15,072,815 Shares
(subject to increase up to 17,333,738 shares
in the event of an oversubscription)
XXXXXX RIVER BANCORP, INC.
(a Delaware corporation)
Common Stock
(par value $0.01 per share)
AGENCY AGREEMENT
, 1998
SANDLER X'XXXXX & PARTNERS, L.P.
Two World Trade Center, 000xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
XXXXXX RIVER BANCORP, INC., a Delaware corporation (the "Company"), and THE
XXXXXX RIVER SAVINGS INSTITUTION, a New York State-chartered mutual savings bank
(the "Bank"), hereby confirm their agreement with Sandler X'Xxxxx & Partners,
L.P. ("Sandler X'Xxxxx" or the "Agent"), with respect to the offer and sale by
the Company of 15,072,815 shares (subject to increase up to 17,333,738 shares in
the event of an oversubscription) of the Company's Common Stock, par value $0.01
per share (the "Common Stock"). The shares of Common Stock to be sold by the
Company are hereinafter referred to as the "Securities." In addition, as
described herein, the Company expects to contribute shares of Common Stock in an
amount equal to 3% of the Securities sold in the Offerings (as hereinafter
defined) to The Xxxxxx River Bank & Trust Company Foundation (the "Foundation"),
such shares being hereinafter referred to as the "Foundation Shares."
The Securities are being offered for sale and the Foundation Shares are
being contributed in accordance with the Plan of Conversion (the "Plan") adopted
by the Board of Trustees of the Bank pursuant to which the Bank intends to
convert from a New York State-chartered mutual savings bank to a New York
State-chartered stock savings bank to be known as Xxxxxx River Bank & Trust
Company and issue all of its stock to the Company. Pursuant to the Plan, the
Company is offering to certain of the Bank's depositors and to the Bank's and
the Company's tax-qualified employee benefit plans, including the Bank's
Employee Stock Ownership Plan (the "ESOP")
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(collectively, the "Employee Plans") rights to subscribe for the Securities in a
subscription offering (the "Subscription Offering"). To the extent Securities
are not subscribed for in the Subscription Offering, such Securities may be
offered through Sandler X'Xxxxx in a community offering to selected persons (the
"Community Offering"). It is currently anticipated by the Bank and the Company
that any Securities not subscribed for in the Subscription Offering and the
Community Offering will be offered to certain members of the general public in a
syndicated community offering (the "Syndicated Community Offering"). The
Subscription Offering, the Community Offering and the Syndicated Community
Offering are hereinafter referred to collectively as the "Offerings," and the
conversion of the Bank from mutual to stock form, the acquisition of the capital
stock of the Bank by the Company and the Offerings are hereinafter referred to
collectively as the "Conversion." It is acknowledged that the number of
Securities to be sold in the Conversion may be increased or decreased as
described in the Prospectus (as hereinafter defined). If the number of
Securities is increased or decreased in accordance with the Plan, the term
"Securities" shall mean such greater or lesser number, where applicable. In the
event that a holding company form of organization is not utilized, all pertinent
terms of this Agreement will apply to the conversion of the Bank from the mutual
to stock form of organization and the sale of the Bank's common stock.
In connection with the Conversion and pursuant to the terms of the Plan as
described in the Prospectus, the Company has established the Foundation.
Immediately following the consummation of the Conversion, subject to compliance
with certain conditions as may be imposed by regulatory authorities, the Company
will contribute newly-issued shares of Common Stock in an amount equal to 3% of
the Securities sold in the Offering, or between 334,223 and 452,184 shares of
Common Stock (subject to increase in certain circumstances to 520,012 shares).
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-1 (No. 333-____), including a
related prospectus, for the registration of the Securities under the Securities
Act of 1933, as amended (the "Securities Act"), has filed such amendments
thereto, if any, and such amended prospectuses as may have been required to the
date hereof by the Commission in order to declare such registration statement
effective, and will file such additional amendments thereto and such amended
prospectuses and prospectus supplements as may hereafter be required. Such
registration statement (as amended to date, if applicable, and as from time to
time amended or supplemented hereafter) and the prospectuses constituting a part
thereof (including in each case all documents incorporated or deemed to be
incorporated by reference therein and the information, if any, deemed to be a
part thereof pursuant to the rules and regulations of the Commission under the
Securities Act, as from time to time amended or supplemented pursuant to the
Securities Act or otherwise (the "Securities Act Regulations")), are hereinafter
referred to as the "Registration Statement" and the "Prospectus," respectively,
except that if any revised prospectus shall be used by the Company in connection
with the Subscription Offering, the Community Offering or the Syndicated
Community Offering which
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differs from the Prospectus on file at the Commission at the time the
Registration Statement becomes effective (whether or not such revised prospectus
is required to be filed by the Company pursuant to Rule 424(b) of the Securities
Act Regulations), the term "Prospectus" shall refer to such revised prospectus
from and after the time it is first provided to the Agent for such use.
Concurrently with the execution of this Agreement, the Company is
delivering to the Agent copies of the Prospectus of the Company to be used in
the Subscription Offering. Such Prospectus contains information with respect to
the Bank, the Company and the Common Stock.
SECTION 1. REPRESENTATIONS AND WARRANTIES.
(a) The Company and the Bank jointly and severally represent and warrant to
the Agent as of the date hereof as follows:
(i) The Registration Statement has been declared effective by the
Commission, no stop order has been issued with respect thereto and no
proceedings therefor have been initiated or, to the knowledge of the
Company and the Bank, threatened by the Commission. At the time the
Registration Statement became effective and at the Closing Time referred to
in Section 2 hereof, the Registration Statement complied and will comply in
all material respects with the requirements of the Securities Act and the
Securities Act Regulations and did not and will not contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading. The Prospectus at the date hereof does not and at the Closing
Time referred to in Section 2 hereof will not include an untrue statement
of a material fact or omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under which
they were made, not misleading; provided, however, that the representations
and warranties in this subsection shall not apply to statements in or
omissions from the Registration Statement or Prospectus made in reliance
upon and in conformity with written information with respect to the Agent
furnished to the Company or the Bank by the Agent expressly for use in the
Registration Statement or Prospectus (the "Agent Information," which the
Company and the Bank acknowledge appears only in the first two paragraphs
of the section captioned "THE CONVERSION -- Marketing and Underwriting
Arrangements" of the Prospectus).
(ii) The Company has filed with the Department of the Treasury, Office
of Thrift Supervision (the "OTS"), the Company's application for approval
of its acquisition of the Bank (the "Holding Company Application") on Form
H-(e)1-S promulgated under the savings and loan holding company provisions
of the Home Owners' Loan Act, as amended ("HOLA") and the regulations
promulgated thereunder. The Company has received written notice from
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the OTS dated __________, 1998, of its approval of the Holding Company
Application, such approval remains in full force and effect and no order
has been issued by the OTS suspending or revoking such approval and no
proceedings therefor have been initiated or, to the knowledge of the
Company or the Bank, threatened by the OTS. At the date of such approval
and at the Closing Time referred to in Section 2, the Holding Company
Application complied and will comply in all material respects with the
applicable provisions of HOLA and the regulations promulgated thereunder.
In addition, the Bank has filed with the OTS an application to be deemed to
be a savings association for purposes of holding company regulation (the
"Thrift Election"). The Bank has received written notice from the OTS dated
___________, 1998, of its approval of the Thrift Election, such approval
remains in full force and effect and no order has been issued by the OTS
suspending or revoking such approval and no proceedings therefor have been
initiated or, to the knowledge of the Company or the Bank, threatened by
the OTS. At the date of such approval and at the Closing Time referred to
in Section 2, the Thrift Election complied and will comply in all material
respects with the applicable provisions of HOLA and the regulations
promulgated thereunder. At the date of such approval and at the Closing
Time referred to in Section 2, the Company was not and will not be required
to obtain approval of the Federal Reserve Board or to register with such
Board to become a "bank holding company" as defined in the Bank Holding
Company Act of 1956, as amended, and the regulations promulgated
thereunder.
(iii) Pursuant to the General Regulations of the Banking Board of the
State of New York and the rules and regulations of the Federal Deposit
Insurance Corporation (the "FDIC") governing the conversion of New York
State-chartered mutual savings banks to stock form (the "Conversion
Regulations"), the Bank has filed with the Superintendent of Banks of the
State of New York (the "Superintendent") an Application for Approval of
Conversion on Form 86-AC, including copies of the Bank's Proxy Statement,
dated ______________, 1998, relating to the Conversion (the "Proxy
Statement") and the Prospectus (such application, as amended to date, if
applicable, and as from time to time amended or supplemented hereafter, is
hereinafter referred to as the "Conversion Application"); the Bank has
filed with the FDIC a Notice of Intention to Convert (the "Conversion
Notice"), including the Form H-(e)1-S and the Form 86-AC; and the Bank has
filed such amendments to the Conversion Application and the Conversion
Notice and such supplementary materials as may have been required to the
date hereof. The Superintendent has, by letter dated __________, 1998,
approved the Conversion Application, such order remains in full force and
effect and no order has been issued by the Superintendent suspending or
revoking such order and no proceedings therefor have been initiated or, to
the knowledge of the Company or the Bank, threatened by the Superintendent.
The FDIC has, by letter dated _____________, 1998, issued a letter of
intent not to object to the Conversion Notice, such letter remains in full
force and effect and no letter or order has been issued by the FDIC
suspending or revoking such letter and no proceedings
5
therefor have been initiated or, to the knowledge of the Company or the
Bank, threatened by the FDIC. At the date of such approval by the
Superintendent and at the Closing Time referred to in Section 2, the
Conversion Application, and at the date of the FDIC letter of intent not to
object and at the Closing Time referred to in Section 2, the Conversion
Notice, complied and will comply in all material respects with the
applicable provisions of the Conversion Regulations.
(iv) At the time of their use, the Proxy Statement and any other proxy
solicitation materials will comply in all material respects with the
applicable provisions of the Conversion Regulations and will not contain an
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The Company and
the Bank will promptly file the Prospectus and any supplemental sales
literature with the Commission, the Superintendent and the FDIC. The
Prospectus and all supplemental sales literature, as of the date the
Registration Statement became effective and at the Closing Time referred to
in Section 2, complied and will comply in all material respects with the
applicable requirements of the Conversion Regulations and, at or prior to
the time of their first use, will have received all required authorizations
of the Superintendent and the FDIC for use in final form.
(v) Neither the Commission, the Superintendent nor the FDIC has, by
order or otherwise, prevented or suspended the use of the Prospectus or any
supplemental sales literature authorized by the Company or the Bank for use
in connection with the Offerings.
(vi) At the Closing Time referred to in Section 2, the Company and the
Bank will have completed the conditions precedent to the Conversion and the
establishment of the Foundation in accordance with the Plan, the applicable
Conversion Regulations and all other applicable laws, regulations,
decisions and orders, including all material terms, conditions,
requirements and provisions precedent to the Conversion imposed upon the
Company or the Bank by the OTS, the Superintendent, the FDIC or any other
regulatory authority, other than those which the regulatory authority
permits to be completed after the Conversion.
(vii) RP Financial, L.C., which prepared the valuation of the Bank as
part of the Conversion, has advised the Company and the Bank in writing
that it satisfies all requirements for an appraiser set forth in the
Conversion Regulations and any interpretations or guidelines issued by the
Superintendent and the FDIC with respect thereto; and Xxxxxxx X. Xxxxxx,
Incorporated, which prepared the opinion filed as Exhibit ___ of the
Conversion Application as required by the Conversion Regulations, satisfies
all requirements for an "independent executive compensation expert" within
the meaning of the Conversion Regulations.
6
(viii) The accountants who certified the consolidated financial
statements and supporting schedules of the Bank included in the
Registration Statement have advised the Company and the Bank in writing
that they are independent public accountants within the meaning of the Code
of Ethics of the American Institute of Certified Public Accountants, and
such accountants are, with respect to the Company, the Bank and each
subsidiary of the Bank, independent certified public accountants as
required by the Securities Act and the Securities Act Regulations.
