LIBERTY BANCORP, INC.
(a Federal Corporation - in Formation)
1,594,475 Shares
(Subject to Increase Up to 1,833,646 Shares)
COMMON STOCK ($1.00 Par Value)
Subscription Price $10.00 Per Share
AGENCY AGREEMENT
----------------
May , 1998
Xxxx, Xxxx & Co., Inc.
000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000-0000
Ladies and Gentlemen:
Liberty Bancorp, Inc., a federal corporation in formation (the "Holding
Company"), Liberty Bancorp, MHC, a federal mutual holding company in formation
(the "MHC") and Axia Federal Savings Bank (the "Association") (collectively, the
"Primary Parties") hereby confirm, jointly and severally their agreement with
Xxxx, Xxxx & Co., Inc. (the "Agent"), as follows:
Section 1. The Offering. The Holding Company is offering up to
1,594,475 shares of common stock, par value $1.00 per share (the "Common Stock")
(subject to an increase up to 1,833,646 shares), in (i) a subscription offering
(the "Subscription Offering"), and, if necessary, (ii) a direct community
offering (the "Direct Community Offering") and (iii) a syndicated community
offering (the "Syndicated Community Offering"), in connection with the
conversion and reorganization of the Association from a mutual savings
association to a stock savings association and wholly-owned subsidiary of the
Holding Company (the "Reorganization"), all pursuant to the Plan of
Reorganization from a Mutual Savings Association to Mutual Holding Company and
Stock Issuance Plan (the "Plan"). References to the Association herein shall
include the Association in its current mutual form or post-Reorganization stock
form as a wholly-owned subsidiary of the Holding Company.
Pursuant to the Plan, the Holding Company will offer and sell shares of
its Common Stock (the "Conversion Shares" or "Shares") in the Subscription
Offering, Direct Community Offering, and Syndicated Community Offering
(collectively, the "Conversion Offerings" or Offering") so that, upon completion
of the Conversion Offerings, the purchasers of Conversion Shares in the
Conversion Offerings will own 47% of the outstanding Common Stock and the MHC
will own 53% of the outstanding Common Stock. The Holding Company will issue the
Shares at a purchase price of $10.00 per share (the "Purchase Price"). If the
number of Conversion Shares is increased or decreased in accordance with the
Plan, the term "Shares" shall mean such greater or lesser number, where
applicable.
In the Subscription Offering, non-transferable rights to subscribe for
between 1,178,525 and 1,594,475 shares (subject to an increase up to 1,833,646
shares) of the Common Stock ("Subscription Rights") will be granted, in the
following priority: (1) the Association's depositors with account balances of
$50.00 or more as of September 30, 1996 ("Eligible Account Holders"); (2) the
Association's tax-qualified Employee Stock Ownership Plan ("ESOP"); (3) the
Association's depositors with account balances of $50.00 or more as of March 31,
1998 ("Supplemental Eligible Account Holders"); and (4) depositors (other than
Eligible Account Holders and Supplemental Eligible Account Holders) and
borrowers of the Association as of the date for determining members entitled to
vote on the approval of the Plan (the "Voting Record Date") (collectively,
"Other Members"), subject to the priorities and purchase limitations set forth
in the Plan. The Holding Company may offer all shares of Common Stock offered
but not subscribed for in the Subscription Offering to members of the general
public, with first preference given to residents of the Association's local
community of the New Jersey counties of Union and Middlesex. In the event a
Direct Community Offering is held, it may be held at any time during or
immediately after the Subscription Offering. Depending on market conditions,
shares not subscribed for in the Subscription Offering or purchased in the
Direct Community Offering may be offered in the Syndicated Community Offering to
eligible members of the general public on a best efforts basis by approved
broker-dealer firms ("Assisting Brokers") which are members of the National
Association of Securities Dealers, Inc. ("NASD").
The Holding Company has filed with the U.S. Securities and Exchange
Commission (the "Commission") a Registration Statement on Form SB-2 (File No.
333-48003) in order to register the Shares under the Securities Act of 1933, as
amended (the "1933 Act"), and has filed such amendments thereto as have been
required to the date hereof (the "Registration Statement"). The prospectus, as
amended, included in the Registration Statement at the time it initially became
effective is hereinafter called the "Prospectus", except that if any prospectus
is filed by the Holding Company pursuant to Rule 424(b) or (c) of the
regulations of the Commission under the 1933 Act differing from the prospectus
included in the Registration Statement at the time it initially becomes
effective, the term "Prospectus" shall refer to the prospectus filed pursuant to
Rule 424(b) or (c) from and after the time said prospectus is filed with the
Commission and shall include any supplements and amendments thereto from and
after their dates of effectiveness or use, respectively.
In connection with the Reorganization, the Association filed with the
Office of Thrift Supervision (the "OTS"), pursuant to Title 12, Parts 575 and
563b of the Code of Federal Regulations (the "MHC Regulations"), a Notice of
Mutual Holding Company Reorganization and Application for Approval of an
Issuance by a Subsidiary of a Mutual Holding Company, including exhibits and the
Prospectus, and has filed amendments thereto as required by the OTS (as so
amended, the "MHC Notice and Application"). The Holding Company filed with the
OTS its application on Form H-(e)1 (the "Holding Company Application") to
acquire the Association under the Home Owners Loan Act and the regulations
promulgated thereunder ("HOLA"). The Association's application with the OTS for
approval of the formation of an interim stock savings bank and the merger of the
interim stock savings bank with and into the Association (the "Merger
Application") was filed as an exhibit to the Holding Company Application. The
MHC Notice and Application and the Holding Company Application (including the
Merger Application) shall collectively be hereinafter referred to as the "OTS
Applications."
Section 2. Appointment of Agent. Subject to the terms and conditions of
this Agreement, the Primary Parties hereby appoint Agent as their financial
advisor and marketing agent to utilize its best efforts to solicit subscriptions
for the Conversion Shares and to advise and assist the Primary Parties with
respect to the sale of the Conversion Shares in the Conversion Offerings.
On the basis of the representations and warranties of the Primary
Parties contained in, and subject to the terms and conditions of, this Agreement
the Agent accepts such appointment and agrees to consult with and advise the
MHC, the Holding Company and the Association as to the matters set forth in the
letter agreement ("Letter Agreement"), dated February 10, 1998, between the
Association and Agent (a copy of which is attached hereto as Exhibit A). It is
acknowledged by the Primary Parties that the Agent shall not be obligated to
purchase any Shares and shall not be obligated to take any action which is
inconsistent with any applicable law, regulation, decision or order.
Subscriptions for Conversion Shares will be offered by means of order forms as
described in the Prospectus. Except as provided in the last paragraph of this
Section 2, the appointment of the Agent hereunder shall terminate upon
consummation of the Offerings.
If selected broker-dealers are used to assist in the sale of Conversion
Shares in the Syndicated Community Offering, the Primary Parties hereby appoint,
subject to the terms and conditions of this Agreement, Agent to manage such
broker-dealers in this Syndicated Community Offering. On the basis of the
representations and warranties of the Primary Parties contained in, and subject
to the terms and conditions of, this Agreement, Agent accepts such appointment
and agrees to manage the selling group of broker-dealers in the Syndicated
Community Offering.
Agent agrees to make available to the Association, MHC and the Holding
Company for a period of 12 months following the consummation of the
Reorganization its Strategic Advisory Services ("STARS") program. If the
Association elects to participate in the STARS program, the Agent will meet with
the Association at its request and will render general advice on the financial
matters listed in Section 9 of the Letter Agreement (but not including (i) any
in-depth merger and acquisition analyses or studies which are available under
Agent's normal fee schedule, or (ii) advice with respect to a specific
acquisition transaction by, or sale of, the Association or the Holding Company).
If the Association elects to participate in the STARS program, the Agent will
waive the regular retainer fee and hourly charges for the first 18 months of
such participation. The Association would be required, however, to reimburse
Agent for its reasonable out-of-pocket expenses incurred in conjunction with the
performance of these services. Such out-of-pocket expenses include travel, legal
and other miscellaneous expenses. Agent would not be permitted to incur any
single expense in excess of $1,000 pursuant to this paragraph without the prior
approval of the Association. If negotiations for a transaction conducted during
the 12-month participation period result in the execution of a definitive
agreement and/or consummation of a transaction for which Agent customarily would
be entitled to a fee for its advisory or other investment banking services,
Agent shall receive a contingent advisory fee in accordance with the terms of a
separate engagement letter to be entered into with respect to such transaction.
Nothing in this Agreement shall require the Holding Company or the
Association to obtain such financial advisory services from Agent. After the
completion of such 12-month participation period, if the parties wish to
continue the relationship, a fee will be negotiated and an agreement with
respect to specific advisory services will be entered into at this time.
Section 3. Refund of Purchase Price. In the event that the
Reorganization is not consummated for any reason, including but not limited to
the inability to sell the Conversion Shares during the Offerings (including any
permitted extension thereof), this Agreement shall terminate and any persons who
have subscribed for any of the Conversion Shares shall have refunded to them the
full amount which has been received from such person, together with interest at
the Association's current passbook rate, from the date payment is received as
provided in the Prospectus. Upon termination of this Agreement, neither the
Agent nor the Primary Parties shall have any obligation to the other except that
(i) the Primary Parties shall remain liable for any amounts due pursuant to
Sections 4(a), 8, 10 and 11 hereof, unless the transaction is not consummated
due to the breach by the Agent of a warranty, representation or covenant; and
(ii) the Agent shall remain liable for any amount due pursuant to Sections 10
and 11 hereof, unless the transaction is not consummated due to the breach by
the Primary Parties of a warranty, representation or covenant.
Section 4. Fees. In addition to the expenses specified in Section 8
hereof, as compensation for the Agent's services under this Agreement, the Agent
has received or will receive the following fees from the Primary Parties:
(a) An advisory and administrative services fee in the amount of
$25,000. Such fee has been earned and paid in full. This fee shall be
applied to the fees payable pursuant to subsection (b).
(b) A marketing and advisory fee of $135,000.
(c) A fee not to exceed 5.5% of the aggregate Purchase Price of the
Conversion Shares sold by Assisting Brokers in any Syndicated Community
Offering. The Agent will pay the Assisting Brokers that assist in the
purchase of Conversation Shares in the Syndicated Community Offering a fee
competitive with gross underwriting discounts charged at such time for
comparable amounts of stock sold at a comparable price per share in a
similar market environment. Assisting Brokers will not be utilized without
the prior approval of the Primary Parties, and it is agreed that Agent will
manage the Assisting Brokers in the Syndicated Offering.
Section 5. Closing. If the minimum number of Conversion Shares
permitted to be sold in the Reorganization on the basis of the most recently
updated Appraisal (as defined in Section 6(h)) are subscribed for at or before
the termination of the Offerings, and the other conditions to the completion of
the Reorganization are satisfied, the Holding Company agrees to issue the Shares
on the Closing Date (as hereinafter defined) against payment therefor by the
means authorized by the Plan and to deliver certificates evidencing ownership of
the Conversion Shares in such authorized denominations and registered in such
names as may be indicated on the subscription order forms directly to the
purchasers thereof as promptly as practicable after the
Closing Date. The Closing shall be held at the offices of special counsel to the
Primary Parties, or at such other place as shall be agreed upon among the
Primary Parties and the Agent, at 10:00 a.m. on the business day selected by the
Holding Company which business day shall be no less than two business days
following the giving of prior notice by the Holding Company to the Agent or at
such other time as shall be agreed upon by the Primary Parties and the Agent. At
the Closing, the Primary Parties shall deliver to the Agent in same-day funds
the commissions, fees and expenses owing to the Agent as set forth in Sections 4
and 8 hereof and the opinions required hereby and other documents deemed
reasonably necessary by the Agent shall be executed and delivered to effect the
sale of the Shares as contemplated hereby and pursuant to the terms of the
Prospectus. The Holding Company shall notify the Agent when funds shall have
been received for the minimum number of shares of the Common Stock. The date
upon which the Holding Company shall release the Conversion Shares for delivery
in accordance with the terms hereof is referred to herein as the "Closing Date."
