EXHIBIT 1.2
4,916,250 Shares
(subject to increase up to 5,653,688 shares
in the event of an increase in the pro forma market
value of the Company's Common Stock)
PRUDENTIAL BANCORP, INC. OF PENNSYLVANIA
(a Pennsylvania-chartered stock holding company)
Common Stock
(par value $.01 per share)
AGENCY AGREEMENT
________ ____ , 0000
XXXXXXX X'XXXXX & PARTNERS, L.P.
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Prudential Bancorp, Inc. of Pennsylvania, a Pennsylvania state-chartered
stock holding company in formation (the "Company"), Prudential Mutual Holding
Company, a Pennsylvania state-chartered mutual holding company in formation (the
"MHC"), and Prudential Savings Bank, a Pennsylvania state-chartered savings bank
(the "Bank"), hereby confirm their agreement with Sandler X'Xxxxx & Partners,
L.P. ("Sandler X'Xxxxx" or the "Agent") with respect to the offer and sale by
the Company of up to 4,916,250 shares (subject to increase up to 5,653,688
shares in the event of an increase in the pro forma market value of the
Company's common stock) 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 in
the Offerings (as defined below) are hereinafter called the "Securities."
The Securities are being offered for sale in accordance with the Bank's
plan of reorganization and related plan of stock issuance (collectively, the
"Plan") adopted by the Boards of Directors of the Company, the MHC and the Bank
pursuant to which the Bank intends to reorganize from a Pennsylvania
state-chartered savings bank to a Pennsylvania state-chartered stock savings
bank in mutual holding company form of ownership and issue all of its stock to
the Company and which provides for a stock offering, in compliance with
regulations of the Pennsylvania Department of Banking (the "Department") and the
Federal Deposit Insurance Corporation (the "FDIC"), of up
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to 49.9% of the Common Stock of the Company. As a result of the sale of stock
under the Plan, the Bank will become a wholly-owned subsidiary of the Company.
Pursuant to the Plan, the Company will offer to certain depositors of the
Bank and to the Bank's tax qualified employee benefit plans, including the
Bank's employee stock ownership plan (the "ESOP") (collectively, the "Employee
Plans"), rights to subscribe for the Securities in a subscription offering (the
"Subscription Offering"). To the extent Securities are not subscribed for in the
Subscription Offering, such Securities may be offered to borrowers of the Bank,
to certain members of the general public and to other persons in a community
offering (the "Community Offering"), with preference given first to certain
depositors of the Bank residing in Delaware and Philadelphia counties in
Pennsylvania, who receive a Prospectus. The Community Offering, which together
with the Subscription Offering, as each may be extended or reopened from time to
time, are herein referred to as the "Subscription and Community Offering," may
be commenced concurrently with, during or after, the Subscription Offering. It
is currently anticipated by the Bank and the Company that any Securities not
subscribed for in the Subscription and Community Offering will be offered,
subject to Section 2 hereof, in a syndicated community offering (the "Syndicated
Community Offering"). The Subscription and Community Offering and the Syndicated
Community Offering are hereinafter referred to collectively as the "Offerings"
and the reorganization of the Bank from a mutual to stock form, the formation of
the Company and the MHC, the acquisition of the capital stock of the Bank by the
Company, the acquisition of the majority of the Company's common stock by the
MHC and the Offerings are hereinafter referred to collectively as the
"Reorganization." The Securities may be offered to the general public in a
public offering (the "Public Offering") in lieu of or subsequent to the
Syndicated Community Offering. If there is a Public Offering, the Public
Offering will be governed by a separate definitive purchase agreement as
described in Section 2 hereof. It is acknowledged that the number of Securities
to be sold in the Offerings may be increased or decreased as described in the
Prospectus. 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 mid-tier holding company form of
organization is not utilized, all pertinent terms of this Agreement will apply
to the Reorganization of the Bank from the mutual to the stock form of
organization and the sale of the Bank's common stock.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-1 (No. 333-119130), including a
related prospectus, for the registration of the Securities under the Securities
Act of 1933, as amended (the "Securities Act"), has filed such amendments
thereto, if any, and such amended prospectuses as may have been required to the
date hereof by the Commission in order to declare such registration statement
effective, and will file such additional amendments thereto and such amended
prospectuses and prospectus supplements as may hereafter be required. Such
registration statement (as amended to date, if applicable, and as from time to
time amended or supplemented hereafter) and the prospectuses constituting a part
thereof (including in each case all documents incorporated or deemed to be
incorporated by reference therein and the information, if any, deemed to be a
part thereof pursuant to the rules and regulations of the Commission under the
Securities Act, as from time to time amended or supplemented pursuant to the
Securities Act or otherwise (the "Securities Act Regulations")), are hereinafter
referred to as the "Registration Statement" and the "Prospectus," respectively,
except that if any revised prospectus shall be used by the Company in connection
with
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the Subscription and Community Offering or the Syndicated Community Offering
which differs from the Prospectus on file at the Commission at the time the
Registration Statement becomes effective (whether or not such revised prospectus
is required to be filed by the Company pursuant to Rule 424(b) of the Securities
Act Regulations), the term "Prospectus" shall refer to such revised prospectus
from and after the time it is first provided to the Agent for such use.