(ix) Except for the Bank, the only business entities (individually, a
"Subsidiary" and collectively, the "Subsidiaries") in which the Company and
the Bank own, directly or indirectly, a 25 percent or greater legal or
beneficial interest, and the percentage of such interest, are as follows:
Xxxxxx City Associates, Inc., wholly owned by the Bank; Xxxxxx River
Mortgage Corporation, wholly owned by the Bank; Xxxxxx River Funding Corp.,
__ percent owned by the Bank; Xxxxxx City Centre, Inc., wholly owned by the
Bank; and Premium Payment Plan ("PPP"), a partnership 65 percent owned by
Xxxxxx City Associates, Inc.
(x) The consolidated financial statements and the related notes
thereto included in the Registration Statement and the Prospectus present
fairly the financial position of the Company, the Bank and the Subsidiaries
at the dates indicated and the results of operations, retained earnings and
cash flows for the periods specified, and comply as to form in all material
respects with the applicable accounting requirements of the Securities Act
Regulations and the Conversion Regulations; except as otherwise stated in
the Registration Statement, such financial statements have been prepared in
conformity with generally accepted accounting principles applied on a
consistent basis; and the supporting schedules and tables included in the
Registration Statement present fairly the information required to be stated
therein.
(xi) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, except as otherwise stated
therein (A) there has been no material adverse change in the financial
condition, results of operations or business affairs of the Company, the
Bank and the Subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, and (B) except for transactions
specifically referred to or contemplated in the Prospectus, there have been
no transactions entered into by the Company, the Bank or any of the
Subsidiaries, other than those in the ordinary course of business, which
are material with respect to the Company, the Bank and the Subsidiaries,
considered as one enterprise.
(xii) The Company has been duly incorporated and is validly existing
as a
7
corporation in good standing under the laws of the State of Delaware with
corporate power and authority to own, lease and operate its properties and
to conduct its business as described in the Prospectus and to enter into
and perform its obligations under this Agreement; and the Company is duly
qualified as a foreign corporation to transact business and is in good
standing in the State of New York and in each other jurisdiction in which
such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the failure to
be so qualified would not have a material adverse effect on the financial
condition, results of operations or business affairs of the Company, the
Bank and the Subsidiaries, considered as one enterprise.
(xiii) Upon consummation of the Conversion and the contribution of the
Foundation Shares as described in the Prospectus, the authorized, issued
and outstanding capital stock of the Company will be as set forth in the
Prospectus under "CAPITALIZATION" (except for subsequent issuances, if any,
pursuant to reservations, agreements or employee benefit plans referred to
in the Prospectus); no shares of Common Stock have been or will be issued
prior to the Closing Time referred to in Section 2; at the time of
Conversion, the Securities will have been duly authorized for issuance and,
when issued and delivered by the Company pursuant to the Plan against
payment of the consideration calculated as set forth in the Plan and stated
on the cover page of the Prospectus, will be duly and validly issued and
fully paid and non-assessable; the terms and provisions of the Common Stock
and the capital stock of the Company conform to all statements relating
thereto contained in the Prospectus; the certificates representing the
shares of Common Stock conform to the requirements of applicable law and
regulations; and the issuance of the Securities is not subject to
preemptive or other similar rights.
(xiv) The Bank, as of the date hereof, is a New York State-chartered
savings bank in mutual form and upon consummation of the Conversion will be
a New York State-chartered savings bank in stock form, in both instances
with full corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the Prospectus; the
Company, the Bank and the Subsidiaries have obtained all licenses, permits
and other governmental authorizations currently required for the conduct of
their respective businesses or required for the conduct of their respective
businesses as contemplated by the Holding Company Application and the
Conversion Application, except where the failure to obtain such licenses,
permits or other governmental authorizations would not have a material
adverse effect on the financial condition, results of operations or
business affairs of the Company, the Bank and the Subsidiaries, considered
as one enterprise; all such licenses, permits and other governmental
authorizations are in full force and effect and the Company, the Bank and
the Subsidiaries are in all material respects in compliance therewith;
neither the Company, the Bank nor any of the Subsidiaries has received
notice of any
8
proceeding or action relating to the revocation or modification of any such
license, permit or other governmental authorization which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or finding,
might have a material adverse effect on the financial condition, results of
operations or business affairs of the Company, the Bank and the
Subsidiaries, considered as one enterprise; and the Bank is in good
standing under the laws of the State of New York and is duly qualified as a
foreign corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by reason of
ownership or leasing of property or the conduct of business, except where
the failure to be so qualified would not have a material adverse effect on
the financial condition, results of operations or business affairs of the
Company, the Bank and the Subsidiaries, considered as one enterprise.
(xv) The deposit accounts of the Bank are insured by the FDIC up to
the applicable limits and, upon consummation of the Conversion, the
liquidation account for the benefit of eligible account holders and
supplemental eligible account holders will be duly established in
accordance with the requirements of the Conversion Regulations. The Bank is
a "qualified thrift lender" within the meaning of 12 U.S.C. Section
1467a(m).
(xvi) Upon consummation of the Conversion, the authorized capital
stock of the Bank will be 40,000,000 shares of common stock, par value $.01
per share (the "Bank Common Stock"), and 5,000,000 shares of preferred
stock, par value $.01 per share (the "Bank Preferred Stock"), and the
issued and outstanding capital stock of the Bank will be 1,000 shares of
Bank Common Stock and no shares of the Bank Preferred Stock; no shares of
Bank Common Stock or Bank Preferred Stock have been or will be issued prior
to the Closing Time referred to in Section 2; the shares of Bank Common
Stock to be issued to the Company will have been duly authorized for
issuance and, when issued and delivered by the Bank pursuant to the Plan
against payment of the consideration calculated as set forth in the Plan
and as described in the Prospectus, will be duly and validly issued and
fully paid and non-assessable, and all such Bank Common Stock will be owned
beneficially and of record by the Company free and clear of any security
interest, mortgage, pledge, lien, encumbrance or legal or equitable claim;
the terms and provisions of Bank Common Stock and the Bank Preferred Stock
conform to all statements relating thereto contained in the Prospectus, and
the certificates representing the shares of Bank Common Stock will conform
with the requirements of applicable laws and regulations; and the issuance
of the Bank Common Stock is not subject to preemptive or similar rights.
(xvii) The Foundation has been duly incorporated and is validly
existing as a non-stock corporation in good standing under the laws of the
State of Delaware with corporate power and authority to own, lease and
operate its properties and to conduct its business as
9
described in the Prospectus; the Foundation will not be a savings and loan
holding company within the meaning of 12 C.F.R. Section 574.2(q) as a
result of the issuance of shares of Common Stock to it in accordance with
the terms of the Plan and in the amounts as described in the Prospectus; no
approvals are required to establish the Foundation and to contribute the
shares of Common Stock thereto as described in the Prospectus other than
those imposed by the Superintendent and the FDIC; except as specifically
disclosed in the Prospectus and the Proxy Statement, there are no
agreements and/or understandings, written or oral, between the Company
and/or the Bank and the Foundation with respect to the control, directly or
indirectly, over the voting and the acquisition or disposition of the
Foundation Shares; at the time of the Conversion, the Foundation Shares
will have been duly authorized for issuance and, when issued and
contributed by the Company pursuant to the Plan, will be duly and validly
issued and fully paid and non-assessable; and the issuance of the
Foundation Shares is not subject to preemptive or similar rights.
(xviii) Each Subsidiary has been duly incorporated (or, in the case of
PPP, formed) and is validly existing as a corporation (or, in the case of
PPP, a partnership) in good standing under the laws of the jurisdiction of
its incorporation or formation, as the case may be, has full corporate or
partnership, as the case may be, power and authority to own, lease and
operate its properties and to conduct its business as described in the
Registration Statement and Prospectus, and is duly qualified to transact
business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure to so qualify
would not have a material adverse effect on the financial condition,
results of operations or business affairs of the Company, the Bank and the
Subsidiaries, considered as one enterprise; the activities of each
Subsidiary are permitted to subsidiaries of a savings association holding
company and of a New York State-chartered savings bank by the rules,
regulations, resolutions and practices of the OTS, the Superintendent and
the FDIC, as the case may be; all of the issued and outstanding capital
stock of each Subsidiary that is a corporation has been duly authorized and
validly issued, is fully paid and non-assessable and is owned (or, in the
case of Xxxxxx River Funding Corp., ____ percent of such issued and
outstanding capital stock is owned) beneficially and of record by the Bank
free and clear of any security interest, mortgage, pledge, lien,
encumbrance or legal or equitable claim; 65 percent of the ownership
interests in PPP have been duly acquired and are owned beneficially and of
record by Xxxxxx City Associates, Inc., free and clear of any security
interest, mortgage, pledge, lien, encumbrance or legal or equitable claim
and the other 35 percent of the ownership interests are owned by
______________.
(xix) The Company and the Bank have taken all corporate action
necessary for them to execute, deliver and perform this Agreement, and this
Agreement has been duly executed
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and delivered by, and is the valid and binding agreement of, the Company
and the Bank, enforceable in accordance with its terms, except as may be
limited by bankruptcy, insolvency or other laws affecting the
enforceability of the rights of creditors generally and judicial
limitations on the right of specific performance and except as the
enforceability of indemnification and contribution provisions may be
limited by applicable securities laws.
(xx) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus and prior to the
Closing Time referred to in Section 2, except as otherwise may be indicated
or contemplated therein, none of the Company, the Bank or any Subsidiary
will have (A) issued any securities or incurred any liability or
obligation, direct or contingent, or borrowed money, except borrowings in
the ordinary course of business from the same or similar sources and in
similar amounts as indicated in the Prospectus, or (B) entered into any
transaction or series of transactions which is material in light of the
business of the Company, the Bank and the Subsidiaries, considered as one
enterprise, excluding the origination, purchase and sale of loans or the
purchase or sale of investment securities or mortgaged-backed securities in
the ordinary course of business.
(xxi) No approval of any regulatory or supervisory or other public
authority is required in connection with the execution and delivery of this
Agreement or the issuance of the Securities and the Foundation Shares that
has not been obtained and a copy of which has been delivered to the Agent,
except for the filing with the Superintendent of the Bank's amended and
restated organization certificate and as may be required under the
securities laws of various jurisdictions.
(xxii) Neither the Company, the Bank nor any of the Subsidiaries is in
violation of its certificate of incorporation, organization certificate,
articles of incorporation or charter, as the case may be, or bylaws (and
the Bank will not be in violation of its organization certificate or bylaws
in stock form upon consummation of the Conversion); and neither the
Company, the Bank nor any of the Subsidiaries is in default (nor has any
event occurred which, with notice or lapse of time or both, would
constitute a default) in the performance or observance of any obligation,
agreement, covenant or condition contained in any contract, indenture,
mortgage, loan agreement, note, lease or other instrument to which the
Company, the Bank or any of the Subsidiaries is a party or by which it or
any of them may be bound, or to which any of the property or assets of the
Company, the Bank or any of the Subsidiaries is subject, except for such
defaults that would not, individually or in the aggregate, have a material
adverse effect on the financial condition, results of operations or
business of the Company, the Bank and the Subsidiaries, considered as one
enterprise; and there are no contracts or documents of the Company, the
Bank or any of the Subsidiaries which are required to be filed as exhibits
to the Registration Statement or the Conversion Application which have not
been so filed.