Section 6.A. Representations and Warranties of the Primary Parties. The
Primary Parties jointly and severally represent and warrant to the Agent that:
(a) The Holding Company and the Association have, and as of the
Closing Date, the MHC will have, all such power, authority, authorizations,
approvals and orders as may be required to enter into this Agreement, to
carry out the provisions and conditions hereof and to issue and sell the
Shares as provided herein and as described in the Prospectus. The
consummation of the Reorganization, the execution, delivery and performance
of this Agreement and the consummation of the transactions herein
contemplated have been duly and validly authorized by all necessary
corporate action on the part of the Holding Company and the Association
and, as of the Closing Date, will have been duly and validly authorized by
all necessary action of the part of MHC. This Agreement had been validly
executed and delivered by the Holding Company and the Association and, as
of the Closing Date, this Agreement will be the valid, legal and binding
agreement of the MHC, in each case enforceable in accordance with its
terms, except to the extent, if any, that the provisions of Sections 10 and
11 hereof may be unenforceable as against public policy, and except to the
extent that such enforceability may be limited by bankruptcy laws,
insolvency laws, or other laws affecting the enforcement of creditors'
rights generally, or the rights of creditors of savings institutions
insured by the FDIC (including the laws relating to the rights of the
contracting parties to equitable remedies).
(b) The Plan has been approved by the OTS.
(c) The Registration Statement was declared effective by the
Commission on [ ], 1998; and no stop order has been issued with respect
thereto and no proceedings therefor have been initiated or to the best
knowledge of the Primary Parties threatened by the Commission. At the time
the Registration Statement, including the Prospectus contained therein
(including any amendment or supplement thereto), became effective, the
Registration Statement complied as to form in all material respects with
the 1933 Act and the regulations promulgated thereunder and the
Registration Statement, including the Prospectus contained therein
(including any amendment or supplement thereto), any Blue Sky Application
or any Sales Information (as such terms are defined in Section 10 hereof)
authorized by the Primary Parties for use in connection with the Offerings
did not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading, and at the time any Rule 424(b) or (c) Prospectus was
filed with the Commission and at the Closing Date referred to in Section 5,
the Registration Statement, including the Prospectus contained therein
(including any amendment or supplement thereto), and any Blue Sky
Application or any Sales Information authorized by the Primary Parties for
use in connection with the Offerings will not contain an untrue statement
of a material fact or omit to state a material fact necessary in order to
make the statements therein, in light of the circumstances under which they
were made, not misleading; provided, however, that the representations and
warranties in this Section 6(c) shall not apply to statements or omissions
made in reliance upon and in conformity with written information furnished
to the Primary Parties by the Agent expressly regarding the Agent for use
under the captions ["Market for the Common Stock" and "The Reorganization
and Offering -- Plan of Distribution and Selling Commissions"] or written
statements or omissions from any sales information or information filed
pursuant to state securities or blue sky laws or regulations regarding the
Agent.
(d) The MHC Notice and Application, including the Prospectus, was
approved by the OTS on February __, 1998; and the Proxy Statement of the
Association relating to the special meeting of the members of the
Association at which the Plan shall be considered for approval by the
Association's eligible voting members (the "Proxy Statement"), was
authorized for use by the Notice and Application, including the Prospectus,
by the OTS (including any amendment or supplement thereto) and at all times
subsequent thereto until the Closing Date, the MHC Notice and Application,
including the Prospectus, did and will comply as to form in all material
respects with the MHC Regulations and any other applicable rules and
regulations of the OTS (except as modified or waived in writing by the
OTS). At the time of the approval of the MHC Notice and Application,
including the Prospectus (including any amendment or supplement thereto),
did not and does not include any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which
they were made, not misleading; provided, however, that representations or
warranties in this subsection (d) shall not apply to statements or
omissions made in reliance upon and in conformity with written information
furnished to the Primary Parties by the Agent expressly regarding the Agent
for use in Prospectus contained in the Application for Conversion under the
captions ["Market for the Common Stock" and "The Reorganization and
Offering -- Plan of Distribution and Selling Commissions"] or written
statements or omissions from any sales information or information filed
pursuant to state securities or blue sky laws or regulations regarding the
Agent.
(e) No order has been issued by the OTS, the Commission, or any state
regulatory authority, preventing or suspending the use of the Prospectus
and no action by or before any such government entity to revoke any
approval, authorization or order of effectiveness related to the
Reorganization is pending or, to the best knowledge of the Primary Parties,
threatened.
(f) The Plan has been duly adopted by the Board of Directors of the
Association. To the best knowledge of the Primary Parties, no person has,
or at the Closing Date will have, sought to obtain review of the final
action of the OTS in approving the Plan, the
Reorganization, or the OTS Applications, pursuant to the HOLA or any other
statute or regulation.
(g) The Holding Company has filed with the OTS the Holding Company
Application (including the Merger Application) and the OTS has approved of
the Holding Company's acquisition of the Association.
(h) FinPro, Inc., which prepared the appraisal of the aggregate pro
forma market value of the Holding Company and the Association on which the
Offerings were based (the "Appraisal"), has advised the Primary Parties
within the meaning of the Conversion Regulations.
(i) Radics & Co., LLP, which certified the financial statements filed
as part of the Registration Statement and the MHC Notice and Application,
has advised the Primary Parties that it is, with respect to each of the
Primary Parties, an independent certified public accountant within the
meaning of 12 C.F.R. Sections 563c.3 and 571.2(c)(3) and under the 1933 Act
and the Regulations promulgated thereunder.
(j) The financial statements and the notes thereto which are including
in the Registration Statement and which are a part of the Prospectus
present fairly the financial condition and retained earnings of the
Association as of the dates indicated and the results of operations and
cash flows for the periods specified. The financial statements comply in
all material respects with the applicable accounting requirements of Title
12 of the Code of Federal Regulations, Regulation S-X of the Commission and
generally accepted accounting principles ("GAAP") applied on a consistent
basis during the periods presented except as otherwise noted therein, and
present fairly in all material respects the information required to be
stated therein. 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 properly applied on the
basis described therein.
(k) Since the respective dates as of which information is given in the
Registration Statement, including the Prospectus; (i) there has not been
any material adverse change in the financial condition or in the earnings,
capital, properties or business affairs of any of the Primary Parties or of
the Primary Parties considered as one enterprise, whether or not arising in
the ordinary course of business; (ii) there has not been any change in
total assets of the Association in an amount greater than $25.0 million,
any material increase in the aggregate amount of loans past due ninety (90)
days or more, or any real estate acquired by foreclosure or loans
characterized as "in substance foreclosure"; nor has the Association issued
any securities or incurred any liability or obligation for borrowings other
than in the ordinary course of business; (iii) there have not been any
material transactions entered into by any of the Primary Parties, other
than those in the ordinary course of business; and (iv) the capitalization,
liabilities, assets, properties and business of the Primary Parties conform
in all material respects to the descriptions thereof contained in the
Prospectus and, none of the Primary Parties has any material liabilities of
any kind, contingent or otherwise, except as disclosed in Registration
Statement or the Prospectus.
(l) As of the Closing Date, the Holding Company will be a corporation
duly organized and in good standing under the federal laws of the United
States, with corporate power authority to own its properties and to conduct
its business as described in the Prospectus, and will be qualified to
transact business and in good standing in each jurisdiction in which the
conduct of business requires such qualification unless the failure to
qualify in one or more of such jurisdictions would not have a material
adverse effect on the financial condition, earnings, capital, properties or
business affairs of the Primary Parties. As of the Closing Date, the
Holding Company will have obtained all licenses, permits and other
governmental authorizations required for the conduct of its business,
except those that individually or in the aggregate would not materially
adversely affect the financial condition, earnings, capital, assets or
properties of the Primary Parties taken as a whole; and as of the Closing
Date, all such licenses permits and governmental authorizations will be in
full force and effect, and the Holding Company will be in compliance
therewith in all material aspects.
(m) As of the Closing Date, the MHC will be duly organized and will be
validly existing as a federally chartered mutual holding company under the
laws of the United States, duly authorized to conduct its business and own
its property as described in the Registration Statement and the Prospectus;
as of the Closing Date, the MHC will have obtained all licenses, permits
and other governmental authorizations required for the conduct of its
business except those that individually or in the aggregate would not
materially adversely affect the financial condition, earnings, capital,
assets or properties of the Primary Parties taken as a whole; as of the
Closing Date, all such licenses, permits and governmental authorizations
will be in full force and effect and the MHC will be in compliance
therewith in all material respects; as of the Closing Date, the MHC will be
duly qualified as a foreign corporation to transact business in each
jurisdiction in which the failure to be so qualified in one or more of such
jurisdictions would have a material adverse effect on the financial
condition, earnings, capital, assets properties or business of the Primary
Parties.
(n) The MHC does not own any equity securities or any equity interest
in any business enterprise except as described in the Prospectus.
(o) The MHC is not authorized to issue any shares of capital stock.
(p) The Association is duly organized and validly existing federally
chartered savings association in mutual form, duly authorized to conduct
its business as described in the Prospectus; the activities of the
Association are permitted by the rules, regulations and practices of the
OTS; the Association has obtained all licenses, permits and other
governmental authorizations currently required for the conduct of its
business except those that individually or in the aggregate would not
materially adversely affect the financial condition of the Primary Parties
taken as a whole; all such licenses, permits and other governmental
authorizations are in full force and effect and the Association is in good
standing under the laws of the United States and is duly qualified as a
foreign corporation to transact business in each jurisdiction in which
failure to so qualify would have a material adverse effect upon the
financial condition, earnings,
capital, properties or business affairs of the Association; all of the
issued and outstanding capital stock of the Association after the
Reorganization will be duly and validly issued and fully paid and
nonassessable; and the Holding Company will directly own all of such
capital stock free and clear of any mortgage, pledge, lien, encumbrance,
claim or restriction. The Association does not own equity securities or any
equity interest in any other business enterprise except as otherwise
described in the Prospectus.
(q) The Association is a member of the Federal Home Loan Bank of New
York ("FHLB of New York"); the deposit accounts of the Association are
insured by the FDIC up to applicable limits. Upon consummation of the
Reorganization, the rights of the members of the Association in its mutual
form shall be transferred to MHC in accordance with the Plan and the
requirements of the MHC Regulations.
(r) The Association is not authorized to issue any shares of capital
stock.
