1
EXHIBIT 1.2
5,577,500 Shares
(subject to increase up to 6,414,100 shares
in the event of an oversubscription)
WARWICK COMMUNITY BANCORP, INC.
(a Delaware corporation)
Common Stock
(par value $.01 per share)
AGENCY AGREEMENT
____________ , 1997
SANDLER X'XXXXX & PARTNERS, L.P.
Two World Trade Center, 000xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Warwick Community Bancorp, Inc., a Delaware corporation (the
"Company"), and The Warwick Savings Bank, a New York 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 5,577,500 shares (subject to increase up to 6,414,100 shares in the
event of an oversubscription) of the Company's common stock, par value $.01 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 3% of
the shares of Common Stock sold in the Offerings (as hereinafter defined) to The
Warwick Savings Foundation (the "Foundation"), such shares hereinafter being
referred to as the "Foundation Shares."
The Securities are being offered for sale and the Foundation Shares
are being contributed in accordance with the plan of conversion (the "Plan")
adopted by the Board of Directors of the Bank pursuant to which the Bank intends
to convert from a New York state chartered mutual savings bank to a New York
state chartered stock savings bank and issue all of its stock to the Company.
Pursuant to the Plan, the Company is offering to the Bank's tax qualified
employee benefit plans (the "Employee Plans") and to certain of the Bank's
depositors rights to subscribe for the Securities in a subscription offering
(the "Subscription Offering"). To the extent that Securities remain available
for purchase following the Subscription Offering, such
2
-2-
Securities may be offered to certain members of the general public, with
preference given to certain natural persons residing in the counties in which
the Bank's offices are located, in a direct community offering (the "Community
Offering"). It is currently anticipated by the Bank and the Company that any
Securities not subscribed for in the Subscription and Community Offerings will
be offered, subject to Section 2 hereof, in a syndicated community offering (the
"Syndicated Community Offering"). The Subscription Offering, the Community
Offering and the Syndicated Community Offering are hereinafter referred to
collectively as the "Offerings," and the conversion of the Bank from mutual to
stock form, the acquisition of the capital stock of the Bank by the Company and
the Offerings are hereinafter referred to collectively as the "Conversion." It
is acknowledged that the number of Securities to be sold in the Conversion may
be increased or decreased as described in the Prospectus (as hereinafter
defined). If the number of Securities is increased or decreased in accordance
with the Plan, the term "Securities" shall mean such greater or lesser number,
where applicable. In the event that a holding company form of organization is
not utilized, all pertinent terms of this Agreement will apply to the conversion
of the Bank from the mutual to stock form of organization and the sale of the
Bank's common stock.
In connection with the Conversion and pursuant to the terms of the Plan as
described in the Prospectus, the Company will establish the Foundation.
Immediately following the consummation of the Conversion, and subject to
compliance with certain conditions as may be imposed by regulatory authorities,
the Company will contribute to the Foundation shares of Common Stock in an
amount equal to 3% of the Securities sold in the Offerings, or between 123,675
and 167,325 shares of Common Stock (subject to increase in certain circumstances
to 192,423 shares).
The Company has filed with the Securities and Exchange Commission
(the "Commission") a registration statement on Form S-1 (No. 333-36021),
including a related prospectus, for the registration of the Securities and the
Foundation Shares under the Securities Act of 1933, as amended (the "Securities
Act"), and such amendments thereto, if any, and such amended prospectuses as may
have been required to the date hereof by the Commission in order to declare such
registration statement effective, and will file such additional amendments
thereto and such amended prospectuses and prospectus supplements as may
hereafter be required. Such registration statement (as amended to date, if
applicable, and as from time to time amended or supplemented hereafter) and the
prospectus constituting a part thereof (including in each case all documents
incorporated or deemed to be incorporated by reference therein and the
information, if any, deemed to be part thereof pursuant to the rules and
regulations of the Commission under the Securities Act, as from time to time
amended or supplemented pursuant to the Securities Act or otherwise (the
"Securities Act Regulations")), are hereinafter referred to as the "Registration
Statement" and the "Prospectus," respectively, except that if any revised
prospectus shall be used by the Company in connection with the Subscription
Offering, the Community Offering or the Syndicated Community Offering which
differs from the Prospectus on file at the Commission at the time the
Registration Statement becomes effective (whether or not such revised prospectus
is required to be filed by the Company pursuant to Rule 424(b) of the Securities
Act Regulations), the term "Prospectus" shall refer to such revised prospectus
from and after the time it is first provided to the Agent for such use.
3
-3-
Concurrently with the execution of this Agreement, the Company is
delivering to the Agent copies of the Prospectus of the Company to be used in
the Subscription Offering and, if applicable, the 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 Registration Statement or Prospectus
made in reliance upon and in conformity with information with respect to
the Agent furnished to the Company and/or the Bank in writing by the Agent
expressly for use in the Registration Statement or Prospectus (the "Agent
Information," which the Company and the Bank acknowledge appears only in
the sections captioned "Market for Common Stock" and the first two
paragraphs of the section "The Conversion -- Marketing and Underwriting
Arrangements" of the Prospectus).
(ii) The Company has filed with the Board of Governors of the
Federal Reserve Board (the "FRB") the Company's application for approval
of its acquisition of the Bank (the "Holding Company Application") on Form
FRY-3 promulgated under the Bank Holding Company Act of 1956, as amended
(the "BHCA") and the regulations promulgated thereunder. The Company has
received written notice from the FRB 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 FRB 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 FRB. At the date of such approval
and at the Closing Time referred to in Section 2, the Holding Company
Application complied and will comply in all material respects with the
applicable provisions of the BHCA 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
4
-4-
Corporation (the "FDIC") governing the conversion of New York state
chartered mutual savings banks to stock form banks (the "Conversion
Regulations"), the Bank has filed an application for conversion on Form
86-AC with the Superintendent of Banks of the State of New York (the
"Superintendent"), a Notice of Conversion, including the Form 86-AC, with
the FDIC and such amendments thereto and supplementary materials as may
have been required to the date hereof (such application for conversion on
Form 86-AC, 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,
dated ______________, 199__, relating to the Conversion (the "Proxy
Statement"), and the Prospectus. The Superintendent has, by letter dated
__________, 199__, 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
________, 199_, 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 issuance of such letter of
non-objection by the FDIC, and at the Closing Time referred to in Section
2, the Conversion Application complied and will comply in all material
respects with the applicable provisions of the Conversion Regulations.