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(xxiii) The execution, delivery and performance of this Agreement and
the consummation of the transactions contemplated herein do not and will
not conflict with or constitute a breach of, or default under, or result in
the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company, the Bank or any of the Subsidiaries
pursuant to, any contract, indenture, mortgage, loan agreement, note, lease
or other instrument to which the Company, the Bank or any of the
Subsidiaries is a party or by which any of them may be bound, or to which
any of the property or assets of the Company, the Bank or any of the
Subsidiaries is subject, except for such defaults that would not,
individually or in the aggregate, have a material adverse effect on the
financial condition, results of operations or business affairs of the
Company, the Bank and the Subsidiaries, considered as one enterprise; nor
will such action result in any violation of the provisions of the
certificate of incorporation, organization certificate, articles of
incorporation or charter or by-laws of the Company, the Bank or any of the
Subsidiaries, or any applicable law, administrative regulation or
administrative or court decree.
(xxiv) No labor dispute with the employees of the Company, the Bank or
any of the Subsidiaries exists or, to the knowledge of the Company or the
Bank, is imminent or threatened; and the Company and the Bank are not aware
of any existing or threatened labor disturbance by the employees of any of
their principal suppliers or contractors which might be expected to result
in any material adverse change in the financial condition, results of
operations or business affairs of the Company, the Bank and the
Subsidiaries, considered as one enterprise.
(xxv) Each of the Company, the Bank and the Subsidiaries have good and
marketable title to all properties and assets for which ownership is
material to its business and to those properties and assets described in
the Prospectus as owned by it, free and clear of all liens, charges,
encumbrances or restrictions, except such as are described in the
Prospectus or are not material in relation to the business of the Company,
the Bank and the Subsidiaries, considered as one enterprise; and all of the
leases and subleases material to the business of the Company, the Bank and
the Subsidiaries, considered as one enterprise, under which the Company,
the Bank or any of the Subsidiaries holds properties, including those
described in the Prospectus, are valid and binding agreements of the
Company, the Bank or such Subsidiary, enforceable in accordance with their
respective terms.
(xxvi) None of the Company, the Bank nor any of the Subsidiaries is in
violation of any directive from the OTS, the Superintendent or the FDIC to
make any material change in the method of conducting its business; the Bank
and the Subsidiaries have conducted and are
12
conducting their businesses so as to comply in all material respects with
all applicable statutes, regulations and administrative and court decrees
(including, without limitation, all regulations, decisions, directives and
orders of the Superintendent and the FDIC).
(xxvii) There is no action, suit or proceeding before or by any court
or governmental agency or body, domestic or foreign, now pending, or, to
the knowledge of the Company or the Bank, threatened, against or affecting
the Company, the Bank or any of the Subsidiaries which is required to be
disclosed in the Registration Statement (other than as disclosed therein),
or which might result in any material adverse change in the financial
condition, results of operations or business affairs of the Company, the
Bank and the Subsidiaries, considered as one enterprise, or which might
materially and adversely affect the properties or assets thereof or which
might materially and adversely affect the performance thereof under this
Agreement or the consummation of the Conversion; all pending legal or
governmental proceedings to which the Company, the Bank or any of the
Subsidiaries is a party or of which any of their respective property or
assets is the subject which are not described in the Registration
Statement, including ordinary routine litigation incidental to the
business, are, considered in the aggregate not material; and there are no
contracts or documents of the Company, the Bank or any of the Subsidiaries
which are required to be filed as exhibits to the Registration Statement or
the Conversion Application which have not been so filed.
(xxviii) The Bank has obtained an opinion of its counsel, Silver,
Xxxxxxxx & Xxxx, L.L.P., with respect to the legality of the Securities and
the Foundation Shares to be issued and the federal income tax consequences
of the Conversion and the Foundation, copies of which are filed as exhibits
to the Registration Statement; all material aspects of the aforesaid
opinions are accurately summarized in the Prospectus; the facts and
representations upon which such opinions are based are truthful, accurate
and complete in all material respects; and neither the Bank nor the Company
has taken or will take any action inconsistent therewith.
(xxix) The Bank has obtained an opinion of KPMG Peat Marwick LLP with
respect to certain New York State income and franchise tax consequences of
the Conversion, a copy of which is filed as an exhibit to the Registration
Statement; all material aspects of such opinion are accurately summarized
in the Prospectus; the facts and representations upon which such opinions
is based are truthful, accurate and complete in all material respects, and
neither the Bank nor the Company has taken or will take any action
inconsistent therewith.
(xxx) The Company is not required to be registered under the
Investment Company Act of 1940, as amended.
(xxxi) All of the loans represented as assets on the most recent
consolidated financial
13
statements or consolidated selected financial information of the Bank
included in the Prospectus meet or are exempt from all requirements of
federal, state or local law pertaining to lending, including without
limitation truth in lending (including the requirements of Regulations Z
and 12 C.F.R. Part 226 and Section 563.99), real estate settlement
procedures, consumer credit protection, equal credit opportunity and all
disclosure laws applicable to such loans, except for violations which, if
asserted, would not result in a material adverse effect on the financial
condition, results of operations or business of the Company, the Bank and
the Subsidiaries, considered as one enterprise.
(xxxii) With the exception of the intended loan to the Bank's ESOP by
the Company to enable the ESOP to purchase Securities in an amount of up to
10% of the aggregate of the Securities sold in the Offerings and the
Foundation Shares, none of the Company, the Bank or, to the knowledge of
the Company and the Bank, any employee of the Bank has made any payment of
funds of the Company or the Bank as a loan for the purchase of Common Stock
or made any other payment of funds prohibited by law, and no funds have
been set aside to be used for any payment prohibited by law.
(xxxiii) The Company, the Bank and the Subsidiaries are in compliance
in all material respects with the applicable financial recordkeeping and
reporting requirements of the Currency and Foreign Transaction Reporting
Act of 1970, as amended, and the rules and regulations thereunder, and the
lending practices of the Bank are and have been in conformity with the Real
Estate Settlement Procedures Act, as amended, and the rules and regulations
thereunder.
(xxxiv) Neither the Company, the Bank or any of the Subsidiaries nor
any properties owned or operated by the Company, the Bank or any of the
Subsidiaries is in violation of or liable under any Environmental Law (as
defined below), except for such violations or liabilities that,
individually or in the aggregate, would not have a material adverse effect
on the financial condition, results of operations or business affairs of
the Company, the Bank and the Subsidiaries, considered as one enterprise.
There are no actions, suits or proceedings, or demands, claims, notices or
investigations (including, without limitation, notices, demand letters or
requests for information from any environmental agency) instituted or
pending, or to the knowledge of the Company or the Bank, threatened,
relating to the liability of any property owned or operated by the Company,
the Bank or any of the Subsidiaries under any Environmental Law. For
purposes of this subsection, the term "Environmental Law" means any
federal, state, local or foreign law, statute, ordinance, rule, regulation,
code, license, permit, authorization, approval, consent, order, judgment,
decree, injunction or agreement with any regulatory authority relating to
(i) the protection, preservation or restoration of the environment
(including, without limitation, air, water, vapor, surface water,
groundwater,
14
drinking water supply, surface soil, subsurface soil, plant and animal life
or any other natural resource), and/or (ii) the use, storage, recycling,
treatment, generation, transportation, processing, handling, labeling,
production, release or disposal of any substance presently listed, defined,
designated or classified as hazardous, toxic, radioactive or dangerous, or
otherwise regulated, whether by type or by quantity, including any material
containing any such substance as a component.
(xxxv) The Company, the Bank and the Subsidiaries have filed all
federal income and state and local income and franchise tax returns
required to be filed and have made timely payments of all taxes shown as
due and payable in respect of such returns, and no deficiency has been
asserted with respect thereto by any taxing authority.
(xxxvi) The Company has received approval, subject to regulatory
approval to consummate the Offerings and issuance, to have the Securities
quoted on the National Market of The Nasdaq Stock Market, Inc. ("Nasdaq
National Market"), effective as of the Closing Time referred to in Section
2 hereof.
(xxxvii) The Company has filed a registration statement for the Common
Stock (the "Exchange Act Registration Statement") under Section 12(g) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
has requested that the Exchange Act Registration Statement become effective
concurrent with the effectiveness of the Registration Statement.
(b) Any certificate signed by any officer of the Company or the Bank and
delivered to either of the Agent or counsel for the Agent shall be deemed a
representation and warranty by the Company or the Bank to the Agent as to each
of the matters covered thereby.
15
SECTION 2. APPOINTMENT OF SANDLER X'XXXXX; SALE AND DELIVERY OF THE
SECURITIES; CLOSING.
On the basis of the representations and warranties herein contained and
subject to the terms and conditions herein set forth, the Company hereby
appoints Sandler X'Xxxxx as its Agent to consult with and advise the Company,
and to assist the Company with the solicitation of subscriptions and purchase
orders for Securities, in connection with the Company's sale of the Securities
in the Offerings. On the basis of the representations and warranties herein
contained, and subject to the terms and conditions herein set forth, Sandler
X'Xxxxx accepts such appointment and agrees to use its best efforts to assist
the Company with the solicitation of subscriptions and purchase orders for
Securities in accordance with this Agreement; provided, however, that the Agent
shall not be obligated to take any action which is inconsistent with any
applicable laws, regulations, decisions or orders. The services to be rendered
by Sandler X'Xxxxx pursuant to this appointment include the following: (i)
consulting as to the securities marketing implications of any aspect of the Plan
or related corporate documents; (ii) reviewing with the Board of Directors the
independent appraiser's appraisal of the Common Stock, particularly with regard
to aspects of the appraisal involving the methodology employed; (iii) reviewing
all offering documents, including the Prospectus, stock order forms and related
offering materials (it being understood that preparation and filing of such
documents are the responsibility solely of the Company and the Bank and their
counsel); (iv) assisting in the design and implementation of a marketing
strategy for the Offerings; (v) assisting the Company and the Bank in obtaining
all requisite regulatory approvals; (vi) assisting Bank management in scheduling
and preparing for meetings with potential investors and broker-dealers; and
(vii) providing such other general advice and assistance as may be requested to
promote the successful completion of the Conversion.
The appointment of the Agent hereunder shall terminate upon the earliest to
occur of (a) forty-five (45) days after the last day of the Subscription and
Community Offerings, unless the Company and the Agent agree in writing to extend
such period and the Superintendent and the FDIC agree to extend the period of
time in which the Securities may be sold, or (b) the receipt and acceptance of
subscriptions and purchase orders for all of the Securities or (c) the
completion of the Syndicated Community Offering.
If any of the Securities remain available after the expiration of the
Subscription and Community Offerings, at the request of the Company and the Bank
Sandler X'Xxxxx will seek to form a syndicate of registered brokers or dealers
(the "Selected Dealers") to assist in the solicitation of purchase orders of
such Securities on a best efforts basis, subject to the terms and conditions set
forth in a selected dealer's agreement (the "Selected Dealer's Agreement"),
substantially in the form set forth as Exhibit A to this Agreement. Sandler
X'Xxxxx will endeavor to limit the aggregate fees to be paid by the Company and
the Bank under any such Selected Dealer's Agreement to an amount
16
competitive with gross underwriting discounts charged at such time for
underwritings of comparable amounts of stock sold at a comparable price per
share in a similar market environment; provided, however, that the aggregate
fees payable to Sandler X'Xxxxx and any Selected Dealers in connection with any
Syndicated Community Offering shall not exceed 7% of the aggregate Purchase
Price (as defined in the Prospectus) of the Securities sold in the Syndicated
Community Offering. Sandler X'Xxxxx will endeavor to distribute the Securities
among the Selected Dealers in a fashion which best meets the distribution
objectives of the Company and the Bank and the requirements of the Plan and
applicable law, which may result in limiting the allocation of stock to certain
Selected Dealers. It is understood that in no event shall Sandler X'Xxxxx be
obligated to act as a Selected Dealer or to take or purchase any Securities.