(s) Upon consummation of the Reorganization, the authorized, issued
and outstanding equity capital of the Holding Company will be within the
range set forth in the Prospectus under the caption "Capitalization" and,
except for the shares of Common Stock held by MHC, no shares of Common
Stock have been or will be issued and outstanding prior to the Closing
Date; and the shares of Common Stock to be subscribed for in the Offering
have been duly and validly authorized for issuance and, when issued and
delivered by the Holding Company pursuant to the Plan against payment of
the consideration calculated as set forth in the Plan and the Prospectus,
will be duly and validly issued and fully paid and nonassessable; the
issuance of the Shares is not subject to preemptive rights, except for the
Subscription Rights granted pursuant to the Plan; and the terms and
provisions of the shares of Common Stock will conform in all material
respects to the description thereof contained in the Prospectus. Upon
issuance of the Shares, good title to the Shares will be transferred from
the Holding Company to the purchasers of Shares against payment therefor in
the Offering as set forth in the Plan and the Prospectus.
(t) The Association is not, and as of the Closing Date neither the
Holding Company nor the MHC will be, in violation of their respective
articles of incorporation or charter or their respective bylaws, or in
material default in the performance or observance of any obligation,
agreement, covenant, or condition contained in any contract, lease, loan
agreement, indenture or other instrument to which they are a party or by
which they, or any of their respective property, may be bound which would
result in a material adverse change in the condition (financial or
otherwise), earnings, capital, properties or assets. The consummation of
the transactions herein contemplated will not (i) conflict with or
constitute a breach of, or default under, the Articles of Incorporation,,
charter or bylaws of the Association or, as of the Closing Date, the
Holding Company or the MHC, or materially conflict with or constitute a
material breach of, or default under, any material contract, lease or other
instrument to which any of the Primary Parties has a beneficial interest,
or any applicable law, rule, regulation or order that is material to the
financial condition of the Primary Parties on a consolidated basis; (ii)
violate any authorization, approval, judgment, decree, order, statute, rule
or regulation applicable to the Primary Parties except for such violations
which would not have a material adverse effect on the financial condition
and results of operations of the Primary Parties on a consolidated basis;
or (iii) result in the creation of any material lien, charge or encumbrance
upon any property of the Primary Parties.
(u) No material default exists, and no event has occurred which with
notice or lapse of time, or both, would constitute a material default on
the part of any of the Primary Parties, in the due performance and
observance of any term, covenant or condition of any indenture, mortgage,
deed of trust, note, bank loan or credit agreement or any other material
instrument or agreement to which any of the Primary Parties is a party or
by which any of them or any of their property is bound or affected in any
respect which, in any such case, is material to the Primary Parties
individually or considered as one enterprise, and such agreements are in
full force and effect; and no other party to any such agreements has
instituted or, to the best knowledge of the Primary Parties, threatened any
action or proceeding wherein any of the Primary Parties is alleged to be in
default thereunder under circumstances where such action or proceeding, if
determined adversely to any of the Primary Parties, would have a material
adverse effect upon the Primary Parties individually or considered as one
enterprise.
(v) The Primary Parties have good and marketable title to all assets
which are material to the businesses of the Primary Parties and to those
assets described in the Prospectus as owned by them, free and clear of all
material liens, charges, encumbrances, restrictions or other claims, except
such as are described in the Prospectus or which do not have a material
adverse effect on the businesses of the Primary Parties taken as a whole;
and all of the leases and subleases which are material to the businesses of
the Primary Parties, as described in the Registration Statement or
Prospectus, are in full force and effect.
(w) Except as may be described in the Prospectus, the Primary Parties
are not in material violation of any directive from the OTS, the FDIC, the
Commission or any other agency to make any material change in the method of
conducting their respective businesses; the Primary Parties have conducted
and are conducting their respective businesses so as to comply in all
respects with all applicable statutes and regulations (including, without
limitation, regulations, decisions, directives and orders of the OTS, the
Commission and the FDIC), except where the failure to so comply would not
reasonably be expected to result in any material adverse change in the
financial condition, results of operations, capital, properties or business
affairs of the Primary Parties considered as one enterprise and, except as
set forth in the Prospectus, there is no charge, investigation, action,
suit or proceeding before or by any court, regulatory authority or
governmental agency or body pending or, to the best knowledge any of the
Primary Parties, threatened, which would reasonably be expected to
materially and adversely affect the Reorganization, the performance of this
Agreement, or the consummation of the transactions contemplated in the Plan
as described in the Registration Statement, or which would reasonably be
expected to result in any material adverse change in the financial
condition results of operations, capital, properties or business affairs of
the Primary Parties considered as one enterprise.
(x) Prior to the Closing Date, the Primary Parties will have received
an opinion of their special counsel, Xxxx Xxxxxx Xxxxxx Xxxxxxxx & Xxxxxx
("Xxxx Xxxxxx"), with respect to the federal income tax consequences of the
Reorganization, as described in the Registration Statement and the
Prospectus, and an opinion from [ ]("[ ]")
with respect to the tax consequences of the proposed transaction under the
laws of the State of New Jersey; and the facts and representations upon
which such opinions are based are truthful, accurate and complete, and none
of the Primary Parties will take any action inconsistent therewith.
(y) The Association has timely filed all required federal and state
tax returns, has paid all taxes that have become due and payable in respect
of such returns, except where permitted to be extended, has made adequate
reserves for similar future tax liabilities, and, except as disclosed in
the Prospectus, no deficiency has been asserted with respect thereto by any
taxing authority.
(z) No approval, authorization, consent or other order of any
regulatory or supervisory or other public authority is required for the
execution and delivery by the Primary Parties of this Agreement, or the
issuance of the Shares, except for the approval of the OTS and the
Commission (which have been received) and any necessary qualification,
notification, or registration or exemption under the securities or blue sky
laws of the various states in which the Shares are to be offered.
(aa) None of the Primary Parties has: (i) issued any securities within
the last 18 months (except for (a) notes to evidence bank loans or other
liabilities in the ordinary course of business or as described in the
Prospectus, and (b) shares of Common Stock issued to the MHC with respect
to the initial capitalization of the Holding Company); (ii) had any
dealings with respect to sales of securities within the 12 months prior to
the date hereof with any member of the NASD, or any person related to or
associated with such member, other than discussions and meetings relating
to the Offering and purchases and sales of U.S. government and agency and
other securities in the ordinary course of business; (iii) entered into a
financial or management consulting agreement except for the Letter
Agreement and as contemplated hereunder; or (iv) engaged any intermediary
between the Agent and the Primary Parties in connection with the Offering
or the offering of shares of the common stock of the Association, and no
person is being compensated in any manner for such services.
(ab) Neither the Primary Parties nor, to the best knowledge of the
Primary Parties, any employee of the Primary Parties has made any payment
of funds of the Primary Parties as a loan to any person for the purchase of
Conversion Shares, except for the Holding Company's loan to the ESOP the
proceeds of which will be used to purchase Conversion Shares, or has 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.
(ac) The Association complies in all material respects with the
applicable financial record keeping and reporting requirements of the
Currency and Foreign Transactions Reporting Act of 1970, as amended, and
the regulations and rules thereunder.
(ad) The Primary Parties have not relied upon Agent or its counsel for
any legal, tax or accounting advice in connection with the Reorganization.
(ae) The records of Eligible Account Holders, Supplemental Eligible
Account Holders and Other Members are accurate and complete in all material
respects.
(af) The Primary Parties comply with all laws, rules and regulations
relating to environmental protection, and none of them has been notified or
is otherwise aware that any of them is potentially liable, or is considered
potentially liable, under the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, or any other Federal,
state or local environmental laws and regulations; no action, suit,
regulatory investigation or other proceeding is pending, threatened against
the Primary Parties relating to environmental protection, nor do the
Primary parties have any reason to believe any such proceedings may be
brought against any of them; and no disposal, release or discharge of
hazardous or toxic substances, pollutants or contaminants, including
petroleum and gas products, as any of such terms may be defined under
federal, state or local law, has occurred on, in, at or about any
facilities or properties owned or leased by any of the Primary Parties or,
to the best knowledge of the Association, in which the Association has a
security interest.
(ag) All of the loans represented as assets on the most recent
financial statements or selected financial information of the Association
included in the Prospectus meet or are exempt from all requirements of
federal, state and local law pertaining to lending, including, without
limitation, truth in lending (including the requirements of Regulations Z
and 12 C.F.R. Part 226), real estate settlement procedures, consumer credit
protection, equal credit opportunity and all disclosure laws applicable to
such loans, except for violations which, if asserted, would not result in a
material adverse effect on the financial condition, results of operations
or business of the Primary Parties taken as a whole.
(ah) None of the Primary Parties are required to be registered as an
investment company under the Investment Company Act of 1940.
(ai) As of the date hereof, the charters of the Holding Company and
the MHC have been filed with the OTS, but neither charter is effective or
otherwise in force.
Any certificates signed by an officer of any of the Primary Parties and
delivered to the Agent or its counsel that refer to this Agreement shall be
deemed to be a representation and warranty by the Primary Parties to the Agent
as to the matters covered thereby with the same effect as if such representation
and warranty were set forth herein.
Section 6.B. Representations and Warranties of the Agent. Agent
represents and warrants to the Primary Parties that:
(a) Agent is a corporation and is validly existing in good standing
under the laws of the State of New Jersey with full power and authority to
provide the services to be furnished to the Primary Parties hereunder.
(b) The execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby have been duly and validly
authorized by all necessary action on the part of Agent, and this Agreement
and is the legal, valid and binding agreement of
Agent, enforceable in accordance with its terms except as the legality,
validity, binding nature and enforceability thereof may be limited by (i)
bankruptcy, insolvency, moratorium, reorganization, conservatorship,
receivership or other similar laws relating to or affecting the enforcement
of creditors' rights generally, (ii) general equity principles regardless
of whether such enforceability is considered in a proceeding in equity or
at law, and (iii) the extent, if any, that the provisions of Sections 10 or
11 hereof may be unenforceable as against public policy.
(c) Except for licenses, approvals and permits required by the [State
of Arkansas] or required by the another jurisdiction solely because the
Offering is being made in such jurisdiction, each of Agent and its
employees, agents and representatives who shall perform any of the services
hereunder shall have, and until the Reorganization is completed or
terminated shall maintain all licenses, approvals and permits necessary to
perform such services.
(d) No action, suit, charge or proceeding before the Commission, the
NASD, any state securities commission or any court is pending, or to the
knowledge of Agent threatened, against Agent which, if determined adversely
to Agent, would have a material adverse effect upon the ability of Agent to
perform its obligations under this Agreement.
(e) Agent is registered as a broker/dealer pursuant to Section 15(b)
of the 1934 Act and is a member of the National Association of Securities
Dealers, Inc.
(f) Any funds received in the Offering by the Agent will be handled by
the Agent in accordance with Rule 15c2-4 under the 1934 Act to the extent
applicable.
Section 7. Covenants of the Primary Parties. The Primary Parties hereby
jointly and severally covenant with the Agent as follows:
(a) The Holding Company will not, at any time after the date the
Registration Statement is declared effective, file any amendment or
supplement to the Registration Statement without providing the Agent and
its counsel an opportunity to review such amendment or file any amendment
or supplement to which amendment the Agent or its counsel shall reasonably
object.
(b) The Primary Parties will not, at any time after the date any OTS
Application is approved, file any amendment or supplement to such OTS
Application without providing the Agent and its counsel an opportunity to
review such amendment or supplement or file any amendment or supplement to
which amendment or supplement the Agent or its counsel shall reasonably
object.
