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EXHIBIT 1.2
_____________ Shares
(subject to increase up to ___________ shares
in the event of an oversubscription)
XXXX FINANCIAL CORPORATION
(a Delaware corporation)
Common Stock
(par value $.0001 per share)
DRAFT AGENCY AGREEMENT
_______________, 0000
XXXXXXX X'XXXXX & PARTNERS, L.P.
Two World Trade Center, 000xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Xxxx Financial Corporation, a Delaware corporation (the "Company"), and
The Xxxx Savings Bank, a New York-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
______ shares (subject to increase up to ________ shares in the event of an
oversubscription) of the Company's Common Stock, par value $.0001 per share (the
"Common Stock"). The shares of Common Stock to be sold by the Company are
hereinafter called the "Securities." In addition, as described herein, the
Company expects to contribute shares of Common Stock in an amount equal to 8% of
the shares of Common Stock sold in the Offerings (as hereinafter defined) to The
Xxxx Savings Bank Community Foundation (the "Foundation"), such shares
hereinafter being referred to as the "Foundation Shares".
The Securities are being offered for sale and the Foundation shares are
being contributed in accordance with the amended and restated plan of conversion
dated July 15, 1998 and amended on December 10, 1998 and January 28, 1999 (the
"Plan") adopted by the Board of Directors of the Bank
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pursuant to which: (i) the Bank will convert into a stock institution; (ii) the
Company will sell the Securities in the Offerings (as hereinafter defined);
(iii) the Company will use a portion of the net proceeds of the sale of the
Securities to purchase all of the outstanding capital stock of the Bank; and
(iv) any common stock of the Company held by the Bank will be canceled.
Pursuant to the Plan, the Company is offering to certain of the Bank's
depositors, and to the Bank's tax qualified employee benefit plans, including
the Employee Stock Ownership Plan (the "ESOP"), rights to subscribe for the
Securities in a subscription offering (the "Subscription Offering"). To the
extent Securities are not subscribed for in the Subscription Offering, such
Securities may be offered to certain members of the general public in a direct
community offering (the "Community Offering" and together with the Subscription
Offering, as each may be extended or reopened from time to time, the
"Subscription and Community Offering") to be commenced concurrently with the
Subscription Offering. It is currently anticipated by the Bank and the Company
that any Securities not subscribed for in the Subscription and Community
Offering will be offered, subject to Section 2 hereof, in a syndicated community
offering (the "Syndicated Community Offering"). The Subscription and Community
Offering and the Syndicated Community Offering are hereinafter referred to
collectively as the "Offerings." The conversion of the Bank from mutual to stock
form, the acquisition of the Bank's capital stock by the Company and the
Offerings are hereinafter referred to collectively as the "Conversion". It is
acknowledged that the number of Securities to be sold in the Offerings may be
increased or decreased as described in the Prospectus (as hereinafter defined).
If the number of Securities is increased or decreased in accordance with the
Plan, the term "Securities" shall mean such greater or lesser number, where
applicable. In 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 issuance of the
Bank's common stock in accordance with the Plan.
In connection with the Conversion and pursuant to the terms of the Plan
as described in the Prospectus, the Company intends to establish 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 a amount equal to the
difference between 8% of the gross proceeds from the sale of Securities in the
Offering and $5.3 million, which is the $5.0 million in contributions, committed
to the existing The Xxxx Savings Bank Charitable Foundation, Inc., and the
$300,000 value of the Music Hall, or between _______ and _________ shares of
Common Stock (subject to increase in certain circumstances to _________ shares).
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-1 (No. 333-68813) including a
prospectus for the registration of the Securities and the Foundation Shares
under the Securities Act of 1933, as amended (the "Securities Act"), has filed
such amendments thereto, if any, and such amended prospectuses as may have been
required to the date hereof by the Commission in order to declare such
registration statement effective, and will file such additional amendments
thereto and such amended prospectuses and prospectus supplements as may
hereafter be required. Such registration statement (as amended
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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 part thereof pursuant to the
rules and regulations of the Commission under the Securities Act, as from time
to time amended or supplemented pursuant to the Securities Act or otherwise (the
"Securities Act Regulations")) are hereinafter referred to as the "Registration
Statement" and the "Prospectus", respectively, except that if any revised
prospectus shall be used by the Company in connection with the Subscription and
Community Offering or the Syndicated Community Offering which differs from the
Prospectus on file with 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 provided to the Agent for such use.
Concurrently with the execution of this Agreement, the Company is
delivering to the Agent copies of the Prospectus of the Company to be used in
the Subscription and Community Offering. Such prospectus contains information
with respect to the Bank, the Company 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
Prospectus made in reliance upon and in conformity with information
with respect to the Agent furnished to the Company in writing by the
Agent expressly for use in the Prospectus (the "Agent Information,"
which the Company and the Bank acknowledge appears only in the sections
captioned "Market for the Common Stock" and the first two paragraphs of
the section captioned "The Conversion - Marketing and Underwriting
Arrangements" of the Prospectus).
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(ii) The Company has filed with the Board of Governors of the
Federal Reserve System (the "Federal Reserve") the Company's
application for approval of its acquisition of the Bank (the "Holding
Company Application") on Form FR Y-3 promulgated under the Bank Holding
Company Act, as amended ("BHC Act"), Regulation Y, and the other
regulations promulgated under the BHC Act. The Company has received
written notice from the Federal Reserve of its approval of the
acquisition of the Bank, such approval remains in full force and effect
and no order has been issued by the Federal Reserve 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
Federal Reserve. At the date of such approval and the Closing Time as
referred to in Section 2, the Holding Company Application complied and
will comply in all material respects with the applicable provisions of
BHC Act 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 ("FDIC") governing the conversion of New
York State chartered mutual savings banks to stock form (the
"Conversion Regulations"), the Bank has filed with the Superintendent
of Banks of the State of New York (the "Superintendent") an application
for conversion on Form 86-AC, and filed with the FDIC a Notice of
Conversion, including the Form 86-AC and the Holding Company
Application, and has filed such amendments thereto and supplementary
materials as may be required to the date hereof (such application, as
amended to date, if applicable, and as from time to time amended or
supplemented hereafter, is hereinafter referred to as the "Conversion
Application"), including copies of the Bank's Proxy Statement, to be
dated _____, 1999, relating to the Conversion (the "Proxy Statement"),
and the Prospectus. The Superintendent has, by letter dated _____ 1999,
approved the Conversion Application, such approval remains in full
force and effect and no order has been issued by the Superintendent
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 Superintendent. The FDIC has, by letter dated ____,
1999, issued a letter of non-objection to the Conversion Application,
and such non-objection remains in full force and effect and no order
has been issued by the FDIC suspending or revoking such approval and no
proceedings therefor have been initiated or, to the knowledge of the
Company or the Bank, threatened by the FDIC. At the date of such
approval by the Superintendent and the letter of non-objection by the
FDIC, and at the Closing Time referred to in Section 2 hereof, the
Conversion Application complied and will comply in all material
respects with the applicable provisions of the Conversion Regulations.
(iv) At the time of their use, the Proxy Statement and any
other proxy solicitation materials will comply in all material respects
with the applicable provisions of the Conversion Regulations and will
not contain an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
The Company and the Bank will promptly file the Prospectus and any
supplemental sales literature with the Commission,
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the Superintendent and the FDIC, as required. 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
hereof, 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) None of 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 Federal
Reserve, the Superintendent, the FDIC, or any other regulatory
authority, other than those which the regulatory authority permits to
be completed after the Conversion.
(vii) FinPro, Inc. ("FinPro"), which prepared the valuation of
the Company and 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. FinPro, which prepared the opinion filed under
separate cover as Exhibit 5 of the Conversion Application as required
by the Conversion Regulations, satisfies all requirements for an
"independent corporate appraisal expert" within the meaning of the
Conversion Regulations.