In the event the Company is unable to sell at least the Minimum Total of
the Securities, as set forth on the cover page of the Prospectus, within the
period herein provided, this Agreement shall terminate and the Company shall
refund to any persons who have subscribed for any of the Securities the full
amount which it may have received from them, together with interest as provided
in the Prospectus, and no party to this Agreement shall have any obligation to
the others hereunder, except for the obligations of the Company and the Bank as
set forth in Sections 4, 6(a) and 7 hereof and the obligations of the Agent as
provided in Sections 6(b) and 7 hereof. Appropriate arrangements for placing the
funds received from subscriptions for Securities or other offers to purchase
Securities in special interest-bearing accounts with the Bank until all
Securities are sold and paid for were made prior to the commencement of the
Subscription Offering, with provision for refund to the purchasers as set forth
above, or for delivery to the Company if all of the Securities are sold.
If at least the Minimum Total of the Securities, as set forth on the cover
page of the Prospectus, are sold, the Company agrees to issue or have issued the
Securities sold and to release for delivery certificates for such Securities at
the Closing Time against payment therefor by release of funds from the special
interest-bearing accounts referred to above. The closing shall be held at the
offices of Silver, Xxxxxxxx & Taff, L.L.P., at 10:00 a.m., Eastern time, or at
such other place and time as shall be agreed upon by the parties hereto, on a
business day to be agreed upon by the parties hereto. The Company shall notify
the Agent by telephone, confirmed in writing, when funds shall have been
received for all of the Securities. Certificates for Securities shall be
delivered directly to the purchasers thereof in accordance with their
directions. Notwithstanding the foregoing, certificates for Securities purchased
through Selected Dealers shall be made available to the Agent for inspection at
least 48 hours prior to the Closing Time at such office as the Agent shall
designate. The hour and date upon which the Company shall release for delivery
all of the Securities, in accordance with the terms hereof, is herein called the
"Closing Time."
The Company will pay any stock issue and transfer taxes which may be
payable with respect to the sale of the Securities.
17
In addition to reimbursement of the expenses specified in Section 4 hereof,
the Agent will receive the following compensation for its services hereunder:
(a) one and one-tenth percent (1.10%) of the aggregate Purchase Price
(as defined in the Prospectus) of the Securities sold in the Offerings,
excluding in each case shares purchased by (i) any trustee, director,
executive officer or employee of the Company or the Bank or members of
their immediate families (which term shall mean parents, grandparents,
spouse, siblings, children and grandchildren); and (ii) any employee
benefit plan of the Company or the Bank.
(b) with respect to any Securities sold by an NASD member firm (other
than Sandler X'Xxxxx) under the Selected Dealer's Agreement in the event of
a Syndicated Community Offering, an additional fee to be negotiated by
Sandler X'Xxxxx with the Company to be remitted to Selected Dealers
consisting of (i) the fees payable to Selected Dealers under any Selected
Dealer's Agreement and (ii) the fees payable to any Sponsoring Dealers (as
defined in Exhibit A) under any Selected Dealer's Agreement; provided that
the aggregate fees payable to Sandler X'Xxxxx and any Selected Dealers in
connection with any Syndicated Community Offering shall not exceed seven
percent (7%) of the aggregate Purchase Price of the Securities sold in the
Syndicated Community Offering.
If this Agreement is terminated by the Agent in accordance with the
provisions of Section 9(a) hereof or the Conversion is terminated by the Company
or the Bank, no fees shall be payable by the Company or the Bank to Sandler
X'Xxxxx; however, the Company and/or the Bank shall reimburse the Agent for all
of its reasonable out-of-pocket expenses incurred prior to termination,
including the reasonable fees and disbursements of counsel for the Agent, in
accordance with the provisions of Section 4 hereof.
All fees payable to the Agent hereunder shall be payable in immediately
available funds at the Closing Time, or upon the termination of this Agreement,
as the case may be. In recognition of the long lead times involved in the
conversion process, the Bank agrees to make advance payments to the Agent in the
aggregate amount of $25,000, all of which has been previously paid, which shall
be credited against any fees or reimbursement of expenses payable hereunder.
18
SECTION 3. COVENANTS OF THE COMPANY.
The Company and the Bank covenant with the Agent as follows:
(a) The Company and the Bank will prepare and file such amendments or
supplements to the Registration Statement, the Prospectus, the Conversion
Application and the Proxy Statement as may hereafter be required by the
Securities Act Regulations or the Conversion Regulations or as may
hereafter be requested by the Agent. Following completion of the
Subscription and Community Offerings, in the event of a Syndicated
Community Offering, the Company and the Bank will (i) promptly prepare and
file with the Commission a post-effective amendment to the Registration
Statement relating to the results of the Subscription and Community
Offerings, any additional information with respect to the proposed plan of
distribution and any revised pricing information or (ii) if no such
post-effective amendment is required, will file with, or mail for filing
to, the Commission a prospectus or prospectus supplement containing
information relating to the results of the Subscription and Community
Offerings and pricing information pursuant to Rule 424 of the Securities
Act Regulations, in either case in a form acceptable to the Agent. The
Company and the Bank will notify the Agent immediately, and confirm the
notice in writing, (i) of the effectiveness of any post-effective amendment
of the Registration Statement, the filing of any supplement to the
Prospectus and the filing of any amendment to the Conversion Application,
(ii) of the receipt of any comments from the Superintendent, the FDIC, the
OTS or the Commission with respect to the transactions contemplated by this
Agreement or the Plan, (iii) of any request by the Superintendent, the
FDIC, the OTS or the Commission for any amendment to the Registration
Statement, the Conversion Application or the Holding Company Application or
any amendment or supplement to the Prospectus or for additional
information, (iv) of the issuance by the Superintendent or the FDIC of any
order suspending the Offerings or the use of the Prospectus or the
initiation of any proceedings for that purpose, (v) of the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement or the initiation of any proceedings for that
purpose and (vi) of the receipt of any notice with respect to the
suspension of any qualification of the Securities for offering or sale in
any jurisdiction. The Company and the Bank will make every reasonable
effort to prevent the issuance of any stop order and, if any stop order is
issued, to obtain the lifting thereof at the earliest possible moment.
(b) The Company and the Bank will give the Agent notice of its
intention to file or prepare any amendment to the Conversion Application,
the Holding Company Application or the Registration Statement (including
any post-effective amendment) or any amendment or supplement to the
Prospectus (including any revised prospectus which the Company proposes for
use in connection with the Syndicated Community Offering of the Securities
which differs from the prospectus on file at the Commission at the time the
Registration Statement becomes effective, whether or not such revised
prospectus is required to be filed pursuant to Rule 424(b) of the
Securities Act Regulations), will furnish the Agent with copies of any such
amendment or supplement a reasonable amount of time prior to such proposed
filing or use, as the case may be, and will not file any such amendment or
supplement or use any such prospectus to which the Agent or counsel for the
Agent may object.
19
(c) The Company and the Bank will deliver to the Agent as many signed
copies and as many conformed copies of the Conversion Application, the
Holding Company Application and the Registration Statement as originally
filed and of each amendment thereto (including exhibits filed therewith or
incorporated by reference therein) as the Agent may reasonably request, and
from time to time such number of copies of the Prospectus as the Agent may
reasonably request.
(d) During the period when the Prospectus is required to be delivered,
the Company and the Bank will comply, at their own expense, with all
requirements imposed upon them by the Superintendent, the FDIC and the OTS,
by the applicable Conversion Regulations, as from time to time in force,
and by the Securities Act, the Securities Act Regulations, the Exchange Act
and the rules and regulations of the Commission promulgated under the
Exchange Act, including, without limitation, Regulation M under the
Exchange Act, so far as necessary to permit the continuance of sales or
dealing in shares of Common Stock during such period in accordance with the
provisions hereof and the Prospectus.
(e) If any event or circumstance shall occur as a result of which it
is necessary, in the opinion of counsel for the Agent, to amend or
supplement the Prospectus in order to make the Prospectus not misleading in
the light of the circumstances existing at the time it is delivered to a
purchaser, the Company and the Bank will forthwith amend or supplement the
Prospectus (in form and substance satisfactory to counsel for the Agent) so
that, as so amended or supplemented, the Prospectus will not include an
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances existing at the time it is delivered to a purchaser, not
misleading, and the Company and the Bank will furnish to the Agent a
reasonable number of copies of such amendment or supplement. For the
purpose of this subsection, the Company and the Bank will each furnish such
information with respect to itself as the Agent may from time to time
reasonably request.
(f) The Company and the Bank will take all necessary action, in
cooperation with the Agent, to qualify the Securities for offering and sale
under the applicable securities laws of such states of the United States
and other jurisdictions as the Conversion Regulations may require and as
the Agent and the Company have agreed; provided, however, that neither the
Company nor the Bank shall be obligated to file any general consent to
service of process or to qualify as a foreign corporation in any
jurisdiction in which it is not so qualified. In each jurisdiction in which
the Securities have been so qualified, the Company and the Bank will file
such statements and reports as may be required by the laws of such
jurisdiction to
20
continue such qualification in effect for a period of not less than one
year from the effective date of the Registration Statement.
(g) The Company authorizes Sandler X'Xxxxx and any Selected Dealers to
act as agent of the Company in distributing the Prospectus to persons
entitled to receive subscription rights and other persons to be offered
Securities having record addresses in the states or jurisdictions set forth
in a survey of the securities or "blue sky" laws of the various
jurisdictions in which the Offerings will be made (the "Blue Sky Survey").
(h) The Company will make generally available to its security holders
as soon as practicable, but not later than 60 days after the close of the
period covered thereby, an earnings statement (in form complying with the
provisions of Rule 158 of the Securities Act Regulations) covering a
twelve-month period beginning not later than the first day of the Company's
fiscal quarter next following the "effective date" (as defined in such Rule
158) of the Registration Statement.
(i) During the period ending on the third anniversary of the
expiration of the fiscal year during which the closing of the transactions
contemplated hereby occurs, the Company will furnish to its stockholders as
soon as practicable after the end of each such fiscal year an annual report
(including consolidated statements of financial condition and consolidated
statements of income, stockholders' equity and cash flows, certified by
independent public accountants) and, as soon as practicable after the end
of each of the first three quarters of each fiscal year (beginning with the
fiscal quarter ending after the effective date of the Registration
Statement), consolidated summary financial information for such quarter in
reasonable detail. In addition, such annual report and quarterly
consolidated summary financial information shall be made public through the
issuance of appropriate press releases at the same time or prior to the
time of the furnishing thereof to stockholders of the Company.
(j) During the period ending on the third anniversary of the
expiration of the fiscal year during which the closing of the transactions
contemplated hereby occurs, the Company will furnish to the Agent (i) as
soon as publicly available, a copy of each report or other document of the
Company furnished generally to stockholders of the Company or furnished to
or filed with the Commission under the Exchange Act or any national
securities exchange or system on which any class of securities of the
Company is listed and (ii) from time to time, such other information
concerning the Company as the Agent may reasonably request.
(k) The Company and the Bank will conduct the Conversion, including
the formation and operation of the Foundation, in all material respects in
accordance with the Plan, the Conversion Regulations and all other
applicable regulations, decisions and orders,
21
including all applicable terms, requirements and conditions precedent to
the Conversion imposed on the Company or the Bank by the Superintendent,
the FDIC or the OTS.
(l) Each of the Company and the Bank will use the net proceeds
received by it from the sale of the Securities or the sale to the Company
of the Bank Common Stock to be purchased by the Company, as the case may
be, in the manner specified in the Prospectus under "Use of Proceeds."
(m) The Company will maintain the effectiveness of the Exchange Act
Registration Statement for not less than three years. The Company will file
with The Nasdaq Stock Market, Inc., all documents and notices required by
The Nasdaq Stock Market, Inc., of companies that have issued securities
that are traded in the over-the-counter market and quotations for which are
reported on the Nasdaq National Market.
(n) The Company and the Bank will take such actions and furnish such
information as are reasonably requested by the Agent in order for the Agent
to ensure compliance with the National Association of Securities Dealers,
Inc.'s "Interpretation Relating to Free-Riding and Withholding."