(c) The Primary Parties will use their best efforts to cause the OTS
to approve the Holding Company's acquisition of the Association, and will
use their best efforts to cause any post-effective amendment to the
Registration Statement to be declared effective by the Commission and any
post-effective amendment to the OTS Applications to be approved by the OTS,
and will immediately upon receipt of any information concerning the events
listed below notify the Agent (i) when the Registration Statement, as
amended, has become effective; (ii) when the MHC Notice and Application, as
amended, has been approved by the OTS; (iii) when
the Holding Company Application, as amended, has been approved by the OTS;
(iv) when the Merger Application has been approved by the OTS; (v) of the
receipt of any comments from the Commission, the OTS, or any other
governmental entity with respect to the Reorganization or the transactions
contemplated by this Agreement; (vi) of any request by the Commission, the
OTS, any other governmental entity for any amendment or supplement to the
Registration Statement or the OTS Applications or for additional
information; (vii) of the issuance by the Commission, the OTS, or any other
governmental agency of any order or other action suspending the Offerings
or the use of the Registration Statement or the Prospectus or any other
filing of the Primary Parties under the Conversion Regulations or other
applicable law, or the threat of any such action; (viii) of the issuance by
the Commission, the OTS, the FDIC or any state authority of any stop order
suspending the effectiveness of the Registration Statement or of the
initiation or threat of initiation or threat of any proceedings for that
purpose; or (ix) of the occurrence of any event mentioned in paragraph (f)
below. The Primary Parties will make every reasonable effort to prevent the
issuance by the Commission, the OTS, the FDIC or any state authority of any
order referred to in (vii) and (viii) above and, if any such order shall at
any time be issued, to obtain the lifting thereof at the earliest possible
time.
(d) The Primary Parties will deliver to the Agent and to its counsel
conformed copies of each of the following documents, with all exhibits:
each of the OTS Applications as originally filed and of each amendment or
supplement thereto, and the Registration Statement, as originally filed and
each amendment thereto. Further, the Primary Parties will deliver such
additional copies of the foregoing documents to counsel to the Agent as may
be required for any NASD filings. In addition, the Primary Parties will
also deliver to the Agent such number of copies of the Prospectus, as
amended or supplemented, as the Agent may reasonably request.
(e) The Primary Parties will comply in all material respects with any
and all terms, conditions, requirements and provisions with respect to the
Reorganization and the transactions contemplated thereby imposed by the
Commission, by applicable state law and regulations, and by the 1933 Act,
the Securities Exchange Act of 1934, as amended (the "1934 Act"), and the
rules and regulations of the Commission promulgated under such statutes, to
be complied with prior to or subsequent to the Closing Date; and when the
Prospectus is required to be delivered, the Primary Parties will comply in
all material respects, at their own expense, with all material requirements
imposed upon them by the OTS, the Conversion Regulations (except as
modified or waived in writing by the OTS), the Commission, by applicable
state law and regulations and by the 1933 Act, the 1934 Act and the rules
and regulations of the Commission promulgated under such statutes, in each
case as from time to time in force, so far as necessary to permit the
continuance of sales or dealing in shares of Common Stock during such
period in accordance with the provisions hereof and the Prospectus.
(f) Each of the Primary Parties will inform the Agent of any event or
circumstances of which it is or becomes aware as a result of which the
Registration Statement and/or Prospectus, as then supplemented or amended,
would include an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein not
misleading. If it is necessary, in the reasonable opinion of counsel for
the Primary Parties, to amend or supplement the Registration Statement or
the Prospectus in order to correct such untrue statement of a material fact
or to make the statements therein not misleading in light of the
circumstances existing at the time of their use, the Primary Parties will,
at their expense, prepare, file with the Commission and the OTS, and
furnish to the Agent, a reasonable number of copies of an amendment or
amendments of, or a supplement or supplements to, the Registration
Statement and the Prospectus (in form and substance reasonably satisfactory
to counsel for the Agent after a reasonable time for review) which will
amend or supplement the Registration Statement and/or the Prospectus so
that as amended or supplemented it will not contain an untrue statement of
a material fact or omit to state a material fact necessary in order to make
the statements therein, in light of the circumstances existing at the time,
not misleading. For the purpose of this subsection, each of the Primary
Parties will furnish such information with respect to itself as the Agent
may from time to time reasonably request.
(g) Pursuant to the terms of the Plan, the Holding Company will
endeavor in good faith, in cooperation with the Agent, to register or to
qualify the Shares for offering and sale or to exempt such Shares from
registration and to exempt the Holding Company and its officers, directors
and employees from registration as broker-dealers, under the applicable
securities laws of the jurisdictions in which the Offering will be
conducted; provided, however, that the Holding Company shall not be
obligated to file any general consent to service of process or to qualify
to do business in any jurisdiction in which it is not so qualified. In each
jurisdiction where any of the Shares shall have been registered or
qualified as above provided, the Holding Company will make and file such
statements and reports in each year as are or may be required by the laws
of such jurisdictions.
(h) The Holding Company will not sell or issue, contract to sell or
otherwise dispose of, for a period of 90 days after the date hereof,
without the Agent's prior written consent, which consent shall not be
unreasonably withheld, any shares of Common Stock other than in connection
with any plan or arrangement described in the Prospectus.
(i) For the period of three years from the date of this Agreement, the
Holding Company will furnish to the Agent upon request (i) a copy of each
report of the Holding Company furnished to or filed with the Commission
under the 1934 Act or any national securities exchange or system on which
any class of securities of the Holding Company is listed or quoted, (ii) a
copy of each report of the Holding Company mailed to holders of Common
Stock or non-confidential report filed with the Commission or the OTS or
any other supervisory or regulatory authority or any national securities
exchange or system on which any class of the securities of the Holding
Company is listed or quoted, and (iii) from time-to-time, such other
publicly available information concerning the Primary Parties as the Agent
may reasonably request.
(j) The Primary Parties will use the net proceeds from the sale of the
Common Stock in the manner set forth in the Prospectus under the caption
"Use of Proceeds."
(k) The Holding Company and the Association will distribute the
Prospectus or other offering materials in connection with the offering and
sale of the Common Stock only in accordance with the Conversion
Regulations, the 1933 Act and the 1934 Act and the rules and regulations
promulgated under such statutes, and the laws of any state in which the
shares are qualified for sale.
(l) Prior to the Closing Date, the Holding Company shall register its
Common Stock under Section 12(g) of the 1934 Act. The Holding Company shall
maintain the effectiveness of such registration for not less than three
years or such shorter period as permitted by the OTS.
(m) For so long as the Common Stock is registered under the 1934 Act,
the Holding Company will furnish to its stockholders as soon as practicable
after the end of each fiscal year such reports and other information as are
required to be furnished to its stockholders under the 1934 Act (including
consolidated financial statements of the Holding Company and its
subsidiaries, certified by independent public accountants).
(n) The Holding Company will comply with the provisions of Rule 158 of
the 0000 Xxx.
(o) The Holding Company will file with the Commission within the
required time period, such reports on Form SR as may be required pursuant
to Rule 463 under the 1933 Act.
(p) The Primary Parties will maintain appropriate arrangements for
depositing all funds received from persons mailing subscriptions for or
orders to purchase Conversion Shares on an interest bearing basis at the
rate described in the Prospectus until the Closing Date and satisfaction of
all conditions precedent to the release of the Holding Company's obligation
to refund payments received from persons subscribing for or ordering
Conversion Shares in the Conversion Offerings, in accordance with the Plan
as described in the Prospectus, or until refunds of such funds have been
made to the persons entitled thereto or withdrawal authorizations canceled
in accordance with the Plan and as described in the Prospectus. The Primary
Parties will maintain such records of all funds received to permit the
funds of each subscriber to be separately insured by the FDIC (to the
maximum extent allowable) and to enable the Primary Parties to make the
appropriate refunds of such funds in the event that such refunds are
required to be made in accordance with the Plan and as described in the
Prospectus.
(q) Prior to the Closing Date, the MHC and the Holding Company will
each register as a savings and loan holding company under the HOLA.
(r) The Primary Parties will take such actions and furnish such
information as are reasonably requested by the Agent in order for the Agent
to ensure compliance with the "Interpretation of the Board of Governors of
the NASD on Free Riding and Withholding."
(s) The Primary Parties will conduct their businesses in compliance in
all material respects with all applicable federal and state laws, rules,
regulations, decisions, directives and orders including, all decisions,
directives and orders of the Commission, the OTS and the FDIC.
(t) The Primary Parties will not amend the Plan without notifying the
Agent prior thereto.
(u) The Holding Company shall provide the Agent with any information
necessary to carry out the allocation of the Conversion Shares in the event
of an oversubscription, and such information shall be accurate and reliable
in all material respects.
(v) The Holding Company will not deliver the Shares until the Primary
Parties have satisfied or caused to be satisfied each condition set forth
in Section 9 hereof, unless such condition is waived in writing by the
Agent.
(w) Upon completion of the sale by the Holding Company of the Shares
contemplated by the Plan and the Prospectus, (i) the MHC shall have been
formed pursuant to the Plan and shall own at all times more than 50% of the
issued and outstanding shares of Common Stock, (ii) all of the issued and
outstanding shares of capital stock of the Association shall be owned by
the Holding Company, (iii) the Holding Company shall have no direct
subsidiaries other than the Association, and (iv) the Reorganization shall
have been effected in accordance with all applicable statutes, regulations,
decisions and orders; and all terms, conditions, requirements and
provisions with respect to the Reorganization (except those that are
conditions subsequent) imposed by the Commission, the OTS or any other
governmental agency, if any, shall have been complied with by the Primary
Parties in all material respects or appropriate waivers shall have been
obtained and all notice and waiting periods shall have been satisfied,
waived or elapsed.
(x) Prior to the Closing Date, the Plan shall have been approved by
the eligible voting members of the Association in accordance with the
Conversion Regulations and the provisions of the Association's charter and
bylaws.
(y) As of the Closing Date, the Primary Parties shall have completed
all conditions precedent to the Reorganization in accordance with the Plan
and shall have complied in all material respects with applicable laws,
regulations (except as modified or waived in writing by the OTS), decisions
and orders, including all terms, conditions, requirements and provisions
precedent to the Reorganization imposed upon it by the OTS as set forth in
correspondence received from the OTS.
(z) On or before the Closing Date, the Primary Parties will have
completed all conditions precedent to the Reorganization specified in the
Plan and the offer and sale of the Shares will have been conducted in all
material respects in accordance with the Plan, the Conversion Regulations
(except as modified or waived in writing by the OTS) and with all other
applicable laws, regulations, decisions and orders, including all terms,
conditions, requirements and provisions precedent to the Reorganization
imposed upon any of the Primary Parties by the OTS, the Commission or any
other regulatory authority and in the manner described in the Prospectus.
Section 8. Payment of Expenses. Whether or not the Reorganization is
completed or the sale and exchange of the Shares by the Holding Company is
consummated, the Primary Parties will pay for all expenses incident to the
performance of this Agreement, including without limitation: (a) the preparation
and filing of the OTS Applications; (b) the preparation, printing, filing,
delivery and shipment of the Registration Statement, including the Prospectus,
and all amendments and supplements thereto; (c) all filing fees and expenses in
connection with the qualification or registration of the Shares for offer and
sale by the Holding Company or the Association under the securities or "blue
sky" laws, including without limitation filing fees, reasonable legal fees and
disbursements of counsel in connection therewith, and in connection with the
preparation of a blue sky law survey; (d) the filing fees of the NASD; and (e)
the reasonable expenses of the Agent. Notwithstanding the foregoing, the Primary
Parties shall not be required to reimburse Agent for more than $25,000 in legal
fees (other than such fees as shall be related to "blue sky" matters) and
$10,000 in non-legal out-of-pocket expenses, except in the event of any material
delay in the Offering that would require an update of the financial information
in tabular form contained in the Registration Statement, as amended or
supplemented, to reflect a period later than that set forth in the original
Registration Statement. Not later than three days prior to the Closing Date, the
Agent will provide the Association with a detailed accounting of all
reimbursable expenses to be paid at the Closing.