(viii) Xxxxxxx X. Xxxxxx, Incorporated, ("Mercer") has
reviewed the total compensation package for the trustees or directors
and executive officers of the Company and the Bank for the purpose of
determining whether or not such compensation package, viewed as a whole
and on an individual basis, is reasonable and proper in comparison to
compensation provided to executive officers, directors or trustees of
similar publicly traded financial institutions and has advised the
Company and the Bank in writing that the compensation satisfies all
requirements set forth in the Conversion Regulations and any
interpretations or guidelines issued by the Superintendent and the FDIC
with respect thereto. Mercer, which prepared the opinion filed as
Exhibit 9(h) 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.
(ix) 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
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meaning of the Code of Ethics of the American Institute of Certified
Public Accountants, and that such accountants are, with respect to the
Company and the Bank, and each subsidiary of the Bank, independent
certified public accountants as required by the Securities Act and the
Securities Act Regulations.
(x) The Bank has 15 wholly owned subsidiaries. These are the
only subsidiaries of the Bank (the "Subsidiaries"). The Subsidiaries
are: The Family Investment Services Co., Inc., a New York corporation,
is a full-service securities brokerage firm and a member of the
National Association of Securities Dealers; The Family Mortgage Banking
Co., Inc., a New York corporation, originates residential mortgage
loans; T.S. Capital Corp. is a New York corporation that has applied to
the Small Business Administration to be licensed as a Small Business
Investment Company under Section 302(b) of the Small Business
Investment Act of 1958, as amended; T.S. Real Property, Inc., a New
York corporation, is a holding company for a 25% limited partnership
interest in the Washington Apartments Associates, a New York limited
partnership, and a 99% limited partnership interest in Capitol Hill
Affordable Housing Associates, a New York limited partnership; 507
Heights Corp., Camel Hill Corporation and Realty Umbrella, Ltd., all of
which are New York corporations established to hold shares and assets
acquired by Xxxx in satisfaction of debts previously contracted in good
faith; The Xxxx Savings Bank Charitable Foundation, Inc., a New York
not-for-profit corporation; The Xxxx Savings Bank Music Hall
Foundation, Inc., a New York not-for-profit corporation; The Xxxx
Savings Bank Community Foundation, Inc., a Delaware nonstock,
not-for-profit corporation; The Xxxx Savings Bank Charitable Trust, a
charitable trust established under New York law; 00 Xxxxxx Xxxxxx, x
Xxx Xxxx corporation that owns a condominium unit in Washington
Apartments Associates; The Family Advertising Co., Inc., a New York
corporation that places advertisements for Xxxx and its subsidiaries;
Xxxx SB Real Estate Co., Inc., a New York corporation that provides
real estate brokerage services; and The Family Insurance Agency, Inc.,
a New York corporation engaged in full-service insurance agency
business.
(xi) The consolidated financial statements and the related
notes thereto included in the Registration Statement and the Prospectus
present fairly the consolidated financial position of the Bank and the
Subsidiaries at the dates indicated and the results of operations,
equity and cash flows for the periods specified, and comply as to form
in all material respects with the applicable accounting requirements of
the Securities Act Regulations and the Conversion Regulations. Except
as otherwise stated in the Registration Statement, said financial
statements have been prepared in conformity with 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.
(xii) 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 taken as a whole, whether
or not
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arising in the ordinary course of business, and (B) except for
transactions specifically referred to or contemplated in the
Prospectus, there have been no transactions entered into by the
Company, the Bank or the Subsidiaries other than those in the ordinary
course of business, which are material with respect to the Company, the
Bank and the Subsidiaries taken as a whole.
(xiii) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware with corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectus and to enter into and perform its obligations under this
Agreement; and the Company is duly qualified as a foreign corporation
to transact business and is in good standing in the State of New York
and in each 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, taken as a whole.
(xiv) 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 and outstanding prior to the
Closing Time referred to in Section 2; at the time of Conversion, the
Securities will have been duly authorized for issuance and, when issued
and delivered by the Company pursuant to the Plan against payment of
the consideration calculated as set forth in the Plan, stated on the
cover page of the Prospectus and provided for in resolutions of the
Board of Directors of the Company, 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 form of certificates
evidencing 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.
(xv) 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
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affairs of the Company, the Bank and the Subsidiaries taken as a whole;
all such licenses, permits and other governmental authorizations are in
full force and effect and the Company, the Bank and the Subsidiaries
are in all material respects in compliance therewith; neither the
Company, the Bank nor any of the Subsidiaries has received notice of
any proceeding or action relating to the revocation or modification of
any such license, permit or other governmental authorization which,
singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, might have a material adverse effect on the
financial condition, results of operations or business affairs of the
Company, the Bank and the Subsidiaries, taken as a whole, and the Bank
is in good standing under the laws of the State of New York and is
qualified as a foreign corporation in any jurisdiction in which the
failure to so qualify would have a material adverse effect on the
financial condition, results of operations or business affairs of the
Company, the Bank and the Subsidiaries, taken as a whole.
(xvi) 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 and supplemental
eligible account holders will be duly established in accordance with
the requirements of the Conversion Regulations.
(xvii) Upon consummation of the Conversion, the authorized
capital stock of the Bank will be 1,000 shares of common stock, par
value $1.00 per share (the "Bank Common Stock"). The Bank has no
authorized preferred stock, and the issued and outstanding capital
stock of the Bank will be [1,000] shares of Bank Common Stock; no
shares of Bank Common Stock are issued and outstanding as of the date
hereof. No shares of Bank Common Stock and 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 have been duly authorized and, when issued
and delivered by the Bank pursuant to the Plan against payment of the
consideration calculated as set forth in the Plan, described in the
Prospectus and provided for in resolutions of the Board of Trustees of
the Bank, will be duly and validly issued and fully paid and
nonassessable, and all such Bank Common Stock will be owned
beneficially and of record by the Company free and clear of any
security interest, mortgage, pledge, lien, encumbrance or legal or
equitable claim; the terms and provisions of the Bank Common Stock
conform to all statements relating thereto contained in the Prospectus,
and the certificate(s) representing the shares of the 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.
(xviii) Upon consummation of the Conversion, the Foundation
will be duly incorporated and validly existing as a nonstock
corporation in good standing under the laws of the State of Delaware
with corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the Prospectus;
the Foundation will not be a bank holding company under the New York
Banking law or the BHC Act or 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
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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.
(xix) Each Subsidiary has been duly incorporated and is
validly existing as a corporation in good standing under the laws of
the jurisdiction of its incorporation, has full corporate power and
authority to own, lease and operate its properties and to conduct its
business as described in the Registration Statement and Prospectus, is
duly qualified to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by reason
of the ownership or leasing of property or the conduct of business,
except where the failure to so qualify would not have a material
adverse effect on the financial condition, results of operations or
business of the Company, the Bank and the Subsidiaries, taken as a
whole; the activities of the Subsidiaries are permitted to subsidiaries
of a New York State chartered savings bank by the rules, regulations,
resolutions and practices of the Superintendent and the FDIC; all of
the issued and outstanding capital stock of the Subsidiaries has been
duly authorized and validly issued, is fully paid and nonassessable and
is owned by the Bank directly, free and clear of any security interest,
mortgage, pledge, lien, encumbrance or legal or equitable claim.
(xx) This Agreement has been duly executed and delivered by,
and is the valid and binding agreement of, the Company and the Bank,
enforceable in accordance with its terms, except as may be limited by
bankruptcy, insolvency or other laws affecting the enforceability of
the rights of creditors generally and judicial limitations on the right
of specific performance and except as the enforceability of
indemnification and contribution provisions may be limited by
applicable securities laws.
(xxi) Subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus
and prior to the Closing Time referred to in Section 2, except as
otherwise may be indicated or contemplated therein, none of the
Company, the Bank nor the Subsidiaries 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, taken as
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a whole, excluding the origination, purchase and sale of loans or the
purchase or sale of investment securities or mortgage-backed securities
in the ordinary course of business.
(xxii) No approval of any regulatory or supervisory authority
or any other public authority is required in connection with the
execution and delivery of this Agreement or the issuance of the
Securities and the Foundation Shares that has not been obtained and a
copy of which has been delivered to the Agent, except as may be
required under the securities laws of various jurisdictions.