(iv) At the time of their use, the Proxy Statement and any other
proxy solicitation materials will comply in all material respects with any
and all 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 Bank
will promptly file the Prospectus and any supplemental sales literature
with the Commission, the Superintendent and the FDIC. The Prospectus and
all supplemental sales literature, as of the date the Registration
Statement became effective and at the Closing Time referred to in Section
2, complied and will comply in all material respects with the applicable
requirements of the Conversion Regulations and, at or prior to the time of
their first use, will have received all required authorizations of the
Superintendent and the FDIC for use in final form.
(v) None of the SEC, 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
5
-5-
Company or the Bank by the FRB, 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, which prepared the valuation of the Bank as part of
the Conversion, has advised 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. /_________/, which prepared the opinion filed
as Exhibit 9(f) of the Conversion Application as required by the
Conversion Regulations, satisfies all requirements for an "independent
executive compensation expert" within the meaning of the Conversion
Regulations.
(viii) The accountants who certified the financial statements and
supporting schedules of the Bank included in the Registration Statement
have advised the Company and the Bank in writing that they are independent
public accountants within the meaning of the Code of Ethics of the AICPA,
and such accountants are, with respect to the Company, the Bank and each
subsidiary of the Bank, independent certified public accountants as
required by the Securities Act and the Securities Act Regulations.
(ix) The consolidated financial statements and the related notes
thereto included in the Registration Statement and the Prospectus present
fairly the financial position of the Company, the Bank and its
consolidated subsidiaries at the dates indicated and the results of
operations, retained earnings and cash flows for the periods specified,
and comply as to form in all material respects with the applicable
accounting requirements of the Securities Act Regulations and the
Conversion Regulations. Except as otherwise stated in the Registration
Statement, said financial statements have been prepared in conformity with
generally accepted accounting principles applied on a consistent basis,
and the supporting schedules and tables to said financial statements
included in the Registration Statement present fairly the information
required to be stated therein.
(x) 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 their subsidiaries, considered as one enterprise,
whether or not arising in the ordinary course of business, and (B) except
for transactions specifically referred to or contemplated in the
Prospectus, there have been no transactions entered into by the Company,
the Bank or any of their subsidiaries, other than those in the ordinary
course of business, which are material with respect to the Company and its
subsidiaries, considered as one enterprise.
(xi) 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
6
-6-
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 and its subsidiaries, considered as one enterprise.
(xii) 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 and stated on the cover page of the Prospectus, will
be duly and validly issued and fully paid and non-assessable; the terms
and provisions of the Common Stock and the capital stock of the Company
conform to all statements relating thereto contained in the Prospectus;
the certificates representing the shares of Common Stock conform to the
requirements of applicable law and regulations; and the issuance of the
Securities is not subject to preemptive or other similar rights.
(xiii) 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 their subsidiaries have obtained all
licenses, permits and other governmental authorizations currently required
for the conduct of their respective businesses or required for the conduct
of their respective businesses as contemplated by the Holding Company
Application and the Conversion Application, except where the failure to
obtain such licenses, permits or other governmental authorizations would
not have a material adverse effect on the financial condition, results of
operations or business affairs of the Company, the Bank and their
subsidiaries considered as one enterprise; all such licenses, permits and
other governmental authorizations are in full force and effect and the
Company, the Bank and their subsidiaries are in all material respects in
compliance therewith; neither the Company, the Bank nor any of the Bank's
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 their subsidiaries,
considered as one enterprise; 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 their subsidiaries
considered as one enterprise.
7
-7-
(xiv) The deposit accounts of the Bank are insured by the FDIC up
to applicable limits and upon consummation of the Conversion, the
liquidation account for the benefit of eligible account holders and
supplemental eligible account holders will be duly established in
accordance with the requirements of the Conversion Regulations.
(xv) Upon consummation of the Conversion, the authorized capital
stock of the Bank will be 15,000,000 shares of common stock, par value
$.01 per share (the "Bank Common Stock") and 5,000,000 shares of preferred
stock, par value $.01 per share (the "Bank Preferred Stock"), and no
shares of Bank Common Stock or Bank Preferred Stock have been or will be
issued prior to the Closing Time referred to in Section 2; and as of
Closing Time referred to in Section 2, all of the issued and outstanding
capital stock of the Bank will be duly authorized, validly issued and
fully paid and nonassessable, and all such capital stock will be owned
beneficially and of record by the Company free and clear of any mortgage,
pledge, lien, encumbrance or claim.
(xvi) The Foundation has been duly incorporated and is validly
existing as a non stock corporation in good standing under the laws of the
State of Delaware with corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectus; the Foundation will not be a bank holding company within the
meaning of 12 C.F.R. Section 225.2(c) as a result of the issuance of
shares of Common Stock to it in accordance with the terms of the Plan and
in the amounts as described in the Prospectus; no approvals are required
to establish the Foundation and to contribute the shares of Common Stock
thereto as described in the Prospectus other than those imposed by the
Superintendent and the FDIC; except as specifically disclosed in the
Prospectus and the Proxy Statement, there are no agreements and/or
understandings, written or oral, between the Company and/or the Bank and
the Foundation with respect to the control, directly or indirectly, over
the voting and the acquisition or disposition of the Foundation Shares; at
the time of the Conversion, the Foundation Shares will have been duly
authorized for issuance and, when issued, fully paid and non-assessable;
and the issuance of the Foundation Shares is not subject to preemptive or
similar rights.
(xvii) Each direct and indirect subsidiary of the Bank 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, and is duly qualified to transact business and is in good
standing in each jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the conduct
of business, except where the failure to so qualify would not have a
material adverse effect on the financial condition, results of operations
or business affairs of the Company, the Bank and their subsidiaries,
considered as one enterprise; the activities of each such subsidiary 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 each such
subsidiary has been duly authorized and validly issued, is fully paid and
nonassessable
8
-8-
and is owned by the Bank directly, free and clear of any security
interest, mortgage, pledge, lien, encumbrance or any other legal or
equitable claim.
(xviii) The Company and the Bank have taken all corporate action
necessary for each of them to execute, deliver and perform this Agreement,
and this Agreement has been duly executed and delivered by, and is the
valid and binding agreement of, the Company 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.