(o) Other than in connection with any employee benefit plan or
arrangement described in the Prospectus, the Company will not, without the
prior written consent of the Agent, sell or issue, contract to sell or
otherwise dispose of any shares of Common Stock other than the Securities
for a period of 180 days following the Closing Time.
(p) During the period beginning on the date hereof and ending on the
later of the third anniversary of the Closing Time or the date on which the
Agent receives full payment in satisfaction of any claim for
indemnification or contribution to which it may be entitled pursuant to
Sections 6 or 7 of this Agreement, neither the Company nor the Bank shall,
without the prior written consent of the Agent, take or permit to be taken
any action that could result in the Bank Common Stock or the Bank Preferred
Stock becoming subject to any security interest, mortgage, pledge, lien or
encumbrance; provided, however, that this covenant shall be null and void
if the Board of Governors of the Federal Reserve System, or any other
federal agency having jurisdiction over the Bank, by regulation, policy
statement or interpretive release, or by written order or written advice
addressed to the Bank or the Agent specifically addressing the provisions
of Section 6(a) hereof, permits indemnification of the Agent by the Bank as
contemplated by such provisions.
(q) The Company and the Bank will comply with the conditions imposed
by or agreed to with the OTS in connection with its approval of the Holding
Company Application
22
and with the Superintendent and the FDIC in connection with their approval
of, or non-objection to, the Conversion Application, including those
conditions relating to the establishment and the operation of the
Foundation; the Company and the Bank shall use their best efforts to ensure
that the Foundation submits within the time frames required by applicable
law a request to the Internal Revenue Service to be recognized as a
tax-exempt organization under Section 501(c)(3) of the Internal Revenue
Code of 1986, as amended (the "Code"); the Company and the Bank will take
no action which will result in the possible loss of the Foundation's tax
exempt status; and neither the Company nor the Bank will contribute any
additional assets to the Foundation until such time that such additional
contributions will be deductible for federal and state income tax purposes.
(r) During the period ending on the first anniversary of the Closing
Time or, if sooner, until such time as approval of the Company's
application to the Federal Reserve Board to become a bank holding company
shall have become effective, the Bank will comply with all applicable law
and regulation necessary for the Bank to continue to be a "qualified thrift
lender" within the meaning of 12 U.S.C. Section 1467a(m).
(s) The Company shall not deliver the Securities until the Company and
the Bank have satisfied each condition set forth in Section 5 hereof,
unless such condition is waived by the Agent.
(t) The Company or the Bank will furnish to Sandler X'Xxxxx as early
as practicable prior to the Closing Time, but no later than two (2) full
business days prior thereto, a copy of the latest available unaudited
interim consolidated financial statements of the Bank and the Subsidiaries
which have been read by KPMG Peat Marwick LLP, as part of the procedures
referred to in their letters to be furnished pursuant to subsections (e)
and (f) of Section 5 hereof.
23
SECTION 4. PAYMENT OF EXPENSES.
The Company and the Bank jointly and severally agree to pay all expenses
incident to the performance of their obligations under this Agreement, including
but not limited to (i) the cost of obtaining all securities and bank regulatory
approvals, (ii) the printing and filing of the Registration Statement and the
Conversion Application as originally filed and of each amendment thereto, (iii)
the preparation, issuance and delivery of the certificates for the Securities to
the purchasers in the Offerings, (iv) the fees and disbursements of the
Company's and the Bank's counsel, accountants, conversion agent, appraiser and
other advisors, (v) the qualification of the Securities under securities laws in
accordance with the provisions of Section 3(f) hereof, including filing fees and
the fees and disbursements of counsel in connection therewith and in connection
with the preparation of the Blue Sky Survey, (vi) the printing and delivery to
the Agent of copies of the Registration Statement as originally filed and of
each amendment thereto and the printing and delivery of the Prospectus and any
amendments or supplements thereto to the purchasers in the Offerings and the
Agent, (vii) the printing and delivery to the Agent of copies of the Blue Sky
Survey and (viii) the fees and expenses incurred in connection with the listing
of the Securities on the Nasdaq National Market. In the event the Agent incurs
any such fees and expenses on behalf of the Bank or the Company, the Bank will
reimburse the Agent for such fees and expenses whether or not the Conversion is
consummated; provided, however, that the Agent shall not incur any substantial
expenses on behalf of the Bank or the Company pursuant to this Section without
the prior approval of the Bank.
The Company and the Bank jointly and severally agree to pay certain
expenses incident to the performance of the Agent's obligations under this
Agreement, regardless of whether the Conversion is consummated, including (i)
the filing fees paid or incurred by the Agent in connection with all filings
with the National Association of Securities Dealers, Inc., and (ii) all
reasonable out of pocket expenses incurred by the Agent relating to the
Offerings up to a maximum of $125,000, including, without limitation,
advertising, promotional, syndication and travel expenses and fees and expenses
of the Agent's counsel. All fees and expenses to which the Agent is entitled to
reimbursement under this paragraph of this Section 4 shall be due and payable
upon receipt by the Company or the Bank of a written accounting therefor setting
forth in reasonable detail the expenses incurred by the Agent.
24
SECTION 5. CONDITIONS OF AGENT'S OBLIGATIONS.
The Company, the Bank and the Agent agree that the issuance and sale of the
Securities and all obligations of the Agent hereunder are subject to the
accuracy of the representations and warranties of the Company and the Bank
herein contained as of the date hereof and the Closing Time, to the accuracy of
the statements of officers, directors and trustees of the Company and the Bank
made pursuant to the provisions hereof, to the performance by the Company and
the Bank of their obligations hereunder and to the following further conditions:
(a) No stop order suspending the effectiveness of the Registration
Statement shall have been issued under the Securities Act or proceedings
therefor initiated or threatened by the Commission, no order suspending the
Offerings or authorization for final use of the Prospectus shall have been
issued or proceedings therefor initiated or threatened by the
Superintendent or the FDIC and no order suspending the sale of the
Securities in any jurisdiction shall have been issued.
(b) At Closing Time, the Agent shall have received:
(1) The favorable opinion, dated as of Closing Time, of Silver,
Xxxxxxxx & Taff, L.L.P., counsel for the Company and the Bank, in form
and substance satisfactory to counsel for the Agent, to the effect
that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
State of Delaware.
(ii) The Company has full corporate power and authority to
own, lease and operate its properties and to conduct its business
as described in the Registration Statement and Prospectus and to
enter into and perform its obligations under this Agreement.
(iii) The Company is duly qualified as a foreign corporation
to transact business and is in good standing in the State of New
York and in each other jurisdiction in which such qualification
is required whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure to
be so qualified would not have a material adverse effect upon the
financial condition, results of operations or business affairs of
the Company, the Bank and the Subsidiaries, considered as one
enterprise.
25
(iv) Upon consummation of the Conversion and the issuance of
the Foundation Shares to the Foundation immediately upon
completion thereof, the authorized, issued and outstanding
capital stock of the Company will be as set forth in the
Prospectus under "Capitalization" and no shares of Common Stock
have been issued prior to the Closing Time.
(v) The Securities and the Foundation Shares have been duly
and validly authorized for issuance and sale and, when issued and
delivered by the Company pursuant to the Plan against payment of
the consideration calculated as set forth in the Plan, or
contributed by the Company pursuant to the Plan in the case of
the Foundation Shares, will be duly and validly issued and fully
paid and non-assessable.
(vi) The issuance of the Securities and the Foundation
Shares is not subject to preemptive or other similar rights
arising by operation of law or, to the best of such counsel's
knowledge, otherwise.
(vii) The Bank has been at all times prior to the Closing
Time duly organized, and is validly existing and in good standing
under the laws of the State of New York as a New York
State-chartered savings bank in mutual form, and, at the Closing
Time, has become duly organized, validly existing and in good
standing under the laws of the State of New York as a New York
State-chartered savings bank in stock form, in both instances
with full corporate power and authority to own, lease and operate
its properties and to conduct its business as described in the
Registration Statement and the Prospectus; and the Bank is duly
qualified as a foreign corporation to transact business and is in
good standing in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure to
be so qualified would not have a material adverse effect upon the
financial condition, results of operations or business affairs of
the Company, the Bank and the Subsidiaries, considered as one
enterprise.
(viii) The Bank is a member in good standing of the Federal
Home Loan Bank of New York and the deposit accounts of the Bank
are insured by the FDIC up to the applicable limits.
(ix) Each Subsidiary has been duly incorporated and is
validly existing as a corporation in good standing under the laws
of the jurisdiction of
26
its incorporation, has full corporate power and authority to own,
lease and operate its properties and to conduct its business as
described in the Registration Statement and is duly qualified as
a foreign corporation to transact business and is in good
standing in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure to
be so qualified would not have a material adverse effect upon the
financial condition, results of operations or business affairs of
the Company, the Bank and the Subsidiaries, considered as one
enterprise; the activities of each Subsidiary are permitted to
subsidiaries of a savings association holding company and of a
New York State-chartered savings bank by the rules, regulations,
resolutions and practices of the OTS, the Superintendent and the
FDIC, as the case may be; all of the issued and outstanding
capital stock of each Subsidiary has been duly authorized and
validly issued, is fully paid and non-assessable and is owned by
the Bank directly, free and clear of any security interest,
mortgage, pledge, lien, encumbrance or legal or equitable claim.
(x) The Foundation has been duly incorporated and is validly
existing as a non-stock corporation in good standing under the
laws of the State of Delaware with corporate power and authority
to own, lease and operate its properties and to conduct its
business as described in the Prospectus; the Foundation is not a
savings and loan holding company within the meaning of 12 C.F.R.
Section 574.2(q) as a result of the issuance of shares of Common
Stock to it in accordance with the terms of the Plan and in the
amounts as described in the Prospectus; no approvals are required
to establish the Foundation and to contribute the shares of
Common Stock thereto as described in the Prospectus other than
those set forth in any written notice or order of approval of, or
non-objection to, the Conversion, the Conversion Application or
the Holding Company Application, copies of which were provided to
the Agent prior to the Closing Time;
(xi) The shares of Bank Common Stock to be issued to the
Company in the Conversion have been duly and validly authorized
for issuance and, when issued and delivered pursuant to the Plan
against payment of the consideration calculated as set forth in
the Plan and as described in the Prospectus, will be duly and
validly issued and fully paid and non-assessable and will
constitute all of the issued and outstanding capital stock of the
Bank, and all such Bank Common Stock will be owned beneficially
and of record by the Company free and clear of any security
interest, mortgage, pledge, lien, encumbrance or legal or
equitable claim.
27
(xii) The OTS has approved the Holding Company Application
and the Thrift Election, the Superintendent has approved the
Conversion Application and the FDIC has issued a letter of intent
not to object to the Conversion Notice, and no action is pending
or, to the best of such counsel's knowledge, threatened
respecting the Holding Company Application, the Thrift Election,
the Conversion Application (including the establishment of the
Foundation and the contribution thereto of the Foundation Shares)
or the Conversion Notice, or the acquisition by the Company of
all of the Bank's issued and outstanding capital stock; the
Holding Company Application and the Thrift Election each comply
with the applicable requirements of the OTS, the Conversion
Application complies with the applicable requirements of the
Superintendent and the Conversion Notice complies with the
applicable requirements of the FDIC, and the Holding Company
Application, the Thrift Election, the Conversion Application and
the Conversion Notice include all documents required to be filed
as exhibits thereto, and are, to the best of such counsel's
knowledge, truthful, accurate and complete; and the Company is
duly authorized to become a savings association holding company
and is duly authorized to own all of the issued and outstanding
capital stock of the Bank to be issued pursuant to the Plan.