(xxiii) None of 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
restated 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,
taken as a whole; and there are no contracts or documents of the
Company, the Bank or any of the Subsidiaries which are required to be
filed as exhibits to the Registration Statement or the Conversion
Application which have not been so filed.
(xxiv) The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated herein
have been duly authorized by all necessary corporate action and do not
and will not conflict with or constitute a breach of, or default under,
or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company, the Bank or any
of the Subsidiaries pursuant to, any contract, indenture, mortgage,
loan agreement, note, lease or other instrument to which the Company,
the Bank or any of the Subsidiaries is a party or by which it or any of
them may be bound, or to which any of the property or assets of the
Company, the Bank or any of the Subsidiaries is subject, except for
such defaults that would not, individually or in the aggregate, have a
material adverse effect on the financial condition, results of
operations or business of the Company, the Bank and the Subsidiaries
taken as a whole; nor will such action result in any violation of the
provisions of the certificate of incorporation, organization
certificate, articles of incorporation or charter, as the case may be
and in each case as amended, or the by-laws of the Company, the Bank or
any of the Subsidiaries, or any applicable law, administrative
regulation or administrative or court decree to which the Company, the
Bank or any of the Subsidiaries is subject or by which any of their
property or assets may be bound.
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(xxv) No labor dispute with the employees of the Company, the
Bank or any of the Subsidiaries exists or, to the knowledge of the
Company or the Bank, is imminent or threatened; and the Company and the
Bank are not aware of any existing or threatened labor disturbance by
the employees of any of its principal suppliers or contractors which
might be expected to result in any material adverse change in the
financial condition, results of operations or business of the Company
and the Bank, taken as a whole.
(xxvi) Each of the Company, the Bank and the Subsidiaries has
good and marketable title to all properties and assets for which
ownership is material to the business of the Company, the Bank or the
Subsidiaries and to those properties and assets described in the
Prospectus as owned by them, free and clear of all liens, charges,
encumbrances or restrictions, except such as are described in the
Prospectus or are not material in relation to the business of the
Company, the Bank and the Subsidiaries taken as a whole; and all of the
leases and subleases material to the business of the Company, the Bank
and the Subsidiaries, under which the Company, the Bank and any of the
Subsidiaries hold properties, including those described in the
Prospectus, are valid and binding agreements of the Company, the Bank
and any of the Subsidiaries enforceable in accordance with their terms.
(xxvii) None of the Company, the Bank nor any of the
Subsidiaries is in violation of any directive from the Superintendent
or the FDIC to make any material change in the method of conducting
their respective businesses; the Bank and the Subsidiaries have
conducted and are conducting their businesses so as to comply with all
applicable statutes, regulations and administrative and court decrees
(including, without limitation, all regulations, decisions, directives
and orders of the Superintendent or the FDIC).
(xxviii) 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, taken
as a whole, or which might materially and adversely affect the
properties or assets thereof or which might materially and adversely
affect 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 their
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.
(xxix) The Bank has obtained an opinion of its special
counsel, Xxxxx & Xxxxxxx L.L.P., with respect to the legality of the
Securities to be issued and the Foundation Shares
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and the federal income tax consequences of the Conversion, copies of
which are filed as exhibits to the Registration Statement; the Bank has
obtained the opinion of KPMG LLP with respect to the state and local
income tax consequences of the Conversion (including franchise tax,
sales or use tax, license fee on foreign corporations, stock transfer
tax, real property transfer gain tax and real estate transfer tax) and
the federal income tax consequences of the Foundation, copies of which
are filed as exhibits to the Registration Statement; all material
aspects of the aforesaid opinions are accurately summarized in the
Prospectus; the facts and representations upon which such opinions are
based are truthful, accurate and complete in all material respects; and
neither the Bank, any of the Subsidiaries 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 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 Regulation Z and 12 C.F.R. Part 226),
real estate settlement procedures, consumer credit protection, equal
credit opportunity and all disclosure laws applicable to such loans,
except for violations which, if asserted, would not result in a
material adverse effect on the financial condition, results of
operations or business of the Company, the Bank and the Subsidiaries
taken as a whole.
(xxxii) To the knowledge of the Company and the Bank, with the
exception of the intended loan to the Bank's ESOP by the Company to
enable the ESOP to purchase shares of Common Stock in an amount of up
to 8% of the Common Stock issued in the Conversion, none of the
Company, the Bank or any employee of the Bank has made any payment of
funds of the Company or the Bank as a loan for the purchase of the
Common Stock nor 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.
(xxxiv) None of the Company, the Bank nor 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 of the Company, the Bank and the Subsidiaries,
taken as a whole. There are no actions, suits or proceedings,
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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 Subsidiary,
under any Environmental Law. For purposes of this subsection, the term
"Environmental Law" means any federal, state, local or foreign law,
statute, ordinance, rule, regulation, code, license, permit,
authorization, approval, consent, order, judgment, decree, injunction
or agreement with any regulatory authority relating to (i) the
protection, preservation or restoration of the environment (including,
without limitation, air, water, vapor, surface water, groundwater,
drinking water supply, surface soil, subsurface soil, plant and animal
life or any other natural resource), and/or (ii) the use, storage,
recycling, treatment, generation, transportation, processing, handling,
labeling, production, release or disposal of any substance presently
listed, defined, designated or classified as hazardous, toxic,
radioactive or dangerous, or otherwise regulated, whether by type or by
quantity, including any material containing any such substance as a
component.
(xxxv) The Company, the Bank and the Subsidiaries have filed
all federal income and state and local franchise tax returns required
to be filed and have made timely payments of all taxes shown as due and
payable in respect of such returns, and no deficiency has been asserted
with respect thereto by any taxing authority.
(xxxvi) The Company has received approval, subject to
regulatory approval to consummate the Offerings and stock issuance, to
have the Securities quoted on the Nasdaq Stock Market (the "Nasdaq
National Market") effective at the Closing Time referred to in Section
2 hereof.
(xxxvii) The Company has filed a registration statement for
the Common Stock under Section 12(g) of the Securities Exchange Act of
1934, as amended (the "Exchange Act Registration Statement") and the
Exchange Act Registration Statement has 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 the Agent or counsel for the Agent shall be deemed a
representation and warranty by the Company or the Bank to each of the matters
covered thereby.
SECTION 2. APPOINTMENT OF SANDLER X'XXXXX; SALE AND DELIVERY OF THE
SECURITIES; CLOSING.
On the basis of the representations and warranties herein contained and
subject to the terms and conditions herein set forth, the Company hereby
appoints Sandler X'Xxxxx as its Agent to consult with and advise the Company,
and to assist the Company with the solicitation of subscriptions and purchase
orders for Securities, in connection with the Company's sale of Common Stock in
The Subscription and Community Offering and the Syndicated Community Offering.
On the basis of
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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 its 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 that is inconsistent with any applicable laws, regulations, decisions or
orders. The services to be rendered by Sandler X'Xxxxx pursuant to this
appointment include the following: (i) consulting as to the securities marketing
implications of any aspect of the Plan or related corporate documents; (ii)
reviewing with the Bank's Board of Trustees the independent appraiser's
appraisal of the common stock, particularly with regard to aspects of the
appraisal including the methodology employed; (iii) reviewing all offering
documents, including the Prospectus, stock order forms and related offering
materials (it being understood that the preparation and filing of such documents
is the sole responsibility of the Company and the Bank and their counsel); (iv)
assisting in the design and implementation of a marketing strategy for the
Offerings; (v) assisting in obtaining all requisite regulatory approvals; (vi)
assisting Bank management in preparing for meetings with potential investors and
broker-dealers; and (vii) providing such other general advice and assistance as
may be requested to promote the successful completion of the Conversion.