(xix) Subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus and prior to the
Closing Time, except as otherwise may be indicated or contemplated
therein, none of the Company, the Bank or any subsidiary of the Bank 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 their subsidiaries, considered as one enterprise,
excluding the origination, purchase and sale of loans or the purchase or
sale of investment securities or mortgaged-backed securities in the
ordinary course of business or otherwise as indicated in the Prospectus.
(xx) No approval of any regulatory or supervisory or other public
authority is required in connection with the execution and delivery of
this Agreement or the issuance of the Securities and the Foundation Shares
that has not been obtained and a copy of which delivered to the Agent,
except as may be required under the securities laws of various
jurisdictions.
(xxi) Neither the Company, the Bank nor any of the Bank's
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
charter or bylaws in stock form upon consummation of the Conversion); and
neither the Company, the Bank nor any of the Bank's 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 their 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 their 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 their subsidiaries,
considered as one enterprise; and there are no contracts or documents of
the Company, the Bank or any of the Bank's subsidiaries which are required
to be filed as
9
-9-
exhibits to the Registration Statement or the Conversion Application which
have not been so filed.
(xxii) 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 their subsidiaries
pursuant to any contract, indenture, mortgage, loan agreement, note, lease
or other instrument to which the Company, the Bank or any of their
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 or any of the Company's
subsidiaries is subject, except for such defaults that would not,
individually or in the aggregate, have a material adverse effect on the
financial condition, results of operations or business affairs of the
Company, the Bank and their subsidiaries considered as one enterprise; nor
will such action result in any violation of the provisions of certificate
of incorporation, organization certificate, articles of incorporation or
charter or by-laws of the Company, the Bank or any of their subsidiaries,
or any applicable law, administrative regulation or administrative or
court decree.
(xxiii) No labor dispute with the employees of the Company, the Bank
or any of their subsidiaries exists or, to the knowledge of the Company or
the Bank, is imminent; and the Company is not aware of any existing or
imminent 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 affairs of the Company, the Bank and their subsidiaries
considered as one enterprise.
(xxiv) The Company, the Bank and their subsidiaries have good and
marketable title to all properties and assets for which ownership is
material to the business of the Company, the Bank or their 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 or their subsidiaries
considered as one enterprise; and all of the leases and subleases material
to the business of the Company, the Bank and their subsidiaries under
which the Company, the Bank or their subsidiaries hold properties,
including those described in the Prospectus, are valid and binding
agreements of the Company, the Bank and their subsidiaries, enforceable in
accordance with their terms.
(xxv) The Company, the Bank and their subsidiaries are not in
violation of any directive from the FRB, the Superintendent or the FDIC to
make any material change in the method of conducting their respective
businesses; the Bank and its subsidiaries have conducted and are
conducting their business so as to comply in all material respects with
all applicable statutes, regulations and administrative and court
10
-10-
decrees (including, without limitation, all regulations, decisions,
directives and orders of the Superintendent or the FDIC).
(xxvi) 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 their 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 their subsidiaries considered as one enterprise,
or which might materially and adversely affect the properties or assets
thereof or which might materially and adversely affect the consummation of
the Conversion; all pending legal or governmental proceedings to which the
Company, the Bank or any subsidiary is a party, or of which any of their
respective property or assets is the subject, which are not described in
the Registration Statement, including ordinary routine litigation
incidental to the business, are considered in the aggregate not material;
and there are no contracts or documents of the Company, the Bank or any of
their subsidiaries which are required to be filed as exhibits to the
Registration Statement or the Conversion Application which have not been
so filed.
(xxvii) The Bank has obtained an opinion of its counsel, Thacher,
Xxxxxxxx & Xxxx ("TP&W"), with respect to the legality of the Securities
to be issued and the federal and New York state income tax consequences of
the Conversion, 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, the Company nor any of their
subsidiaries has taken or will take any action inconsistent therewith.
(xxviii) The Company is not required to be registered under the
Investment Company Act of 1940, as amended.
(xxix) 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 Regulations Z and 12 C.F.R. Part 226 and Section 563.99), real estate
settlement procedures, consumer credit protection, equal credit
opportunity and all disclosure laws applicable to such loans, except for
violations which, if asserted, would not result in a material adverse
effect on the financial condition, results of operations or business of
the Company, the Bank and their subsidiaries considered as one enterprise.
(xxx) 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 employees of the Bank has made any
11
-11-
payment of funds of the Company or the Bank as a loan for the purchase of
the Common Stock or made any the Bank as a loan for the purchase of the
Common Stock or made any other payment of funds prohibited by law, and no
funds have been set aside to be used for any payment prohibited by law.
(xxxi) The Company, the Bank and the Bank's 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.
(xxxii) None of the Company, the Bank nor their subsidiaries nor any
properties owned or operated by the Company, the Bank or their
subsidiaries is in violation of, or liable under, any Environmental Law
(as defined below), except for such violations or liabilities that,
individually or in the aggregate, would not have a material adverse effect
on the financial condition, results of operations or business affairs of
the Company, the Bank and their subsidiaries considered as one enterprise.
There are no actions, suits or proceedings, or demands, claims, notices or
investigations (including, without limitation, notices, demand letters or
requests for information from any environmental agency) instituted or
pending, or to the knowledge of the Company or the Bank, threatened,
relating to the liability of any property owned or operated by the
Company, the Bank or their subsidiaries, under any Environmental Law (as
defined below). 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.
(xxxiii) The Company, the Bank and their 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.
(xxxiv) The Company has received approval, subject to regulatory
approval to consummate the Offerings and issuance, to have the Securities
quoted on the National Market of The Nasdaq Stock Market, Inc. (the
"Nasdaq Stock Market") effective as of the Closing Time.
(xxxv) 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
12
-12-
"Exchange Act") and has requested that such registration statement be
effective concurrent with the effectiveness of the Registration Statement.
(b) Any certificate signed by any officer of the Company or the Bank
and delivered to either of the Agent to counsel for the Agent shall be deemed a
representation and warranty by the Company or the Bank to each Agent as to the
matters covered thereby.
SECTION 2. APPOINTMENT OF SANDLER X'XXXXX; SALE AND DELIVERY OF THE
SECURITIES; CLOSING.