(xiii) The execution and delivery of this Agreement, the
incurrence of the obligations set forth herein and the
consummation of the transactions contemplated hereby, including
the establishment of the Foundation and the contribution thereto
of the Foundation Shares, (A) have been duly and validly
authorized by all necessary action on the part of each of the
Company and the Bank, and this Agreement constitutes the legal,
valid and binding agreement of each of the Company and the Bank,
enforceable in accordance with its terms, except as rights to
indemnity and contribution hereunder may be limited under
applicable law (it being understood that such counsel may avail
itself of customary exceptions concerning the effect of
bankruptcy, insolvency or similar laws and the availability of
equitable remedies); (B) will not result in any violation of the
provisions of the charter or by-laws of the Company, the Bank or
any of the Subsidiaries; and (C) will not conflict with or
constitute a breach of, or default under, and no default exists
nor has any event occurred which, with notice or lapse of time or
both, would constitute a default under, or result in the creation
or imposition of any lien, charge or encumbrance upon any
property or assets of the Company, the Bank or any of the
Subsidiaries
28
pursuant to, any contract, indenture, mortgage, loan agreement,
note, lease or other instrument to which the Company, the Bank or
any of the Subsidiaries is a party or by which any of them may be
bound, or to which any of the property or assets of the Company,
the Bank or any of the Subsidiaries is subject, that,
individually or in the aggregate, would have a material adverse
effect on the financial condition, results of operations or
business affairs of the Company, the Bank and the Subsidiaries,
considered as one enterprise.
(xiv) The Prospectus has been duly authorized by the
Superintendent and the FDIC for final use pursuant to the
Conversion Regulations, and no action is pending or, to the best
of such counsel's knowledge, threatened by the Superintendent or
the FDIC to revoke such authorization.
(xv) The Registration Statement is effective under the
Securities Act, and no stop order suspending the effectiveness of
the Registration Statement has been issued under the Securities
Act or proceedings therefor initiated or, to the best of such
counsel's knowledge, threatened by the Commission.
(xvi) No further approval, authorization, consent or other
order of any public board or body is required in connection with
the execution and delivery of this Agreement, the issuance of the
Securities and the Foundation Shares and the consummation of the
Conversion, except as may be required under the securities or
Blue Sky laws of various jurisdictions, as to which no opinion
need be rendered.
(xvii) At the time the Registration Statement became
effective, the Registration Statement (other than the financial
statements and statistical data included therein, as to which no
opinion need be rendered) complied as to form in all material
respects with the requirements of the Securities Act and the
Securities Act Regulations and the Conversion Regulations.
(xviii) The Common Stock conforms to the description thereof
contained in the Prospectus, and the form of certificate used to
evidence the Common Stock is in due and proper form and complies
with all applicable statutory requirements.
(xix) There are no legal or governmental proceedings pending
or, to the best of such counsel's knowledge, threatened against
or affecting the
29
Company, the Bank, any of the Subsidiaries or the Foundation
which are required, individually or in the aggregate, to be
disclosed in the Registration Statement and the Prospectus, other
than those disclosed therein, and all pending legal or
governmental proceedings to which the Company, the Bank or any of
the Subsidiaries is a party or to which any of its property is
subject which are not described in the Registration Statement,
including ordinary routine litigation incidental to the business,
are, considered in the aggregate, not material.
(xx) The information in the Prospectus under "RISK FACTORS
--Risks Associated with the Establishment of the Charitable
Foundation Possible Nondeductibility of the Stock Contribution"
and "- Potential AntiTakeover Effect," and "-- Takeover Defensive
Provisions," "DIVIDENDS," "BUSINESS OF THE BANK -- Legal
Proceedings," "REGULATION," "TAXATION," "THE CONVERSION --
Effects of Conversion- Liquidation Rights" and "- Tax Aspects,"
"-- Establishment of The Xxxxxx River Bank and Trust Company
Foundation," and "-- Certain Restrictions on Purchase or Transfer
of Shares After Conversion," "RESTRICTIONS ON ACQUISITION OF THE
HOLDING COMPANY AND THE BANK," "DESCRIPTION OF CAPITAL STOCK OF
THE HOLDING COMPANY" and "DESCRIPTION OF CAPITAL STOCK OF THE
BANK," to the extent that it constitutes matters of law,
summaries of legal matters, documents or proceedings, or legal
conclusions has been reviewed by such counsel and is complete and
accurate in all material respects and to the extent it
constitutes summaries of written legal opinions rendered by a
person or entity other than such counsel, has been reviewed by
such counsel and is a complete and accurate summary of such
opinions in all material respects.
(xxi) To the best of such counsel's knowledge, there are no
contracts, indentures, mortgages, loan agreements, notes, leases
or other instruments required to be described or referred to in
the Registration Statement or to be filed as exhibits thereto
other than those described or referred to therein or filed as
exhibits thereto, and the descriptions thereof or references
thereto are correct.
(xxii) The Plan has been duly authorized by the Board of
Directors of the Company and the Board of Trustees of the Bank
and the Superintendent's approval of and the FDIC's non-objection
to the Plan remain in full force and effect; the Bank's
organization certificate has been amended
30
and restated, effective upon consummation of the Conversion and
the filing of such amended and restated organization certificate
with the Superintendent, to authorize the issuance of permanent
capital stock; to the best of such counsel's knowledge, the
Company and the Bank have conducted the Conversion and the
establishment and funding of the Foundation in all material
respects in accordance with applicable requirements of the
Conversion Regulations, the Plan and all other applicable
regulations, decisions and orders thereunder, including all
material applicable terms, conditions, requirements and
conditions precedent to the Conversion imposed upon the Company
or the Bank by the Superintendent, the FDIC or the OTS and no
order has been issued by the Superintendent, the FDIC or the OTS
to suspend the Conversion or the Offerings and no action for such
purpose has been instituted or, to the best of such counsel's
knowledge, threatened by the Superintendent, the FDIC or the OTS;
and, to the best of such counsel's knowledge, no person has
sought to obtain review of the final action of the Superintendent
in approving or the FDIC in not objecting to the Conversion
Application (which includes the Plan which provides for the
establishment of the Foundation) or of the OTS in approving the
Holding Company Application.
(xxiii) To the best of such counsel's knowledge, the
Company, the Bank and the Subsidiaries have obtained all
licenses, permits and other governmental authorizations currently
required for the conduct of their respective businesses as
described in the Registration Statement and the Prospectus, and
all such licenses, permits and other governmental authorizations
are in full force and effect, and the Company and the Bank and
the Subsidiaries are in all material respects complying
therewith.
(xxiv) Neither the Company, the Bank nor any of the
Subsidiaries is in violation of its certificate of incorporation,
organization certificate, articles of incorporation or charter,
as the case may be, or by-laws (and the Bank will not be in
violation of its organization certificate and by-laws in stock
form upon consummation of the Conversion); and to the best of
such counsel's knowledge, none of the Company, the Bank or any of
the Subsidiaries is in default (nor has any event occurred which,
with notice or lapse of time or both, would constitute a default)
in the performance or observance of any obligation, agreement,
covenant or condition contained in any contract, indenture,
mortgage, loan agreement, note, lease or other instrument to
which the Company, the Bank or any of the Subsidiaries is a party
or by which the
31
Company, the Bank or any of the Subsidiaries or any of their
property may be bound.
(xxv) The Company is not required to be registered as an
investment company under the Investment Company Act of 1940.
(2) The favorable opinion, dated as of Closing Time, of Peabody &
Xxxxx, counsel for the Agent, with respect to the matters set forth in
Section 5(b)(1)(i), (iv), (v), (vi) (solely as to preemptive rights
arising by operation of law), (xii), (xvi) and (xvii) and such other
matters as the Agent may reasonably require.
(3) In giving their opinions required by subsections (b)(l) and
(b)(2), respectively, of this Section, Silver, Xxxxxxxx and Taff,
L.L.P., and Peabody & Xxxxx shall each additionally state that nothing
has come to their attention that would lead them to believe that the
Registration Statement (except for financial statements and schedules
and other financial or statistical data included therein, as to which
counsel need make no statement), at the time it became effective,
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading or that the Prospectus (except for
financial statements and schedules and other financial or statistical
data included therein, as to which counsel need make no statement), at
the time the Registration Statement became effective or at Closing
Time, included an untrue statement of a material fact or omitted to
state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading. In giving their opinions, Silver Xxxxxxxx & Taff,
L.L.P., and Peabody & Xxxxx may rely as to matters of fact on
certificates of officers, directors and trustees of the Company and
the Bank and certificates of public officials, and Peabody & Xxxxx may
also rely on the opinion of Silver, Xxxxxxxx & Taff, L.L.P.
(c) At Closing Time, the Company and the Bank shall have completed in
all material respects the conditions precedent to the Conversion in
accordance with the Plan, the applicable Conversion Regulations and all
other applicable laws, regulations, decisions and orders, including all
terms, conditions, requirements and provisions precedent to the Conversion
imposed upon the Company or the Bank by the OTS, the Superintendent, the
FDIC or any other regulatory authority other than those which the OTS, the
Superintendent or the FDIC permit to be completed after the Conversion.
(d) At Closing Time, there shall not have been, since the date hereof
or since the
32
respective dates as of which information is given in the Registration
Statement and the Prospectus, any material adverse change in the financial
condition, results of operations or business affairs of the Company, the
Bank and the Subsidiaries, considered as one enterprise, whether or not
arising in the ordinary course of business, and the Agent shall have
received a certificate of the President and Chief Executive Officer of the
Company and of the Bank and the Chief Financial Officer of the Company and
of the Bank, dated as of Closing Time, to the effect that (i) there has
been no such material adverse change, (ii) there has been no material
transaction entered into by the Company or the Bank from the latest date as
of which the financial condition of the Company or the Bank is set forth in
the Registration Statement and the Prospectus other than transactions
referred to or contemplated therein and transactions in the ordinary course
of business, (iii) neither the Company nor the Bank has received from the
OTS, the Superintendent or the FDIC any direction (oral or written) to make
any material change in the method of conducting its business with which it
has not complied (which direction, if any, shall have been disclosed to the
Agent) or which materially and adversely would affect the financial
condition, results of operations or business affairs of the Company, the
Bank and the Subsidiaries, considered as one enterprise, (iv) the
representations and warranties in Section 1 hereof are true and correct
with the same force and effect as though expressly made at and as of the
Closing Time, (v) the Company and the Bank have complied with all
agreements and satisfied all conditions on their part to be performed or
satisfied at or prior to Closing Time, (vi) no stop order suspending the
effectiveness of the Registration Statement has been issued and no
proceedings for that purpose have been initiated or threatened by the
Commission and (vii) no order suspending the Offerings or the authorization
for final use of the Prospectus has been issued and no proceedings for that
purpose have been initiated or threatened by the Superintendent or the FDIC
and no person has sought to obtain regulatory or judicial review of the
action of the Superintendent in approving the Plan in accordance with the
Conversion Regulations, nor has any person sought to obtain regulatory or
judicial review of the action of the OTS in approving the Holding Company
Application.