The appointment of the Agent hereunder shall terminate upon the earlier
to occur of (a) forty five (45) days after the last day of the Subscription and
Community Offering, unless the Company and the Agent agree in writing to extend
such period and the Superintendent agrees to extend the period of time in which
the Shares may be sold, (b) the receipt and acceptance of subscriptions and
purchase orders for all of the Securities, or (c) the completion of the
Syndicated Community Offering.
If any of the Securities remain available after the expiration of the
Subscription Offering and Community Offering, at the request of the Company and
the Bank and subject to the continued satisfaction of all terms of this
Agreement, Sandler X'Xxxxx will seek to form a syndicate of registered brokers
or dealers ("Selected Dealers") to assist in the solicitation of purchase orders
of such Securities on a best efforts basis, subject to the terms and conditions
set forth in a selected dealers' agreement (the "Selected Dealers' Agreement"),
substantially in the form set forth in Exhibit A to this Agreement. Sandler
X'Xxxxx will endeavor to limit the aggregate fees to be paid by the Company and
the Bank under any such Selected Dealers' Agreement to an amount competitive
with gross underwriting discounts charged at such time for underwritings of
comparable amounts of stock sold at a comparable price per share in a similar
market environment; provided, however, that the aggregate fees payable to Xxxxxx
X'Xxxxx and Selected Dealers shall not exceed 5% of the aggregate Purchase Price
of the Securities sold under such Selected Dealers Agreement. Xxxxxx X'Xxxxx
will endeavor to distribute the Securities among the Selected Dealers in a
fashion which best meets the distribution objective of the Bank and the Company
and the requirements of the Plan, which may result in limiting the allocation of
stock to certain Selected Dealers. It is understood that in no event shall
Sandler X'Xxxxx be obligated to act as a Selected Dealer or to take or purchase
any Securities.
In the event the Company is unable to sell at least the total minimum
of the Securities, as set forth on the cover page of the Prospectus, within the
period herein provided, this Agreement shall
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terminate and the Company shall refund to any persons who have subscribed for
any of the Securities the full amount which it may have received from them,
together with interest as provided in the Prospectus, and no party to this
Agreement shall have any obligation to the others hereunder, except for the
obligations of the Company and the Bank as set forth in Sections 4, 6(a) and 7
hereof and the obligations of the Agent as provided in Sections 6(b) and 7
hereof. Appropriate arrangements for placing the funds received from
subscriptions for Securities or other offers to purchase Securities in special
interest-bearing accounts with the Bank until all Securities are sold and paid
for were made prior to the commencement of the Subscription Offering, with
provision for refund to the purchasers as set forth above, or for delivery to
the Company if all Securities are sold.
If at least the total minimum of Securities, as set forth on the cover
page of the Prospectus, are sold, the Company agrees to issue or have issued the
Securities sold and to release for delivery certificates for such Securities at
the Closing Time as defined below against payment therefor by release of funds
from the special interest-bearing accounts referred to above. The closing shall
be held at the office of Xxxxx & Xxxxxxx L.L.P., at 10:00 a.m., local time, or
at such other place and time as shall be agreed upon by the parties hereto, on a
business day to be agreed upon by the parties hereto. The Company shall notify
the Agent by telephone, confirmed in writing, when funds shall have been
received for all the Securities. Certificates for Securities shall be delivered
directly to the purchasers thereof in accordance with their directions.
Notwithstanding the foregoing, certificates for Securities purchased through
Selected Dealers shall be made available to the Agent for inspection at least 48
hours prior to the Closing Time at such office as the Agent shall designate. The
hour and date upon which the Company shall release for delivery all of the
Securities, in accordance with the terms hereof, is herein called the "Closing
Time."
The Company will pay any stock issue and transfer taxes which may be
payable with respect to the sale of the Securities.
In addition to reimbursement of the expenses specified in Section 4
hereof, if the Conversion is consummated 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 Subscription and
Community Offering, excluding in each case shares purchased by (i) any employee
benefit plan of the Company or the Bank established for the benefit of their
respective trustees, directors, officers and employees, (ii) any trustee,
director, officer or employee of the Company, the Bank or any Subsidiary or
members of their immediate families (which term shall mean parents,
grandparents, spouse, siblings, children and grandchildren) and the Bank's
general counsel, Xxxxxxx X. Xxxxxxxx; and
(b) with respect to any Securities sold by an NASD member firm (other
than Sandler X'Xxxxx) under any Selected Dealers' Agreement in the Syndicated
Community Offering, (i) the sales commission payable to Selected Dealers under
any Selected Dealers Agreement, (ii) any sponsoring dealer's fees and (iii) a
management fee to Sandler X'Xxxxx of one and one-tenth percent (1.10%) of the
aggregate Purchase Price of such Securities sold under any such agreement. Any
fees payable
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to Sandler X'Xxxxx for Securities under such agreement shall be limited to an
aggregate of one and one-tenth percent (1.10%) of the aggregate Purchase Price
of such Securities.
If this Agreement is terminated by the Agent in accordance with the
provisions of Section 9(a) hereof or the Conversion is terminated by the Company
or the Bank, no fee shall be payable by the Company or the Bank to Sandler
X'Xxxxx; however, 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 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 $50,000, $25,000 of which has been previously paid and the
remaining $25,000 of which shall be payable upon execution hereof, which shall
be credited against any fees or reimbursement of expenses payable hereunder.
SECTION 3. COVENANTS OF THE COMPANY AND THE BANK.
The Company and the Bank covenant with the Agent as follows:
(a) The Company and the Bank will prepare and file such amendments or
supplements to the Registration Statement, the Prospectus, the Conversion
Application and the Proxy Statement as may hereafter be required by the
Securities Act Regulations or the Conversion Regulations or as may hereafter be
requested by the Agent. Following completion of the Subscription and Community
Offering, in the event of a Syndicated Community Offering, the Company and the
Bank will (i) promptly prepare and file with the Commission a post-effective
amendment to the Registration Statement relating to the results of the
Subscription and Community Offering, any additional information with respect to
the proposed plan of distribution and any revised pricing information or (ii) if
no such post-effective amendment is required, file with, or mail for filing to,
the Commission a prospectus or prospectus supplement containing information
relating to the results of the Subscription and Community Offering and pricing
information pursuant to Rule 424 of the Securities Act Regulations, in either
case in a form acceptable to the Agent. The Company and the Bank will notify the
Agent immediately, and confirm the notice in writing, (i) of the effectiveness
of any post-effective amendment to 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 Federal Reserve or the Commission with respect to the transactions
contemplated by this Agreement or the Plan, (iii) of any request by the
Commission, the Superintendent or the FDIC for any amendment to the Registration
Statement or the Conversion 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
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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 their
intention to file or prepare any amendment to the Conversion Application or
Registration Statement (including any post-effective amendment) or any amendment
or supplement to the Prospectus (including any revised prospectus which the
Company proposes for use in connection with the Syndicated Community Offering of
the Securities which differs from the prospectus on file at the Commission at
the time the Registration Statement becomes effective, whether or not such
revised prospectus is required to be filed pursuant to Rule 424(b) of the
Securities Act Regulations), will furnish the Agent with copies of any such
amendment or supplement a reasonable amount of time prior to such proposed
filing or use, as the case may be, and will not file any such amendment or
supplement or use any such prospectus to which the Agent or counsel for the
Agent may object.
(c) The Company and the Bank will deliver to the Agent as many signed
copies and as many conformed copies of the Conversion Application and the
Registration Statement as originally filed and of each amendment thereto
(including exhibits filed therewith or incorporated by reference therein) as the
Agent may reasonably request, and from time to time such number of copies of the
Prospectus as the Agent may reasonably request.
(d) During the period when the Prospectus is required to be delivered,
the Company and the Bank will comply, at their own expense, with all
requirements imposed upon them by the Superintendent and the FDIC, by the
applicable Conversion Regulations, as from time to time in force, and by the
Securities Act, the Securities Act Regulations, the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and the rules and regulations of the
Commission promulgated thereunder, including, without limitation, Regulation M
under the Exchange Act, so far as necessary to permit the continuance of sales
or dealing in shares of Common Stock during such period in accordance with the
provisions hereof and the Prospectus.