On the basis of the representations and warranties herein contained
and subject to the terms and conditions herein set forth, the Company hereby
appoints Sandler X'Xxxxx as its Agent to consult with and advise the Company,
and to assist the Company with the solicitation of subscriptions and purchase
orders for Securities, in connection with the Company's sale of Common Stock in
the Subscription Offering, the Community Offering and the Syndicated Community
Offering. On the basis of the representations and warranties herein contained,
and subject to the terms and conditions herein set forth, Sandler X'Xxxxx
accepts such appointment and agrees to use its best efforts to assist the
Company with the solicitation of subscriptions and purchase orders for
Securities in accordance with this Agreement; provided, however, that the Agent
shall not be obligated to take any action which is inconsistent with any
applicable laws, regulations, decisions or orders. The services to be rendered
by Sandler X'Xxxxx pursuant to this appointment include the following: (i)
consulting as to the securities marketing implications of any aspect of the Plan
of Conversion or related corporate documents; (ii) reviewing with the Board of
Directors the independent appraiser's appraisal of the Common Stock; (iii)
reviewing all offering documents, including the Prospectus, stock order form and
related offering materials (it being understood that preparation and filing of
such documents is the sole responsibility of the Company and the Bank and their
counsel); (iv) assisting in the design and implementation of a marketing
strategy for the Offerings; (v) providing support to the Company and the Bank in
obtaining all requisite regulatory approvals; (vi) assisting Bank management in
preparing for meetings with potential investors and broker-dealers; and (vii)
providing such other general advice and assistance as may be requested to
promote the successful completion of the Offerings.
The appointment of the Agent hereunder shall terminate upon the
earlier to occur of (a) later of forty-five (45) days after the last day of the
Subscription Offering or, if applicable, the 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, or (b) the receipt and acceptance of subscriptions and purchase orders for
all of the Securities, or (c) the completion of the Syndicated Community
Offering.
If any of the Securities remain available after the expiration of
the Subscription and Community Offering, at the request of the Company and the
Bank, Sandler X'Xxxxx will seek to form a syndicate of registered broker 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
13
-13-
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 7% of the aggregate Purchase Price of the Securities sold by such
Selected Dealers. Xxxxxx X'Xxxxx will endeavor to distribute the Securities
among the Selected Dealers in a fashion which best meets the distribution
objective of the Company and the requirements of the Plan, 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 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 against payment therefor by release of funds from
the special interest-bearing accounts referred to above. The closing shall be
held at the offices of TP&W, 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, the Agent will receive the following compensation for its services
hereunder:
14
-14-
(a) one and seven-eighths percent (1.875%) of the aggregate Actual
Purchase Price (as defined in the Prospectus) of the Securities sold in
the Subscription Offering and Community Offering, excluding in each case
shares purchased by (i) any employee benefit plan of the Company or the
Bank established for the benefit of their respective directors, trustees,
officers and employees, and (ii) any director, trustee (including trustees
emeriti), officer or employee of the Company or the Bank or members of
their immediate families (which term shall mean parents, grandparents,
spouse, sibling, children and grandchildren); 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 the
selected dealers under any such selected dealers' agreement, (ii) any
sponsoring dealer's fees; and (iii) a management fee to Sandler X'Xxxxx of
one and one-half percent (1.5%). Any fees payable to Sandler X'Xxxxx for
Securities sold by Sandler X'Xxxxx under any such agreement shall be
limited to an aggregate of one and seven-eighths percent (1.875%) of the
Actual Purchase Price of such Securities.
If this Agreement is terminated by the Agent in accordance with the
provisions of Section 9(a) hereof or the Conversion is terminated by the
Company, no fee shall be payable by the Company to Sandler X'Xxxxx; however, the
Company shall reimburse the Agent for all of its reasonable out-of-pocket
expenses incurred prior to termination, including the reasonable fees and
disbursements of counsel for the Agent 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 $25,000, $[25,000] of which has been previously paid,
which shall be credited against any fees or reimbursement of expenses payable
hereunder.
SECTION 3. COVENANTS OF THE COMPANY. The Company and the Bank
covenant with the Agent as follows:
(a) The Company and the Bank will prepare and file such amendments
or supplements to the Registration Statement, the Prospectus, the
Conversion Application and the Proxy Statement as may hereafter be
required by the Securities Act Regulations or the Conversion Regulations
or as may hereafter be requested by the Agent. Following completion of the
Subscription and Community Offerings, in the event of a Syndicated
Community Offering, the Company and the Bank will: (i) promptly prepare
and file with the Commission a post-effective amendment to the
Registration Statement relating to the results of the Subscription and
Community Offerings, any additional information with respect to the
proposed plan of distribution and any revised pricing information or (ii)
if no such post-effective amendment is required, will file with, or mail
for filing to, the Commission a prospectus or prospectus supplement
containing information relating to the
15
-15-
results of the Subscription and Community Offerings and pricing
information pursuant to Rule 424(c) of the Securities Act Regulations, in
either case in a form acceptable to the Agent. The Company and the Bank
will notify the Agent immediately, and confirm the notice in writing, (i)
of the effectiveness of any post-effective amendment of the Registration
Statement, the filing of any supplement to the Prospectus and the filing
of any amendment to the Conversion Application, (ii) of the receipt of any
comments from the Superintendent, the FDIC, the FRB or the Commission with
respect to the transactions contemplated by this Agreement or the Plan,
(iii) of any request by the Commission, the Superintendent, the FDIC or
the FRB 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 with respect to the
suspension of any qualification of the Securities for offering or sale in
any jurisdiction. The Company and the Bank will make every reasonable
effort to prevent the issuance of any stop order and, if any stop order is
issued, to obtain the lifting thereof at the earliest possible moment.
(b) The Company and the Bank will give the Agent notice of its
intention to file or prepare any amendment to the Conversion Application
or the Registration Statement (including any post-effective amendment) or
any amendment or supplement to the Prospectus (including any revised
prospectus which the Company proposes for use in connection with the
Syndicated Community Offering of the Securities which differs from the
prospectus on file at the Commission at the time the Registration
Statement becomes effective, whether or not such revised prospectus is
required to be filed pursuant to Rule 424(b) of the Securities Act
Regulations), will furnish the Agent with copies of any such amendment or
supplement a reasonable amount of time prior to such proposed filing or
use, as the case may be, and will not file any such amendment or
supplement or use any such prospectus to which the Agent or counsel for
the Agent may object.
(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
Exchange Act, and the rules and regulations of the Commission promulgated
thereunder, including, without limitation, Rule 10b-6 under the Exchange
Act, so far as
16
-16-
necessary to permit the continuance of sales or dealing in shares of
Common Stock during such period in accordance with the provisions hereof
and the Prospectus.
