EXHIBIT 1.2
EXHIBIT 1.2
568,695 Shares
(subject to increase up to 653,976 shares
in the event of an oversubscription)
LINCOLN PARK BANCORP
(a federally chartered mid-tier stock holding company)
Common Stock
(par value $0.01 per share)
AGENCY AGREEMENT
______________ , 2004
Sandler X'Xxxxx & Partners, L.P.
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Lincoln Park Bancorp, a federally chartered mid-tier stock holding
company in formation (the "Company"), Lincoln Park Bancorp, MHC, a federally
chartered mutual holding company in formation (the "MHC") and Lincoln Park
Savings Bank, a New Jersey 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 568,695 shares
(subject to increase up to 653,976 shares in the event of an oversubscription)
of the Company's common stock, par value $0.01 per share (the "Common Stock").
The shares of Common Stock to be sold by the Company are hereinafter called the
"Securities."
The Securities are being offered for sale in accordance with the plan of
reorganization from a mutual stock association to a mutual holding company and
stock issuance plan (the "Plan") adopted by the Board of Directors of the Bank
pursuant to which the Bank intends to reorganize from a New Jersey chartered
mutual savings bank to a New Jersey chartered stock savings bank in the federal
mutual holding company form of ownership and issue all of its stock to the
Company. As of the date hereof, the Company and the MHC are in formation.
Pursuant to the Plan, the Company is offering in a subscription offering by way
of nontransferable subscription rights, Common Stock for a purchase price of
$10.00 per share in descending order of priority to: (i) depositors who had
accounts at the Bank with aggregate balances of at least $50 at March 31, 2003
("Eligible Account Holders"); (ii) the Bank's tax-qualified employee benefit
plans, including the Employee Stock Ownership Plan and Trust (the "ESOP")
(collectively, the "Employee Plans"); (iii) depositors who had accounts at the
Bank with aggregate balances of at least $50 on June 30, 2004 ("Supplemental
Eligible Account Holders"); and (iv) other depositors of the Bank on [VOTING
RECORD DATE], 2004 ("Voting Depositors") (collectively, 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, with preference given to
certain natural persons residing in the Borough of Lincoln Park, Pequannock
Township, Montville Township and Xxxxx Township, New Jersey, in a direct
community offering (the "Community Offering" and together with the Subscription
Offering, as each may be extended or reopened from time to time, the
"Subscription and Community Offering") to be commenced concurrently with or
promptly after the Subscription Offering. It is currently anticipated by the
Bank, the Company and the MHC that any Securities not subscribed for in the
Subscription and Community Offering will be offered, subject to Section 2
hereof, in a syndicated community offering (the "Syndicated Community
Offering"). The Subscription and Community Offering and the Syndicated Community
Offering are hereinafter referred to collectively as the "Offerings," and the
conversion of the Bank from mutual to stock form, the formation of the Company
and the MHC, the acquisition of the capital stock of the Bank by the Company,
the acquisition of the majority of the Company's stock by the MHC and the
Offerings are hereinafter referred to collectively as the "Reorganization." It
is acknowledged that the price of the Securities may be decreased and the number
of Securities to be sold in the Reorganization 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 the
event that a holding company form of organization is not utilized, all pertinent
terms of this Agreement will apply to the conversion of the Bank from the mutual
to stock form of organization and the sale of the Bank's common stock.
In connection with the Plan, the Bank adopted a plan of charter
conversion on April 21, 2004 (the "Charter Conversion") to convert from a New
Jersey chartered mutual savings and loan association to a New Jersey chartered
mutual savings bank. On _____, 2004, pursuant to the approval of the New Jersey
Department of Banking and Insurance (the "Department") issued by letter dated
____, 2004, the Bank completed its conversion to a New Jersey chartered mutual
savings bank.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form SB-2 (No. 333-116639), including
a related prospectus, for the registration of the Securities under the
Securities Act of 1933, as amended (the "Securities Act"), has filed such
amendments thereto, if any, and such amended prospectuses as may have been
required to the date hereof by the Commission in order to declare such
registration statement effective, and will file such additional amendments
thereto and such amended prospectuses and prospectus supplements as may
hereafter be required. Such registration statement (as amended to date, if
applicable, and as from time to time amended or supplemented hereafter) and the
prospectuses constituting a part thereof (including in each case all documents
incorporated or deemed to be incorporated by reference therein and the
information, if any, deemed to be a part thereof pursuant to the rules and
regulations of the Commission under the Securities Act, as from time to time
amended or supplemented pursuant to the Securities Act or otherwise (the
"Securities Act Regulations")), are hereinafter referred to as the "Registration
Statement" and the "Prospectus," respectively, except that if any revised
prospectus shall be used by the Company in connection with the Subscription and
Community Offering or the Syndicated Community Offering which differs from the
Prospectus on file at the Commission at the time the Registration Statement
becomes effective (whether or not such revised prospectus is required to be
filed by the Company pursuant to Rule 424(b) of the
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Securities Act Regulations), the term "Prospectus" shall refer to such revised
prospectus from and after the time it is first provided to the Agent for such
use.
Concurrently with the execution of this Agreement, the Company is
delivering to the Agent copies of the Prospectus of the Company to be used in
the Subscription and Community Offering. Such prospectus contains information
with respect to the Bank, the Company, the MHC and the Common Stock.
SECTION 1. REPRESENTATIONS AND WARRANTIES.
(a) The Company, the Bank and the MHC 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, the Bank and the MHC, threatened
by the Commission. At the time the Registration Statement became
effective and at the Closing Time referred to in Section 2
hereof, the Registration Statement complied and will comply in
all material respects with the requirements of the Securities
Act and the Securities Act Regulations and did not and will not
contain an untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to
make the statements therein not misleading. The Prospectus, at
the date hereof does not and at the Closing Time referred to in
Section 2 hereof will not, include an untrue statement of a
material fact or omit to state a material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
PROVIDED, HOWEVER, that the representations and warranties in
this subsection shall not apply to statements in or omissions
from the Registration Statement or Prospectus made in reliance
upon and in conformity with information with respect to the
Agent furnished to the Company in writing by the Agent expressly
for use in the Registration Statement or Prospectus (the "Agent
Information," which the Company, the Bank and the MHC
acknowledge appears only in the second sentence of the first
paragraph of the section captioned "Market for the Common Stock"
and the second paragraph of the section captioned "The
Reorganization and the Stock Offering - Plan of Distribution and
Marketing Arrangements" of the Prospectus).
(ii) The Company has filed with the Department of the
Treasury, Office of Thrift Supervision (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, the Bank or the MHC, threatened by the OTS. At
the date of such approval and at the Closing Time referred to in
Section 2, the Holding Company
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Application complied and will comply in all material respects
with the applicable provisions of HOLA and the regulations
promulgated thereunder.
(iii) Pursuant to the rules and regulations of the OTS
governing the reorganization of mutual savings and loan
associations into the mutual holding company form of ownership
(the "MHC Regulations"), the Bank has filed with the OTS a
Notice of Mutual Holding Company Reorganization on Form MHC-1
and an Application for Approval of a Minority Stock Issuance by
a Savings Association Subsidiary of a Mutual Holding Company on
Form MHC-2, 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 "MHC Application"), including
copies of the Bank's Proxy Statement, dated ______________,
2004, relating to the Reorganization (the "Proxy Statement"),
and the Prospectus. The OTS has, by letter dated __________,
2004, approved the MHC Application, including the Proxy
Statement and Prospectus, 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, the Bank or the
MHC, threatened by the OTS. At the date of such approval and at
the Closing Time referred to in Section 2, the MHC Application
complied and will comply in all material respects with the
applicable provisions of the MHC Regulations.
(iv) Pursuant to the New Jersey Banking Act of 1948 and the
regulations promulgated thereunder governing the conversion of
New Jersey chartered mutual savings banks to New Jersey
chartered stock savings banks and the formation of a mutual
savings bank holding company (the "New Jersey Banking Law"), the
Bank has filed an application for formation of a mutual savings
bank holding company (such application, as amended to date, if
applicable, and as from time to time amended or supplemented
hereafter, is hereinafter referred to as the "New Jersey
Application") with the Department including copies of the Bank's
Proxy Statement and the Prospectus. The Department has, by order
dated __________ 2004, approved the New Jersey Application, such
approval remains in full force and effect and no order has been
issued by the Department suspending or revoking such approval
and no proceedings therefor have been initiated or, to the
knowledge of the Company, the Bank or the MHC, threatened by the
Department. At the date of such approval by the Department and
at the Closing Time referred to in Section 2, the New Jersey
Application complied and will comply in all material respects
with the applicable provisions of the New Jersey Banking Law.
(v) Pursuant to the rules and regulations of the Federal
Deposit Insurance Corporation (the "FDIC") governing the
conversion of state-chartered mutual savings banks to stock form
(the "FDIC Conversion Regulations") (together with the New
Jersey Banking Law, the "Conversion Regulations"), the Bank has
filed with the FDIC a notice for conversion on the appropriate
form, and has filed such amendments thereto and supplementary
materials as may have been required to
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the date hereof (such notice, as amended to date, if applicable,
and as from time to time amended or supplemented hereafter, is
hereinafter referred to as the "FDIC Conversion Notice"),
including copies of the Proxy Statement and the Prospectus. The
FDIC, by letter dated ____ ___, 2004, issued its notice of
intent not to object to the FDIC Conversion Notice, including
the Proxy Statement and Prospectus, such intent not to object
remains in full force and effect and no order has been issued by
the FDIC suspending or revoking such intent not to object and no
proceedings therefor have been initiated or, to the knowledge of
the Company, the Bank or the MHC, threatened by the FDIC. Prior
to the Closing Date, the FDIC shall have issued its letter not
objecting to the FDIC Conversion Notice. At the date of such
non-objection and at the Closing Time referred to in Section 2,
the FDIC Conversion Notice complied and will comply in all
material respects with the applicable provisions of the FDIC
Conversion Regulations.