(e) If any event or circumstance shall occur as a result of which it is
necessary, in the opinion of counsel for the Agent, to amend or supplement the
Prospectus in order to make the Prospectus not misleading in the light of the
circumstances existing at the time it is delivered to a purchaser, the Company
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.
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(f) The Company and the Bank will take all necessary action, in
cooperation with the Agent, to qualify the Securities for offering and sale
under the applicable securities laws of such states of the United States and
other jurisdictions as the Conversion Regulations may require and as the Agent
and the Company have agreed; provided, however, that the Company and the Bank
shall not be obligated to file any general consent to service of process or to
qualify as a foreign corporation in any jurisdiction in which it is not so
qualified. In each jurisdiction in which the Securities have been so qualified,
the Company, and the Bank will file such statements and reports as may be
required by the laws of such jurisdiction to continue such qualification in
effect for a period of not less than one year from the effective date of the
Registration Statement.
(g) The Company authorizes Sandler X'Xxxxx and any Selected Dealers to
act as agent of the Company in distributing the Prospectus to persons entitled
to receive subscription rights and other persons to be offered Securities having
record addresses in the states or jurisdictions set forth in a survey of the
securities or "blue sky" laws of the various jurisdictions in which the
Offerings will be made (the "Blue Sky Survey").
(h) The Company will make generally available to its security holders
as soon as practicable, but not later than 60 days after the close of the period
covered thereby, an earnings statement (in form complying with the provisions of
Rule 158 of the Securities Act Regulations) covering a twelve month period
beginning not later than the first day of the Company's fiscal quarter next
following the "effective date" (as defined in said Rule 158) of the Registration
Statement.
(i) During the period ending on the third anniversary of the expiration
of the fiscal year during which the closing of the transactions contemplated
hereby occurs, the Company will furnish to its stockholders as soon as
practicable after the end of each such fiscal year in such period an annual
report (including consolidated statements of financial condition and
consolidated statements of income, stockholders' equity and cash flows of the
Company certified by independent public accountants) and, will make available to
stockholders as soon as practicable after the end of each of the first three
quarters of each fiscal year (beginning with the fiscal quarter ending after the
effective date of the Registration Statement), consolidated summary financial
information of the Company 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 publically
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.
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(k) The Company and the Bank will conduct the Conversion (including the
establishment and operation of the Foundation) in all material respects in
accordance with the Plan, the Conversion Regulations and all other applicable
regulations, decisions and orders, including all applicable terms, requirements
and conditions precedent to the Conversion imposed upon the Company or the Bank
by the Superintendent, the FDIC or the Federal Reserve.
(l) Each of the Company and the Bank will use the net proceeds received
by it from the sale of the Securities in the manner specified in the Prospectus
under "Use of Proceeds."
(m) The Company will file with the Commission such reports as may be
required pursuant to Rule 463 of the Securities Act Regulations, if such report
or substantially similar report is required by the SEC.
(n) 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 all documents and notices required by the Nasdaq Stock
Market of companies that have issued securities that are listed on the Nasdaq
Stock Market.
(o) During the period beginning on the date hereof and ending on the
later of the third anniversary of the Closing Time or the date on which the
Agent receives full payment in satisfaction of any claim for indemnification or
contribution to which it may be entitled pursuant to Sections 6 or 7,
respectively, neither the Company nor the Bank shall, without the prior written
consent of the Agent, which consent shall not be unreasonably withheld, take or
permit to be taken any action that could result in the Bank Common Stock or Bank
Preferred Stock becoming subject to any security interest, mortgage, pledge,
lien or encumbrance; provided, however, that this covenant shall be null and
void if the Federal Reserve, by regulation, policy statement or interpretive
release, or letter, permits indemnification of the Agent by the Bank as
contemplated by Section 6(a) hereof.
(p) 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."
(q) 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.
(r) The Company and the Bank will comply with the conditions imposed by
or agreed to with the Superintendent and the Federal Reserve in connection with
its approval of the Holding Company Application and with the Superintendent or
the FDIC in connection with their approval of, or non-objection to, the
Conversion Application including those conditions relating to the establishment
and the operation of the Foundation; the Company and the Bank shall use their
best efforts to ensure that the Foundation submits within the time frames
required by applicable law a
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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.
(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 Date, but no later than two (2) full business
days prior thereto, a copy of the latest available unaudited interim
consolidated financial statements of the Bank and the Subsidiaries which have
been read by KPMG LLP, as stated in their letters to be furnished pursuant to
subsections (e) and (f) of Section 5 hereof.
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
as originally filed and of each amendment thereto, (iii) the preparation,
issuance and delivery of the certificates for the Securities to the purchasers
in the Offerings, (iv) the fees and disbursements of the Company's and the
Bank's counsel, accountants, conversion agent, appraiser and other advisors, (v)
the qualification of the Securities under securities laws in accordance with the
provisions of Section 3(f) hereof, including filing fees and the fees and
disbursements of counsel in connection therewith and in connection with the
preparation of the Blue Sky Survey, (vi) the printing and delivery to the Agent
of copies of the Registration Statement as originally filed and of each
amendment thereto and the printing and delivery of the Prospectus and any
amendments or supplements thereto to the purchasers in the Offerings and the
Agent, (vii) the printing and delivery to the Agent of copies of a Blue Sky
Survey, (viii) the fees and expenses incurred in connection with the listing of
the Securities on the Nasdaq Stock Market, and (viii) the cost of printing and
distributing the offering materials. In the event the Agent incurs any such fees
and expenses on behalf of the Bank or the Company, the Bank will reimburse the
Agent for such fees and expenses whether or not the Conversion is consummated;
provided, however, that the Agent shall not incur any substantial expenses on
behalf of the Bank or the Company pursuant to this Section without the prior
approval of the Bank or the Company.
The Company and the Bank jointly and severally agree to pay certain
expenses incident to the performance of the Agent's obligations under this
Agreement, regardless of whether the Conversion is consummated, including (i)
the filing fees paid or 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, including, without limitation,
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advertising, promotional, syndication and travel expenses and fees and expenses
of the Agent's counsel (not to exceed $150,000). 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.
SECTION 5. CONDITIONS OF AGENT'S OBLIGATIONS.
The Company, the Bank and the Agent agree that the issuance and the
sale of Securities and all obligations of the Agent hereunder are subject to the
accuracy of the representations and warranties of the Company and the Bank
herein contained as of the date hereof and the Closing Time, to the accuracy of
the statements of officers, 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 Xxxxx
& Xxxxxxx L.L.P., special counsel for the Company and the Bank, in form
and substance satisfactory to counsel for the Agent, to the effect
that:
(i) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of the State of Delaware.
(ii) The Company has full corporate power and
authority to own, lease and operate its properties and to
conduct its business as described in the Registration
Statement and Prospectus and to enter into and perform its
obligations under this Agreement.
(iii) The Company is duly qualified as a foreign
corporation to transact business and is in good standing in
the State of New York, and in each other jurisdiction in which
such qualification is required whether by reason of the
ownership or leasing of property or the conduct of business,
except where the failure to be so qualified would not have a
material adverse effect upon the financial condition, results
of operation or business of the Company, the Bank and the
Subsidiaries, taken as a whole.
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(iv) Upon consummation of the Conversion, and
issuance of the Foundation Shares to the Foundation
immediately upon completion thereof, the authorized, issued
and outstanding capital stock of the Company will be within
the range set forth in the Prospectus under "Capitalization"
and no shares of Common Stock have been or will be issued and
remain outstanding prior to the Closing Time.
