwise giving testimony and to compensate the Agent
in an amount to be mutually agreed upon.
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 0000 Xxx) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this Section 7,
each person, if any, who controls the Agent within the meaning of Section 15 of
the 1933 Act or Section 20 of the 1934 Act shall have the same rights to
contribution as the Agent, and each director of the Company, each trustee 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 1933 Act or Section 20 of the 1934 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 Closing Time (i) if there has been,
since the date of this Agreement or since the respective dates as
of which information is given in the Registration Statement, any
material adverse change in the financial condition, results of
operations or business of the Company or the Bank, or of the
Company, the Bank and the Subsidiaries, taken as a whole, whether
or not arising in the ordinary course of business; (ii) if there
has occurred any material adverse change in the financial markets
in the United States or elsewhere or any outbreak of hostilities or
escalation thereof or other calamity or crisis the effects 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; (iii) if trading generally on either the Nasdaq Stock
Market 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 either of
said Exchanges or by order of the Commission or any other
governmental authority, or if a banking moratorium has been
declared by either Federal or New York authorities; (iv) if any
condition specified in Section 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 price
for the Securities established by Xxxxxx & Company is not
reasonable or equitable under then prevailing market conditions; or
(vii) if the Conversion is not consummated prior to March 31, 1998.
(b) If this Agreement is terminated pursuant to this Section, such
termination shall be without liability of any party to any other
party except that the provisions of Section 4 relating to
reimbursement of expenses and 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
36
telecommunication. Notices to the Agent shall be directed to the Agent at Two
World Trade Center, 104th Floor, New York, New York 10048, attention of
Xxxxxxxxx X. Xxxxxx, Principal, with a copy to Xxxxxx X. Xxxxxx, Esq., Xxxxxxx
Xxxxxxxx & Wood at Two World Xxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000;
notices to the Company and the Bank shall be directed to either of them at 0000
Xxxxxxxxx Xxxxxx, Xxxxxx Xxxxxx, Xxx Xxxx 00000, attention of Xxxxxxx X.
Xxxxxxxx, President and Chief Executive Officer, with a copy to Xxxxxxx X.
Xxxxxxxx, Esq., Xxxxxxx, Xxxxxx & Xxxxxxxx, 0000 Xxxxxxxxx Xxxxxx, X.X.,
Xxxxxxxxxx, X.X. 00000.
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 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 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 July 30, 1997, by and between the Agent and the Bank,
relating to the Agent's providing conversion agent services and proxy
solicitation services to the Company and the Bank in connection with the
Conversion, which engagement letter shall be governed solely by its terms. 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. 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
37
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.
38
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,
Richmond County Financial Corp.
By:
---------------------------------------------
Xxxxxxx X. Xxxxxxxx
President and Chief Executive Officer
Richmond County Savings Bank
By:
---------------------------------------------
Xxxxxxx X. Xxxxxxxx
President and Chief Executive Officer
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:
------------------------------------------
Xxxxxxxxx X. Xxxxxx
Vice President
39
Exhibit A
---------
Richmond County Financial Corp.
24,466,250 Shares
(Maximum Offered in Conversion)
Common Stock
(Par Value $0.01 Per Share)
SELECTED DEALER'S AGREEMENT
_________, 1997
We have agreed to assist Richmond County Financial Corp. (the
"Company") in connection with the offer and sale of shares (the "Shares") of
Common Stock, par value $0.01 per share, of the Company, to be issued in
connection with the conversion of Richmond County Savings Bank, a New York State
chartered savings bank (the "Bank"), from mutual to stock form. The Company, in
connection with its plan to effect such conversion, offered [24,466,250] Shares
for subscription by certain of the Bank's depositors and the Bank's employee
stock ownership plan 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 rules of the New York
State Banking Department (the "NYBD") and the conversion 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
[one and one-half percent (1.5%)] 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 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 resident therein and (B) in making other sales to comply
with the above-mentioned NASD Interpretation, Rules 2730, 2740 and 2750 of the
above-mentioned 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 stabilizing (as defined in Rule 10b-7
promulgated under the Securities Exchange Act of 1934) with respect to the
Company's Common Stock during the offering.
We and each Selected Dealer assisting in selling Shares pursuant
hereto agree to comply with the applicable requirements of the Securities
Exchange Act of 1934 and applicable rules and regulations issued by the Federal
Reserve Board and the OTS. In addition, we and each Selected Dealer confirm that
the Securities and Exchange Commission interprets Rule 15c2-8 promulgated under
the Securities Exchange Act of 1934 as requiring that a prospectus be supplied
to each person who is expected to receive a confirmation of sale 48 hours prior
to delivery of such person's order form.
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 Securities and Exchange
Commission of Rule 15c2-4 promulgated under the Securities Exchange Act of 1934
either (a) upon receipt of an executed order form or direction to execute
2
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 Securities Exchange Act of 1934.
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 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.
3
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., Xxx Xxxxx Xxxxx Xxxxxx, 000xx 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:
---------------------------------------------
4