(vi) The Bank has filed with the FDIC the Bank's application
for approval of its merger with Lincoln Park Bank Interim Bank
II ("Interim II") (the "Bank Merger Application") on the form of
interagency bank merger application promulgated under the bank
merger provisions of the Federal Deposit Insurance Act, as
amended (the "FDIA"), and the regulations promulgated
thereunder. Prior to the Closing Time referred to in Section 2,
the Bank will have received written notice from the FDIC of its
approval of the merger with Interim II and at the Closing Time,
such approval will be in full force and effect, and no order
will have been issued by the FDIC suspending or revoking such
approval and no proceedings therefor will have been initiated
or, to the knowledge of the Company, the Bank or the MHC,
threatened by the FDIC. At the date of such approval and at the
Closing Time referred to in Section 2, the Bank Merger
Application complied and will comply in all material respects
with the applicable provisions of the FDIA and the regulations
promulgated thereunder.
(vii) Pursuant to the New Jersey Banking Law, the Bank, in its
prior status as a mutual savings and loan association, filed an
Application for Conversion from an Association to a Savings Bank
and such amendments and supplementary materials as may have been
required by such application, and as from time to time amended
or supplemented, is hereinafter referred to as the ("Charter
Conversion Application"), including copies of the Bank's notice
to depositors and borrowers. The Department, by letter dated
______, 2004 ("Charter Conversion Approval") approved the
Charter Conversion Application. The Charter Conversion
Application at the date of the Charter Conversion Approval
complied in all material respects with the applicable provisions
of the New Jersey Banking Law. The Bank completed the Charter
Conversion on _____, 2004. The completion of the Charter
Conversion was effected in compliance with the terms and
conditions of the Charter Conversion Approval and the applicable
provisions of the New Jersey Banking Law. The Holding Company
Application, the MHC Application, the New Jersey Application,
the FDIC Conversion Notice, the Bank Merger Application and the
Charter Conversion Application are hereinafter referred to as
the "Reorganization Applications."
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(viii) 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 MHC Regulations,
the FDIC Conversion Regulation and the New Jersey Banking Law
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, the Bank and
the MHC will promptly file the Prospectus and any supplemental
sales literature with the Commission, the OTS, the FDIC and the
Department. 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 MHC Regulations, the New Jersey
Banking Law and the FDIC Conversion Regulations and, at or prior
to the time of their first use, will have received all required
authorizations of the OTS, the FDIC and the Department for use
in final form.
(ix) None of the Commission, the OTS, the FDIC or the
Department has, by order or otherwise, prevented or suspended
the use of the Prospectus or any supplemental sales literature
authorized by the Company, the Bank or the MHC for use in
connection with the Offerings and no action by or before any
such governmental entity to prevent or suspend the use of the
Proxy Statement, the Prospectus or any supplemental sales
literature is pending, or to the best knowledge of the Company
and the Bank, threatened.
(x) At the Closing Time referred to in Section 2, the
Company, the Bank and the MHC will have completed the conditions
precedent to the Reorganization in accordance with the Plan, the
applicable MHC Regulations, the applicable FDIC Conversion
Regulations, the applicable New Jersey Banking Law and all other
applicable laws, regulations, decisions and orders, including
all material terms, conditions, requirements and provisions
precedent to the Reorganization imposed upon the Company, the
Bank or the MHC by the OTS, the FDIC, the Department or any
other regulatory authority, other than those which the
regulatory authority permits to be completed after the
Reorganization.
(xi) R.P. Financial, LC ("RP Financial"), which prepared the
valuation of the Bank as part of the Reorganization, has advised
the Company, the Bank and the MHC in writing that it satisfies
all requirements for an appraiser set forth in the MHC
Regulations, the FDIC Conversion Regulations and New Jersey
Banking Law and any interpretations or guidelines issued by the
OTS, the FDIC or the Department with respect thereto.
(xii) The accountants who certified the financial statements
and supporting schedules of the Bank included in the
Registration Statement have advised the Company, the Bank and
the MHC in writing that they are independent public accountants
within the meaning of the Code of Ethics of the American
Institute of Certified Public Accountants (the "AICPA"), and
such accountants are, with respect to the Company, the Bank and
the MHC, independent certified public accountants as required by
the Securities Act and the Securities Act Regulations
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and such accountants are not in violation of the auditor
independence requirements of the Xxxxxxxx-Xxxxx Act of 2002 (the
"Xxxxxxxx-Xxxxx Act") and the Securities Exchange Act of 1934,
as amended ("Exchange Act"), and the regulations promulgated
thereunder ("Exchange Act Regulations").
(xiii) The financial statements and the related notes thereto
included in the Registration Statement and the Prospectus
present fairly the financial position of the Company, the Bank
and the MHC 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 Securities Act
Regulations and the MHC Regulations; except as otherwise stated
in the Registration Statement, said financial statements have
been prepared in conformity with accounting principles generally
accepted in the United States applied on a consistent basis and
are consistent with financial statements and other reports filed
by the Bank with the OTS, the FDIC and the Department; and the
supporting schedules and tables included in the Registration
Statement present fairly the information required to be stated
therein. The other financial, statistical and pro forma
information and related notes included in the Prospectus present
fairly the information shown therein on a basis consistent with
the audited and unaudited financial statements included in the
Prospectus, and as to the pro forma adjustments, the adjustments
made therein have been consistently applied on the basis
described therein. The capitalization, liabilities, assets,
properties and business of each of the Company, the Bank and the
MHC conform in all material respects to the descriptions
contained in the Prospectus and, none of the Company, the Bank
or the MHC has any material liabilities of any kind, contingent
or otherwise, except as disclosed in the Registration Statement
or the Prospectus.
(xiv) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, except
as otherwise stated therein (A) there has been no material
adverse change in the financial condition, results of
operations, business affairs or prospects of the Company, the
Bank and the MHC, considered as one enterprise, whether or not
arising in the ordinary course of business consistent with past
practice, 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 MHC,
other than those in the ordinary course of business consistent
with past practice, which are material with respect to the
Company, the Bank and the MHC, considered as one enterprise.
(xv) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
United States with corporate power and authority to own, lease
and operate its properties and to conduct its business as
described in the Prospectus and to enter into and perform its
obligations under this Agreement; and the Company is duly
qualified as a foreign corporation to transact business and is
in good standing in the State of New Jersey and in each other
jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of
business, except
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where the failure to so qualify would not have a material
adverse effect on the financial condition, results of operations
or business affairs or prospects of the Company, the Bank and
the MHC, considered as one enterprise. The Company is a
registered savings and loan holding company under HOLA.
(xvi) The MHC has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
United States 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 MHC is duly qualified
as a foreign corporation to transact business and is in good
standing in the State of New Jersey and 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 business affairs of the Company, the Bank and the MHC,
considered as one enterprise. The MHC is a registered savings
and loan holding company under HOLA.
(xvii) Upon consummation of the Reorganization, the authorized,
issued and outstanding capital stock of the Company will be as
set forth in the Prospectus under "Capitalization" (except for
subsequent issuances, if any, pursuant to reservations,
agreements or employee benefit plans referred to in the
Prospectus); no shares of Common Stock or other capital stock of
the Company have been or will be issued and outstanding prior to
the Closing Time referred to in Section 2; at the time of
Reorganization, 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
certificates representing the shares of Common Stock conform to
the requirements of applicable law and regulations; and the
issuance of the Securities is not subject to preemptive or other
similar rights.
(xviii) As of the Closing Time referred to in Section 2, the MHC
will not own any equity securities or any equity interest in any
business enterprise except as described in the Prospectus.
(xix) The Bank, as of the date hereof, is a New Jersey
chartered savings bank in mutual form and upon consummation of
the Reorganization will be a New Jersey chartered savings bank
in stock form, in both instances with full corporate power and
authority to own, lease and operate its properties and to
conduct its business as described in the Prospectus; the
Company, the Bank and the MHC 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 Prospectus, the Holding Company Application, the MHC
Application, the FDIC Conversion Notice, the Bank Merger
Application and the New Jersey Application, except where the
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failure to obtain such licenses, permits or other governmental
authorizations would not have a material adverse effect on the
financial condition, results of operations, business affairs or
prospects of the Company, the Bank and the MHC, considered as
one enterprise; all such licenses, permits and other
governmental authorizations are in full force and effect and the
Company, the Bank and the MHC are in all material respects in
compliance therewith; none of the Company, the Bank or the MHC
has received notice of any proceeding or action relating to the
revocation or modification of any such license, permit or other
governmental authorization which, singly or in the aggregate, if
the subject of an unfavorable decision, ruling or finding, might
have a material adverse effect on the financial condition,
results of operations, business affairs or prospects of the
Company, the Bank and the MHC, considered as one enterprise; and
the Bank is validly existing and in good standing under the laws
of the State of New Jersey and is qualified to transact business
as a foreign corporation in any jurisdiction where the failure
to so qualify would have a material adverse effect on the
financial condition, results of operations, business affairs or
prospects of the Company, the Bank and the MHC, considered as
one enterprise.
(xx) The deposit accounts of the Bank are insured by the FDIC
up to the applicable limits. Upon consummation of the
Reorganization, the liquidation account for the benefit of
eligible account holders and supplemental eligible account
holders of the Bank will be duly established in accordance with
the requirements of the Plan and the MHC Regulations, the FDIC
Conversion Regulations and New Jersey Banking Law. The Bank is a
"qualified thrift lender" within the meaning of 12 U.S.C.
Section 1467a(m).