Concurrently with the execution of this Agreement, the Company is
delivering to the Agent copies of the Prospectus of the Company to be used in
the Offerings. Such Prospectus contains information with respect to the Bank,
the Company, the MHC and the Common Stock.
SECTION 1. REPRESENTATIONS AND WARRANTIES.
(a) The Company, the Bank and the MHC jointly and severally represent
and warrant to the Agent as of the date hereof as follows:
(i) The Registration Statement has been declared effective by the
Commission, no stop order has been issued with respect thereto and no
proceedings therefor have been initiated or, to the knowledge of the
Company, the MHC 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 in writing by the Agent
expressly for use in the Registration Statement or Prospectus (the "Agent
Information," which the Company, the MHC and the Bank acknowledge appears
only in the sixth paragraph of the section "The Offering - Plan of
Distribution and Marketing Arrangements" of the Prospectus.)
(ii) Pursuant to the rules and regulations of the FDIC and the
Department governing the reorganization of state-chartered mutual savings
banks into the mutual holding company form of ownership and related
issuances of stock, as from time to time amended or supplemented
(collectively, the "Reorganization Regulations"), the Bank has filed with
the Department a Notice To Effect a Mutual Holding Company Reorganization
and has filed with the FDIC a Notice of Intent To Convert To Stock Form
for the Mutual Holding Company Reorganization and has filed such
amendments thereto as may have been required to the date hereof (such
applications, as amended to date, if applicable, and as from time to time
amended or supplemented hereafter, is hereinafter collectively referred to
as the "Applications"). The Applications have been approved by the FDIC
and the Department. The Prospectus, the Applications, the Bank Holding
Company Application and the Interagency Merger Application are truthful
and accurate in all material respects. The
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Offerings and the Plan have been duly adopted by the Boards of Directors
of the Company, the Bank and the MHC and such adoption has not since been
rescinded or revoked. The Prospectus and the proxy statement to be
delivered to the depositors of the Bank (the "Proxy Statement") have been
approved for use by the Department and the FDIC, such approvals remain in
full force and effect and no order has been issued by the Department or
the FDIC suspending or revoking such approvals and no proceedings therefor
have been initiated or, to the knowledge of the Company, the MHC or the
Bank, threatened by the Department or the FDIC. At the date of such
approvals and at the Closing Time referred to in Section 2, the
Applications, including the Prospectus and the Proxy Statement, complied
and will comply in all material respects with the applicable provisions of
the Reorganization 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 light of the circumstances under which
they were made, not misleading.
(iii) The Company, the MHC and the Bank have filed the Prospectus
and any supplemental sales literature with the Commission, the Department
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 Reorganization
Regulations, the Securities Act and the Securities Act Regulations and, at
or prior to the time of their first use, will have received all required
authorizations of the Department, the FDIC and the Commission for use in
final form.
(iv) The Company and the MHC have filed with the Federal Reserve
Board (the "FRB") the Company's application for approval of its
acquisition of the Bank (the "Holding Company Application") on Form FR Y-3
promulgated under the Bank Holding Company Act, as amended (the "BHCA"),
and the Holding Company Application is accurate and truthful in all
material respects. 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 therefore have been initiated
or, to the knowledge of the Company, the Bank or the MHC, threatened by
the FRB. At the date of such approval, the Holding Company Application
complied in all material respects with the applicable provisions of the
BHCA and the regulations promulgated hereunder.
(v) The Company has filed with the FDIC an application for the
merger (the "Interagency Merger Application") between the Bank and an
interim Pennsylvania-chartered stock savings bank to be formed as a
wholly-owned subsidiary of the Bank to facilitate the transaction
contemplated by the Plan. The Interagency Merger Application is accurate
and truthful in all material respects. At or prior to the Effective Time,
the Company will receive written notice from the FDIC of its approval of
the merger, such approval will remain in full force and effect and no
order will be issued by the FDIC suspending or revoking such approval and
no proceedings therefore have been initiated or, to the knowledge of the
Company, Bank, or the MHC, threatened by the FDIC. At the date of such
approval, the Interagency Merger Application complied in all material
respects with all applicable laws and regulations.
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(vi) None of the Commission, the Department, the FDIC, the FRB or
any "Blue Sky" authority has, by order or otherwise, prevented or
suspended the use of the Proxy Statement, the Prospectus or any
supplemental sales literature authorized by the Company, the MHC or the
Bank for use in connection with the Offerings, and no proceedings for such
purposes are pending or threatened.
(vii) The Offerings and other transactions contemplated hereby do
not and will not require any material consent, approval, authorization or
permit or filing with any other governmental agency or regulatory
authority, except as disclosed in the Prospectus.
(viii) At the Closing Time referred to in Section 2, the Company,
the Bank and the MHC will have completed the conditions precedent to the
Reorganization in accordance with the Plan, the applicable Reorganization
Regulations and all other applicable laws, regulations, decisions and
orders, including all material terms, conditions, requirements and
provisions precedent to the Reorganization imposed upon the Company, the
Bank or the MHC by the Department, the FDIC, or any other regulatory
authority, other than those which the regulatory authority permits to be
completed after the Reorganization.