Section 9. Conditions to the Agent's obligations. The obligations of
the Agent hereunder and the occurrence of the Closing and the Reorganization are
subject to the condition that all representations and warranties and other
statements of the Primary Parties herein contained are, at and as of the
commencement of the Offering and at and as of the Closing Date, true and
correct, the condition that the Primary Parties shall have performed all of
their obligations hereunder to be performed on or before such dates and to the
following further conditions:
(a) The Registration Statement shall have been declared effective by
the Commission and the MHC Notice and Application approved by the OTS prior
to the commencement of the Offering, the Holding Company Application shall
have been approved, and no stop order or other action suspending the
effectiveness of the Registration Statement shall have been issued under
the 1933 Act or proceedings therefor initiated or, to any of the Primary
Parties' best knowledge, threatened by the Commission or any state
authority and no order or other action suspending the authorization for use
of the Prospectus or the consummation of the Reorganization shall have been
issued or proceedings therefor initiated or, to any of the Primary Parties'
best knowledge, threatened by the OTS, the Commission, or any other
governmental body.
(b) At the Closing Date, the Agent shall have received:
(1) The favorable opinion, dated as of the Closing Date, of Xxxx
Xxxxxx, in form and substance satisfactory to counsel for the Agent to
the effect that:
(i) The Holding Company is a corporation duly organized and
validly existing and in good standing under the federal laws of
the United States of America, with corporate power and authority
to own its properties and to conduct its business as described in
the Prospectus, and is duly qualified to transact business and is
in good standing in each jurisdiction in which the conduct of its
business requires such qualification and in which the failure to
qualify would have a material adverse effect on the financial
condition, earnings, capital, properties or business affairs of
the Primary Parties.
(ii) The Association is a duly organized and validly
existing federally chartered mutual savings association with full
power and authority to own its properties and to conduct its
business as described in the Prospectus and to enter into this
Agreement and perform its obligations hereunder; the activities
of the Association as described in the Prospectus are permitted
by the rules, regulations and practices of the OTS; the issuance
and sale of the capital stock of the Association to the Holding
Company in the Reorganization has been duly and validly
authorized by all necessary corporate action on the part of the
Holding Company and the Association and, upon payment therefor in
accordance with the terms of the Plan, will be validly issued,
fully paid and nonassessable; and will be owned of record and
beneficially by the Holding Company, free and clear of any
mortgage, pledge, lien, encumbrance, claim or restriction.
(iii) The Association is a member of the FHLB of New York
and the Association is an insured depository institution under
the provisions of the Federal Deposit Insurance Act, as amended,
and to such counsel's knowledge no proceedings for the
termination or revocation of such insurance are pending or
threatened.
(iv) The MHC has been duly organized and is validly existing
as a federally chartered mutual holding company, duly authorized
to conduct its business and own its properties as described in
the Registration Statement and Prospectus.
(v) Upon consummation of the Reorganization, (a) the
authorized, issued and outstanding capital stock of the Holding
Company will be within the range set forth in the Prospectus
under the caption "Capitalization," and no shares of Common Stock
have been or will be issued and outstanding prior to the Closing
Date (except for the shares issued to the MHC upon incorporation
of the Holding Company); (b) the shares of Common Stock of the
Holding Company issued to the MHC will have been duly and validly
authorized for issuance and will be fully paid and nonassessable;
(c) the shares of Common Stock of the Holding Company to be
subscribed for in the Offering will have been duly and validly
authorized for issuance, and when issued and delivered by the
Holding Company pursuant to the Plan against payment of the
consideration calculated as set forth in the Plan, will be fully
paid and nonassessable; and (d) the issuance of the shares of
Common Stock is not subject to preemptive rights under the
charter, articles of incorporation or bylaws of any of the
Primary Parties, or arising or outstanding by operation of law
or, to the best knowledge of such counsel, under any contract,
indenture, agreement, instrument or other document, except for
the subscription rights under the Plan.
(vi) The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been
duly authorized by all necessary corporate action on the part of
the Primary Parties; and this Agreement constitutes a valid,
legal and binding obligation of each of the Primary Parties,
enforceable in accordance with its terms, except to the extent
that the provisions of Sections 10 and 11 hereof may be
unenforceable as against public policy, and except to the extent
that such enforceability may be limited by bankruptcy laws,
insolvency laws, or other laws affecting the enforcement of
creditors' rights generally, or the rights of creditors of
savings institutions insured by the FDIC (including the laws
relating to the rights of the contracting parties to equitable
remedies).
(vii) The Plan has been duly adopted by the board of
directors of the Association and by the members of the
Association, in the manner required by the MHC Regulations and
the Association's respective charter and bylaws.
(viii) The OTS Applications have been approved by the OTS
and the Prospectus and the Proxy Statement have been authorized
for use by the OTS, and subject to the satisfaction of any
conditions set forth in such OTS approvals, no further approval,
registration, authorization, consent or other order of any
federal or state regulatory agency, public board or body is
required in connection with the execution and delivery of this
Agreement, the offer, sale and issuance of the Shares and the
consummation of the Reorganization.
(ix) The purchase by the Holding Company of all of the
issued and outstanding capital stock of the Association has been
authorized by the OTS and no action has been taken, or, to such
counsel's knowledge, is pending or threatened, to revoke any such
authorization or approval.
(x) The Registration Statement has become effective under
the 1933 Act, no stop order suspending the effectiveness of the
Registration Statement has been issued, and, to the best of such
counsel's knowledge, no proceedings for that purpose have been
instituted or threatened.
(xi) The material tax consequences of the Reorganization are
set forth in the Prospectus under the caption ["The
Reorganization and Offering -- Tax Effects of the
Reorganization."] The information in the Prospectus under the
caption ["The Reorganization and Offering -- Tax Effects of the
Reorganization"] has been reviewed by such counsel and fairly
describes such opinions rendered by such counsel and [local tax
counsel] to the Primary Parties with respect to such matters.
(xii) The terms and provisions of the shares of Common Stock
conform to the description thereof contained in the Registration
Statement and the Prospectus and such description describes in
all material respects the rights of the holders thereof; the
information in the Prospectus under the captions ["Restrictions
on the Acquisition of the Company and the Bank -- Absence of
Cumulative Voting" and "-- Authorization of Preferred Stock,"
"Restrictions on the Acquisition of the Company" and "Description
of Capital Stock of the Company,"] to the extent that they
constitute matters of law or legal conclusions, has been prepared
by such counsel and is accurate in all material respects; and the
forms of certificates proposed to be used to evidence the shares
of Common Stock are in due and proper form.
(xiii) At the time the MHC Notice and Application was
approved, the MHC Notice and Application (as amended or
supplemented) including the Prospectus contained therein,
complied as to form in all material respects with the
requirements of the MHC Regulations and all applicable laws,
rules and regulations and decisions and orders of the OTS, except
as modified or waived in writing by the OTS (other than the
financial statements, notes to financial statements, financial
tables and other financial and statistical data included therein
and the appraisal valuation as to which counsel need express no
opinion). To such counsel's knowledge, no person has sought to
obtain regulatory or judicial review of the final action of the
OTS approving the OTS Applications.
(xiv) At the time that the Registration Statement became
effective the Registration Statement, including the Prospectus
contained therein (as amended or supplemented) (other than the
financial statements, notes to financial statements, financial
tables or other financial and statistical data included therein
and the appraisal valuation as to which counsel need express no
opinion), complied as to form in all material respects with the
requirements of the 1933 Act and the rules and regulations
promulgated thereunder.
(xv) To the best of such counsel's knowledge, there are no
legal or governmental proceedings pending, or threatened (i)
asserting the invalidity of this Agreement or (ii) seeking to
prevent the Reorganization or the offer, sale or issuance of the
Shares.
(xvi) The information in the Prospectus under the captions
"Regulation," "Taxation," and "The Reorganization and Offering,"
to the extent that it constitutes matters of law, summaries of
legal matters, documents or proceedings, or legal conclusions,
has been prepared by such counsel and is accurate in all material
respects (except as to the financial statements and other
financial data included therein as to which such counsel need
express no opinion).
(xvii) None of the Primary Parties are required to be
registered as an investment company under the Investment Company
Act of 1940.
(xviii) The Association has duly adopted a federal stock
charter and bylaws effective upon consummation of the
Reorganization, and none of the Primary Parties is in violation
of its articles of incorporation or its charter, as the case may
be, or its bylaws or, to the best of such counsel's knowledge,
any material obligation, agreement, covenant or condition
contained in any material contract, indenture, mortgage, loan
agreement, note, lease or other instrument filed as an exhibit
to, or incorporated by reference in, the Registration Statement,
which violation would have a material adverse effect on the
financial condition of the Primary Parties considered as one
enterprise, or on the earnings, capital, properties or business
affairs of the Primary Parties considered as one enterprise. In
addition, the execution and delivery of and performance under
this Agreement by the Primary Parties, the incurrence of the
obligations set forth herein and the consummation of the
transactions contemplated herein will not result in any material
violation of the provisions of the articles of incorporation or
charter, as the case may be, or the bylaws of any of the Primary
Parties or any material violation of any applicable law, act,
regulation, or to such counsel's knowledge, order or court order,
writ, injunction or decree.
The opinion may be limited to matters governed by the laws of the
United States and the State of New Jersey. In rendering such opinion, such
counsel may rely (A) as to matters involving the application of laws of any
jurisdiction other than the United States, to the extent such counsel deems
proper and specified in such opinion, upon the opinion of other counsel of good
standing, as long as such other opinion indicates that the Agent may rely on the
opinion, and (B) as to matters of fact, to the extent such counsel deems proper,
on certificates of responsible officers of the Primary Parties and public
officials; provided copies of any such opinion(s) or certificates of public
officials are delivered to Agent together with the opinion to be rendered
hereunder by special counsel to the Primary Parties. The opinion of such counsel
for the Primary Parties shall state that it has no reason to believe that the
Agent is not justified in relying thereon.
(2) The letter of Xxxx Xxxxxx in form and substance to the effect that
during the preparation of the Registration Statement and the Prospectus,
Xxxx Xxxxxx participated in conferences with certain officers of and other
representatives of the Primary Parties, counsel to the Agent,
representatives of the independent public accountants for the Primary
Parties and representatives of the Agent at which the contents of the
Registration Statement and the Prospectus and related matters were
discussed and has considered the matters required to be stated therein and
the statements contained therein and, although (without limiting the
opinions provided pursuant to Section 9(b)(1)) Xxxx Xxxxxx has not
independently verified the accuracy, completeness or fairness of the
statements contained in the Registration Statement and Prospectus, on the
basis of the foregoing, nothing has come to the attention of Xxxx Xxxxxx
that caused Xxxx Xxxxxx to believe that the Registration Statement at the
time it was declared effective by the SEC and as of the date of such
letter, contained or contains any untrue statement of a material fact or
omitted to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading (it being understood that
counsel need express no comment or opinion with respect to the financial
statements, schedules and other financial and statistical data included, or
statistical or appraisal methodology employed, in the Registration
Statement or Prospectus).