(xxi) Upon consummation of the Reorganization, the authorized
capital stock of the Bank will be [______] shares of common
stock, par value [$.01] per share (the "Bank Common Stock") and
[______] shares of preferred stock, par value [$.01] per share
(the "Bank Preferred Stock"), and the issued and outstanding
capital stock of the Bank will be [_____] shares of Bank Common
Stock and no shares of the Bank Preferred Stock, and no shares
of Bank Common Stock or Bank Preferred Stock have been or will
be issued prior to the Closing Time referred to in Section 2;
and as of the Closing Time referred to in Section 2, all of the
issued and outstanding capital stock of the Bank will be duly
authorized, validly issued and fully paid and nonassessable and
have been issued in compliance with all federal and state
securities laws. The shares of Bank Common Stock to be issued to
the Company will have been duly authorized for issuance and,
when issued and delivered by the Bank pursuant to the Plan
against payment of the consideration calculated as set forth in
the Plan and as described in the Prospectus, will be duly and
validly issued and fully paid and nonassessable, and all such
Bank Common Stock will be owned beneficially and of record by
the Company free and clear of any security interest, mortgage,
pledge, lien, encumbrance or legal or equitable claim; the terms
and provisions of the Bank Common Stock and the Bank Preferred
Stock conform to all statements relating thereto contained in
the Prospectus, and the certificates representing the shares of
the Bank Common Stock will conform with the requirements of
applicable laws and regulations; and
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the issuance of the Bank Common Stock is not subject to
preemptive or similar rights.
(xxii) The Company, the Bank and the MHC have taken all
corporate action necessary for them to execute, deliver and
perform this Agreement, and this Agreement has been duly
executed and delivered by, and is the valid and binding
agreement of, the Company, the Bank and the MHC, 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.
(xxiii) Subsequent to the respective dates as of which
information is given in the Registration Statement and the
Prospectus and prior to the Closing Time, except as otherwise
may be indicated or contemplated therein, none of the Company,
the Bank or the MHC will have (A) issued any securities or
incurred any liability or obligation, direct or contingent, or
borrowed money, except borrowings in the ordinary course of
business consistent with past practice from the same or similar
sources and in similar amounts as indicated in the Prospectus,
or (B) entered into any transaction or series of transactions
which is material in light of the business of the Company, the
Bank and the MHC, considered as one enterprise, 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 consistent with past practice.
(xxiv) 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
that has not been obtained and a copy of which has been
delivered to the Agent, except as may be required under the
"blue sky" or state securities laws of various jurisdictions.
(xxv) None of the Company, the Bank or the MHC is in violation
of its certificate of incorporation, organization certificate,
articles of incorporation or charter, as the case may be, or
bylaws (and the Bank will not be in violation of its charter or
bylaws in stock form upon consummation of the Reorganization);
and none of the Company, the Bank or the MHC 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 MHC 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 MHC is subject, except for such defaults that
would not, individually or in the aggregate, have a material
adverse effect on the financial condition, results of
operations, business affairs or prospects of the Company, the
Bank and the MHC considered as one enterprise; and there are no
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contracts or documents of the Company, the Bank or the MHC which
are required to be filed as exhibits to the Registration
Statement, the MHC Application, the Holding Company Application,
the Bank Merger Application, the New Jersey Application or the
FDIC Conversion Notice which have not been so filed.
(xxvi) The consummation of the Reorganization, 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 on the part of the
Company, the Bank and the MHC and 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 MHC
pursuant to, any contract, indenture, mortgage, loan agreement,
note, lease or other instrument to which the Company, the Bank
or the MHC 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 MHC is subject, except for such defaults that
would not, individually or in the aggregate, have a material
adverse effect on the financial condition, results of
operations, business affairs or prospects of the Company, the
Bank and the MHC, considered as one enterprise; nor will such
action result in any violation of the provisions of the
certificate of incorporation, organization certificate, articles
of incorporation or charter or bylaws of the Company, the Bank
or the MHC, or any applicable law, administrative regulation or
administrative or court decree.
(xxvii) No labor dispute with the employees of the Company, the
Bank or the MHC exists or, to the knowledge of the Company, the
Bank or the MHC, is imminent or threatened; and the Company, the
Bank and the MHC are not aware of any existing or threatened
labor disturbance by the employees of any of its principal
suppliers or contractors which might be expected to result in
any material adverse change in the financial condition, results
of operations, business affairs or prospects of the Company, the
Bank and the MHC, considered as one enterprise.
(xxviii) Each of the Company, the Bank and the MHC have good and
marketable title to all properties and assets for which
ownership is material to the business of the Company, the Bank
or the MHC and to those properties and assets described in the
Prospectus as owned by them, free and clear of all liens,
charges, encumbrances or restrictions, except such as are
described in the Prospectus or are not material in relation to
the business of the Company, the Bank and the MHC considered as
one enterprise; and all of the leases and subleases material to
the business of the Company, the Bank or the MHC under which the
Company, the Bank or the MHC hold properties, including those
described in the Prospectus, are valid and binding agreements of
the Company, the Bank and the MHC in full force and effect,
enforceable in accordance with their terms (except as
enforceability may be limited by applicable bankruptcy,
insolvency, reorganization and similar laws of general
applicability relating to or affecting creditors' rights or
general principles of equity).
11
(xxix) None of the Company, the Bank or the MHC are in
violation of any directive from the Commission, the OTS, the
FDIC or the Department or any other governmental entity to make
any material change in the method of conducting their respective
businesses; the Company, the Bank and the MHC have conducted and
are conducting their business so as to comply in all material
respects with all applicable statutes, regulations and
administrative and court decrees (including, without limitation,
all regulations, decisions, directives and orders of the
Commission, the FDIC, the OTS and the Department). None of the
Company, the Bank or the MHC is subject or is party to, or has
received any notice or advice that any of them may become
subject or party to, any investigation with respect to any
cease-and-desist order, agreement, consent agreement, memorandum
of understanding or other regulatory enforcement action,
proceeding or order with or by, or is a party to any commitment
letter or similar undertaking to, or is subject to any directive
by, or has been a recipient of any supervisory letter from, or
has adopted any board resolutions at the request of, any
Regulatory Agency (as defined below) that currently restricts in
any material respect the conduct of their business or that in
any material manner relates to their capital adequacy, their
credit policies, their management or their business (each, a
"Regulatory Agreement"), nor has the Company, the Bank or the
MHC been advised by any Regulatory Agency that it is considering
issuing or requesting any such Regulatory Agreement; and there
is no unresolved violation, criticism or exception by any
Regulatory Agency with respect to any report or statement
relating to any examinations of the Company, the Bank or the MHC
which, in the reasonable judgment of the Company, the Bank or
the MHC, is expected to result in a material adverse effect on
the financial condition, results of operations, or business
affairs or prospects of the Company, the Bank and the MHC
considered as one enterprise. As used herein, the term
"Regulatory Agency" means any federal or state agency charged
with the supervision or regulation of depositary institutions or
holding companies of depositary institutions, or engaged in the
insurance of depositary institution deposits, or any court,
administrative agency or commission or other governmental
agency, authority or instrumentality having supervisory or
regulatory authority with respect to the Company, the Bank or
the MHC.
(xxx) 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, the Bank or the
MHC, threatened, against or affecting the Company, the Bank or
the MHC which is required to be disclosed in the Registration
Statement (other than as disclosed therein), or which might
result in any material adverse change in the financial
condition, results of operations, business affairs or prospects
of the Company, the Bank and the MHC considered as one
enterprise, or which might materially and adversely affect the
properties or assets thereof or which might materially and
adversely affect the consummation of the Reorganization or the
performance of this Agreement; all pending legal or governmental
proceedings to which the Company, the Bank or the MHC is a party
or of which any of their respective property or assets is the
subject which are not described in the Registration Statement,
including ordinary routine litigation
12
incidental to the business, are considered in the aggregate not
material; and there are no contracts or documents of the Company
or any of its subsidiaries which are required to be filed as
exhibits to the Registration Statement, the Holding Company
Application, the MHC Application, the New Jersey Application,
the Bank Merger Application or the FDIC Conversion Notice which
have not been so filed.
(xxxi) The Bank has obtained opinions of its outside
legal and tax counsel, Xxxx Xxxxxx Xxxxxxxx & Xxxxxx, P.C.
("Xxxx Xxxxxx"), with respect to the legality of the Securities
to be issued and the federal income tax consequences of the
Reorganization, 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
none of the Company, the Bank or the MHC has taken or will take
any action inconsistent therewith.
(xxxii) The Bank has received a letter from Radics &
Co., LLC ("Radics") with respect to the tax consequences of the
Reorganization under the laws of the State of New Jersey; the
facts and representations upon which such letter is based are
truthful, accurate and complete in all material respects; and
none of the Company, the Bank or the MHC has taken or will take
any action inconsistent therewith.
(xxxiii) The Company is not and, upon completion of the
Reorganization and the Offerings and sale of the Common Stock
and the application of the net proceeds therefrom, will not be,
required to be registered under the Investment Company Act of
1940, as amended.
(xxxiv) All of the loans represented as assets on the
most recent financial statements or selected financial and other
information of the Bank included in the Prospectus meet or are
exempt from all requirements of federal, state or local law
pertaining to lending, including without limitation truth in
lending (including the requirements of Regulations Z and 12
C.F.R. Part 226 and Section 560.93), real estate settlement
procedures, consumer credit protection, equal credit opportunity
and all disclosure laws applicable to such loans, except for
violations which, if asserted, would not result in a material
adverse effect on the financial condition, results of
operations, business affairs or prospects of the Company, the
Bank and the MHC, considered as one enterprise.
(xxxv) To the knowledge of the Company, the Bank and
the MHC, with the exception of the intended loan to the Bank's
ESOP by the Company to enable the ESOP to purchase shares of
Common Stock in an amount of up to 4.0% of the Common Stock sold
in the Reorganization other than to the MHC, none of the
Company, the Bank, the MHC or employees of the Bank have made
any payment of funds of the Company, the Bank or the MHC 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.