(ix) RP Financial, LC, (the "Appraiser"), which prepared the
valuation of the Bank as part of the Plan, has advised the Company, the
MHC and the Bank in writing that it satisfies all requirements for an
appraiser set forth in the Reorganization Regulations and any
interpretations or guidelines issued by the Department, the FDIC or any of
their respective staff with respect thereto.
(x) Deloitte & Touche, LLP, the accountants who audited and
reported on the consolidated financial statements and supporting schedules
of the Bank and its subsidiaries included in the Registration Statement,
have advised the Company, the MHC and the Bank in writing that they are
independent public accountants within the meaning of the Code of Ethics of
the American Institute of Certified Public Accountants (the "AICPA"), that
they are registered with the Public Company Accounting Oversight Board
("PCAOB") and such accountants are, with respect to the Company, the MHC
and the Bank, independent registered public accountants as required by,
and are not in violation of the auditors independence requirements of, the
Securities Act, the Securities Act Regulations and Reorganization
Regulations.
(xi) The only direct or indirect subsidiary of the Company is the
Bank. None of the Company, the MHC or the Bank, directly or indirectly,
controls any other corporation, limited liability company, partnership,
joint venture, association, trust or other business organization.
(xii) The financial statements and the related schedules and notes
thereto included in the Registration Statement and the Prospectus present
fairly the financial position of the Bank at the dates indicated and the
results of operations, retained earnings, equity and cash flows for the
periods specified, and comply as to form with the applicable accounting
requirements of the Securities Act Regulations and the Reorganization
Regulations; except as otherwise stated in the Registration Statement and
Prospectus, said financial statements
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have been prepared in conformity with generally accepted accounting
principles applied on a consistent basis; and the supporting schedules and
tables included in the Registration Statement and Prospectus present
fairly the information required to be stated therein. The other financial,
statistical and pro forma information and related notes included in the
Prospectus present fairly the information shown therein on a basis
consistent with the audited and unaudited financial statements included in
the Prospectus, and as to the pro forma adjustments, the adjustments made
therein have been consistently applied on the basis described therein.
(xiii) Since the respective dates as of which information is given
in the Registration Statement and the Prospectus, except as otherwise
stated therein (A) there has been no material adverse change in the
financial condition, results of operations, business affairs or prospects
of the Company, the MHC and the Bank, considered as one enterprise,
whether or not arising in the ordinary course of business, (B) except for
transactions specifically referred to or contemplated in the Registration
Statement and Prospectus, there have been no transactions entered into by
the Company, the MHC or the Bank, other than those in the ordinary course
of business consistent with past practice, which are material with respect
to the Company, the MHC and the Bank, considered as one enterprise, and
(C) the capitalization, liabilities, assets, properties and business of
the Company, the MHC and the Bank conform in all material respects to the
descriptions contained in the Prospectus and none of the Company, the MHC
or the Bank has any material liabilities of any kind, contingent or
otherwise, except as disclosed in the Registration Statement or the
Prospectus.
(xiv) The Company, upon completion of its formation, and in any
event no later than the Closing time, will have been duly organized and
will be validly existing as a stock holding company chartered under the
laws of the Commonwealth of Pennsylvania with full corporate power and
authority to own, lease and operate its properties, to conduct its
business as described in the Registration Statement and the Prospectus,
and to enter into and perform its obligations under this Agreement and the
transactions contemplated hereby; and the Company is duly qualified to
transact business and is in good standing under the laws of the
Commonwealth of Pennsylvania 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 on the financial
condition, results of operations, business affairs or prospects of the
Company, the MHC and the Bank, considered as one enterprise (a "Material
Adverse Effect").
(xv) Upon completion of the Offerings as described in the
Prospectus, the issued and outstanding capital stock of the Company will
be within the range as set forth in the Prospectus under "Our
Capitalization" (except for subsequent issuances, if any, pursuant to
reservations, agreements or employee benefit plans referred to in the
Prospectus). The authorized capital stock of the Company consists of
40,000,000 shares of Common Stock and 10,000,000 shares of preferred
stock, par value $.01 per share, of which no shares have been or will be
issued and outstanding prior to the Closing Time; at the date hereof and
at the Closing Time, 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
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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
nonassessable; the terms and provisions of the Common Stock and the other
capital stock of the Company conform to all statements relating thereto
contained in the Prospectus; the certificates representing the shares of
Common Stock will conform to the requirements of applicable law and
regulations; and the issuance of the Securities is not subject to
preemptive or other similar rights, except for subscription rights granted
pursuant to the Plan in accordance with the Reorganization Regulations.
(xvi) The MHC, upon completion of its formation, and in any event no
later than the Closing Time, will have been duly organized and will be
validly existing as a mutual holding company chartered under the laws of
the Commonwealth of Pennsylvania with full corporate power and authority
to own, lease and operate its properties, to conduct its business as
described in the Registration Statement and the Prospectus, and to enter
into and perform its obligations under this Agreement and the transactions
contemplated thereby; and the MHC is duly qualified to transact business
and is in good standing under the laws of the Commonwealth of Pennsylvania
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.