(3) The favorable opinion, dated as of the Closing Date, of XxXxxxxx &
English, LLP, counsel for the Agent, with respect to such matters as the
Agent may reasonably require; such opinion may rely, as to matters of fact,
upon certificates of officers and directors of the Primary Parties
delivered pursuant hereto or as such counsel may reasonably request.
(c) Concurrently with the execution of this Agreement, the Agent
shall receive a letter from Radics & Co., LLP, dated the date hereof
and addressed to the Agent, such letter confirming that Radics & Co.,
LLP is a firm of independent public accountants within the meaning of
the Code of Professional Ethics of the American Institute of Certified
Public Accountants, the 1933 Act and the regulations promulgated
thereunder and 12 C.F.R. Section 571.2(c)(3), and no information
concerning its relationship with or interests in the Primary Parties
is required by the OTS Applications or [Item 10] of the Registration
Statement, and stating in effect that in Radics & Co., LLP's opinion
the financial statements of the Association included in the Prospectus
comply as to form in all material respects with the applicable
accounting requirements of the 1933 Act, the 1934 act and the related
published rules and regulations of the Commission thereunder and the
Conversion Regulations and generally accepted accounting principles
consistently applied; (ii) stating in effect that, on the basis of
certain agreed upon procedures (but not an audit examination in
accordance with generally accepted auditing standards) consisting of a
reading of the latest available unaudited interim financial statements
of the Association prepared by the Association, a reading of the
minutes of the meetings of the Board of Directors of the Association
and the members of the Association, a review of interim financial
information in accordance with Statement on Auditing Standards No. 71,
and consultations with officers of the Association responsible for
financial and accounting matters, nothing came to their attention
which caused them to believe that: (A) such unaudited financial
statements, including recent developments, if any, are not in
conformity with generally accepted accounting principles applied on a
basis substantially consistent with that of the audited financial
statements included in the Prospectus; or (B) during the period from
the date of the latest unaudited consolidated financial statements
included in the Prospectus to a specified date not more than three
business days prior to the date hereof, there was any increase in
borrowings (defined as advances from the FHLB of New York, securities
sold under agreements to repurchase and any other form of debt other
than deposits) of any of the Primary Parties or in nonperforming loans
of the Association; or (C) there was any decrease in retained earnings
of the Association at the date of such letter as compared with amounts
shown in the latest unaudited statement of condition included in the
Prospectus or there was any decrease in net income or net interest
income of the Association for the number of full months commencing
immediately after the period covered by the latest unaudited income
statement included in the Prospectus and ended on the latest month end
prior to the date of the Prospectus or in such letter as compared to
the corresponding period in the preceding year; and (iii) stating
that, in addition to the audit examination referred to in its opinion
included in the Prospectus and the performance of the procedures
referred to in clause (ii) of this subsection (c), they have compared
with the general accounting records of the Primary Parties, which are
subject to the internal controls of the accounting system of the
Primary Parties and other data prepared by the Primary Parties
directly from such accounting records, to the extent specified in such
letter, such amounts and/or percentages set forth in the Prospectus as
the Agent may reasonably request, and they have found such amounts and
percentages to be in agreement therewith (subject to rounding).
(d) At the Closing Date, the Agent shall receive a letter from
Radics & Co., LLP dated the Closing Date, addressed to the Agent,
confirming the statements made by its letter delivered by it pursuant
to subsection (c) of this Section 9, the "specified date" referred to
in clause (ii)(B) thereof to be a date specified in such letter, which
shall not be more than three business days prior to the Closing Date.
(e) At the Closing Date, counsel to the Agent shall have been
furnished with such documents and opinions as counsel for the Agent
may require for the purpose of enabling them to advise the Agent with
respect to the issuance and sale of the Common Stock as herein
contemplated and related proceedings, or in order to evidence the
accuracy of any of the representations and warranties, or the
fulfillment of any of the conditions herein contained.
(f) At the Closing Date, the Agent shall receive a certificate of
the Chief Executive Officer and Chief Financial Officer of each of the
Primary Parties, dated the Closing Date, to the effect that: (i) they
have examined the Prospectus and at the time the Prospectus became
authorized for final use, the Prospectus did not contain an untrue
statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; (ii) there
has not been, since the respective dates as of which information is
given in the Prospectus, any material adverse change in the financial
condition or in the earnings, capital, properties, business prospects
or business affairs of the Primary Parties, considered as one
enterprise, whether or not arising in the ordinary course of business;
(iii) the representations and warranties contained in Section 6 of
this Agreement are true and correct with the same force and effect as
though made at and as of the Closing Date; (iv) the Primary Parties
have complied in all material respects with all material agreements
and satisfied all conditions on its part to be performed or satisfied
at or prior to the Closing Date including the conditions contained in
this Section 9; (v) no stop order has been issued or, to the best of
their knowledge, is threatened, by the Commission or any other
governmental body; (vi) no order suspending the Offering, the
Reorganization, the acquisition of all of the shares of the
Association by the Holding Company, the acquisition by the MHC of
shares of the Common Stock or the effectiveness of the Prospectus has
been issued and to the best of their knowledge, no proceedings for any
such purpose have been initiated or threatened by the OTS, the
Commission, or any other federal or state authority; (vii) to the best
of their knowledge, no person has sought to obtain regulatory or
judicial review of the action of the OTS in approving the Plan or to
enjoin the Reorganization.
(g) At the Closing Date, the Agent shall receive a letter from
FinPro, Inc., dated as of the Closing Date, (i) confirming that said
firm is independent of the Primary Parties and is experienced and
expert in the area of corporate appraisals within the meaning of the
Conversion Regulations, (ii) stating in effect that the Appraisal
complies in all material respects with the applicable requirements of
the Conversion Regulations, and (iii) further stating that its opinion
of the aggregate pro forma market value of the Primary Parties, as
converted, expressed in the Appraisal as most recently updated,
remains in effect.
(h) None of the Primary Parties shall have sustained, since the
date of the latest audited financial statements included in the
Registration Statement and Prospectus, any material loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise
than as set forth in the Registration Statement and the Prospectus,
and since the respective dates as of which information is given in the
Registration Statement and the Prospectus, there shall not have been
any material change, or any development involving a prospective
material change in, or affecting the general affairs of, management,
financial position, retained earnings, long-term debt, stockholders'
equity or results of operations of any of the Primary Parties,
otherwise than as set forth or contemplated in the Registration
Statement and the Prospectus, the effect of which, in any such case
described above, is in the Agent's reasonable judgment sufficiently
material and adverse as to make it impracticable or inadvisable to
proceed with the Offering or the delivery of the Shares on the terms
and in the manner contemplated in the Prospectus.
(i) Prior to and at the Closing Date: (i) there shall have been
no material transaction entered into by the Primary Parties,
considered as one enterprise, from the latest date as of which the
financial condition of the Primary Parties is set forth in the
Prospectus, other than transactions referred to or contemplated
therein; none of the Primary Parties shall have received from the OTS
or the FDIC any direction (oral or written) to make any material
change in the method of conducting their business with which it has
not complied in all material respects (which direction, if any, shall
have been disclosed to the Agent) and which would reasonably be
expected to have a material and adverse effect on the condition
(financial or otherwise) or on the earnings, capital, properties or
business affairs of the Primary Parties considered as one enterprise;
(iii) none of the Primary Parties shall have been in default (nor
shall an event have occurred which, with notice or lapse of time or
both, would constitute a default) under any provision of any agreement
or instrument relating to any material outstanding indebtedness; (iv)
no action, suit or proceeding, at law or in equity or before or by any
federal or state commission, board or other administrative agency,
shall be pending or, to the knowledge of the Primary Parties,
threatened against any of the Primary Parties or affecting any of
their properties wherein an unfavorable decision, ruling or finding
would reasonably be expected to have a material and adverse effect on
the financial condition or on the earnings, capital, properties or
business affairs of the Primary Parties, considered as one enterprise;
and (vi) the Shares have been qualified or registered for offering and
sale under the securities or "blue sky" laws of the jurisdictions
requested by the Agent.
(j) At or prior to the Closing Date, the Agent shall receive (i)
a copy of the letter from the OTS authorizing the use of the
Prospectus and approving the MHC Notice and Application, (ii) a copy
of the order from the Commission declaring the Registration Statement
effective, (iii) a copy of a certificate of existence for the
Association , (iv) a certificate & or other writing, in form and
substance reasonably satisfactory to Agent evidencing the valid
existence, from the appropriate federal authority of the Holding
Company as of the Closing Date, (v) a copy of the letter from the OTS
approving the Holding Company Application, (vi) a certificate from the
FDIC evidencing the Association's insurance of accounts, (vii) a
certificate of the FHLB of New York evidencing the Association's
membership therein, (viii) a certificate or other writing from the
OTS, in form and substance reasonably satisfactory to Agent,
evidencing the valid existence of the MHC as of the Closing Date, (ix)
a copy of the letters from the OTS approving the Merger Application
and (x) any other documents that Agent shall reasonably request.
(k) Subsequent to the date hereof, there shall not have occurred
any of the following: (i) a suspension or limitation in trading in
securities generally on the New York Stock Exchange or American Stock
Exchange or in the over-the-counter market, or quotations halted
generally on the Nasdaq Stock Market, or minimum or maximum prices for
trading have been fixed, or maximum ranges for prices for securities
have been required by either of such exchanges or the NASD or by order
of the Commission or any other governmental authority other than
temporary trading halts (A) imposed as a result of intraday changes in
the Dow Xxxxx Industrial Average, (B) lasting no longer than until the
regularly scheduled commencement of trading on the next succeeding
business-day, and (C) which, when combined with all other such halts
occurring during the previous five business days, total less than
three; (ii) a general moratorium on the operations of commercial banks
or other federally-insured financial institutions or general
moratorium on the withdrawal of deposits from commercial banks or
other federally-insured financial institutions declared by either
federal or state authorities; (iii) the engagement by the United
States in hostilities which have resulted in the declaration, on or
after the date hereof, of a national emergency or war; or (iv) a
material decline in the price of equity or debt securities if the
effect of any of (i) through (iv) herein, in the Agent's reasonable
judgment, makes it impracticable or inadvisable to proceed with the
offering or the delivery of the Shares on the terms and in the manner
contemplated in the Registration Statement and the Prospectus.
Section 10. Indemnification.