13
(xxxvi) To the knowledge of the Company, except for Xx.
Xxxxxxx X. Xxxxxxxx, a director of the Company, the Bank and the
MHC, there are no affiliations or associations (as such terms
are defined by the National Association of Securities Dealers,
Inc. ("NASD")) between any member of the NASD and any of the
Company's officers or directors.
(xxxvii) Each of the Company, the Bank and the MHC
carries, or is covered by, insurance in such amounts and
covering such risks as is adequate for the conduct of their
respective businesses and the value of their respective
properties as is customary for companies engaged in similar
industries.
(xxxviii) The Company, the Bank and the MHC each maintain
a system of internal accounting controls sufficient to provide
reasonable assurance that (a) transactions are executed in
accordance with management's general or specific authorizations;
(b) transactions are recorded as necessary to permit preparation
of financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability; (c)
access to assets is permitted only in accordance with
management's general or specific authorization; and (d) the
recorded accountability for assets is compared with the existing
assets at reasonable intervals and appropriate action is taken
with respect to any differences.
(xxxix) Each of the Company, the Bank and the MHC is in
compliance in all material respects with the applicable
financial recordkeeping and reporting requirements of the
Currency and Foreign Transaction Reporting Act of 1970, as
amended, and the rules and regulations thereunder. The Bank has
established compliance programs to ensure compliance with the
requirements of the USA Patriot Act and all applicable
regulations promulgated thereunder. The Bank is in compliance in
all material respects with the USA Patriot Act and all
applicable regulations promulgated thereunder, and there is no
charge, investigation, action, suit or proceeding before any
court, regulatory authority or governmental agency or body
pending or, to the best knowledge of the Company, the Bank and
the MHC, threatened regarding the Bank's compliance with the USA
Patriot Act or any regulations promulgated thereunder.
(xl) The Company, the Bank and the MHC have not
relied on Agent or its counsel for any legal, tax or accounting
advice in connection with the Reorganization.
(xli) The records of Eligible Account Holders,
Supplemental Eligible Account Holders and Voting Depositors are
accurate and complete in all material respects.
(xlii) Each of the Company, the Bank and the MHC is in
compliance in all material respects with all presently
applicable provisions of the Employee Retirement Income Security
Act of 1974, as amended, including the regulations and published
interpretations thereunder ("ERISA"); no "reportable event" (as
defined in ERISA) has occurred with respect to any "pension
plan" (as defined in ERISA) for which the Company, the Bank or
the MHC, respectively, would have
14
any liability; each of the Company, the Bank or the MHC has not
incurred and does expect to incur liability under (i) Title IV
of ERISA with respect to termination of, or withdrawal from, any
"pension plan" or (ii) Sections 412 or 4971 of the Internal
Revenue Code of 1986, as amended, including the regulations and
published interpretations thereunder (the "Code"); and each
"pension plan" for which the Company, the Bank and the MHC would
have any liability that is intended to be qualified under
Section 401(a) of the Code is so qualified in all material
respects and nothing has occurred, whether by action or by
failure to act, which would cause the loss of such
qualification.
(xliii) None of the Company, the Bank or the MHC nor any
properties owned or operated by the Company, the Bank or the MHC
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 affairs of the Company, the Bank and the MHC,
considered as one enterprise. There are no actions, suits or
proceedings, or demands, claims, notices or investigations
(including, without limitation, notices, demand letters or
requests for information from any environmental agency)
instituted or pending, or to the knowledge of the Company, the
Bank or the MHC threatened, relating to the liability of any
property owned or operated by the Company, the Bank or the MHC,
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.
(xliv) The Company, the Bank and the MHC 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. The Company, the Bank and the MHC have no knowledge
of any tax deficiency which has been asserted or could be
asserted against the Company, the Bank or the MHC.
(xlv) The Company has received approval, subject to
regulatory approval to consummate the Offerings and issuance, to
have the Securities quoted on the Over-the-Counter Bulletin
Board (the "OTC Bulletin Board") effective as of the Closing
Time referred to in Section 2 hereof.
15
(xlvi) The Company has filed a registration statement
for the Common Stock under Section 12(g) of the Exchange Act and
such registration statement was declared effective concurrent
with the effectiveness of the Registration Statement.
(xlvii) The Company is in compliance with the applicable
provisions of the Xxxxxxxx-Xxxxx Act and will use its best
efforts to comply with those provisions of the Xxxxxxxx- Xxxxx
Act that will become effective in the future upon their
effectiveness.
(b) Any certificate signed by any officer of the Company, the Bank
or the MHC and delivered to either of the Agent to counsel for the Agent shall
be deemed a representation and warranty by the Company, the Bank or the MHC to
each Agent and, for purposes of the opinion to be delivered to the Agent
pursuant to Section 5(b)(2) hereof, to the counsel of the Agent as to 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 Common Stock in
the Subscription and 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 Directors the independent appraiser's
appraisal of the common stock; (iii) reviewing all offering documents, including
the Prospectus, stock order form and related offering materials (it being
understood that preparation and filing of such documents is the sole
responsibility of the Company, the Bank and the MHC and their counsel); (iv)
assisting in the design and implementation of a marketing strategy for the
Offerings; (v) assisting Bank management in preparing for meetings with
potential investors and broker-dealers; and (vi) 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 earlier
to occur of (a) forty-five (45) days after the last day of the Subscription and
Community Offering, unless the Company and the Agent agree in writing to extend
such period and the OTS agrees to extend the period of time in which the
Securities may be sold, or (b) the receipt and acceptance of subscriptions and
purchase orders for all of the Securities, or (c) the completion of the
Syndicated Community Offering.
If any of the Securities remain available after the expiration of the
Subscription and Community Offering, at the request of the Company, the Bank and
the MHC, Sandler X'Xxxxx
16
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. Sandler X'Xxxxx will endeavor to limit the aggregate fees
to be paid by the Company, the Bank and the MHC 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 Xxxxxx X'Xxxxx and Selected Dealers shall not exceed
seven percent (7.0%) of the actual purchase price of the Securities sold by such
Selected Dealers. Sandler X'Xxxxx will endeavor to distribute the Securities
among the Selected Dealers in a fashion which best meets the distribution
objective of the Company 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 Sandler X'Xxxxx be obligated to
act as a Selected Dealer or to take or purchase any Securities.
If any of the Securities remain available after the expiration of the
Offerings, the Company agrees to offer the Agent the first right to act as lead
managing underwriter for a publicly underwritten firm commitment offering (the
"Public Offering"). The terms of the Public Offering will be set forth in a
separate definitive purchase agreement in a form satisfactory to Sandler X'Xxxxx
and containing customary representations, warranties, conditions, agreements and
indemnities, which purchase agreement, when executed, will supersede and replace
this Agreement with respect to Securities sold thereunder (the "Purchase
Agreement"). This Agreement is not intended to constitute, and should not be
construed as, an agreement or commitment between the Company, the Bank and
Sandler X'Xxxxx relating to the firm commitment underwriting of any securities,
and Sandler X'Xxxxx may, in its sole judgment and discretion, determine at any
time not to proceed with the proposed firm commitment underwriting. Such
proposed underwriting will be subject, among other things, to: (i) satisfactory
completion by Sandler X'Xxxxx of such due diligence investigation or inquiries
as it may deem appropriate, (ii) approval of the proposed underwriting by
Sandler X'Xxxxx'x commitment committee or such other authorization as may be
required by its internal procedures, (iii) market conditions, which, in the sole
judgment of Sandler X'Xxxxx, shall be satisfactory, and (iv) the execution and
delivery of a definitive Purchase Agreement.
In the event the Company is unable to sell at least the total minimum of
the Securities, as set forth on the cover page of the Prospectus, within the
period herein provided, this Agreement shall terminate and the Company shall
refund to any persons who have subscribed for any of the Securities the full
amount which it may have received from them, together with interest as provided
in the Prospectus, and no party to this Agreement shall have any obligation to
the others hereunder, except for the obligations of the Company, the Bank and
the MHC as set forth in Sections 4, 6(a) and 7 hereof and the obligations of the
Agent as provided in Sections 6(b) and 7 hereof. Appropriate arrangements for
placing the funds received from subscriptions for Securities or other offers to
purchase Securities in special interest-bearing accounts with the Bank until all
Securities are sold and paid for were made by the Bank prior to the commencement
of the Subscription Offering, with provision for refund to the purchasers as set
forth above, or for delivery to the Company if all Securities are sold.
If at least the total minimum of Securities, as set forth on the cover
page of the Prospectus, are sold, the Company agrees to issue or have issued the
Securities sold and to
17
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 Xxxx
Xxxxxx 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, is herein called the "Closing Time."
The Company will pay any stock issue and transfer taxes which may be
payable with respect to the sale of the Securities.
In addition to the reimbursement of the expenses specified in Section 4
hereof, the Agent will receive the following compensation for its services
hereunder:
(a) Two percent (2.0%) of the aggregate Purchase Price of the
Securities sold in the Subscription and Community Offering, excluding in each
case shares purchased by (i) any employee benefit plan of the Company or the
Bank established for the benefit of their respective directors, officers and
employees, and (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
(including Sandler X'Xxxxx) in the Syndicated Community Offering, (i) the
compensation payable to Selected Dealers, (ii) any sponsoring dealer's fees, and
(iii) a management fee to Sandler X'Xxxxx referred to in paragraph (a) above.