(xvii) The MHC has no capital stock. All holders of the savings,
demand or other authorized accounts of the Bank are members of the MHC. As
of the Closing Time referred to in Section 2, the MHC will not own any
equity securities or any equity interest in any business enterprise except
as described in the Prospectus.
(xviii) The Bank has been duly organized and is validly existing as
a savings bank in mutual form chartered under the laws of the Commonwealth
of Pennsylvania and, upon consummation of the Reorganization, will be a
Pennsylvania chartered savings bank in stock form, in each case, with full
corporate power and authority to own, lease and operate its properties, to
conduct its business as described in the Registration Statement and the
Prospectus, and to enter into and perform its obligations under this
Agreement and the transactions contemplated hereby; and the Bank is duly
qualified to transact business and is in good standing under the laws of
the Commonwealth of Pennsylvania 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.
(xix) Upon consummation of the Offerings described in the
Prospectus, the authorized capital stock of the Bank will be
________shares of common stock, par value $.01 per share ("Bank Common
Stock"), and _____ shares of serial preferred stock, par value $.01 per
share, and the issued and outstanding capital stock of the Bank will be
100 shares of Bank Common Stock and no shares of preferred stock, and no
shares of Bank Common Stock and no shares of preferred stock have been or
will be issued prior to the Closing Time referred to in Section 2. The
shares of Bank Common Stock to be issued to the Company will have been
duly authorized for issuance and, when issued and delivered by the Bank
pursuant to the Plan against payment of the consideration calculated as
set forth in the Plan and as described in the Prospectus, will be duly and
validly issued and fully paid and nonassessable, and all such Bank Common
Stock will be owned beneficially and of
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record by the Company free and clear of any security interest, mortgage,
pledge, lien, encumbrance or legal or equitable claim; the terms and
provisions of the Bank Common Stock conform to all statements relating
thereto contained in the Prospectus, and the certificates representing the
shares of the Bank Common Stock will conform with the requirements of
applicable laws and regulations; and the issuance of the Bank Common Stock
is not subject to preemptive or similar rights; and there are no other
warrants, options or rights of any kind to acquire additional shares of
Bank Common Stock or any shares of Bank preferred stock.
(xx) The Company, the MHC and the Bank have each 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
Applications, the Bank Holding Company Application and the Interagency
Merger Application, except where the failure to obtain such licenses,
permits or other governmental authorizations would not have a Material
Adverse Effect; all such licenses, permits and other governmental
authorizations are in full force and effect and the Company, the MHC and
the Bank are in all material respects in compliance therewith; none of the
Company, the MHC or the Bank 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.
(xxi) The Bank is a member in good standing of the Federal Home Loan
Bank of Pittsburgh; the deposit accounts of the Bank are insured by the
FDIC up to the applicable limits.
(xxii) The Company, the MHC and the Bank have taken all corporate
action necessary for them to execute, deliver and perform this Agreement
and the transactions contemplated hereby, and this Agreement has been duly
executed and delivered by, and is the valid and binding agreement of, the
Company, the MHC and the Bank, enforceable against each of them 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 the availability of equitable remedies.
(xxiii) Subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus and prior to the
Closing Time, except as otherwise may be indicated or contemplated
therein, none of the Company, the MHC or 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
with past practice from the same or similar sources and in similar amounts
as indicated in the Prospectus, or (B) entered into any transaction or
series of transactions which is material in light of the business of the
Company, the MHC and the Bank, considered as one enterprise.
(xxiv) No approval of any regulatory or supervisory or other public
authority is required in connection with the execution and delivery of
this Agreement or the issuance of the Securities that has not been
obtained and a copy of which has been delivered to the
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Agent, except as may be required under the "Blue Sky" or securities laws
of various jurisdictions.
(xxv) None of the Company, the MHC or the Bank is in violation of
their respective certificate of incorporation, organization certificate,
articles of incorporation or charter, as the case may be, or bylaws or
other written corporate governance requirements or guidelines (and the
Bank will not be in violation of its charter or bylaws in stock form upon
consummation of the Reorganization); and none of the Company, the MHC or
the Bank 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 MHC or the Bank 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 MHC or the Bank is subject, except for such
defaults that would not, individually or in the aggregate, have a Material
Adverse Effect; and there are no contracts or documents of the Company,
the MHC or the Bank which are required to be filed as exhibits to the
Registration Statement or the Applications which have not been so filed.
(xxvi) The Reorganization, the execution, delivery and performance
of this Agreement and the consummation of the transactions contemplated
herein, have been duly authorized by all necessary corporate action on the
part of the Company, the MHC, and the Bank, 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 MHC or the Bank pursuant to, any
contract, indenture, mortgage, loan agreement, note, lease or other
instrument to which the Company, the MHC or the Bank 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 MHC or the Bank is subject, except for such
conflicts, breaches or defaults that would not, individually or in the
aggregate, have a Material Adverse Effect; nor will such action result in
any violation of the provisions of the respective charter or bylaws of the
Company, the MHC or the Bank, or any applicable law, administrative
regulation or administrative or court decree.