(a) The Primary Parties jointly and severally agree to indemnify and
hold harmless the Agent, its officers, directors, agents, attorneys, servants
and employees and each person, if any, who controls the Agent within the meaning
of Section 15 of the 1933 Act or Section 20(a) of the 1934 Act, against any and
all loss, liability, claim, damage or expense whatsoever (including but not
limited to settlement expenses, subject to the limitation set forth in the last
sentence of paragraph (c) below), joint or several, that the Agent or any of
such officers, directors, agents, attorneys, servants, employees and controlling
Persons (collectively, the "Related Persons") may suffer or to which the Agent
or the Related Persons may become subject under all applicable federal and state
laws or otherwise, and to promptly reimburse the Agent and any Related Persons
upon written demand for any reasonable expenses (including reasonable fees and
disbursements of counsel) incurred by the Agent or any Related Persons in
connection with investigating, preparing or defending any actions, proceedings
or claims (whether commenced or threatened) to the extent such losses, claims,
damages, liabilities or actions: (i) arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment or supplement thereto), preliminary or
final Prospectus (or any amendment or supplement thereto), the OTS Applications,
or any blue sky application or other instrument or document of the Primary
Parties or based upon written information supplied by any of the Primary Parties
filed in any state or jurisdiction to register or qualify any or all of the
Shares under the securities laws thereof (collectively, the "Blue Sky
Applications"), or any application or other document, advertisement, or
communication ("Sales Information") prepared, made or executed by or on behalf
of any of the Primary Parties with its consent or based upon written information
furnished by or on behalf of any of the Primary Parties, whether or not filed in
any Jurisdiction in order to qualify or register the Shares under the securities
laws thereof, (ii) arise out of or are based upon the omission or alleged
omission to state in any of the foregoing documents or information, a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading; (iii)
arise from any theory of liability whatsoever relating to or arising from or
based upon the Registration Statement (or any amendment or supplement thereto),
preliminary or final Prospectus (or any amendment or supplement thereto), the
OTS Applications, any Blue Sky Applications or Sales Information or other
documentation distributed in connection with the Reorganization; or (iv) result
from any claims made with respect to the accuracy, reliability and completeness
of the records of Eligible Account Holders, Supplemental Eligible Account
Holders and Other Members or for any denial or reduction of a subscription or
order to purchase Common Stock, whether as a result of a properly calculated
allocation pursuant to the Plan or otherwise, based upon such records; provided,
however, that no indemnification is required under this paragraph (a) to the
extent such losses, claims, damages, liabilities or actions arise out of or are
based upon any untrue material statements or alleged untrue material statements
in, or material omission or alleged material omission from, the Registration
Statement (or any amendment or supplement thereto) or the preliminary or final
Prospectus (or any amendment or supplement thereto), the OTS Applications, the
Blue Sky Applications or Sales Information or other documentation distributed in
connection with the Reorganization made in reliance upon and in conformity with
written information furnished to the Primary Parties by the Agent or its
representatives (including counsel) with respect to the Agent expressly for use
in the Registration Statement (or any amendment or supplement thereto) or
Prospectus (or any amendment or supplement thereto) under the captions ["Market
for the Common Stock" and "The Reorganization and Offering -- Plan of
Distribution and Selling Commissions" or statistical information regarding the
Holding Company prepared by the Agent for use in the Sales Information, except
for information derived from the Prospectus. Provided further, that the Primary
Parties will not be responsible for any loss, liability, claim, damage or
expense to the extent they result primarily from material oral misstatements by
the Agent to a purchaser of Shares which are not based upon information in the
Registration Statement or Prospectus, or from actions taken or omitted to be
taken by the Agent in bad faith or from the Agent's gross negligence or willful
misconduct, and the Agent agrees to repay to the Primary Parties any amounts
advanced to it by the Primary Parties in connection with matters as to which it
is found not to be entitled to indemnification hereunder.
(b) The Agent agrees to indemnify and hold harmless the Primary
Parties, their directors and officers, agents, servants and employees and each
person, if any, who controls any of the Primary Parties within the meaning of
Section 15 of the 1933 Act or Section 20(a) of the 1934 Act against any and all
loss, liability, claim, damage or expense whatsoever (including but not limited
to settlement expenses ,subject to the limitation set forth in the last sentence
of paragraph (c) below), joint or several which they, or any of them, may suffer
or to which they, or any of them, may become subject under all applicable
federal and state laws or otherwise, and to promptly reimburse the Primary
Parties and any such persons upon written demand for any reasonable expenses
(including fees and disbursements of counsel) incurred by them in connection
with investigating, preparing or defending any actions, proceedings or claims
(whether commenced or threatened) to the extent such losses, claims, damages,
liabilities or actions arise out of or are based upon any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement (or any amendment of supplement thereto), the OTS Applications or any
Blue Sky Applications or Sales Information or are based upon the omission or
alleged omission to state in any of the foregoing documents a material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading;
provided, however, that the Agent's obligations under this Section 10(b) shall
exist only if and only to the extent that such untrue statement or alleged
untrue statement was made in, or such material fact or alleged material fact was
omitted from, the Registration Statement (or any amendment or supplement
thereto) or the Prospectus (or any amendment or supplement thereto) in reliance
upon and in conformity with written information furnished to the Primary Parties
by the Agent expressly for use under the captions ["Market for the Common Stock"
and "The Reorganization and Offering - Plan of Distribution and Selling
Commissions" or statistical information regarding the Holding Company prepared
by the Agent for use in the Sales information (except for statistical
information derived from the Prospectus).
(c) Each indemnified party shall give prompt written notice to each
indemnifying party of any action, proceeding, claim (whether commenced or
threatened), or suit instituted against it in respect of which indemnity may be
sought hereunder, but failure to so notify an indemnifying party shall not
relieve it from any liability which it may have on account of this Section 10,
Section 11 or otherwise. An indemnifying party may participate at its own
expense in the defense of such action. In addition, if it so elects within a
reasonable time after receipt of such notice, an indemnifying party, jointly
with any other indemnifying parties receiving such notice, may assume defense of
such action with counsel chosen by it and approved by the indemnified parties
that are defendants in such action, unless such indemnified parties reasonably
object to such assumption on the ground that there may be legal defenses
available to them that are different from or in addition to those available to
such indemnifying party. If an indemnifying party assumes the defense of such
action, the indemnifying parties shall not be liable for any fees and expenses
of counsel for the indemnified parties incurred thereafter in connection with
such action, proceeding or claim, other than reasonable costs of investigation.
In no event shall the indemnifying parties be liable for the fees and expenses
of more than one separate firm of attorneys (unless an indemnified party or
parties shall have reasonably concluded that there may be defenses available to
it or them which are different from or in addition to those of other indemnified
parties)- for all indemnified parties in connection with any one action,
proceeding or claim or separate but similar or related actions, proceedings or
claims in the same jurisdiction arising out of the same general allegations or
circumstances. No indemnifying party, shall be liable for any settlement of any
action, proceeding or suit, which settlement is effected without its prior
written consent.
(d) The agreements contained in this Section 10 and in Section 11
hereof and the representations and warranties of the Primary Parties set forth
in this Agreement shall remain operative and in full force and effect regardless
of (i) any investigation made by or on behalf of the Agent or its officers,
directors, controlling persons, agents or employees or by or on behalf of any of
the Primary Parties or any officers, directors, controlling persons, agents or
employees of any of the Primary Parties; (ii) delivery of and payment hereunder
for the Shares; or (iii) any termination of this Agreement.
Section 11. Contribution.
(a) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in Section 10 is due in
accordance with its terms but is for any reason held by a court to be
unavailable from the Primary Parties on the one hand, or the Agent on the other
hand, as the case may be, the Primary Parties on the one hand, or the Agent on
the other hand, as the case may be, shall contribute to the aggregate losses,
claims, damages and liabilities (including any investigation, legal and other
expenses incurred in connection therewith and any amount paid in settlement of
any action, suit or proceeding of any claims asserted, but after deducting any
contribution received by the Primary Parties on the one hand, or the Agent on
the other hand, as the case may be, from persons other than the other party
thereto, who may also be liable for contribution) in such proportion so that (i)
the Agent is responsible for that portion represented by the percentage that the
fees paid to the Agent pursuant to Section 4 of this Agreement (not including
expenses) ("Agent's Fees"), less any portion of Agent's Fees paid by Agent to
Assisting Brokers, bear to the total proceeds received by the Primary Parties
from the sale of the Conversion Shares in the Conversion Offerings, net of all
expenses of the Offerings except Agent's Fees, and (ii) the Primary Parties
shall be responsible for the balance. If, however, the allocation provided above
is not permitted by applicable law or if the indemnified party failed to give
the notice required under Section 10 above, then each indemnifying party shall
contribute to such amount paid or payable by such indemnified party in such
proportion as is appropriate to reflect not only such relative fault of the
Primary Parties on
the one hand and the Agent on the other in connection with the statements or
omissions which resulted in such losses, claims, damages or liabilities (or
actions, proceedings or claims in respect thereof), but also the relative
benefits received by the Primary Parties on the one hand and the Agent on the
other from the Offering, as well as any other relevant equitable considerations.
The relative benefits received by the Primary Parties on the one hand and the
Agent on the other hand shall be deemed to be in the same proportion as the
total proceeds from the Conversion Offerings, net of all expenses of the
Conversion Offerings except Agent's Fees, received by the Primary Parties bear,
with respect to the Agent, to the total fees (not including expenses) received
by the Agent less the portion of such fees paid by the Agent to Assisting
Brokers. The relative fault shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Primary Parties on the one hand or the Agent on the other and
the parties relative intent, good faith, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Primary
Parties and the Agent agree that it would not be just and equitable if
contribution pursuant to this Section 11 were determined by pro-rata allocation
or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 11. The amount paid
or payable by an indemnified party as a result of the losses, claims, damages or
liabilities (or action, proceedings or claims in respect thereof) referred to
above in this Section 11 shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action, proceeding or claim. It is expressly agreed that
the Agent shall not be liable for any loss, liability, claim, damage or expense
or be required to contribute any amount which in the aggregate exceeds the
amount paid (excluding reimbursable expenses) to the Agent under this Agreement
less the portion of such fees paid by the Agent to Assisting Brokers. It is
understood and agreed that the above-stated limitation on the Agent's liability
is essential to the Agent and that the Agent would not have entered into this
Agreement if such limitation had not been agreed to by the parties to this
Agreement. No person found guilty of any fraudulent misrepresentation (within
the meaning of Section 11(f) of the 0000 Xxx) shall be entitled to contribution
from any person who was not found guilty of such fraudulent misrepresentation.
The duties, obligations and liabilities of the Primary Parties and the Agent
under this Section 11 and under Section 10 shall be in addition to any duties,
obligations and liabilities which the Primary Parties and the Agent may
otherwise have. For purposes of this Section 11, each of the Agent's and the
Primary Parties' officers and directors and each person, if any, who controls
the Agent or any of the Primary Parties within the meaning of the 1933 Act and
the 1934 Act shall have the same rights to contribution as the Primary Parties
and the Agent. Any party entitled to contribution, promptly after receipt of
notice of commencement of any action, suit, claim or proceeding against such
party in respect of which a claim for contribution may be made against another
party under this Section 11, will notify such party from whom contribution may
be sought, but the omission to so notify such party shall not relive the party
from whom contribution may be sought from any other obligation it may have
hereunder or otherwise than under this Section 11.
Section 12. Representations, Warranties and Indemnities to Survive
Delivery. All representations, warranties and indemnities and other statements
contained in this Agreement, or contained in certificates of officers of the
Primary Parties or the Agent submitted pursuant hereto, shall remain operative
and in full force and effect, regardless of any termination or cancellation of
this Agreement or any investigation made by or on behalf of the Agent or its
controlling persons, or by or on behalf of the Primary Parties and shall survive
the issuance of the Shares, and any legal representative, successor or assign of
the Agent, any of the Primary Parties, and any indemnified person shall be
entitled to the benefit of the respective agreements, indemnities, warranties
and representations.
Section 13. Termination. Agent may terminate this Agreement by giving
the notice indicated below in this Section at any time after this Agreement
becomes effective as follows:
(a) In the event the Holding Company fails to sell the minimum number
of the Conversion Shares within the period specified in accordance with the
provisions of the Plan or as required by the Conversion Regulations and
applicable law, this Agreement shall terminate upon refund by the Primary
Parties to each person who has subscribed for or ordered any of the
Conversion Shares the full amount which it may have received from such
person, together with interest in accordance with Section 3, and no party
to this Agreement shall have any obligation to the other hereunder, except
as set forth in Sections 3, 4, 8, 10 and 11 hereof.