Any fees payable to Sandler X'Xxxxx and other NASD member firms in the
Syndicated Community Offering for Securities sold by Sandler X'Xxxxx or such
firms under any such agreement shall be limited to an aggregate of seven percent
(7%) of the actual 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 Reorganization is terminated by the
Company, no fee shall be payable by the Company to Sandler X'Xxxxx; PROVIDED,
HOWEVER, the Company shall reimburse the Agent for all of its reasonable
out-of-pocket expenses incurred prior to termination, including the reasonable
fees and disbursements of counsel for the Agent, up to a maximum of $40,000 in
accordance with the provisions of Section 4 hereof in the event of any such
termination.
All fees payable to the Agent hereunder shall be payable in immediately
available funds at Closing Time, or upon the termination of this Agreement, as
the case may be. In recognition of the long lead times involved in the
conversion process, the Bank has made an advance payment to the Agent in the
amount of $25,000, which shall be credited against any fees or reimbursement of
expenses payable hereunder.
SECTION 3. COVENANTS OF THE COMPANY. The Company, the Bank and the MHC
covenant with the Agent as follows:
18
(a) The Company, the Bank and the MHC will prepare and file such
amendments or supplements to the Registration Statement, the Prospectus, the MHC
Application, the Holding Company Application, the New Jersey Application, the
Bank Merger Application, the FDIC Conversion Notice and the Proxy Statement as
may hereafter be required by the Securities Act Regulations or the MHC
Regulations, the FDIC Conversion Regulation or the New Jersey Banking Law or as
may hereafter be requested by the Agent. Following completion of the
Subscription and Community Offering, in the event of a Syndicated Community
Offering, the Company, the Bank and the MHC will (i) promptly prepare and file
with the Commission a post-effective amendment to the Registration Statement
relating to the results of the Subscription and Community Offering, any
additional information with respect to the proposed plan of distribution and any
revised pricing information or (ii) if no such post-effective amendment is
required, will file with, or mail for filing to, the Commission a prospectus or
prospectus supplement containing information relating to the results of the
Subscription and Community Offering and pricing information pursuant to Rule 424
of the Securities Act Regulations, in either case in a form acceptable to the
Agent. The Company, the Bank and the MHC will notify the Agent immediately, and
confirm the notice in writing, (i) of the effectiveness of any post-effective
amendment of the Registration Statement, the filing of any supplement to the
Prospectus and the filing of any amendment to the MHC Application, the Holding
Company Application, the Bank Merger Application, the FDIC Conversion Notice and
the New Jersey Application (ii) of the receipt of any comments from the OTS, the
Commission, the FDIC or the Department with respect to the transactions
contemplated by this Agreement or the Plan, (iii) of any request by the
Commission or the OTS, the FDIC or the Department for any amendment to the
Registration Statement, the MHC Application, the Holding Company Application,
the Merger Application, the FDIC Conversion Notice and the New Jersey
Application or any amendment or supplement to the Prospectus or for additional
information, (iv) of the issuance by the Commission, OTS, the FDIC, the
Department or any other governmental entity 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 or any state securities
governmental authority 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, the Bank and the MHC 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, the Bank and the MHC will give the Agent notice of
its intention to file or prepare any amendment to the MHC Application, the
Holding Company Application, the Bank Merger Application, the FDIC Conversion
Notice, the New Jersey Application or Registration Statement (including any
post-effective amendment) or any amendment or supplement to the Prospectus, 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, the Bank and the MHC will deliver to the Agent as
many signed copies and as many conformed copies of the MHC Application, the
Holding Company Application, the Merger Application, the FDIC Conversion Notice,
the New Jersey Application and the Registration Statement as originally filed
and of each amendment thereto (including
19
exhibits filed therewith or incorporated by reference therein) as the Agent may
reasonably request, and from time to time such number of copies of the
Prospectus as the Agent may reasonably request.
(d) During the period when the Prospectus is required to be
delivered, the Company, the Bank and the MHC will comply, at their own expense,
with all requirements imposed upon them by the OTS, the FDIC and the Department
by the applicable MHC Regulations, the FDIC Conversion Regulations and the New
Jersey Banking Law as from time to time in force, and by the Securities Act, the
Securities Act Regulations, the Exchange Act, and the rules and regulations of
the Commission promulgated thereunder, including, without limitation, Regulation
M under the Exchange Act, so far as necessary to permit the continuance of sales
or dealing in shares of Common Stock during such period in accordance with the
provisions hereof and the Prospectus.
(e) If any event or circumstance shall occur as a result of which it
is necessary, in the opinion of counsel for the Agent, to amend or supplement
the Prospectus in order to make the Prospectus not misleading in the light of
the circumstances existing at the time it is delivered to a purchaser, the
Company, the Bank and the MHC 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, the Bank and the MHC
will furnish to the Agent a reasonable number of copies of such amendment or
supplement. For the purpose of this subsection, the Company, the Bank and the
MHC will each furnish such information with respect to itself as the Agent may
from time to time reasonably request.
(f) The Company, the Bank and the MHC 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 MHC Regulations may require and as the
Agent and the Company have agreed; provided, however, that the Company, the Bank
and the MHC shall not be obligated to file any general consent to service of
process or to qualify as a foreign corporation in any jurisdiction in which it
is not so qualified. In each jurisdiction in which the Securities have been so
qualified, the Company, the Bank and the MHC will file such statements and
reports as may be required by the laws of such jurisdiction to continue such
qualification in effect for a period of not less than one year from the
effective date of the Registration Statement.
(g) The Company authorizes Sandler X'Xxxxx and any Selected Dealers
to act as agent of the Company in distributing the Prospectus to persons
entitled to receive subscription rights and other persons to be offered
Securities having record addresses in the states or jurisdictions set forth in a
survey of the securities or "blue sky" laws of the various jurisdictions in
which the Offerings will be made (the "Blue Sky Survey").
(h) The Company will make generally available to its security
holders as soon as practicable, but not later than 60 days after the close of
the period covered thereby, an earnings statement (in form complying with the
provisions of Rule 158 of the Securities Act Regulations) covering a
twelve-month period beginning not later than the first day of the Company's
fiscal
20
quarter next following the "effective date" (as defined in said Rule 158) of the
Registration Statement.
(i) During the period ending on the third anniversary of the
expiration of the fiscal year during which the closing of the transactions
contemplated hereby occurs, the Company will furnish to its stockholders as soon
as practicable after the end of each such fiscal year an annual report
(including consolidated statements of financial condition and consolidated
statements of income, stockholders' equity and cash flows, certified by the
Company's registered independent public accounting firm) 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), consolidated summary financial information of the
Company, the Bank and the MHC for such quarter in reasonable detail. In
addition, such annual report and quarterly consolidated summary financial
information shall be made public through the issuance of appropriate press
releases at the same time or prior to the time of the furnishing thereof to
stockholders of the Company.
(j) During the period ending on the third anniversary of the
expiration of the fiscal year during which the closing of the transactions
contemplated hereby occurs, the Company will furnish to the Agent (i) as soon as
publicly available, a copy of each report or other document of the Company
furnished generally to stockholders of the Company or furnished to or filed with
the Commission under the Exchange Act or any national securities exchange or
system on which any class of securities of the Company is listed or quoted, and
(ii) from time to time, such other information concerning the Company as the
Agent may reasonably request.
(k) The Company, the Bank and the MHC will conduct the
Reorganization in all material respects in accordance with the Plan, the MHC
Regulations, the FDIC Conversion Regulations, the New Jersey Banking Law and all
other applicable regulations, decisions and orders, including all applicable
terms, requirements and conditions precedent to the Reorganization imposed upon
the Company, the Bank or the MHC by the OTS, the FDIC or the Department.
(l) The Company, the Bank and the MHC will use the net proceeds
received by it from the sale of the Securities in the manner specified in the
Prospectus under "How we Intend to Use the Proceeds From the Offering."
(m) The Company will report the use of proceeds from the Offerings
on its first periodic report filed with the Commission pursuant to Section 13(a)
or 15(d) of the Exchange Act and on any subsequent periodic reports as may be
required pursuant to Rule 463 of the Securities Act Regulations.
(n) The Company will maintain the effectiveness of the Exchange Act
Registration Statement for not less than three years and will comply in all
material respects with its filing obligations under the Exchange Act. The
Company will file with the Nasdaq Stock Market all documents and notices
required by the Nasdaq Stock Market of companies that have issued securities
that are traded on the OTC Bulletin Board and quotations for which are reported
by the Nasdaq Stock Market.
21
(o) The Company, the Bank and the MHC will take such actions and
furnish such information as are reasonably requested by the Agent in order for
the Agent to ensure compliance with Rule 2790 of the National Association of
Securities Dealers, Inc.'s Conduct Rules.
(p) Other than in connection with any employee benefit plan or
arrangement described in the Prospectus, the Company will not, without the prior
written consent of the Agent, sell or issue, contract to sell or otherwise
dispose of, any shares of Common Stock other than the Securities for a period of
180 days following the Closing Time.
(q) During the period beginning on the date hereof and ending on the
later of the fifth 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, none of the Company, the Bank or the MHC shall, without the prior
written consent of the Agent, take or permit to be taken any action that could
result in the Bank Common Stock becoming subject to any security interest,
mortgage, pledge, lien or encumbrance.
(r) The Company, the MHC 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 the MHC Application and with the FDIC and
the Department in connection with their approval of or non-objection to, the
FDIC Conversion Notice, the Bank Merger Application or the New Jersey
Application.
(s) During the period ending on the first anniversary of the Closing
Time, the Bank will comply with all applicable laws and regulations necessary
for the Bank to continue to be a "qualified thrift lender" within the meaning of
12 U.S.C. Section 1467a(m).
(t) The Company shall not deliver the Securities until the Company,
the Bank and the MHC have satisfied each condition set forth in Section 5
hereof, unless such condition is waived by the Agent.
(u) The Company, the Bank or the MHC 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 financial statements of the Bank which have been read by Radics as
stated in their letters to be furnished pursuant to subsections (f) and (g) of
Section 5 hereof.