(xxvii) No labor dispute with the employees of the Company, the MHC
or the Bank exists or, to the knowledge of the Company, the MHC or the
Bank, is imminent or threatened; and the Company, the MHC and the Bank are
not aware of any existing or threatened labor disturbance by the employees
of any of its principal suppliers or contractors which might be expected
to result in any Material Adverse Effect.
(xxviii) Each of the Company, the MHC and the Bank has good and
marketable title to all of its properties and assets for which ownership
is material to the business of the Company, the MHC or the Bank 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 MHC or the Bank, considered as one
enterprise; and all of the leases and subleases material to the business
of the Company, the MHC or the Bank under which the Company, the MHC or
the Bank hold properties, including those described in the Prospectus, are
valid and binding agreements of the Company, the MHC or the Bank,
9
in full force and effect, enforceable in accordance with their terms
except as may be limited by bankruptcy, insolvency or other laws affecting
the enforceability of the rights of creditors generally and the
availability of equitable remedies.
(xxix) None of the Company, the MHC or the Bank is in violation of
any order or directive from the Department, the FDIC, the FRB, the
Commission or any regulatory authority to make any material change in the
method of conducting its respective businesses; the Company, the MHC and
the Bank, have conducted and are conducting their business so as to comply
with all applicable statutes, regulations and administrative and court
decrees (including, without limitation, all regulations, decisions,
directives and orders of the Department, the FDIC, the FRB and the
Commission). Neither the Company, the MHC nor the Bank is subject or is
party to, or has received any notice or advice that any of them may become
subject or party to, any investigation with respect to any
cease-and-desist order, agreement, consent agreement, memorandum of
understanding or other regulatory enforcement action, proceeding or order
with or by, or is a party to any commitment letter or similar undertaking
to, or is subject to any directive by, or has been a recipient of any
supervisory letter from, or has adopted any board resolutions at the
request of, any Regulatory Agency (as defined below) that currently
restricts the conduct of their business or that in any manner relates to
their capital adequacy, their credit policies, their management or their
business (each, a "Regulatory Agreement"), nor has the Company, the MHC or
the Bank been advised by any Regulatory Agency that it is considering
issuing or requesting the issuance of any such Regulatory Agreement; and
there is no unresolved violation, criticism or exception by any Regulatory
Agency with respect to any report or statement relating to any
examinations of the Company, the MHC or the Bank which is expected to have
a Material Adverse Effect, or which might materially and adversely affect
the properties or assets thereof or which might adversely affect the
consummation of the Offerings or the performance of this Agreement. As
used herein, the term "Regulatory Agency" means any federal or state
agency charged with the supervision or regulation of depositary
institutions or holding companies of depositary institutions, or engaged
in the insurance of depositary institution deposits, or any court,
administrative agency or commission or other governmental agency,
authority or instrumentality having supervisory or regulatory authority
with respect to the Company, the MHC or the Bank.
(xxx) There is no action, suit or proceeding before or by any court
or governmental agency or body, domestic or foreign, now pending, or, to
the knowledge of the Company, the MHC, or the Bank, threatened, against or
affecting the Company, the MHC or the Bank which is required to be
disclosed in the Registration Statement (other than as disclosed therein),
or which might have a Material Adverse Effect, or which might materially
and adversely affect the properties or assets thereof, or which might
adversely affect the consummation of the Offerings, or the performance of
this Agreement; all pending legal or governmental proceedings to which
Company, the MHC or the Bank 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.
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(xxxi) The Company, MHC and the Bank have obtained (i) an opinion of
its counsel, Elias, Matz, Xxxxxxx & Xxxxxxx L.L.P., with respect to the
legality of the Securities to be issued and certain federal income tax
consequences of the Offerings and the Plan, and (ii) the opinion of Elias,
Matz, Xxxxxxx & Xxxxxxx L.L.P. with respect to the certain state and local
income tax consequences of the Offerings and the Plan, copies of which are
filed as exhibits to the Registration Statement; all material aspects of
the aforesaid opinions are accurately summarized in the Prospectus under
"The Offering - Tax Aspects," the facts and representations upon which
such opinions are based are truthful, accurate and complete in all
material respects; and neither the Company, the MHC, nor the Bank has
taken or will take any action inconsistent therewith.
(xxxii) The Company is not and, upon completion of the
Reorganization and the Offerings and sale of the Securities and the
application of the net proceeds therefrom, will not be, required to be
registered as an "investment company" as that term is defined under the
Investment Company Act of 1940, as amended.
(xxxiii) 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, business affairs
or prospects of the Company, the MHC and the Bank, considered as one
enterprise.
(xxxiv) To the knowledge of the Company, the MHC and the Bank, with
the exception of the intended loan to the Bank's ESOP by the Company to
enable the ESOP to purchase up to [8.0]% of the Securities sold in the
Offerings, none of the Company, the MHC, the Bank or their employees has
made any payment of funds of the Company, the MHC or 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.