(e) At the time of the execution of this Agreement, the Agent shall
have received from KPMG Peat Marwick LLP a letter dated such date, in form
and substance satisfactory to the Agent, to the effect that (i) they are
independent public accountants with respect to the Company, the Bank and
the Subsidiaries within the meaning of the Code of Ethics of the American
Institute of Certified Public Accountants, the Securities Act and the
Securities Act Regulations and the Conversion Regulations; (ii) it is their
opinion that the consolidated financial statements and supporting schedules
included in the Registration Statement and covered by their opinions
therein comply as to form in all material respects with the applicable
accounting requirements of the Securities Act, the Securities Act
Regulations and the Conversion Regulations; (iii) based upon limited
procedures as agreed upon by the Agent and KPMG Peat Marwick LLP set forth
in detail in such letter, nothing has come to their
33
attention which causes them to believe that (A) the unaudited financial
statements and supporting schedules of the Bank and the Subsidiaries
included in the Registration Statement do not comply as to form in all
material respects with the applicable accounting requirements of the
Securities Act, the Securities Act Regulations and the Conversion
Regulations or are not presented in conformity with generally accepted
accounting principles applied on a basis substantially consistent with that
of the audited financial statements included in the Registration Statement
and the Prospectus, (B) the unaudited amounts set forth under "SELECTED
CONSOLIDATED FINANCIAL AND OTHER DATA OF THE BANK" in the Registration
Statement and the Prospectus do not agree with the amounts set forth in
unaudited consolidated financial statements as of and for the dates and
periods presented under such caption or such unaudited amounts were not
determined on a basis substantially consistent with that used in
determining the corresponding amounts in the audited financial statements
included in the Registration Statement and the Prospectus, (C) at a
specified date not more than five days prior to the date of this Agreement,
there has been any increase in the consolidated long term or short term
debt of the Bank and the Subsidiaries or any decrease in consolidated total
assets, the allowance for loan losses, total deposits or net worth of the
Bank and the Subsidiaries, in each case as compared with the amounts shown
in the December 31, 1997 balance sheet included in the Registration
Statement or (D) during the period from December 31, 1997 to a specified
date not more than five days prior to the date of this Agreement, there
were any decreases, as compared with the corresponding period in the
preceding year, in total interest income, net interest income, net interest
income after provision for loan losses, income before income tax expense or
net income of the Bank and the Subsidiaries, except in all instances for
increases or decreases which the Registration Statement and the Prospectus
disclose have occurred or may occur; and (iv) in addition to the
examination referred to in their opinions and the limited procedures
referred to in clause (iii) above, they have carried out certain specified
procedures, not constituting an audit, with respect to certain amounts,
percentages and financial information which are included in the
Registration Statement and the Prospectus and which are specified by the
Agent, and have found such amounts, percentages and financial information
to be in agreement with the relevant accounting, financial and other
records of the Company, the Bank and the Subsidiaries identified in such
letter.
(f) At Closing Time, the Agent shall have received from KPMG Peat
Marwick LLP a letter, dated as of Closing Time, to the effect that they
reaffirm the statements made in the letter furnished pursuant to subsection
(d) of this Section, except that the specified date referred to shall be a
date not more than five days prior to Closing Time.
(g) At Closing Time, the Securities shall have been approved for
listing on the Nasdaq National Market upon notice of issuance.
34
(h) At Closing Time, the Agent shall have received a letter from RP
Financial, L.C., dated as of the Closing Time, confirming its appraisal.
(i) At Closing Time, counsel for the Agent shall have been furnished
with such documents and opinions as they may require for the purpose of
enabling them to pass upon the issuance and sale of the Securities as
herein contemplated and related proceedings, or in order to evidence the
accuracy of any of the representations or warranties, or the fulfillment of
any of the conditions, herein contained; and all proceedings taken by the
Company in connection with the issuance and sale of the Securities as
herein contemplated shall be satisfactory in form and substance to the
Agent and counsel for the Agent.
(j) At any time prior to Closing Time, (i) there shall not have
occurred any material adverse change in the financial markets in the United
States or elsewhere or any outbreak of hostilities or escalation thereof or
other calamity or crisis the effect of which it, in the judgment of the
Agent, are so material and adverse as to make it impracticable to market
the Securities or to enforce contracts, including subscriptions or orders,
for the sale of the Securities, and (ii) trading generally on the New York
Stock Exchange, the American Stock Exchange or the Nasdaq Stock Market
shall not have been suspended, and minimum or maximum prices for trading
shall not have been fixed, or maximum ranges for prices for securities have
been required, by either of such Exchanges or the Nasdaq Stock Market or by
order of the Commission or any other governmental authority, and a banking
moratorium shall not have been declared by either federal or New York
authorities.
SECTION 6. INDEMNIFICATION.
(a) The Company and the Bank, jointly and severally, agree to
indemnify and hold harmless the Agent, each person, if any, who controls
the Agent within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act, and their respective partners, directors, officers,
employees, agents and counsel as follows:
(i) from and against any and all loss, liability, claim, damage
and expense whatsoever, as incurred, related to or arising out of the
Conversion (including the establishment of the Foundation and the
contribution of the Foundation Shares thereto by the Company) or any
action taken by the Agent where acting as agent of the Company or the
Bank or otherwise as described in Section 2 hereof;
(ii) from and against any and all loss, liability, claim, damage
and expense whatsoever, as incurred, based upon or arising out of any
untrue statement or alleged untrue
35
statement of a material fact contained in the Registration Statement
(or any amendment thereto), or the omission or alleged omission
therefrom of a material fact required to be stated therein or
necessary to make the statements therein not misleading or arising out
of any untrue statement or alleged untrue statement of a material fact
contained in the Prospectus (or any amendment or supplement thereto)
or the omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(iii) from and against any and all loss, liability, claim, damage
and expense whatsoever, as incurred, to the extent of the aggregate
amount paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or
threatened, or of any claim whatsoever described in clauses (i) or
(ii) above, if such settlement is effected with the written consent of
the Company or the Bank, which consent shall not be unreasonably
withheld; and
(iv) from and against any and all expense whatsoever, as incurred
(including, subject to Section 6(c) hereof, the fees and disbursements
of counsel chosen by the Agent), reasonably incurred in investigating,
preparing for or defending against any litigation, or any
investigation, proceeding or inquiry by any governmental agency or
body, commenced or threatened, or any claim whatsoever described in
clauses (i) or (ii) above, to the extent that any such expense is not
paid under (i), (ii) or (iii) above;
provided, however, that the indemnification provided for in this paragraph
(a) shall not apply to any loss, liability, claim, damage or expense (i) to
the extent arising out of any untrue statement or alleged untrue statement
of a material fact contained in the Prospectus (or any amendment or
supplement thereto), or the omission or alleged omission therefrom of a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading,
which was made in reliance upon and in conformity with the Agent
Information or (ii) found in a final judgment by a court of competent
jurisdiction to have resulted primarily from the bad faith, willful
misconduct or gross negligence of the person seeking indemnification
hereunder. Notwithstanding the foregoing, the indemnification provided for
in this paragraph (a) shall not apply to the Bank to the extent that such
indemnification by the Bank is found in a final judgment by a court of
competent jurisdiction to constitute a covered transaction under Section
23A of the Federal Reserve Act.
(b) The Agent agrees to indemnify and hold harmless the Company, the
Bank, their directors and trustees, each of their officers who signed the
Registration Statement, and each person, if any, who controls the Company
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act against any and all loss, liability, claim, damage and expense
described in the
36
indemnity contained in paragraph (a) of this Section, as incurred, but only
with respect to untrue statements or omissions, or alleged untrue
statements or omissions, of a material fact made in the Prospectus (or any
amendment or supplement thereto) in reliance upon and in conformity with
the Agent Information.
(c) Each indemnified party shall give notice as promptly as reasonably
practicable to each indemnifying party of any action commenced against it
in respect of which indemnity may be sought hereunder, but failure to so
notify an indemnifying party shall not relieve such indemnifying party from
any liability which it may have otherwise than on account of this indemnity
agreement. An indemnifying party may participate at its own expense in the
defense of any such action. In no event shall the indemnifying parties be
liable for fees and expenses of more than one counsel (in addition to no
more than one local counsel in each separate jurisdiction in which any
action or proceeding is commenced) separate from their own counsel for all
indemnified parties in connection with any one action or separate but
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances.
(d) The Company and the Bank also agree that the Agent shall not have
any liability (whether direct or indirect, in contract or tort or
otherwise) to the Bank, the Company, its security holders or the Bank's or
the Company's creditors relating to or arising out of the engagement of the
Agent pursuant to, or the performance by the Agent of the services
contemplated by, this Agreement, except to the extent that any loss, claim,
damage or liability is found in a final judgment by a court of competent
jurisdiction to have resulted primarily from the Agent's bad faith, willful
misconduct or gross negligence.
(e) In addition to, and without limiting, the provisions of Section
(6)(a)(iv) hereof, in the event that any Agent, any person, if any, who
controls the Agent within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act or any of their respective partners,
directors, officers, employees or agents is requested or required to appear
as a witness or otherwise gives testimony in any action, proceeding,
investigation or inquiry brought by or on behalf of or against the Company,
the Bank, the Agent or any of their respective affiliates or any
participant in the transactions contemplated hereby in which the Agent or
such person or agent is not named as a defendant, the Company and the Bank
jointly and severally agree to reimburse the Agent for all reasonable and
necessary out-of-pocket expenses incurred by it in connection with
preparing or appearing as a witness or otherwise giving testimony and to
compensate the Agent in an amount to be mutually agreed upon.
37
SECTION 7. CONTRIBUTION.
In order to provide for just and equitable contribution in circumstances in
which the indemnity agreement provided for in Section 6 hereof is for any reason
held to be unenforceable by the indemnified parties although applicable in
accordance with its terms, the Company, the Bank and the Agent shall contribute
to the aggregate losses, liabilities, claims, damages and expenses of the nature
contemplated by said indemnity agreement incurred by the Company or the Bank and
the Agent, as incurred, in such proportions (i) that the Agent is responsible
for that portion represented by the percentage that the maximum aggregate
marketing fees appearing on the cover page of the Prospectus bears to the
maximum aggregate gross proceeds appearing thereon and the Company and the Bank
are jointly and severally responsible for the balance or (ii) if, but only if,
the allocation provided for in clause (i) is for any reason held unenforceable,
in such proportion as is appropriate to reflect not only the relative benefits
to the Company and the Bank on the one hand and the Agent on the other, as
reflected in clause (i), but also the relative fault of the Company and the Bank
on the one hand and the Agent on the other, as well as any other relevant
equitable considerations; provided, however, that no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section, each person, if any,
who controls the Agent within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act shall have the same rights to contribution as the
Agent, and each director of the Company, each trustee of the Bank, each officer
of the Company who signed the Registration Statement, and each person, if any,
who controls the Company or the Bank within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act shall have the same rights to
contribution as the Company and the Bank. Notwithstanding anything to the
contrary set forth herein, to the extent permitted by applicable law, in no
event shall the Agent be required to contribute an aggregate amount in excess of
the aggregate marketing fees to which the Agent is entitled and actually paid
pursuant to this Agreement.
SECTION 8. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE DELIVERY.
All representations, warranties and agreements contained in this Agreement,
or contained in certificates of officers of the Company or the Bank submitted
pursuant hereto, shall remain operative and in full force and effect, regardless
of any investigation made by or on behalf of any Agent or controlling person, or
by or on behalf of the Company, and shall survive delivery of the Securities.
38
SECTION 9. TERMINATION OF AGREEMENT.
(a) The Agent may terminate this Agreement, by notice to the Company,
at any time at or prior to Closing Time (i) if there has been, since the
date of this Agreement or since the respective dates as of which
information is given in the Registration Statement, any material adverse
change in the financial condition, results of operations or business
affairs of the Company or the Bank, or the Company, the Bank and the
Subsidiaries, considered as one enterprise, whether or not arising in the
ordinary course of business, or (ii) if there has occurred any material
adverse change in the financial markets in the United States or elsewhere
or any outbreak of hostilities or escalation thereof or other calamity or
crisis the effect of which it, in the judgment of the Agent, are so
material and adverse as to make it impracticable to market the Securities
or to enforce contracts, including subscriptions or orders, for the sale of
the Securities, (iii) or if trading generally on the New York Stock
Exchange, the American Stock Exchange or the Nasdaq Stock Market has been
suspended, or minimum or maximum prices for trading have been fixed, or
maximum ranges for prices for securities have been required, by either of
such Exchanges or the Nasdaq Stock Market or by order of the Commission or
any other governmental authority, or if a banking moratorium has been
declared by either federal or New York authorities, (iv) if any condition
specified in Section 5 has not been fulfilled when and as required to be
fulfilled; (v) if there has been such material adverse change in the
condition or prospects of the Company or the Bank or the prospective market
for the Company's securities as in the Agent's good faith opinion would
make it inadvisable to proceed with the offering, sale or delivery of the
Securities; (vi) if in the Agent's good faith opinion, the price for the
Securities established by RP Financial L.C. is not reasonable or equitable
under then prevailing market conditions, or (vii) if the Conversion is not
consummated on or prior to ____________________.