(v) Each of the Company, the Bank and the MHC will conduct its
respective business in compliance in all material respects with all applicable
federal and state laws, rules, regulations, decisions, directives and orders,
including all decisions, directives and orders of the Commission, the OTS, the
FDIC and the Department.
(w) The Bank will not amend the Plan in any manner that would affect
the sale of the Securities or the terms of this Agreement.
(x) The Company, the Bank and the MHC will not, prior to the Closing
Time, incur any liability or obligation, direct or contingent, or enter into any
material transaction, other than
22
in the ordinary course of business consistent with past practice, except as
contemplated by the Prospectus.
(y) The Company, the Bank and the MHC will use all reasonable
efforts to comply with, or cause to be complied with, the conditions precedent
to the several obligations of the Agent specified in Section 5 hereof.
(z) The Company, the Bank and the MHC will provide the Agent with
any information necessary to carry out the allocation of the Securities in the
event of an oversubscription, and such information will be accurate and reliable
in all material respects.
(aa) The Company, the Bank and the MHC will notify the Agent when
funds have been received for the minimum number of Securities set forth in the
Prospectus.
SECTION 4. PAYMENT OF EXPENSES. The Company, the Bank and the MHC
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 Reorganization
Applications 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,
the Bank's and the MHC's counsel, accountants, appraiser and other advisors, (v)
the qualification of the Securities under securities laws in accordance with the
provisions of Section 3(f) hereof, including filing fees and the fees and
disbursements of the Company's 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 and (viii) the fees and expenses incurred in connection with the
quotation of the Securities on the OTC. In the event the Agent incurs any such
fees and expenses on behalf of the Bank, the Company or the MHC, 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, the Company or the MHC pursuant to this Section
without the prior approval of the Bank.
The Company, the Bank and the MHC jointly and severally agree to pay
certain expenses incident to the performance of the Agent's obligations under
this Agreement, regardless of whether the Conversion is consummated, including
(i) the filing fees paid or incurred by the Agent in connection with all filings
with the NASD and (ii) all reasonable out of pocket expenses 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, up to a maximum of $40,000 with respect to the expenses
contemplated by this clause (ii); PROVIDED, HOWEVER, that the Agent shall
document the expenses contemplated by clause (ii) to the reasonable satisfaction
of the Bank. 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, the Bank or the MHC of a written accounting
therefor setting forth in reasonable detail the expenses incurred by the Agent.
23
SECTION 5. CONDITIONS OF AGENT'S OBLIGATIONS. The Company, the Bank, the
MHC and the Agent agree that the issuance and the sale of Securities and all
obligations of the Agent hereunder are subject to the accuracy of the
representations and warranties of the Company, the Bank and the MHC herein
contained as of the date hereof and the Closing Time, to the accuracy of the
statements of officers and directors of the Company, the Bank and the MHC made
pursuant to the provisions hereof, to the performance by the Company, the Bank
and the MHC of their obligations hereunder, and to the following further
conditions:
(a) No stop order suspending the effectiveness of the Registration
Statement shall have been issued under the Securities Act or proceedings
therefor initiated or threatened by the Commission, no order suspending the
Offerings or authorization for final use of the Prospectus shall have been
issued or proceedings therefor initiated or threatened by the OTS, the FDIC or
the Department 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 Xxxx
Xxxxxx, counsel for the Company, the Bank and the MHC, 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 United States of America as a federally
chartered mid-tier holding company.
(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 Jersey and in each other
jurisdiction in which such qualification is required
whether by reason of the ownership or leasing of
property or the conduct of business, except where the
failure to so qualify would not have a material adverse
effect upon the financial condition, results of
operations, business affairs or prospects of the
Company, the Bank and the MHC, considered as one
enterprise. The Company is a registered savings and loan
holding company under HOLA.
(iv) Upon consummation of the Reorganization, the
authorized, issued and outstanding capital stock of the
Company will be as set forth in the Prospectus under
"Capitalization" and no shares of Common Stock have been
or will be issued and outstanding prior to the Closing
Time.
(v) The Securities 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, will be duly and validly issued and fully paid
and non-assessable.
24
(vi) The issuance of the Securities is not subject to
preemptive or other similar rights arising by operation
of law or, to the best of their knowledge and
information, otherwise.
(vii) Upon completion of the Reorganization, the
issuance of the Securities will be in compliance with
all of the conditions imposed upon the Company, the Bank
and the MHC by the OTS, the FDIC or the Department under
the terms of their written approval or notice of
intention not to object, as applicable, of the
Reorganization Applications.
(viii) The Bank has been at all times and prior to the
Closing Time duly organized, and is validly existing and
in good standing under the laws of the State of New
Jersey as either a New Jersey chartered savings bank of
mutual form or a New Jersey chartered savings and loan
association of mutual form, and, at Closing Time, has
become duly organized, validly existing and in good
standing under the laws of the State of New Jersey as a
New Jersey chartered savings bank of stock form, in both
instances with full corporate power and authority to
own, lease and operate its properties and to conduct its
business as described in the Registration Statement and
the Prospectus; and the Bank is duly qualified as a
foreign corporation to transact business and is in good
standing in each jurisdiction in which the failure to so
qualify would have a material adverse effect upon the
financial condition, results of operations, business
affairs or prospects of the Bank.
(ix) The Bank is a member in good standing of the
Federal Home Loan Bank of New York and the deposit
accounts of the Bank are insured by the FDIC up to the
applicable limits.
(x) The MHC is a federal mutual holding company and
has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the
United States and 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 to enter into and perform its obligations
under this Agreement. The MHC is a registered savings
and loan holding company under HOLA.
(xi) Upon consummation of the Reorganization, all of
the issued and outstanding capital stock of the Bank
when issued and delivered pursuant to the Plan against
payment of consideration calculated as set forth in the
Plan and set forth in the Prospectus, will be duly
authorized and validly issued and fully paid and
nonassessable, and all such capital stock will be owned
beneficially and of record by the Company free and clear
of any security interest, mortgage, pledge, lien,
encumbrance, claim or equity.
(xii) The OTS, the FDIC and the Department have duly
approved or not objected to, as the case may be, the
Reorganization Applications and no action is pending, or
to the best of such counsel's knowledge after due
inquiry, threatened respecting the Reorganization
Applications or the acquisition by the Company of
25
all of the Bank's issued and outstanding capital stock;
the Reorganization Applications comply as to form with
the applicable requirements of the OTS, the FDIC and the
Department, include all documents required to be filed
as exhibits thereto, and are, to the best of such
counsel's knowledge after due inquiry, truthful,
accurate and complete; and the Company is duly
authorized to become a savings and loan 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, (A) have been duly and validly authorized by all
necessary action on the part of each of the Company, the
Bank and the MHC, and this Agreement constitutes the
legal, valid and binding agreement of each of the
Company, the Bank and the MHC, 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 result
in any violation of the provisions of the charter or
bylaws of the Company, the Bank or the MHC; and (C) will
not conflict with or constitute a breach of, or default
under, and no event has occurred which, with notice or
lapse of time or both, would constitute a default under,
or result in the creation or imposition of any lien,
charge or encumbrance, that, individually or in the
aggregate, would have a material adverse effect on the
financial condition, results of operations, business
affairs or prospects of the Company, the Bank and the
MHC considered as one enterprise, upon any property or
assets of the Company, the Bank or MHC pursuant to any
contract, indenture, mortgage, loan agreement, note,
lease or other instrument to which the Company, the Bank
or the MHC 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 MHC is subject.
(xiv) The Prospectus has been duly authorized by the
OTS, the FDIC and the Department for final use pursuant
to the MHC Regulations, the FDIC Conversion Regulations
and the New Jersey Banking Law and no action is pending,
or to the best of such counsel's knowledge after due
inquiry, is threatened, by the OTS, the FDIC or the
Department to revoke such authorization.
(xv) The Registration Statement is effective under
the Securities Act and no stop order suspending the
effectiveness of the Registration Statement has been
issued under the Securities Act or, to the best of such
counsel's knowledge after due inquiry, proceedings
therefor initiated or 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
consummation of the Reorganization, except as may be
required under the securities or Blue Sky laws of
various jurisdictions as to which no opinion need be
rendered.
26
(xvii) At the time the Registration Statement became
effective, the Registration Statement (other than the
financial statements and statistical data included
therein, as to which no opinion need be rendered)
complied as to form in all material respects with the
requirements of the Securities Act, the Securities Act
Regulations, the MHC Regulations, the FDIC Conversion
Regulations and the New Jersey Banking Law.
(xiii) 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 or the MHC 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 MHC 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 - Our Stock Value may be Negatively Affected by
Federal Regulations Restricting Takeovers and our Mutual
Holding Company Structure," "Our Policy Regarding
Dividends," " Business of Lincoln Park Savings - Legal
Proceedings," " Federal and State Taxation,"
"Regulation," "The Reorganization and the Stock Offering
- Effects of the Reorganization and Offering on
Depositors and Borrowers of Lincoln Park Savings", "The
Reorganization and the Stock Offering - Tax Effects of
the Reorganization," "The Reorganization and the Stock
Offering - Restrictions on Purchase or Transfer of Stock
by Directors and Officers," "Restrictions on the
Acquisition of Lincoln Park Bancorp and Lincoln Park
Savings" and "Description of Capital Stock of Lincoln
Park Bancorp," 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 therein or filed as
exhibits thereto, the descriptions thereof or references
thereto are correct, and no default exists, and no event
has occurred which, with notice or lapse of time or
both, would constitute a default, in the due performance
or observance of any material obligation, agreement,
covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or
other instrument so described, referred to or filed.