(xxxv) Each of the Company, the MHC and the Bank maintains a system
of internal accounting controls sufficient to provide reasonable assurance
that (a) transactions are executed in accordance with management's general
or specific authorizations; (b) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset accountability; (c)
access to assets is permitted only in accordance with management's general
or specific authorization; and (d) the recorded accountability for assets
is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
(xxxvi) The Company, the MHC and the Bank are in compliance 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.
11
The Bank has established compliance programs to ensure compliance with the
requirements of the USA Patriot Act and all applicable regulations
promulgated thereunder. The Bank is in compliance with the USA Patriot Act
and all applicable regulations promulgated thereunder, and there is no
charge, investigation, action, suit or proceeding before any court,
regulatory authority or governmental agency or body pending or, to the
best knowledge of the Company, the MHC, and the Bank, threatened regarding
the Bank's compliance with the USA Patriot Act or any regulations
promulgated thereunder.
(xxxvii) None of the Company, the MHC or the Bank nor any properties
owned or operated by the Company, the MHC or the Bank is in violation of
or liable under any Environmental Law (as defined below). There are no
actions, suits or proceedings, or demands, claims, notices or
investigations (including, without limitation, notices, demand letters or
requests for information from any environmental agency) instituted or
pending, or to the knowledge of the Company, the MHC or the Bank
threatened, relating to the liability of any property owned or operated by
the Company, the MHC or the Bank, under any Environmental Law, except for
such actions, suits or proceedings, or demands, claims, notices or
investigations that, individually or in the aggregate, would not have a
Material Adverse Effect. 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.
(xxxviii) The Company, the MHC and the Bank have filed all federal,
state and local income and franchise tax returns required to be filed and
have made timely payments of all taxes shown as due and payable in respect
of such returns, and no deficiency has been asserted with respect thereto
by any taxing authority. No tax deficiency has been asserted, and the
Company, the MHC and the Bank have no knowledge of any tax deficiency
which could be asserted against the Company, the MHC or the Bank.
(xxxix) The Company has received all approvals required to
consummate the Offerings, and to have the Securities quoted on the Nasdaq
National Market effective as of the Closing Time referred to in Section 2
hereof.
(xl) The Company has filed a registration statement for the
Securities under Section 12(g) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and such registration statement was declared
effective concurrent with the effectiveness of the Registration Statement.
12
(xli) There are no affiliations or associations (as such terms are
defined by the National Association of Securities Dealers, Inc. ("NASD"))
between any member of the NASD and any of the MHC's, Company's or Bank's
officers or directors.
(xlii) The Company, the MHC and the Bank carries, or is covered by,
insurance in such amounts and covering such risks as is adequate for the
conduct of their respective businesses and the value for their respective
properties as is customary for companies engaged in similar industries.
(xliii) The Company, the MHC and the Bank have not relied on Agent
or its counsel for any legal, tax or accounting advice in connection with
the Offerings.
(xliv) The records of eligible account holders, supplemental
eligible account holders, and other depositors are accurate and complete
in all material respects.
(xlv) Each of the Company, the MHC and the Bank is in compliance
with all presently applicable provisions of the Employee Retirement Income
Security Act of 1974, as amended, including the regulations and published
interpretations thereunder ("ERISA"); no "reportable event" (as defined in
ERISA) has occurred with respect to any "pension plan" (as defined in
ERISA) for which the Company, the MHC or the Bank, respectively, would
have any liability; each of the Company, the MHC and the Bank has not
incurred and does expect to incur liability under (i) Title IV of ERISA
with respect to termination of, or withdrawal from, any "pension plan" or
(ii) Sections 412 or 4971 of the Internal Revenue Code of 1986, as
amended, including the regulations and published interpretations
thereunder (the "Code"); and each "pension plan" for which the Company,
the MHC and the Bank would have any liability that is intended to be
qualified under Section 401(a) of the Code is so qualified and nothing has
occurred, whether by action or by failure to act, which would cause the
loss of such qualification.
(xlvi) The Company is in compliance with the applicable provisions
of the Xxxxxxxx-Xxxxx Act, the rules and regulations of the Commission
thereunder, and the Nasdaq corporate governance rules applicable to the
Company, and will use its best efforts to comply with those provisions of
the Xxxxxxxx-Xxxxx Act and the Nasdaq corporate governance rules that will
become effective in the future upon their effectiveness.
(b) Any certificate signed by any officer of the Company, the MHC
or the Bank and delivered to either of the Agent or counsel for the Agent
shall be deemed a representation and warranty by the Company, the MHC or
the Bank to the Agent as to the matters covered thereby.