(v) The Securities and the Foundation Shares have
been duly and validly authorized for issuance and sale and,
when issued and delivered by the Company pursuant to the Plan
against payment of the consideration calculated as set forth
in the Plan, or contributed by the Company pursuant to the
Plan in the case of the Foundation Shares, will be duly and
validly issued, 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 Foundation has been duly incorporated and
is validly existing as a non-stock corporation in good
standing under the laws of the State of Delaware with
corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the
Prospectus; the Foundation is not a bank holding company under
the New York Banking law or the BHC Act or a savings and loan
holding company within the meaning of 12 C.F.R. Section
574.2(q) as a result of the issuance of shares of Common Stock
to it in accordance with the terms of the Plan and in the
amounts as described in the Prospectus; no approvals are
required to establish the Foundation and to contribute the
shares of Common Stock thereto as described in the Prospectus
other than those set forth in any written notice or order of
approval or non-objection of the Conversion, Conversion
Application or the Holding Company Application copies of which
were provided to the Agent prior to the Closing Time.
(viii) The Bank has been at all times since the date
of this Agency Agreement and prior to the Closing Time duly
organized, and is validly existing in good standing under the
laws of the State of New York as a New York State chartered
savings bank of mutual form, and at Closing Time, has become
duly organized, validly existing and in good standing under
the laws of the State of New York as a New York-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 in each jurisdiction
in which such qualification is required, whether by reason of
the ownership or leasing of property or the conduct of
business except where the failure to so qualify would not have
a material adverse effect upon the financial condition or
results of operations or business of the Bank.
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(ix) The deposit accounts of the Bank are insured by
the FDIC up to the applicable limits, and the Bank is a member
of the Federal Home Loan Bank of New York.
(x) Each Subsidiary has been duly incorporated and
is validly existing as a corporation in good standing under
the laws of the jurisdiction of its incorporation, has full
corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the
Registration Statement, the Prospectus and the Holding Company
Application and is duly qualified as a foreign corporation to
transact business and is in good standing in each jurisdiction
in which such qualification is required, whether by reason of
the ownership or leasing of property or the conduct of
business, except where the failure to so qualify would not
have a material adverse effect upon the financial condition,
results of operation or business of the Company, the Bank and
the Subsidiaries, taken as a whole, the activities of the
Subsidiaries as described in the Prospectus and the Holding
Company Application 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 Federal Reserve and the Superintendent, as
the case may be; all of the issued and outstanding capital
stock of each of the Subsidiaries has been duly authorized and
validly issued, is fully paid and non-assessable and is owned
by the Bank free and clear of any security interest, mortgage,
pledge, lien, encumbrance or claim.
(xi) Upon consummation of the Conversion, all of the
issued and outstanding capital stock of the Bank when issued
and delivered pursuant to the Plan against payment of
consideration calculated as set forth in the Plan will be duly
authorized and validly issued and fully paid and
nonassessable, and all such capital stock will be owned
beneficially and of record by the Company free and clear of
any security interest, mortgage, pledge, lien, encumbrance,
claim or equity.
(xii) The Superintendent and Federal Reserve has
approved the Holding Company Application, the Superintendent
has approved the Conversion Application and the FDIC has
issued a letter of intent not to object to the Conversion and
no action is pending, or to the best of such counsel's
knowledge, threatened respecting the Holding Company
Application or the Conversion Application (including therewith
the establishment of the Foundation and the contribution of
shares of Common stock thereto) or the acquisition by the
Company of all of the Bank's issued and outstanding capital
stock; the Holding Company Application complies as to form in
all material respects with the applicable requirements of the
Superintendent and the Federal Reserve, and the Conversion
Application complies as to form in all material respects with
the applicable requirements of the Superintendent and the FDIC
and include all documents required to be filed as exhibits
thereto, excluding the Prospectus and any related marketing
materials filed as a part of the Holding
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Company Application or the Conversion Application; the Company
is duly authorized to become a bank holding company and is
duly authorized to own all of the issued and outstanding
capital stock of the Bank to be issued pursuant to the Plan.
(xiii) The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby,
including the establishment of the Foundation and the
contribution thereto of the Foundation Shares, (A) have been
duly and validly authorized by all necessary action on the
part of each of the Company and the Bank, and this Agreement
constitutes the legal, valid and binding agreement of each of
the Company and the Bank, enforceable in accordance with its
terms, except as rights to indemnity and contribution
hereunder may be limited under applicable law (it being
understood that such counsel may avail itself of customary
exceptions concerning the effect of bankruptcy, insolvency,
and the availability of equitable remedies), (B) will not
result in any violation of the provisions of the certificate
of incorporation, organization certificate, articles of
incorporation or charter, as the case may be, or by-laws of
the Company, the Bank or any of its Subsidiaries; and, (C)
will not conflict with or constitute a breach of, or default
under, and no event has occurred which, with notice or lapse
of time or both, would constitute a default under, or result
in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company, the
Bank or the Subsidiaries pursuant to any contract, indenture,
mortgage, loan agreement, note, lease or other instrument to
which the Company, the Bank or 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 the
Subsidiaries is subject, that, individually or in the
aggregate, would have a material adverse effect on the
financial condition, results of operations or business of the
Company, the Bank and the Subsidiaries, taken as a whole.
(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, is 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, to the best of such counsel's
knowledge, have proceedings therefor been initiated or
threatened by the Commission.
(xvi) No further approval, authorization, consent or
other order of any public board or body is required in
connection with the execution and delivery of this Agreement,
the issuance of the Securities and the consummation of the
Conversion, except as may be required under the securities or
Blue Sky laws of various jurisdictions as to which no opinion
need be rendered.
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(xvii) At the time the Registration Statement became
effective, the Registration Statement (other than the
financial statements the notes thereto, related schedules and
other financial, appraisal 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 threatened against or affecting the 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 Prospectus, other than those
disclosed therein.
(xx) All pending legal or governmental proceedings
to which the Company, the Bank or any of the Subsidiaries is a
party or to which any of their property is subject which are
not described in the Registration Statement, including
ordinary routine litigation incidental to the business, are,
considered in the aggregate, not material.
(xxi) The information in the Prospectus under "Risk
Factors - Contribution to the Charitable Foundation -
Potential Anti-Takeover Effect," and "Risk Factors -
Contribution to the Charitable Foundation - Impact on Earnings
and Tax Considerations;" and "Risk Factors Anti-Takeover
Provisions Restricting the Acquisition of Xxxx Financial
Corporation", "Risk Factors - Possible Adverse Income Tax
Consequences of the Distribution of Subscription Rights,"
"Dividend Policy," "Regulatory Capital Compliance", "Business
of The Xxxx Savings Bank - Legal Proceedings," "Taxation,"
"Regulation and Supervision," "The Conversion-Establishment of
The Community Foundation," "- Effects of Conversion," "-
Liquidation Rights" and "- Tax Aspects," "Restrictions on
Acquisition of The Xxxx Financial Corporation," "Description
of Capital Stock of The Xxxx Financial Corporation" and
"Description of Capital Stock of The Xxxx Savings Bank" to the
extent that it constitutes matters of law, summaries of legal
matters, documents or proceedings, or legal conclusions, has
been reviewed by them and is complete and accurate in all
material respects.
(xxii) To the best of such counsel's knowledge,
there are no contracts, indentures, mortgages, loan
agreements, notes, leases or other instruments required to be
described or referred to in the Registration Statement or to
be filed as exhibits thereto other than those described or
referred to therein or filed as exhibits thereto, and the
descriptions thereof or references thereto are correct.
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(xxiii) The Plan has been duly authorized by the
Board of Directors of the Company and the Board of Trustees of
the Bank and the Superintendent's and the FDIC's approvals of
the Plan remain in full force and effect; the Bank's
organization certificate has been amended and restated,
effective upon consummation of the Conversion and the filing
of such amended and restated organization certificate with the
Superintendent, to authorize the issuance of permanent capital
stock; to the best of such counsel's knowledge, the Company
and the Bank have conducted the Conversion and the
establishment and funding of the Foundation in all material
respects in accordance with applicable requirements of the
Conversion Regulations, 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 Federal Reserve
or the FDIC and, no order has been issued by the
Superintendent or the FDIC to suspend the Conversion or the
Offerings and no action for such purpose has been instituted
or threatened by the Superintendent or the FDIC; and, to the
best of such counsel's knowledge, no person has sought to
obtain review of the final action of the Superintendent, the
Federal Reserve or the FDIC, as applicable, in approving the
Conversion Application (which includes the Plan which provides
for establishment of the Foundation) or the Holding Company
Application.