(xxii) The Plan has been duly authorized by the Boards
of Directors of the Company, the Bank and the MHC and
the OTS', the Department's and the
27
FDIC's approval of or non-objection to the Plan remains
in full force and effect; the Bank's charter has been
amended, effective upon consummation of the
Reorganization and the filing of such amended charter
with the Department, to authorize the issuance of
permanent capital stock; the Company, the Bank and the
MHC have conducted the Reorganization in all material
respects in accordance with applicable requirements of
the MHC Regulations, the FDIC Conversion Regulations,
the New Jersey Banking Law, the Plan and all other
applicable regulations, decisions and orders thereunder,
including all material applicable terms, conditions,
requirements and conditions precedent to the
Reorganization imposed upon the Company, the Bank or the
MHC by the OTS, the FDIC or the Department and, no order
has been issued by the OTS, the FDIC or the Department
to suspend the Reorganization or the Offerings and no
action for such purpose has been instituted or
threatened by the OTS, the FDIC or the Department; and,
to the best of such counsel's knowledge after due
inquiry, no person has sought to obtain review of the
final action of the OTS, the FDIC or the Department in
approving or not objecting to the Reorganization
Applications.
(xxiii) To the best of such counsel's knowledge after
due inquiry, the Company, the Bank and the MHC 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, and all such
licenses, permits and other governmental authorizations
are in full force and effect, and the Company, the Bank
and the MHC are in all material respects complying
therewith.
(xxiv) None of the Company, the Bank or the MHC is in
violation of its certificate of incorporation,
organization certificate, articles of incorporation or
charter, as the case may be, or bylaws (and the Bank
will not be in violation of its charter in stock form
upon consummation of the Reorganization) or in default
(nor has any event occurred which, with notice or lapse
of time or both, would constitute a default) in the
performance or observance of any obligation, agreement,
covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or
other instrument to which the Company, the Bank or the
MHC is a party or by which the Company, the Bank or the
MHC or any of their property may be bound.
(xxv) The Company is not and, upon completion of the
Reorganization and the Offerings and the sale of the
Securities and the application of the net proceeds
therefrom, will not be required to be registered as an
investment company under the Investment Company Act of
1940.
(xxvi) The Company is in compliance with the applicable
provisions of the Xxxxxxxx-Xxxxx Act of 2002 and the
regulations promulgated pursuant thereto.
(2) The favorable opinion, dated as of Closing Time, of
Elias, Matz, Xxxxxxx & Xxxxxxx L.L.P. ("Xxxxx 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), (xi), (xii), (xiii), (xv) and
(xvi) and such other matters as the Agent may reasonably
require.
28
(3) In giving their opinions required by subsections (b)(l)
and (b)(2), respectively, of this Section, Xxxx Xxxxxx and Xxxxx
Xxxx shall each additionally state that nothing has come to
their attention that would lead them to believe that the
Registration Statement (except for financial statements and
schedules and other financial or statistical data included
therein, as to which counsel need make no statement), at the
time it became effective, contained an untrue statement of a
material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading or that the Prospectus (except for financial
statements and schedules and other financial or statistical data
included therein, as to which counsel need make no statement),
at the time the Registration Statement became effective or at
Closing Time, included an untrue statement of a material fact or
omitted to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under
which they were made, not misleading. In giving their opinions,
Xxxx Xxxxxx and Xxxxx Xxxx may rely as to matters of fact on
certificates of officers and directors of the Company, the Bank
and the MHC and certificates of public officials, and Xxxxx Xxxx
may also rely on the opinion of Xxxx Xxxxxx.
(c) At Closing Time referred to in Section 2, the Company, the Bank
and the MHC shall have completed in all material respects the conditions
precedent to the Reorganization in accordance with the Plan, the applicable MHC
Regulations, the FDIC Conversion Regulations and the New Jersey Banking Law and
all other applicable laws, regulations, decisions and orders, including all
terms, conditions, requirements and provisions precedent to the Reorganization
imposed upon the Company, the Bank or the MHC by the OTS, the FDIC or the
Department or any other regulatory authority other than those which the OTS, the
FDIC or the Department permit to be completed after the Reorganization.
(d) At Closing Time, there shall not have been, since the date
hereof or since the respective dates as of which information is given in the
Registration Statement and the Prospectus, any material adverse change in the
financial condition, results of operations, business affairs or prospects of the
Company, the Bank and the MHC considered as one enterprise, whether or not
arising in the ordinary course of business consistent with past practice, and
the Agent shall have received a certificate of the President and the Chief
Executive Officer of the Company, the Bank and the MHC and the chief financial
or principal accounting officer of the Company, the Bank and the MHC, dated as
of Closing Time, to the effect that (i) there has been no such material adverse
change, (ii) there shall have been no material transaction entered into by the
Company, the Bank or the MHC from the latest date as of which the financial
condition of the Company, the Bank or the MHC 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 consistent with past
practice, (iii) none of the Company, the Bank or the MHC shall have received
from the OTS any direction (oral or written) to make any material change in the
method of conducting its business with which it has not complied (which
direction, if any, shall have been disclosed to the Agent) or which materially
and adversely would affect the business affairs, financial condition, results of
operations or prospects of the Company, the Bank or the MHC (iv) the
representations and warranties in Section 1 hereof are true and correct with the
same force and effect as though expressly made at and as of the Closing Time,
(v) the Company, the Bank and the MHC 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
29
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 OTS, the FDIC or the Department and no person has sought to
obtain regulatory or judicial review of the action of the OTS, the FDIC or the
Department in approving or not objecting to the Plan in accordance with the MHC
Regulations, the FDIC Conversion Regulations or the New Jersey Banking Law 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 Closing Time, the Agent shall have received a certificate
of the President and Chief Executive Officer of the Company, the Bank and the
MHC and the Chief Financial Officer of the Company, the Bank and the MHC, dated
as of Closing Time, to the effect that (i) they have reviewed the contents of
the Registration Statement and the Prospectus; (ii) based on each of their
knowledge, the Registration Statement and the Prospectus do not contain any
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements made therein, in light of the circumstances
under which such statements were made, not misleading; (iii) based on each of
their knowledge, the financial statements and other financial information
included in the Registration Statement and the Prospectus fairly present the
financial condition and results of operations of the Bank as of and for the
dates and periods covered by the Registration Statement and the Prospectus; (iv)
they are responsible for establishing and maintaining internal controls; (v)
they have designed such internal controls to ensure that material information
relating to the Company, the Bank and the MHC is made known to them; (vi) they
have evaluated the effectiveness of their internal controls; and (vii) they have
disclosed to Radics and the audit committee (A) all significant deficiencies in
the design or operation of internal controls which could adversely affect the
Company's, the Bank's and the MHC's ability to record, process, summarize, and
report financial data, and have identified for the Company's, the Bank's and the
MHC's auditors any material weaknesses in internal controls and (B) any fraud,
whether or not material, that involves management or other employees who have a
significant role in the Company's, the MHC's and the Bank's internal controls.
(f) At the time of the execution of this Agreement, the Agent shall
have received from Radics a letter dated such date, in form and substance
satisfactory to the Agent, to the effect that (i) they are independent
registered public accountants with respect to the Company, the Bank and the MHC
within the meaning of the Code of Ethics of the AICPA, the Securities Act and
the Securities Act Regulations, the MHC Regulations and the FDIC Conversion
Regulations and they are not in violation of the auditor independence
requirements of the Xxxxxxxx-Xxxxx Act, the Exchange Act and the Exchange Act
Regulations; (ii) it is their opinion that the financial statements and
supporting schedules included in the Registration Statement and covered by their
opinions therein comply as to form in all material respects with the applicable
accounting requirements of the Securities Act and the Securities Act
Regulations; (iii) based upon limited procedures as agreed upon by the Agent and
Radics 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 included in the Registration Statement do not
comply as to form in all material respects with the applicable accounting
requirements of the Securities Act, the Securities Act Regulations, the MHC
Regulations and the FDIC Conversion Regulation 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
30
and the Prospectus, (B) the unaudited amounts of net interest income and net
income set forth under "Selected Financial and Other Data" in the Registration
Statement and Prospectus do not agree with the amounts set forth in unaudited
financial statements as of and for the dates and periods presented under such
captions or such amounts were not determined on a basis substantially consistent
with that used in determining the corresponding amounts in the audited financial
statements included in the Registration Statement, (C) at a specified date not
more than five days prior to the date of this Agreement, there has been any
increase in the consolidated long term or short term debt of the Bank or any
decrease in total assets, the allowance for loan losses, total deposits or
retained earnings of the Bank, in each case as compared with the amounts shown
in the March 31, 2004 balance sheet included in the Registration Statement or,
(D) during the period from March 31, 2004 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, except in all instances for
increases or decreases which the Registration Statement and the Prospectus
disclose have occurred or may occur; and (iv) in addition to the examination
referred to in their opinions and the limited procedures referred to in clause
(iii) above, they have carried out certain specified procedures, not
constituting an audit, with respect to certain amounts, percentages and
financial information which are included in the Registration Statement and the
Prospectus and which are specified by the Agent, and have found such amounts,
percentages and financial information to be in agreement with the relevant
accounting, financial and other records of the Company, the Bank and the MHC
identified in such letter.
(g) At Closing Time, the Agent shall have received from Radics a
letter, dated as of Closing Time, to the effect that they reaffirm the
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.
(h) At Closing Time, the Securities shall have been approved for
listing on the OTC Bulletin Board upon notice of issuance.
(i) At Closing Time, the Agent shall have received a letter from
R.P. Financial dated as of the Closing Time, confirming its appraisal.
(j) At Closing Time, counsel for the Agent shall have been furnished
with such documents and opinions as they may require for the purpose of enabling
them to pass upon the issuance and sale of the Securities 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 as herein contemplated shall be
satisfactory in form and substance to the Agent and counsel for the Agent.