(b) If this Agreement is terminated pursuant to this Section, such
termination shall be without liability of any party to any other party
except as provided in Section 4 hereof relating to the reimbursement of
expenses and except that the provisions of Sections 6 and 7 hereof shall
survive any termination of this Agreement.
SECTION 10. NOTICES.
All notices and other communications hereunder shall be in writing and
shall be deemed to have been duly given if mailed or transmitted by any standard
form of telecommunication. Notices to the Agent shall be directed to the Agent
at Two World Trade Center, 104th Floor, New York, New York 10048, attention of
Xxxxxxxxx X. Xxxxxx, Principal, with a copy to Xxxxx X. Xxxxxx, Esq., Peabody &
Xxxxx, 000 Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000-0000; notices to the
Company and the Bank shall be directed to either of them at 0 Xxxxxx Xxxx
Xxxxxx, Xxxxxx, Xxx
00 Xxxx 00000, attention of Xxxx X. Xxxxxx, President and Chief Executive
Officer, with a copy to _____________________, Silver, Xxxxxxxx & Xxxx, L.L.P.,
Suite 700, East Tower, 0000 Xxx Xxxx Xxxxxx, X.X., Xxxxxxxxxx, XX 00000.
SECTION 11. PARTIES.
This Agreement shall inure to the benefit of and be binding upon the Agent,
the Company and the Bank and their respective successors. Nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any
person, firm or corporation, other than the Agent, the Company and the Bank and
their respective successors and the controlling persons and officers and
directors referred to in Sections 6 and 7 and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision herein or therein contained. This
Agreement and all conditions and provisions hereof and thereof are intended to
be for the sole and exclusive benefit of the Agent, the Company and the Bank and
their respective successors, and said controlling persons and officers and
directors and their heirs and legal representatives, and for the benefit of no
other person, firm or corporation.
40
SECTION 12. ENTIRE AGREEMENT; AMENDMENT.
This Agreement represents the entire understanding of the parties hereto
with reference to the transactions contemplated hereby and supersedes any and
all other oral or written agreements heretofore made, except for the engagement
letter dated January 14, 1998, by and between the Agent and the Bank, relating
to the Agent's providing conversion agent services to the Company and the Bank
in connection with the Conversion. No waiver, amendment or other modification of
this Agreement shall be effective unless in writing and signed by the parties
hereto.
SECTION 13. GOVERNING LAW AND TIME.
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York applicable to agreements made and to be performed
in said State without regard to the conflicts of laws provisions thereof. Unless
otherwise noted, specified times of day refer to Eastern time.
SECTION 14. SEVERABILITY.
Any term or provision of this Agreement which is invalid or unenforceable
in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent
of such invalidity or unenforceability without rendering invalid or
unenforceable the remaining terms and provisions of this Agreement or affecting
the validity or enforceability of any of the terms or provisions of this
Agreement in any other jurisdiction. If any provision of this Agreement is so
broad as to be unenforceable, the provision shall be interpreted to be only so
broad as is enforceable.
SECTION 15. HEADINGS.
Sections headings are not to be considered part of this Agreement, are for
convenience and reference only, and are not to be deemed to be full or accurate
descriptions of the contents of any paragraph or subparagraph.
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement between
the Agent, the Company and the Bank in accordance with its terms.
Very truly yours,
XXXXXX RIVER BANCORP, INC.
By: ____________________________________________
Xxxx X. Xxxxxx
Title: President and Chief Executive Officer
THE XXXXXX RIVER SAVINGS INSTITUTION
By: ____________________________________________
Xxxx X. Xxxxxx
Title: President and Chief Executive Officer
CONFIRMED AND ACCEPTED,
as of the date first above written:
SANDLER X'XXXXX & PARTNERS, L.P.
By: Sandler X'Xxxxx & Partners Corp.,
the sole general partner
By: ______________________________
Xxxxxxxxx X. Xxxxxx
Title:
Exhibit A
---------
[17,333,738] Shares
(Maximum Offered in Conversion)
Common Stock
(Par Value $0.01 Per Share)
SELECTED DEALER'S AGREEMENT
_______________, 1998
We have agreed to assist Xxxxxx River Bancorp, Inc. (the "Company"), in
connection with the offer and sale of shares (the "Shares") of Common Stock, par
value $0.01 per share, of the Company, to be issued in connection with the
conversion of The Xxxxxx River Savings Institution, a New York State-chartered
savings bank (the "Bank"), from mutual to stock form. The Company, in connection
with its plan to effect such conversion, offered [17,333,738] Shares for
subscription by certain of the Bank's depositors and the Bank's employee stock
ownership plan in a subscription offering and to selected persons in a community
offering. The Shares which were not subscribed for pursuant to such subscription
and direct community offerings are being offered to certain members of the
general public in a syndicated community offering (the "Syndicated Community
Offering") in accordance with the rules of the New York State Banking Department
(the "NYBD") and the conversion regulations of the Federal Deposit Insurance
Corporation (the "FDIC"). The Shares, the bases on which the number of Shares to
be issued may change, and certain of the terms on which they are being offered
are more fully described in the enclosed Prospectus (the "Prospectus").
We are offering to Selected Dealers (of which you are one) the opportunity
to participate in the solicitation of offers to buy the Shares in the Syndicated
Community Offering, and we will pay you a fee in the amount of ______________
percent (_________) of the dollar amount of the Shares sold on behalf of the
Company by you. The number of Shares sold by you shall be determined based on
the authorized designation of your firm on the order form or forms for such
Shares accompanying the funds transmitted for payment therefor (whether in the
form of a check payable to the Bank or a withdrawal from an existing account at
the Bank) to the special account established by the Company for the purpose of
holding such funds. It is understood, of course, that payment of your fee will
be made only out of compensation received by us for the Shares sold on behalf of
the Company by you, as evidenced in accordance with the preceding sentence. The
Bank has requested us to invite you to become a "Sponsoring Dealer," that is, a
Selected Dealer who solicits offers which result in the sale on behalf of the
Bank of at least ___________ Shares. You may become a Sponsoring Dealer (subject
to your fulfillment of the requirement in the preceding sentence) by checking
the box on the confirmation at the end of this letter. If you become a
Sponsoring Dealer, you shall be entitled to an additional fee in the amount of
_______ percent (_______%) of the dollar amount of the Shares sold on behalf of
the Company by you as evidenced in the manner set forth above.
2
Each order form for the purchase of Shares must set forth identity, address
and tax identification number of each person ordering Shares, regardless of
whether the Shares will be registered in street name or in the purchaser's name.
Such order form should clearly identify your firm.
As soon as practicable after all the Shares are sold, we will remit to you,
out of your compensation as provided above, the fees to which you are entitled
hereunder, including your Sponsoring Dealer fee.
This offer is made subject to the terms and conditions herein set forth and
is made only to Selected Dealers which are (i) members in good standing of the
National Association of Securities Dealers, Inc. (the "NASD") which agree to
comply with all applicable rules of the NASD, including, without limitation, the
NASD's Interpretation With Respect to Free-Riding and Withholding and Rule 2740
of the NASD's Conduct Rules, or (ii) foreign dealers not eligible for membership
in the NASD which agree (A) not to sell any Shares within the United States, its
territories or possessions or to persons who are citizens thereof or resident
therein and (B) in making other sales to comply with the above-mentioned NASD
Interpretation, Rules 2730, 2740 and 2750 of the above-mentioned Conduct Rules
as if they were NASD members and Rule 2420 of such Conduct Rules as it applies
to non-member brokers or dealers in a foreign country.
Orders for Shares will be strictly subject to confirmation and we, acting
on behalf of the Company, reserve the right in our absolute discretion to reject
any order in whole or in part, to accept or reject orders in the order of their
receipt or otherwise, and to allot. Neither you nor any other person is
authorized by the Company, the Bank or by us to give any information or make any
representations other than those contained in the Prospectus in connection with
the sale of any of the Shares. No Selected Dealer is authorized to act as agent
for us when soliciting offers to buy the Shares from the public or otherwise. No
Selected Dealer shall engage in any transaction prohibited by Regulation M
promulgated under the Securities Exchange Act of 1934 with respect to the
Company's Common Stock during the offering.
We and each Selected Dealer assisting in selling Shares pursuant hereto
agree to comply with the applicable requirements of the Securities Exchange Act
of 1934 and applicable rules and regulations issued by the Federal Reserve Board
and the Office of Thrift Supervision. In addition, we and each Selected Dealer
confirm that the Securities and Exchange Commission interprets Rule 15c2-8
promulgated under the Securities Exchange Act of 1934 as requiring that a
prospectus be supplied to each person who is expected to receive a confirmation
of sale 48 hours prior to delivery of such person's order form.
We and each Selected Dealer further agree to the extent that our customers
desire to pay for Shares with funds held by or to be deposited with us, in
accordance with the interpretation of the Securities and Exchange Commission of
Rule 15c2-4 promulgated under the Securities Exchange Act of 1934, either (a)
upon receipt of an executed order form or direction to execute an order form on
behalf of a customer to forward the syndicated community offering price for the
Shares ordered on or before 12:00 noon on the business day following receipt or
execution of an order form by us to the Bank for deposit in a segregated account
or (b) to solicit indications of interest, in which event (i) we will
subsequently contact any customers indicating interest to confirm the interest
and give instructions to execute and return an order form or to receive
authorization to execute an order form on their behalf, (ii) we will mail
3
acknowledgments of receipt of orders to each customer confirming interest on the
business day following such confirmation, (iii) we will debit accounts of such
customers on the fifth business day (the "debit date") following receipt of the
confirmation referred to in (i), and (iv) we will forward completed order forms
together with such funds to the Bank on or before 12:00 noon on the next
business day following the debit date for deposit in a segregated account. We
acknowledge that if the procedure in (b) is adopted, our customer's funds are
not required to be in their accounts until the debit date. We and each Selected
Dealer further acknowledge that, in order to use the foregoing "sweep
arrangements," we comply with the net capital requirements for broker/dealers
under Rule 15c3-1(a)(1) of the Securities Exchange Act of 1934.
Unless earlier terminated by us, this Agreement shall terminate 45 full
business days after the date hereof, but may be extended by us for an additional
period or periods not exceeding 30 full business days in the aggregate. We may
terminate this Agreement or any provisions hereof at any time by written or
telegraphic notice to you. Of course, our obligations hereunder are subject to
the successful completion of the offering, including the sale of all of the
Shares.
You agree that at any time or times prior to the termination of this
Agreement you will, upon our request, report to us the number of Shares sold on
behalf of the Company by you under this Agreement.
We shall have full authority to take such actions as we may deem advisable
in respect to all matters pertaining to the offering. We shall be under no
liability to you except for lack of good faith and for obligations expressly
assumed by us in this Agreement.
Upon application to us, we will inform you as to the states in which we
believe the Shares have been qualified for sale under, or are exempt from the
requirements of, the respective blue sky laws of such states, but we assume no
responsibility or obligation as to your rights to sell Shares in any state.
Additional copies of the Prospectus and any supplements thereto will be
supplied in reasonable quantities upon request.
Any notice from us to you shall be deemed to have been duly given if
mailed, telephoned or telegraphed to you at the address to which this Agreement
is mailed.
This Agreement shall be construed in accordance with the laws of the State
of New York.
Please confirm your agreement hereto by signing and returning the
confirmation accompanying this letter at once to us at Sandler X'Xxxxx &
Partners, L.P., Xxx Xxxxx Xxxxx Xxxxxx, 000xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000.
The enclosed duplicate copy will evidence the agreement between us.
Very truly yours,
SANDLER X'XXXXX & PARTNERS, L.P.
By: Sandler X'Xxxxx & Partners Corp.,
the sole general partner
By: _______________________________
CONFIRMED AND ACCEPTED
as of the date first above written:
___________________________________
By: _______________________________