(xxiv) To the best of such counsel's knowledge, the
Company, the Bank and the Subsidiaries have obtained all
material licenses, permits and other governmental
authorizations currently required for the conduct of their
respective businesses as described in the Registration
Statement and Prospectus, and all such licenses, permits and
other governmental authorizations are in full force and
effect, and the Company, the Bank and the Subsidiaries are in
all material respects complying therewith.
(xxv) None of the Company, the Bank nor any of the
Subsidiaries is in violation of its certificate of
incorporation, organization certificate, articles of
incorporation or charter, as the case may be, or bylaws (and
the Bank will not be in violation of its organization
certificate and bylaws in stock form upon consummation of the
Conversion) or, to the best of such counsel's knowledge, 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 material contract,
indenture, mortgage, loan agreement, note, lease or other
instrument to which the Company, the Bank or any of the
Subsidiaries is a party or by which the Company, the Bank or
any of the Subsidiaries or any of their property may be bound.
(xxvi) The Company is not required to be registered
as an investment company under the Investment Company Act of
1940.
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(2) The favorable opinion, dated as of Closing Time, of
Xxxxxxx, Xxxxxx & Xxxxxxxx LLP, 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), (xiii), (xvii), and
(xviii) and such other matters as the Agent may reasonably require.
(3) In giving their opinions required by subsections (b)(1)
and (b)(2), respectively, of this Section, Xxxxx & Xxxxxxx L.L.P. and
Xxxxxxx, Xxxxxx & Xxxxxxxx LLP shall each additionally state that
nothing has come to their attention that would lead them to believe
that the Registration Statement (except for the appraisal, financial
statements, notes thereto, related schedules and other financial,
statistical or appraisal 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 the
appraisal, financial statements and schedules and other financial,
statistical or appraisal 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 Xxxxx &
Xxxxxxx L.L.P. and Xxxxxxx, Xxxxxx & Xxxxxxxx LLP may state that they
have not independently verified the information with respect to the
Company and the Bank contained in the Registration Statement,
Conversion Application and the Prospectus. In giving their opinions,
Xxxxx & Xxxxxxx L.L.P. and Xxxxxxx, Xxxxxx & Xxxxxxxx LLP may rely as
to matters of fact on certificates of officers and directors of the
Company and the Bank and certificates of public officials, and as to
certain matters of New York law upon the opinion of Pattison, Sampson,
Xxxxxxxx & Xxxxxxx, P.C., general counsel for the Company and the Bank
and as to certain matters of Delaware law upon the opinion of
______________________, which opinions shall be in form and substance
satisfactory to the Agent, and Xxxxxxx, Xxxxxx & Xxxxxxxx LLP may also
rely on the opinion of Xxxxx & Xxxxxxx L.L.P.
(c) At the Closing time referred to in Section 2, the Company and the
Bank will have completed in all material respects the conditions precedent to
the Conversion in accordance with the Plan, the applicable Conversion
Regulations and all other applicable laws, regulations, decisions and orders,
including all terms, conditions, requirements and provisions precedent to the
Conversion imposed upon the Company or the Bank by the Federal Reserve, the
Superintendent, the FDIC, or any other regulatory authority other than those
which the Federal Reserve, 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 respective dates as of which information is given in the
Registration Statement and the Prospectus, any material adverse change in the
financial condition, results of operations or business of the Company, the Bank
and the Subsidiaries, taken as a whole, whether or not arising in the ordinary
course of business, and the Agent shall have received a certificate of the Chief
Executive Officer of
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the Company and the Bank, and the chief financial or chief accounting officer of
the Company and of the Bank, dated as of Closing Time, to the effect that (i)
there has been no such material adverse change, (ii) there shall have 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
Superintendent, the FDIC or the Federal Reserve any direction (oral or written)
to make any material change in the method of conducting its business with which
it has not complied (which direction, if any, shall have been disclosed to the
Agent) or which materially and adversely would affect the business, financial
condition or results of operations of the Company, the Bank and the
Subsidiaries, taken as a whole, (iv) the representations and warranties in
Section 1 hereof are true and correct with the same force and effect as though
expressly made at and as of the Closing Time, (v) the Company and the Bank have
complied with all agreements and satisfied all conditions on their part to be
performed or satisfied at or prior to Closing Time, (vi) no stop order
suspending the effectiveness of the Registration Statement has been issued and
no proceedings for that purpose have been initiated or threatened by the
Commission and (vii) no order suspending the Offerings or the authorization for
final use of the Prospectus has been issued and no proceedings for that purpose
have been initiated or threatened by the Superintendent or the FDIC and no
person has sought to obtain regulatory or judicial review of the action of the
Superintendent or the FDIC in approving the Plan in accordance with the
Conversion Regulations nor has any person sought to obtain regulatory or
judicial review of the action of the Federal Reserve in approving the Holding
Company Application.
(e) At the time of the execution of this Agreement, the Agent shall
have received from KPMG 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 and the
Securities Act Regulations and the Conversion Regulations; (iii) based upon
limited procedures as agreed upon by the Agent and KPMG LLP set forth in detail
in such letter, nothing has come to their attention which causes them to believe
that (A) the unaudited financial statements and supporting schedules of the Bank
and the Subsidiaries included in the Registration Statement do not comply as to
form in all material respects with the applicable accounting requirements of the
Securities Act, the Securities Act Regulations, and the Conversion Regulations
or are not presented in conformity with generally accepted accounting principles
applied on a basis substantially consistent with that of the audited financial
statements included in the Registration Statement and the Prospectus, (B) the
unaudited amounts set forth under "Selected Consolidated Financial Information
and Other Data" and "Recent Developments" in the Registration Statement and
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
captions or such amounts were not determined on a basis substantially consistent
with that used
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in determining the corresponding amounts in the audited financial statements
included in the Registration Statement, (C) at a specified date not more than
five days prior to the date of this Agreement, there has been any increase in
the consolidated long term or short term debt of the Bank and the Subsidiaries
or any decrease in consolidated total assets, the allowance for loan losses,
total deposits or retained earnings of the Bank and the Subsidiaries, in each
case as compared with the amounts shown in the ______________, 1998 balance
sheet included in the Registration Statement or, (D) during the period from
______________, 1998 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
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 LLP a
letter, dated as of Closing Time, to the effect that they reaffirm the
statements made in the letter furnished pursuant to subsection (e) of this
Section, except that the specified date referred to shall be a date not more
than five days prior to Closing Time.
(g) At Closing Time, the Securities shall have been approved for
listing on the Nasdaq Stock Market upon notice of issuance.
(h) At Closing Time, the Agent shall have received a letter from
FinPro, dated as of the Closing Time, confirming its appraisal.
(i) At Closing Time, counsel for the Agent shall have been furnished
with such documents and opinions as they may require for the purpose of enabling
them to pass upon the issuance and sale of the Securities and the Foundation
Shares as herein contemplated and related proceedings, or in order to evidence
the accuracy of any of the representations or warranties, or the fulfillment of
any of the conditions, herein contained; and all proceedings taken by the
Company in connection with the issuance and sale of the Securities and
Foundation Shares as herein contemplated shall be satisfactory in form and
substance to the Agent and counsel for the Agent.
(j) At any time prior to Closing Time, (i) there shall not have
occurred any material adverse change in the financial markets in the United
States or elsewhere or any outbreak of hostilities or escalation thereof or
other calamity or crisis the effect of which, in the judgment of the Agent, are
so material and adverse as to make it impracticable to market the Securities or
to enforce contracts, including subscriptions or orders, for the sale of the
Securities, and (ii) trading generally
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on the American Stock Exchange, the New York Stock Exchange or Nasdaq shall not
have been suspended, and minimum or maximum prices for trading shall not have
been fixed, or maximum ranges for prices for securities have been required, by
either of said Exchanges or by order of the Commission or any other governmental
authority, and a banking moratorium shall not have been declared by either
Federal or New York authorities.