(e) If any event or circumstance shall occur as a result of which it
is necessary, in the opinion of counsel for the Agent, to amend or
supplement the Prospectus in order to make the Prospectus not misleading
in the light of the circumstances existing at the time it is delivered to
a purchaser, the Company and the Bank will forthwith amend or supplement
the Prospectus (in form and substance satisfactory to counsel for the
Agent) so that, as so amended or supplemented, the Prospectus will not
include an untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the light of
the circumstances existing at the time it is delivered to a purchaser, not
misleading, and the Company and the Bank will furnish to the Agent a
reasonable number of copies of such amendment or supplement. For the
purpose of this subsection, the Company and the Bank will each furnish
such information with respect to itself as the Agent may from time to time
reasonably request.
(f) The Company and the Bank will take all necessary action, in
cooperation with the Agent, to qualify the Securities for offering and
sale under the applicable securities laws of such states of the United
States and other jurisdictions as the Conversion Regulations may require
and as the Agent and the Company have agreed; provided, however, that 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 an annual
report (including consolidated statements of financial condition and
consolidated statements of income, stockholders' equity and cash flows,
certified by
17
-17-
independent public accountants) and, as soon as practicable after the end
of each of the first three quarters of each fiscal year (beginning with
the fiscal quarter ending after the effective date of the Registration
Statement), consolidated summary financial information 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 available, a copy of each report or other document of the Company
furnished generally to stockholders of the Company or furnished to or
filed with the Commission under the Exchange Act or any national
securities exchange or system on which any class of securities of the
Company is listed, and (ii) from time to time, such other information
concerning the Company as the Agent may reasonably request.
(k) The Company and the Bank will conduct the Conversion 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 FRB.
(l) The Company and the Bank will use the net proceeds received from
the sale of the Securities in the manner specified in the Prospectus under
the caption "Use of Proceeds."
(m) The Company will file with the Commission such reports on Form
SR 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 file a registration statement for the Common
Stock under Section 12(g) of the 1934 Act prior to completion of the
Offerings and will request that such registration statement be effective
upon completion of the Conversion. The Company will maintain the
effectiveness of such registration 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 traded in the over-the-counter market and quotations
for which are reported by the Nasdaq National Market.
(o) The Company and the Bank will take such actions and furnish such
information as are reasonably requested by the Agent in order for the
Agent to ensure compliance with the National Association of Securities
Dealers, Inc.'s "Interpretation Relating to Free-Riding and Withholding."
18
-18-
(p) Other than in connection with any employee benefit plan or
arrangement described in the Prospectus, the Company will not, without the
prior written consent of the Agent, sell or issue, contract to sell or
otherwise dispose of, any shares of Common Stock, other than the
Securities, for a period of 180 days following the Closing Time.
(q) During the period beginning on the date hereof and ending on the
later of the 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 becoming subject to any security interest,
mortgage, pledge, lien or encumbrance.
(r) The Company and the Bank will comply with the conditions imposed
by or agreed to with the FRB in connection with its approval of the
Holding Company Application and with the Superintendent or the FDIC in
connection with their approval of, or non-objection to, the Conversion
Application including those conditions relating to the establishment and
the operation of the Foundation; the Company and the Bank shall use their
best efforts to ensure that the Foundation submits within the time frames
required by applicable law a request to the Internal Revenue Service to be
recognized as a tax-exempt organization under Section 501(c)(3) of the
Internal Revenue Code of 1986, as amended (the "Code"); the Company and
the Bank will take no action which will result in the possible loss of the
Foundation's tax-exempt status; and neither the Company nor the Bank will
contribute any additional assets to the Foundation until such time that
such additional contributions will be deductible for federal and state
income tax purposes.
(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 Xxxxxx Xxxxxxxx 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 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
19
-19-
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, and (viii) the fees and expenses incurred in connection
with the listing of the Securities on the Nasdaq National Market. In the event
the Agent incurs any such fees and expenses on behalf of the Bank or the
Company, the Bank will reimburse the Agent for such fees and expenses whether or
not the Conversion is consummated; provided, however, that the Agent shall not
incur any substantial expenses on behalf of the Bank or the Company pursuant to
this Section without the prior approval of the Bank.
The Company and the Bank jointly and severally agree to pay certain
expenses incident to the performance of the Agent's obligations under this
Agreement, regardless of whether the Conversion is consummated, including: (i)
the filing fees paid or incurred by the Agent in connection with all filings
with the National Association of Securities Dealers, Inc., and (ii) all
reasonable out of pocket expenses incurred by the Agent relating to the
Offerings, including, without limitation, advertising, promotional, syndication
and travel expenses and fees and expenses of the Agent's counsel. All fees and
expenses to which the Agent is entitled to reimbursement under this paragraph of
this Section 4 shall be due and payable upon receipt by the Company or the Bank
of a written accounting therefor setting forth in reasonable detail the expenses
incurred by the Agent.
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, trustees and directors, as applicable, 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 TP&W,
counsel for the Company and the Bank, in form and substance
satisfactory to counsel for the Agent, to the effect that:
20
-20-
(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 so qualify would not have a material
adverse effect upon the financial condition, results of
operations or business affairs of the Company.
(iv) Upon consummation of the Conversion, and the issuance
of the Foundation Shares to the Foundation immediately upon
completion thereof, the authorized, issued and outstanding
capital stock of the Company will be as set forth in the
Prospectus under the caption "Capitalization" and no shares of
Common Stock have been or will be issued and outstanding prior
to the Closing Time.
(v) The Securities and the Foundation Shares have been
duly and validly authorized for issuance and sale and, when
issued and delivered by the Company pursuant to the Plan
against payment of the consideration calculated as set forth
in the Plan, or contributed by the Company pursuant to the
Plan in the case of the Foundation Shares, will be duly and
validly issued and fully paid and non-assessable.
(vi) The issuance of the Securities and the Foundation
Shares is not subject to preemptive or other similar rights
arising by operation of law or, to the best of TP&W's
knowledge and information, otherwise.