13
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 Offerings. On the basis of the representations and warranties
herein contained, and subject to the terms and conditions herein set forth,
Sandler X'Xxxxx accepts such appointment and agrees to use its best efforts to
assist the Company with the solicitation of subscriptions and purchase orders
for Securities in accordance with this Agreement; provided, however, that the
Agent shall not be obligated to take any action which is inconsistent with any
applicable laws, regulations, decisions or orders. The services to be rendered
by Sandler X'Xxxxx pursuant to this appointment include the following: (i)
consulting as to the securities marketing implications of any aspect of the Plan
or related corporate documents; (ii) reviewing with the Board of Directors of
the Company, the MHC and the Bank financial and securities marketing
implications of the Appraiser's appraisal of the Common Stock; (iii) reviewing
all offering documents, including the Prospectus, stock order forms and related
offering materials (it being understood that preparation and filing of such
documents is the sole responsibility of the Company and the Bank and their
counsel); (iv) assisting in the design and implementation of a marketing
strategy for the Offerings; (v) assisting management of the Company and the Bank
in preparing for meetings with potential investors and broker-dealers; and (vi)
providing such other general advice and assistance regarding financial and
marketing aspects of the Offering as may be requested to promote the successful
completion of the Offering.
The appointment of the Agent hereunder shall terminate upon the earlier to
occur of (a) forty-five (45) days after the last day of the Subscription and
Community Offering, unless the Company and the Agent agree in writing to extend
such period and the Department and the FDIC agree to extend the period of time
in which the Securities may be sold, or (b) the receipt and acceptance of
subscriptions and purchase orders for all of the Securities, or (c) the
completion of the Syndicated Community Offering.
If any of the Securities remain available after the expiration of the
Subscription and Community Offering, at the request of the Company and the Bank,
Sandler X'Xxxxx will seek to form a syndicate of registered brokers or dealers
("Selected Dealers") to assist in the solicitation of purchase orders of such
Securities on a best efforts basis. Sandler X'Xxxxx will endeavor to limit the
aggregate fees to be paid by the Company, the MHC and the Bank 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 Sandler X'Xxxxx and Selected Dealers shall not exceed 7.0% of
the aggregate dollar amount of the Securities sold in the Syndicated Community
Offering by such Selected Dealers. Sandler X'Xxxxx will endeavor to distribute
the Securities among the Selected Dealers in a fashion which best meets the
distribution objective of the Company and the Bank, which may result in limiting
the allocation of stock to certain Selected Dealers. It is understood that in no
14
event shall Sandler X'Xxxxx be obligated to act as a Selected Dealer or to take
or purchase any Securities.
If any of the Securities remain available after the expiration of the
Offerings, the Company agrees to offer the Agent the first right to act as lead
managing underwriter for the Public Offering. The terms of the Public Offering
will be set forth in a separate definitive purchase agreement in a form
satisfactory to Sandler X'Xxxxx and containing customary representations,
warranties, conditions, agreements and indemnities, which purchase agreement,
when executed, will supersede and replace this Agreement with respect to
Securities sold thereunder (the "Purchase Agreement"). This Agreement is not
intended to constitute, and should not be construed as, an agreement or
commitment between the Company, the Bank and Sandler X'Xxxxx relating to the
firm commitment underwriting of any securities, and Sandler X'Xxxxx may, in its
sole judgment and discretion, determine at any time not to proceed with the
proposed firm commitment underwriting. Such proposed underwriting will be
subject, among other things, to: (i) satisfactory completion by Sandler X'Xxxxx
of such due diligence investigation or inquiries as it may deem appropriate,
(ii) market conditions, which, in the sole judgment of Sandler X'Xxxxx, shall be
satisfactory, and (iii) the execution and delivery of a definitive Purchase
Agreement.
In the event the Company is unable to sell at least the total minimum of
the Securities, as set forth on the cover page of the Prospectus, within the
period herein provided, this Agreement shall terminate and the Company shall
refund to any persons who have subscribed for any of the Securities the full
amount which it may have received from them, together with interest as provided
in the Prospectus, and no party to this Agreement shall have any obligation to
the others hereunder, except for the obligations of the Company, the MHC 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 Elias, Matz, Xxxxxxx & Xxxxxxx, L.L.P., at 10:00 a.m., Eastern time,
or at such other place and time as shall be agreed upon by the parties hereto,
on a business day to be agreed upon by the parties hereto. The Company shall
notify the Agent by telephone, confirmed in writing, when funds shall have been
received for all 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."
15
The Company will pay any stock issue and transfer taxes which may be
payable with respect to the sale of the Securities.
In addition to the reimbursement of the expenses specified in Section 4
hereof, the Agent will receive the following compensation for its services
hereunder:
(a) One percent (1.00%) of the aggregate purchase price of the
Securities sold in the Subscription and Community Offering, excluding in each
case shares purchased by (i) any employee benefit plan of the Company or the
Bank established for the benefit of their respective directors, officers and
employees, and (ii) any director, officer or employee of the Company or the Bank
or members of their immediate families; and
(b) With respect to any Securities sold by a National Association of
Securities Dealers, Inc. ("NASD") member firm (other than Sandler X'Xxxxx) in
the Syndicated Community Offering, (i) the compensation payable to Selected
Dealers, (ii) any sponsoring dealer's fees; and (iii) a management fee to
Sandler X'Xxxxx of one percent (1.00%) of the aggregate purchase price of the
Securities sold in the Syndicated Community Offering. 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 seven percent (7.00%) of the purchase price
of the Securities sold by Sandler X'Xxxxx and other NASD member firms.