SECTION 6. INDEMNIFICATION.
(a) The Company and the Bank, jointly and severally, agree to indemnify
and hold harmless the Agent, each person, if any, who controls the Agent, within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act, and its respective partners, directors, officers, employees and agents as
follows:
(i) from and against any and all loss, liability, claim,
damage and expense whatsoever, as incurred, related to or arising out
of the Conversion (including 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 statement of a material fact
contained in the Registration Statement (or any amendment thereto), or
the omission or alleged omission therefrom of a material fact required
to be stated therein or necessary to make the statements therein not
misleading or arising out of any untrue statement or alleged untrue
statement of a material fact contained in the Proxy Statement or
Prospectus (or any amendment or supplement thereto) or the omission or
alleged omission therefrom of a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading;
(iii) from and against any and all loss, liability, claim,
damage and expense whatsoever, as incurred, to the extent of the
aggregate amount paid in settlement of any litigation, or any
investigation or proceeding by any governmental agency or body,
commenced or threatened, or of any claim whatsoever described in
clauses (i) or (ii) above, if such settlement is effected with the
written consent of the Company or the Bank, which consent shall not be
unreasonably withheld; and
(iv) from and against any and all expense whatsoever, as
incurred (including, subject to Section 6(c) hereof, the fees and
disbursements of counsel chosen by the Agent), reasonably incurred in
investigating, preparing for or defending against any litigation, or
any investigation, proceeding or inquiry by any governmental agency or
body, commenced or threatened, or any claim pending or threatened
whatsoever described in clauses (i) or (ii) above, to the extent that
any such expense is not paid under (i), (ii) or (iii) above;
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provided, however, that the indemnification provided for in this paragraph (a)
shall not apply to any loss, liability, claim, damage or expense to the extent
arising out of any untrue statement or alleged untrue statement of a material
fact contained in the Prospectus (or any amendment or supplement thereto) or the
omission or alleged omission therefrom of a material fact necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading which was made in reliance upon and in conformity with
the Agent Information.
(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 indemnity contained in subsection (a) of this Section, as incurred, but only
with respect to untrue statements or omissions, or alleged untrue statements or
omissions, of a material fact made in the Registration Statement (or any
amendment thereto) or 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 its partners, directors, officers, employees or
agents is requested or required to appear as a witness or otherwise gives
testimony in any action, proceeding, investigation or inquiry brought by or on
behalf of or against the Company, the Bank, the Agent or any of its respective
affiliates or any participant in the transactions contemplated hereby in which
the Agent or such person or agent is not named as a defendant or subject of an
investigation or inquiry, the Company and the Bank jointly and severally agree
to
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reimburse the Agent for all reasonable and necessary out-of-pocket expenses
incurred by it in connection with preparing or appearing as a witness or
otherwise giving testimony and to compensate the Agent in an amount to be
mutually agreed upon.
SECTION 7. CONTRIBUTION.
In order to provide for just and equitable contribution in
circumstances in which the indemnity agreement provided for in Section 6 hereof
is for any reason held to be unenforceable by the indemnified parties although
applicable in accordance with its terms, the Company, the Bank and the Agent
shall contribute to the aggregate losses, liabilities, claims, damages and
expenses of the nature contemplated by said indemnity agreement incurred by the
Company or the Bank and the Agent, as incurred, in such proportions (i) that the
Agent is responsible for that portion represented by the percentage that the
maximum aggregate marketing fees appearing on the cover page of the Prospectus
bears to the maximum aggregate gross proceeds appearing thereon and the Company
and the Bank are jointly and severally responsible for the balance or (ii) if,
but only if, the allocation provided for in clause (i) is for any reason held
unenforceable, in such proportion as is appropriate to reflect not only the
relative benefits to the Company and the Bank on the one hand and the Agent on
the other, as reflected in clause (i), but also the relative fault of the
Company and the Bank on the one hand and the Agent on the other, as well as any
other relevant equitable considerations; provided, however, that no person
guilty of fraudulent misrepresentation (within the meaning of Section 11 (f) of
the 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.
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SECTION 9. TERMINATION OF AGREEMENT.
(a) The Agent may terminate this Agreement, by notice to the Company,
at any time at or prior to Closing Time (i) if there has been, since the date of
this Agreement or since the respective dates as of which information is given in
the Registration Statement, any material adverse change in the financial
condition, results of operations or business of the Company or the Bank, or the
Company, the Bank and the Subsidiaries taken as a whole, whether or not arising
in the ordinary course of business, or (ii) if there has occurred any material
adverse change in the financial markets in the United States or elsewhere or any
outbreak of hostilities or escalation thereof or other calamity or crisis the
effect of which, in the judgment of the Agent, are so material and adverse as to
make it impracticable to market the Securities or to enforce contracts,
including subscriptions or orders, for the sale of the Securities, (iii) if
trading generally on the Nasdaq Stock Market, the American Stock Exchange or the
New York Stock Exchange has been suspended, or minimum or maximum prices for
trading have been fixed, or maximum ranges for prices for securities have been
required, by such market or either of said Exchanges or by order of the
Commission or any other governmental authority, or if a banking moratorium has
been declared by either Federal or New York authorities, (iv) if any condition
specified in Section 5 shall not have been fulfilled when and as required to be
fulfilled; (v) if there shall have been such material adverse change in the
condition or prospects of the Company or the Bank or the prospective market for
the Company's securities as in the Agent's good faith opinion would make it
inadvisable to proceed with the offering, sale or delivery of the Securities;
(vi) if, in the Agent's good faith opinion, the price for the Securities
established by FinPro is not reasonable or equitable under then prevailing
market conditions, or (vii) if the Conversion is not consummated on or prior to
December 31, 1999.
(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 Xxxxxx X. Xxxxxxx, Esq., Xxxxxxx,
Xxxxxx & Xxxxxxxx LLP, 0000 Xxxxxxxxx Xxxxxx, X.X., Xxxxxxxxxx, X.X. 00000;
notices to the Company and the Bank shall be directed to either of them at The
Xxxx Savings Bank, 00 Xxxxxx xx Xxxxx Xxxxxxx, Xxxx, XX 00000, attention of
Xxxxxx X. Xxxxxxx, Xx., President and Chief Executive Officer, with a copy to
Xxxxxx X. Xxxxx, Esq., Xxxxx & Xxxxxxx L.L.P., Columbia Square, 000 Xxxxxxxxxx
Xxxxxx, X.X., Xxxxxxxxxx, XX 00000-0000.
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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,
trustees 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, trustees
and directors and their heirs and legal representatives, and for the benefit of
no other person, firm or corporation.
SECTION 12. ENTIRE AGREEMENT; AMENDMENT.
This Agreement represents the entire understanding of the parties
hereto with reference to the transactions contemplated hereby and supersedes any
and all other oral or written agreements heretofore made, except for engagement
letter dated July 15, 1998, by and between the Agent and the Company 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. Specified times of day refer to Eastern time.
SECTION 14. SEVERABILITY.
Any term or provision of this Agreement which is invalid or
unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective
to the extent of such invalidity or unenforceability without rendering invalid
or unenforceable the remaining terms and provisions of this Agreement or
affecting the validity or enforceability of any of the terms or provisions of
this Agreement in any other jurisdiction. If any provision of this Agreement is
so broad as to be unenforceable, the provision shall be interpreted to be only
so broad as is enforceable.
SECTION 15. HEADINGS.
Sections headings are not to be considered part of this Agreement, are
for convenience and reference only and are not to be deemed to be full or
accurate descriptions of the contents of any paragraph or subparagraph.
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If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
between the Agent, the Company and the Bank in accordance with its terms.
Very truly yours,
XXXX FINANCIAL CORPORATION
--------------------------------------------
By: Xxxxxx X. Xxxxxxx, Xx.
Title: President and Chief Executive Officer
Xxxx Savings Bank
--------------------------------------------
By: Xxxxxx X. Xxxxxxx, Xx.
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
Vice President
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