(vii) The Bank has been at all times since 1875 and prior
to the Closing Time duly organized, validly existing and in
good standing under the laws of the State of New York as a New
York state chartered savings bank of mutual form, and, at
Closing Time, will be duly organized, validly existing and in
good standing under the laws of the State of New York as a New
York state chartered savings bank of stock form, in both
instances with full corporate power and authority to own,
lease and operate its properties and to conduct its business
as described in the Registration Statement and the Prospectus;
and the Bank is, and upon consummation of the Conversion will
be, duly qualified as a foreign corporation in each
21
-21-
jurisdiction in which the failure to so qualify would have a
material adverse effect upon the financial condition, results
of operations or business affairs of the Bank.
(viii) The Bank is a member in good standing of the Federal
Home Loan Bank of New York and the deposit accounts of the
Bank are insured by the FDIC up to the applicable limits.
(ix) Each direct and indirect subsidiary of the Bank 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 is duly qualified as a foreign corporation to
transact business and is in good standing in each jurisdiction
in which the failure to so qualify would have a material
adverse effect upon the financial condition, results of
operations or business of the Bank and its subsidiaries, taken
as a whole; the activities of each such subsidiary are
permitted to subsidiaries of a bank holding company and of a
New York state chartered savings bank by the rules,
regulations, resolutions and practices of the FRB and the
Superintendent; all of the issued and outstanding capital
stock of each such subsidiary has been duly authorized and
validly issued, is fully paid and non-assessable and is owned
by the Bank, directly or through subsidiaries, free and clear
of any security interest, mortgage, pledge, lien, encumbrance,
claim or equity.
(x) The Foundation has been duly incorporated and is
validly existing as a non-stock corporation in good standing
under the laws of the State of Delaware with corporate power
and authority to own, lease and operate its properties and to
conduct its business as described in the Prospectus; the
Foundation is not a bank holding company within the meaning of
12 C.F.R. Section 225.2(c) as a result of the issuance of
shares of Common Stock to it in accordance with the terms of
the Plan and 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 or approval or non-objection of the
Conversion, the Conversion Application or the Holding Company
Application, copies of which have been provided to the Agent
prior to the Closing Time.
(xi) Upon consummation of the Conversion, all of the issued
and outstanding capital stock of the Bank when issued and
delivered pursuant to the Plan against payment of
consideration calculated as set forth in the Plan and set
forth in the Prospectus, will be duly authorized and validly
issued and fully paid and nonassessable, and all such capital
stock will be
22
-22-
owned beneficially and of record by the Company free and clear
of any security interest, mortgage, pledge, lien, encumbrance,
claim or equity.
(xii) The FRB has duly approved the Holding Company
Application, the Superintendent has duly 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 TP&W's knowledge, threatened, with
respect to the Holding Company Application, the Conversion
Application (including 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 with the applicable requirements of the FRB and the
Conversion Application complies as to form in all material
respects with the applicable requirements of the
Superintendent and the FDIC (including all documents required
to be filed as exhibits thereto); each of the Holding Company
Application and the Conversion Application is, to the best of
TP&W's knowledge and information, truthful, accurate and
complete; and 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, 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 TP&W may avail itself of customary exceptions
concerning the effect of bankruptcy, insolvency or similar
laws and the availability of equitable remedies); the
execution and delivery of this Agreement, the incurrence of
the obligations herein set forth and the consummation of the
transactions contemplated herein will not result in any
violation of the provisions of the charter or by-laws of the
Company, the Bank or any of their subsidiaries; to the best of
TP&W's knowledge, the execution and delivery of this
Agreement, the incurrence of the obligations herein set forth
and the consummation of the transactions contemplated herein
will not conflict with or constitute a breach of, or a
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 their subsidiaries pursuant to any contract,
indenture, mortgage, loan agreement, note, lease or other
instrument to
23
-23-
which the Company, the Bank or their 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 its
subsidiaries is subject that, individually or in the
aggregate, would have a material adverse effect on the
financial condition, results of operations or business affairs
of the Company, the Bank and its subsidiaries considered as
one enterprise.
(xiv) The Prospectus has been duly authorized by the
Superintendent and the FDIC for final use pursuant to the
Conversion Regulations and no action is pending, or to the
best of TP&W'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 TP&W's knowledge,
proceedings therefor initiated or threatened by the
Commission.
(xvi) No further approval, authorization, consent or other
order of any public board or body is required in connection
with the execution and delivery of this Agreement, the
issuance of the Securities and the consummation of the
Conversion, except as may be required under the securities or
"Blue Sky" laws of various jurisdictions as to which no
opinion need be rendered.
(xvii) At the time the Registration Statement became
effective, the Registration Statement (other than the
financial statements and statistical data included therein, as
to which no opinion need be rendered) complied as to form in
all material respects with the requirements of the Securities
Act and the Securities Act Regulations and the Conversion
Regulations.
(xviii) The Common Stock conforms to the description thereof
contained in the Prospectus, and the form of certificate used
to evidence the Common Stock is in due and proper form and
complies with all applicable statutory requirements.
(xix) There are no legal or governmental proceedings pending
or threatened against or affecting the Company, the Bank or
their subsidiaries or the Foundation which are required,
individually or in the aggregate, to be disclosed in the
Registration Statement and Prospectus, other than those
disclosed therein, and all pending legal or governmental
proceedings to which the Company, the Bank or any of their
subsidiaries is a party or to which any of their property is
subject which are not described in the
24
-24-
Registration Statement, including ordinary routine litigation
incidental to the business, are, considered in the aggregate,
not material.
(xx) The information in the Prospectus under the captions
"Dividend Policy," "Regulatory Capital Compliance," "Federal
and State Taxation," "Regulation and Supervision," "The
Conversion," "Restrictions on Acquisition of the Company and
the Bank," and "Description of Capital Stock of the Company,"
and "Description of Capital Stock of the Bank" to the extent
that it constitutes matters of law, summaries of legal
matters, documents or proceedings, or legal conclusions, has
been reviewed by TP&W and is complete and accurate in all
material respects.
(xxi) To the best of TP&W's knowledge, there are no
contracts, indentures, mortgages, loan agreements, notes,
leases or other instruments required to be described or
referred to in the Registration Statement or to be filed as
exhibits thereto other than those described or referred to
therein or filed as exhibits thereto, the descriptions thereof
or references thereto are correct, and no default exists, and
no event has occurred which, with notice or lapse of time or
both, would constitute a default, in the due performance or
observance of any material obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, loan
agreement, note, lease or other instrument so described,
referred to or filed.