(b) If any of the conditions specified in Section 9 shall not have
been fulfilled when and as required by this Agreement, or by the Closing
Date, or waived in writing by the Agent, this Agreement and all of the
Agent's obligations hereunder may be canceled by the Agent by notifying the
Association of such cancellation in writing at any time at or prior to the
Closing Date, and any such cancellation shall be without liability of any
party to any other party except as otherwise provided in Sections 3, 4, 8,
10 and 11 hereof.
(c) If Agent elects to terminate this Agreement as provided in this
Section, the Association shall be notified by the Agent as provided in
Section 14 hereof.
(d) If this Agreement is terminated in accordance with the provisions
of Sections 3, 9, or 13, the Primary Parties shall pay the Agent the fees
earned pursuant to Section 4 and will reimburse the Agent for its
reasonable expenses pursuant to Section 8, including without limitation
accounting, communication, legal and travel expenses.
Section 14. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to Agent shall be
directed to Xxxx, Xxxx & Co., 000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxx Xxxxxx
00000, Attention: Xxxxxxx Xxxxx (with a copy to Xxxxxxx X. Xxxxxxxx, Esquire,
XxXxxxxx & English, 000 Xxxxxxxx Xxxxxx, Xxxx Xxxxxxx Center, Newark, New Jersey
07102-4096); notices to the Primary Parties shall be directed to [Axia Federal
Savings Bank], 0000 Xx. Xxxxxxx Xxxxxx, Xxxxxx, Xxx Xxxxxx 00000 Attention: Xxxx
X. Xxxxx, President and Chief Executive Officer (with a copy to Xxxx Xxxx,
Esquire, Xxxx Xxxxxx Xxxxxx Xxxxxxxx & Xxxxxx, P.C., 0000 Xxxxxxxxx Xxxxxx,
X.X., Xxxxx 000, Xxxxxxxxxx, X.X. 20015).
Section 15. Parties. This Agreement shall inure to the benefit of and
be binding upon the Agent and the Primary Parties, and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
parties hereto and their respective successors and the controlling persons and
officers and directors referred to in Sections 10 and 11 and their heirs and
legal representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provisions herein contained. It is understood
and agreed that this Agreement is the exclusive agreement among the parties,
supersedes any prior Agreement among the parties and may not be varied except by
a writing signed by all parties.
Section 16. Partial Invalidity. In the event that any term, provision
or covenant herein or the application thereof to any circumstances or situation
shall be invalid or unenforceable, in whole or in part, the remainder hereof and
the application of said term, provision or covenant to any other circumstance or
situation shall not be affected thereby, and each term, provision or covenant
herein shall be valid and enforceable to the full extent permitted by law.
Section 17. Construction. This Agreement shall be construed in
accordance with the laws of the State of New Jersey.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us a counterpart hereof, whereupon this
instrument along with all counterparts will become a binding agreement between
you and us in accordance with its terms.
Very truly yours,
LIBERTY BANCORP, INC.
(In Formation)
By:__________________________
Xxxx X. Xxxxx,
President and Chief
Executive Officer
LIBERTY BANCORP, MHC
(In Formation)
By:____________________________
Xxxx X. Xxxxx,
President and Chief
Executive Officer
AXIA FEDERAL SAVINGS BANK
By:____________________________
Xxxx X. Xxxxx,
President and Chief
Executive Officer
The foregoing Agency Agreement is
hereby confirmed and accepted as of
the date first set and above written.
XXXX, XXXX & CO., INC.
By:__________________________
Xxx X. Xxxxxxx,
President and Chief
Executive Officer
LIBERTY BANCORP, INC.
(A Federal Corporation)
Up to 1,594,475,000 Shares
(Par Value $1.00 Per Share)
_______________, 1998
Ladies and Gentlemen:
We have agreed to assist Liberty Bancorp, Inc. (the "Holding Company"),
a federal corporation, and Axia Federal Savings Bank ("Axia" or the
"Association"), a federally chartered mutual savings association, in connection
with the offer and sale by the Holding Company of up to 1,594,475 shares of the
common stock, $1.00 par value per share (the "Common Stock"). These shares are
to be issued in connection with the reorganization of the Association from a
mutual savings association to a stock savings association and wholly owned
subsidiary of the Holding Company (the "Reorganization"), in accordance with the
Plan of Reorganization from a Mutual Savings Association to Mutual Holding
Company and Stock Issuance Plan (the "Plan"). Under the Plan, the Holding
Company will become, upon consummation of the Reorganization, a majority-owned
subsidiary of Liberty Bancorp, MHC, a federally chartered mutual holding
company. The offering price per share of the Common Stock has been fixed at
$10.00. The Common Stock and certain of the terms on which it is being offered
are more fully described in the enclosed prospectus dated ___________, 1998 (the
"Prospectus"). Capitalized terms not otherwise defined herein shall have the
meaning ascribed to them in the Prospectus.
In connection with the Reorganization, the Holding Company is offering
the Common Stock in a Subscription Offering to the Eligible Account Holders, the
ESOP, the Supplemental Eligible Account Holders and the Other Members. The
Holding Company is also offering all shares of Common Stock offered but not
subscribed for in the Subscription Offering in the Community Offering to members
of the general public, with preference given first to residents of the
Association's local community of the New Jersey counties of Union and Middlesex.
The Common Stock is also being offered in accordance with the Plan by a selling
group of broker-dealers in the Syndicated Community Offering.
We are offering the selected dealers (of which you are one) the
opportunity to participate in the solicitation of offers to buy the Common Stock
and we will pay you a fee in the amount of ________ percent (_______%) of the
dollar amount of the Common Stock sold on behalf of the Holding Company by you,
as evidenced by the authorized designation of your firm on the order form or
forms for such Common Stock accompanying the funds transmitted for payment
therefor to the special account established by the Association for the purpose
of holding such funds. Any purchase of Common Stock made pursuant to this
Agreement is subject to the maximum purchase limitations provided for in the
Plan and described in the Prospectus. It is understood, of course, that payment
of your fee will be made to you directly by the Holding Company for the Common
Stock sold on behalf of the Holding Company by you, as evidenced in accordance
with the preceding sentence. As soon as practicable after the closing date of
the Offering, the Holding Company will remit to you the fees to which you are
entitled hereunder.
Each order form for the purchase of Common Stock must set forth the
identity and address of each person to whom the certificates for such Common
Stock should be issued and delivered. Such order form should clearly identify
your firm. You shall instruct any subscriber who elects to send his order form
to you to make any accompanying check payable to the Association.
This offer is made subject to the terms and conditions herein set forth
and contained in the Plan and is made only to selected dealers who are (i)
members in good standing of the National Association of Securities Dealers, Inc.
(the "NASD") who are to comply with all applicable rules of the NASD, including,
without limitation, the NASD's Interpretation With Respect to Free-Riding and
Withholding and Section 24 of Article III of the NASD's Rules of Fair Practice,
or (ii) foreign dealers not eligible for membership in the NASD who agree (A)
not to sell any Common Stock within the United States, its territories or
possessions or to persons who are citizens thereof or resident therein and (B)
in making other sales to comply with the above-mentioned NASD Interpretation,
Sections 8, 24 and 36 of the above-mentioned Article III as if they were NASD
members and Section 2S of such Article III as it applies to non-member brokers
or dealers in a foreign country.
Orders for Common Stock will be strictly subject to confirmation and
we, acting on behalf of the Holding Company, reserve the right in our
unrestricted discretion to reject any order in whole or in part, to accept or
reject orders in the order of their receipt or otherwise, and to allot. Neither
you nor any other person is authorized by the Holding Company or by us to give
any information or make any representations other than those contained in the
Prospectus in connection with the sale of any of the Common Stock. No selected
dealer is authorized to act as agent for us when soliciting offers to buy the
Common Stock from the public or otherwise. No selected dealer shall engage in
any stabilizing (as defined in Regulation M promulgated under the Securities
Exchange Act of 1934) with respect to the Common Stock during the offering.
We and each selected dealer assisting in selling Common Stock pursuant
hereto agree to comply with the applicable requirements of the Securities
Exchange Act of 1934 and applicable state rules and regulations. In addition, we
and each selected dealer confirm that the Securities and Exchange Commission
interprets Rule 15c2-8 promulgated under the Securities Exchange Act of 1934 as
requiring that a Prospectus be supplied to each person who is expected to
receive a confirmation of sale 48 hours prior to delivery of such person's order
form.
We and each selected dealer within the meaning of Rule 15c3-1(a)(1)
further agree to the extent that our customers desire to pay for shares with
funds held by or to be deposited with us, in accordance with the interpretation
of the Securities and Exchange Commission of Rule 15c2-4 promulgated under the
Securities Exchange Act of 1934, either (a) upon receipt of an executed order
form or direction to execute an order form on behalf of a customer to forward
the offering price for the Common Stock ordered on or before twelve noon of the
business day following receipt or execution of an order form by us to the
Holding Company for deposit in a segregated account or (b) to solicit
indications of interest in which event (i) we will subsequently contact any
customer indicating interest to confirm the interest and give instructions to
execute and return an order form or to receive authorization to execute the
order form on the customer's behalf, (ii) we will mail acknowledgements of
receipt of orders to each customer confirming interest on the business day
following such confirmation, (iii) we will debit accounts of such customers on
the third business day (the "Debit Date") following receipt of the confirmation
referred to in (i), and (iv) we will forward completed order forms together with
such funds to the Holding Company on or before twelve noon on the next business
day following the Debit Date for deposit in a segregated account. We and each
selected dealer acknowledge that if the procedure in (b) is adopted, our
customers' funds are not required to be in their accounts until the Debit Date.
Unless earlier terminated by us, this Agreement shall terminate upon
the closing date of the Offering. We may terminate this Agreement or any
provisions hereof at any time by written or telegraphic notice to you. Of
course, our obligations hereunder are subject to the successful completion of
the Offering.
You agree that at any time or times prior to the termination of this
Agreement you will, upon our request, report to us the number of shares of
Common Stock sold on behalf of the Holding Company by you under this Agreement.
We shall have full authority to take such actions as we may deem
advisable in respect of all matters pertaining to the offering. We shall be
under no liability to you except for lack of good faith and for obligations
expressly assumed by us in this Agreement.
Upon application to us, we will inform you as to the states in which we
believe the Common Stock has been qualified for sale under, or are exempt from
the requirements of, the respective blue sky laws of such states, but we assume
no responsibility or obligation as to your rights to sell Common Stock in any
state.
Additional copies of the Prospectus and any supplements thereto will be
supplied in reasonable quantities upon request.
Any notice from us to you shall be deemed to have been duly given if
mailed, telephoned, or telegraphed to you at the address to which this Agreement
is mailed.
This Agreement shall be construed in accordance with the laws of the
State of New Jersey.
Please confirm your agreement hereto by signing and returning the
confirmation accompanying this letter at once to us at Xxxx, Xxxx & Co., Inc.,
000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxx Xxxxxx 00000. The enclosed duplicate
copy will evidence the agreement between us.
XXXX, XXXX a CO., INC.
By:_____________________________
Xxx X. Xxxxxxx
President and Chief Executive
Officer
Agreed and accepted as of _________________, 1998
_____________________________
_____________________________