(k) At Closing Time, the Agent shall have been furnished with such
other documents or certificates as the Agent may have reasonably requested,
including, without limitation, a certificate relating to compliance by the
Company, the Bank and the MHC in consummating the Reorganization with the
Uniting and Strengthening America by Providing Appropriate Tools Required to
Intercept and Obstruct Terrorism Act of 2001 and certificates of the Chief
Executive Officer and the Chief Financial Officer of the Company, the Bank and
the MHC in form and
31
substance comparable to certifications required under Section 302 of the
Xxxxxxxx-Xxxxx Act of 2002.
(l) At any time prior to Closing Time, (i) there shall not have
occurred any material adverse change in the financial markets in the United
States or elsewhere or any outbreak of hostilities or escalation thereof or
other calamity or crisis the effect of which, in the judgment of the Agent, are
so material and adverse as to make it impracticable to market the Securities or
to enforce contracts, including subscriptions or orders, for the sale of the
Securities, and (ii) trading generally on either the American Stock Exchange,
the New York Stock Exchange or the Nasdaq Stock Market shall not have been
suspended, and minimum or maximum prices for trading shall not have been fixed,
or maximum ranges for prices for securities have been required, by 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, the Bank and the MHC, jointly and severally, agree
to indemnify and hold harmless the Agent, each person, if any, who controls the
Agent, within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act, and its respective partners, directors, officers, employees
and agents as follows:
(i) from and against any and all loss, liability, claim,
damage and expense whatsoever, as incurred, related to or
arising out of the Reorganization or any action taken by the
Agent where acting as agent of the Company, the Bank or the MHC
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
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, the Bank or the MHC, which
consent shall not be unreasonably withheld; and
(iv) from and against any and all expense whatsoever, as
incurred (including, subject to Section 6(c) hereof, the fees
and disbursements of counsel chosen by the Agent), reasonably
incurred in investigating, preparing for or defending
32
against any litigation, or any investigation, proceeding or
inquiry by any governmental agency or body, commenced or
threatened, or any claim pending or threatened whatsoever
described in clauses (i) or (ii) above, to the extent that any
such expense is not paid under (i), (ii) or (iii) above;
PROVIDED, HOWEVER, that the indemnification provided for in this
paragraph (a) shall not apply to any loss, liability, claim, damage or
expense to the extent arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Prospectus (or any
amendment or supplement thereto) or the omission or alleged omission
therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading which was made in reliance upon and in conformity with
the Agent Information. Notwithstanding the foregoing, the
indemnification provided for in this paragraph (a) shall not apply to
the Bank to the extent that such indemnification by the Bank would
constitute a covered transaction under Section 23A of the Federal
Reserve Act.
(b) The Agent agrees to indemnify and hold harmless the Company, the
Bank, the MHC and 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 Securities Act or Section 20 of
the Exchange Act against any and all loss, liability, claim, damage and expense
described in the indemnity contained in subsection (a) of this Section, as
incurred, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, of a material fact made in the Prospectus (or
any amendment or supplement thereto) in reliance upon and in conformity with the
Agent Information.
(c) Each indemnified party shall give notice as promptly as
reasonably practicable to each indemnifying party of any action commenced
against it in respect of which indemnity may be sought hereunder, but failure to
so notify an indemnifying party shall not relieve such indemnifying party from
any liability which it may have otherwise than on account of this indemnity
agreement. An indemnifying party may participate at its own expense in the
defense of any such action. In no event shall the indemnifying parties be liable
for fees and expenses of more than one counsel (in addition to no more than one
local counsel in each separate jurisdiction in which any action or proceeding is
commenced) separate from their own counsel for all indemnified parties in
connection with any one action or separate but similar or related actions in the
same jurisdiction arising out of the same general allegations or circumstances.
(d) The Company, the Bank and the MHC also agree that the Agent
shall not have any liability (whether direct or indirect, in contract or tort or
otherwise) to the MHC, the Bank, the Company, its security holders or the
Bank's, the MHC'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 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 any Agent, any person, if any, who controls
the Agent within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act or any of its partners, directors, officers, employees or
agents is requested or required to appear as a witness or
33
otherwise gives testimony in any action, proceeding, investigation or inquiry
brought by or on behalf of or against the Company, the Bank, the MHC, the Agent
or any of its respective affiliates or any participant in the transactions
contemplated hereby in which the Agent or such person or agent is not named as a
defendant, the Company, the Bank and the MHC 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,
the MHC 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, the Bank or the MHC and the Agent, as
incurred, in such proportions (i) that the Agent is responsible for that portion
represented by the percentage that the fees paid to the Agent pursuant to
Section 2 of this Agreement (not including expenses) bears to the gross proceeds
received by the Company from the sale of the Securities in the Offerings, and
the Company, the Bank and the MHC 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, the Bank and the MHC on
the one hand and the Agent on the other, as reflected in clause (i), but also
the relative fault of the Company, the Bank and the MHC on the one hand and the
Agent on the other, as well as any other relevant equitable considerations;
PROVIDED, HOWEVER, that no person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section, each person, if any, who
controls the Agent within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act shall have the same rights to contribution as the
Agent, and each director of the Company, the Bank and the MHC, each officer of
the Company and the MHC who signed the Registration Statement, and each person,
if any, who controls the Company, the Bank or the MHC within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act shall have
the same rights to contribution as the Company, the Bank and the MHC.
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.
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, the Bank or
the MHC submitted pursuant hereto, shall remain operative and in full force and
effect, regardless of any investigation made by or on behalf of any Agent or
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
34
adverse change in the financial condition, results of operations, business
affairs or prospects of the Company, the Bank or the MHC or the Company, the
Bank and the MHC considered as one enterprise, whether or not arising in the
ordinary course of business, or (ii) if there has occurred any material adverse
change in the financial markets in the United States or elsewhere or any
outbreak of hostilities or escalation thereof or other calamity or crisis the
effect of which, in the judgment of the Agent, are so material and adverse as to
make it impracticable to market the Securities or to enforce contracts,
including subscriptions or orders, for the sale of the Securities, (iii) if
trading generally on the Nasdaq Stock Market, the American Stock Exchange or the
New York Stock Exchange has been suspended, or minimum or maximum prices for
trading have been fixed, or maximum ranges for prices for securities have been
required, by 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, the Bank or the MHC or the prospective market for the Company's
securities as in the Agent's good faith opinion would make it inadvisable to
proceed with the offering, sale or delivery of the Securities; (vi) if, in the
Agent's good faith opinion, the aggregate value for the Securities established
by R.P. Financial is not reasonable or equitable under then prevailing market
conditions, or (vii) if the Reorganization is not consummated on or prior to
______ __, 2005.
(b) If this Agreement is terminated pursuant to this Section, such
termination shall be without liability of any party to any other party except as
provided in Sections 2 and 4 hereof relating to the reimbursement of expenses
and except that the provisions of Sections 6 and 7 hereof shall survive any
termination of this Agreement.
SECTION 10. NOTICES. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the Agent
shall be directed to the Agent at 000 Xxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx
Xxxx 00000, attention of General Counsel, facsimile number (000) 000-0000;
notices to the Company, the Bank and the MHC shall be directed to any of them at
00 Xxxxxxx Xxxxxxxx, Xxxxxxx Xxxx, Xxx Xxxxxx 00000, attention of Xxxxxx X. Xxx,
President and Chief Executive Officer, with a copy to Xxxxxx X. Xxxxxxx at Xxxx
Xxxxxx Xxxxxxxx & Xxxxxx, P.C., 0000 Xxxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxxx,
X.X. 00000.
SECTION 11. PARTIES. This Agreement shall inure to the benefit of and be
binding upon the Agent, the Company, the Bank and the MHC 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, the Bank and the MHC and their respective successors and the
controlling persons and partners, and officers and directors referred to in
Sections 6 and 7 and their heirs and legal representatives, any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision herein or therein contained. This Agreement and all conditions and
provisions hereof and thereof are intended to be for the sole and exclusive
benefit of the Agent, the Company, the Bank and the MHC and their respective
successors, and said controlling persons and partners and officers and directors
and their heirs and legal representatives, and for the benefit of no other
person, firm or corporation.
35
SECTION 12. ENTIRE AGREEMENT; AMENDMENT. This Agreement represents the
entire understanding of the parties hereto with reference to the transactions
contemplated hereby and supersedes any and all other oral or written agreements
heretofore made, except for the engagement letter dated May 27, 2004, by and
between the Agent and the Bank relating to the Agent's providing conversion
agent services to the Company, the Bank and the MHC in connection with the
Reorganization. No waiver, amendment or other modification of this Agreement
shall be effective unless in writing and signed by the parties hereto.
SECTION 13. GOVERNING LAW AND TIME. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York applicable to
agreements made and to be performed in said State without regard to the
conflicts of laws provisions thereof. Unless otherwise noted, specified times of
day refer to Eastern time.
SECTION 14. SEVERABILITY. Any term or provision of this Agreement which
is invalid or unenforceable in any jurisdiction shall, as to that jurisdiction,
be ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of this
Agreement is so broad as to be unenforceable, the provision shall be interpreted
to be only so broad as is enforceable.
SECTION 15. HEADINGS. Sections headings are not to be considered part of
this Agreement, are for convenience and reference only, and are not to be deemed
to be full or accurate descriptions of the contents of any paragraph or
subparagraph.
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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,
LINCOLN PARK BANCORP, MHC
By:_________________________________
Title:______________________________
LINCOLN PARK BANCORP
By:_________________________________
Title:______________________________
LINCOLN PARK SAVINGS BANK
By:_________________________________
Title:______________________________
SANDLER X'XXXXX & PARTNERS, L.P.
By: Sandler X'Xxxxx & Partners Corp.,
the sole general partner
By: _________________________________
Name:
Title:
37