(xxii) The Plan has been duly authorized by the Board of
Directors of the Company and the Board of Directors of the
Bank and, to the best of TP&W's knowledge, the
Superintendent's and the FDIC's approvals of the Plan remain
in full force and effect; the Bank's charter has been amended,
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 TP&W'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 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, the FDIC
or the FRB; and, to the best of TP&W's knowledge, no person
has sought to obtain review of the final action of the
Superintendent or the FDIC in approving the Conversion
Application (which includes the Plan which provides for
establishment of the Foundation) or the FRB in approving the
Holding Company Application.
25
-25-
(xxiii) To the best of TP&W's knowledge, the Company and the
Bank and their subsidiaries have obtained all licenses,
permits and other governmental authorizations currently
required for the conduct of their respective businesses as
described in the Registration Statement and Prospectus, and
all such licenses, permits and other governmental
authorizations are in full force and effect, and the Company
and the Bank and their subsidiaries are in all material
respects complying therewith.
(xxiv) Neither the Company, the Bank nor any of their
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 TP&W'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 contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which the
Company, the Bank or any of their subsidiaries is a party or
by which the Company, the Bank or any of their subsidiaries or
any of their property may be bound.
(xxv) The Company is not required to be registered as an
investment company under the Investment Company Act of 1940.
(2) The favorable opinion, dated as of Closing Time, of
Xxxxxxx, Xxxxxxx & Xxxx LLP ("GP&H"), counsel for the Agent, with
respect to the matters set forth in Section 5(b)(1)(i), (iv), (v),
(vi) (solely as to preemptive rights arising by operation of law),
(xii), (xvi) and (xvii) and such other matters as the Agent may
reasonably require.
(3) In giving their opinions required by subsections (b)(l)
and (b)(2), respectively, of this Section, TP&W and GP&H, shall each
additionally state that nothing has come to their attention that
would lead them to believe that the Registration Statement (except
for financial statements and schedules and other financial or
statistical data included therein, as to which counsel need make no
statement), at the time it became effective, contained an untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading or that the Prospectus (except for financial
statements and schedules and other financial or statistical data
included therein, as to which counsel need make no statement), at
the time the Registration Statement became effective or at Closing
Time, included an untrue statement of a material fact or omitted to
state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were
made, not misleading. In giving their opinions, TP&W and GP&H, may
rely as to matters of fact on certificates of officers and directors
of the Company and the
26
-26-
Bank and certificates of public officials, which opinions shall be
in form and substance satisfactory to counsel for the Agent, and
GP&H may also rely on the opinion of TP&W.
(c) At Closing Time referred to in Section 2, the Company and the
Bank shall have completed in all material respects the conditions
precedent to the Conversion in accordance with the Plan, the applicable
Conversion Regulations and all other applicable laws, regulations,
decisions and orders, including all terms, conditions, requirements and
provisions precedent to the Conversion imposed upon the Company or the
Bank by the FRB, the Superintendent, the FDIC, or any other regulatory
authority other than those which the FRB, the Superintendent or the FDIC
permit to be competed 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 affairs of
the Company, the Bank and their subsidiaries considered as one enterprise,
whether or not arising in the ordinary course of business, and the Agent
shall have received a certificate of the Chief Executive Officer of the
Company and of the Bank, the President of 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 as set for
the in the Registration Statement and the Prospectus other than
transactions referred to or contemplated therein and transactions in the
ordinary cause of business, (iii) neither the Company nor the Bank shall
have received from the Superintendent, the FDIC or the FRB 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 or the Bank, (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 Syndicated
Community Offering 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 FRB 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
FRB in approving the Holding Company Application.
27
-27-
(e) At the time of the execution of this Agreement, the Agent shall
have received from Xxxxxx Xxxxxxxx LLP (the "Accountant"), 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 their subsidiaries within the meaning of the Code of
Ethics of the American Institute of Certified Public Accountants, the
Securities Act, the Securities Act Regulations and the Conversion
Regulations; (ii) it is the Accountant's opinion that the consolidated
financial statements and supporting schedules included in the Registration
Statement and covered by the Accountant's opinions therein comply as to
form in all material respects with the applicable accounting requirements
of the Securities Act and the Securities Act Regulations; (iii) based upon
limited procedures as agreed upon by the Agent and the Accountant 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 its 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 of net interest income and net
income set forth under "Selected Financial Information" 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 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
its subsidiaries or any decrease in consolidated total assets, the
allowance for loan losses, total deposits or net worth of the Bank and its
subsidiaries, in each case as compared with the amounts shown in the May
31, 1997 balance sheet included in the Registration Statement or, (D)
during the period from May 31, 1997 to a specified date not more than five
days prior to the date of this Agreement, there were any decreases, as
compared with the corresponding period in the preceding year, in total
interest income, net interest income, net interest income after provision
for loan losses, income before income tax expense or net income of the
Bank and its 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 the Accountant's 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 their subsidiaries identified in such
letter.
28
-28-
(e) At Closing Time, the Agent shall have received from the
Accountant a letter, dated as of Closing Time, to the effect that they
reaffirm the statements made in the letter furnished pursuant to
subsection (d) of this Section, except that the specified date referred to
shall be a date not more than five days prior to Closing Time.
(f) At Closing Time, the Securities shall have been approved for
listing on the Nasdaq Stock Market upon notice of issuance.
(g) At Closing Time, the Agent shall have received a letter from
FinPro, dated as of the Closing Time, confirming its appraisal.
(h) 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 actions taken by the Company in connection with the issuance and
sale of the Securities and the Foundation Shares as herein contemplated
shall be satisfactory in form and substance to the Agent and counsel for
the Agent.
(i) 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, is so material and adverse as to make it impracticable to
market the Securities or to enforce contracts, including subscriptions or
orders, for the sale of the Securities, and (ii) trading generally on
either the American Stock Exchange or the New York Stock Exchange shall
not have been suspended, and minimum or maximum prices for trading shall
not have 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 the establishment of the Foundation and the
contribution of the Foundation Shares thereto by the Company) or any
action taken by the Agent where acting as agent of the Company or the Bank
or otherwise as described in Section 2 hereof;
29
-29-
(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 Prospectus (or any amendment or supplement
thereto) or the omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(iii) from and against any and all loss, liability, claim, damage
and expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or proceeding
by any governmental agency or body, commenced or threatened, or of any
claim whatsoever described in clauses (i) or (ii) above, if such
settlement is effected with the written consent of the Company or the
Bank, which consent shall not be unreasonably withheld; and
(iv) from and against any and all expense whatsoever, as incurred
(including, subject to Section 6(c) hereof, the fees and disbursements of
counsel chosen by the Agent), reasonably incurred in investigating,
preparing for or defending against any litigation, or any investigation,
proceeding or inquiry by any governmental agency or body, commenced or
threatened, or any claim whatsoever described in clauses (i) or (ii)
above, to the extent that any such expense is not paid under (i), (ii) or
(iii) above;
provided, however, that this indemnity 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 written information relating to the
Agent furnished to the Company or the Bank by the Agent expressly for use in the
Prospectus (or any amendment or supplement thereto), which information the
Company and the Bank acknowledge is included only in the sections captioned
"Market for Capital Stock" and "The Conversion--Marketing and Underwriting
Arrangements" of the Prospectus (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 Prospectus (or any amendment or
supplement thereto) in reliance upon and in conformity with the Agent
Information.
30
-30-
(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. 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, their 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 their respective
affiliates or any participant in the transactions contemplated hereby in which
the Agent or such person or agent is not named as a defendant, the Company and
the Bank jointly and severally agree to reimburse the Agent for all reasonable
and necessary out-of-pocket expenses incurred by it in connection with preparing
or appearing as a witness or otherwise giving testimony and to compensate the
Agent in an amount to be mutually agreed upon.
SECTION 7. CONTRIBUTION. In order to provide for just and equitable
contribution in circumstances in which the indemnity 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 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
31
-31-
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.
SECTION 9. TERMINATION OF AGREEMENT.
(a) The Agent may terminate this Agreement, by notice to the
Company, at any time at or prior to Closing Time (i) if there has been, since
the date of this Agreement or since the respective dates as of which information
is given in the Registration Statement, any material adverse change in the
financial condition, results of operations or business affairs of the Company or
the Bank, or the Company, the Bank and their subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business,(ii) if
there has occurred any material adverse change in the financial markets in the
United States or elsewhere or any outbreak of hostilities or escalation thereof
or other calamity or crisis the effect of which, in the judgment of the Agent,
is so material and adverse as to make it impracticable to market the Securities
or to enforce contracts, including subscriptions or orders, for the sale of the
Securities, (iii) if trading generally on either the American Stock Exchange or
the New York Stock Exchange has been suspended, or minimum or maximum prices for
trading have been fixed, or maximum ranges for prices for securities have been
required, by either of said Exchanges or by order of the Commission or any other
governmental authority, or if a banking moratorium has been declared by either
Federal or New York authorities, (iv) if any condition specified in Section 5
shall not have been fulfilled when and as required to be fulfilled; (v) if there
shall have been such material adverse change in the condition or prospects of
the Company 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 March 31, 1998.
32
-32-
(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 Xxxx
X. Xxx, P.C., Xxxxxxx, Procter & Xxxx LLP, Exchange Place, 00 Xxxxx Xxxxxx,
Xxxxxx, XX 00000; notices to the Company and the Bank shall be directed to
either of them at The Warwick Savings Bank, 00 Xxxxxxx Xxxxxx, Xxxxxxx, Xxx Xxxx
00000-0000, attention of Xx. Xxxxxxx X. Xxxxxxx and Xx. Xxxxxx X. Xxxxxxx, with
a copy to Xxxxxxx X. XxXxxxxxxx, Esq., Xxxxxxx Xxxxxxxx & Xxxx, Xxx Xxxxx Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
SECTION 11. PARTIES. This Agreement shall inure to the benefit of
and be binding upon the Agent, the Company and the Bank and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Agent, the Company and the Bank and their respective successors and the
controlling persons and officers and directors referred to in Sections 6 and 7
and their heirs and legal representatives, any legal or equitable right, remedy
or claim under or in respect of this Agreement or any provision herein or
therein contained. This Agreement and all conditions and provisions hereof and
thereof are intended to be for the sole and exclusive benefit of the Agent, the
Company and the Bank and their respective successors, and said controlling
persons and officers and directors and their heirs and legal representatives,
and for the benefit of no other person, firm or corporation.
SECTION 12. ENTIRE AGREEMENT; AMENDMENT. This Agreement represents
the entire understanding of the parties hereto with reference to the
transactions contemplated hereby and supersedes any and all other oral or
written agreements heretofore made, except for the engagement letter dated July
10, 1997, 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. Unless otherwise noted, specified times of
day refer to New York City 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
33
-33-
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.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
34
-34-
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,
WARWICK COMMUNITY BANCORP, INC.
By:_________________________________
Title:
THE WARWICK SAVINGS BANK
By:_________________________________
Title:
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
35
APPENDIX A
OUTLINE OF CONVERSION AGENT SERVICES
I. Consolidation of Accounts
1. Consolidate files in accordance with regulatory guidelines.
2. Accounts from various files are all linked together. The
resulting central file can then be maintained on a regular basis.
3. Our EDP format will be provided to your data processing people.
II. Proxy/Order Form/Request Card Preparation
1. Vote calculation.
2. Stenciling of proxy cards for initial mailing and any necessary
follow-up mailings.
3. Target group identification for proxy solicitation.
4. Identification of target group(s) for follow-up mailing(s).
III. Organization and Supervision of Conversion Center
1. Advising on and supervising the physical organization of the
Conversion Center, including materials requirements.
2. Assist in the training of all Bank personnel who will be staffing
the conversion center.
3. Establish reporting procedures.
4. On-site supervision of the Conversion Center during the
solicitation/offering period.
IV. Special Meeting Services
1. Direct proxy solicitation if independent solicitor not used.
2. Proxy and ballot tabulation.
3. Act as or support inspector of election.
4. Delete voting record date accounts closed prior to special
meeting.
5. Produce final report of vote.
A - 1
36
V. Subscription Services
1. Produce list of depositors by state (Blue Sky report).
2. Production of subscription rights and research books.
3. Stock order form processing.
4. Acknowledgement letter to confirm receipt of stock order.
5. Daily reports and analysis.
6. Proration calculation and share allocation in the event of an
oversubscription.
7. Produce charter shareholder list.
8. Interface with Transfer Agent for Stock Certificate issuance.
9. Refund and interest calculations.
10. Confirmation letter to confirm purchase of stock.
11. Notification of full/partial rejection of orders.
12. Production of 1099/Debit tape.
A - 2