If this Agreement is terminated by the Agent in accordance with the
provisions of Section 9(a) hereof, no fee shall be payable by the Company to
Sandler X'Xxxxx; provided, however, that 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. In addition, the Company
shall be obligated to pay the fees and expenses as contemplated by the
provisions of Section 4 hereof in the event of any such termination.
All fees payable to the Agent hereunder shall be payable in immediately
available funds at Closing Time, or upon the termination of this Agreement, as
the case may be. In recognition of the long lead times involved in the
conversion process, the Bank agrees to make advance payments to the Agent in the
aggregate amount of $30,000, $30,000 of which has been previously paid, which
shall be credited against any fees or reimbursement of expenses payable
hereunder and any unapplied portions thereof shall be returned by the Agent to
the Bank.
SECTION 3. COVENANTS OF THE COMPANY, THE MHC AND THE BANK. The Company,
the MHC and the Bank covenant with the Agent as follows:
(a) The Company, the MHC and the Bank will prepare and file such
amendments or supplements to the Registration Statement, the Prospectus, the
Proxy Statement, the Interagency Merger Application, the Applications and the
Bank Holding Company Application as may hereafter be required by the Securities
Act, the Securities Act Regulations, the Reorganization Regulations, the BHCA or
the regulations promulgated thereunder, or as may hereafter be requested by the
Agent. Following completion of the Subscription and Community Offering, in the
event of a Syndicated Community Offering,
16
the Company, the MHC and the Bank will (i) promptly prepare and file with the
Commission a post-effective amendment to the Registration Statement relating to
the results of the Subscription and Community Offering, any additional
information with respect to the proposed plan of distribution and any revised
pricing information or (ii) if no such post-effective amendment is required,
will file with the Commission a prospectus or prospectus supplement containing
information relating to the results of the Subscription and Community Offering
and pricing information pursuant to Rule 424 of the Securities Act Regulations,
in either case in a form acceptable to the Agent. The Company, the MHC 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 Applications, the Interagency Merger Application or the Bank
Holding Company Application, (ii) of the receipt of any comments from the FDIC,
the Department, the FRB or the Commission with respect to the transactions
contemplated by this Agreement or the Applications, the Interagency Merger
Application or the Bank Holding Company Application, (iii) of any request by the
Commission, the FDIC, the Department or the FRB for any amendment to the
Registration Statement or the Applications, the Interagency Merger Application
or the Bank Holding Company Application or any amendment or supplement to the
Prospectus or for additional information, (iv) of the issuance by the FDIC, the
Department or the FRB 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, the MHC and the Bank will take all necessary action to prevent the
issuance of any stop order and, if any stop order is issued, to obtain the
lifting thereof at the earliest possible moment.
(b) The Company, the MHC and the Bank will give the Agent notice of its
intention to file or prepare any amendment to the Applications, the Interagency
Merger Application or the Bank Holding Company Application or Registration
Statement (including any post-effective amendment) or any amendment or
supplement to the Prospectus (including any revised prospectus which the Company
proposes for use in connection with the Syndicated Community Offering of the
Securities which differs from the prospectus on file at the Commission at the
time the Registration Statement becomes effective, whether or not such revised
prospectus is required to be filed pursuant to Rule 424(b) of the Securities Act
Regulations), will furnish the Agent with copies of any such amendment or
supplement a reasonable amount of time prior to such proposed filing or use, as
the case may be, and will not file any such amendment or supplement or use any
such prospectus to which the Agent or counsel for the Agent may object.
(c) The Company, the MHC and the Bank will deliver to the Agent as many
signed copies and as many conformed copies of the Bank Holding Company
Application, the Interagency Merger Application, the Applications and the
Registration Statement as originally filed and of each amendment thereto
(including exhibits filed therewith or
17
incorporated by reference therein) as the Agent may reasonably request, and from
time to time such number of copies of the Prospectus as the Agent may reasonably
request.
(d) During the period when the Prospectus is required to be delivered,
the Company, the MHC and the Bank will comply, at their own expense, with all
requirements imposed upon them by the Department, the FDIC, the FRB, by the
Reorganization Regulations, the BHCA and the regulations promulgated thereunder
as from time to time in force, and by the Nasdaq National Market, the Securities
Act, the Securities Act Regulations, the Exchange Act, and the rules and
regulations of the Commission promulgated thereunder, including, without
limitation, Regulation M under the Exchange Act, so far as necessary to permit
the continuance of sales or dealing in shares of the Securities 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
Registration Statement or Prospectus in order to make the Prospectus not
misleading in the light of the circumstances existing at the time it is
delivered to a purchaser, the Company, the MHC and the Bank will forthwith amend
or supplement the Registration Statement or Prospectus (in form and substance
satisfactory to counsel for the Agent) so that, as so amended or supplemented,
the Registration Statement or Prospectus will not include an untrue statement of
a material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances existing at the time it is
delivered to a purchaser, not misleading, and the Company, the MHC 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, the MHC 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, the MHC 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 Reorganization Regulations may require and as the
Agent and the Company have agreed; provided, however, that none of the Company,
the MHC or the Bank shall be obligated to file any general consent to service of
process or to qualify as a foreign corporation in any jurisdiction in which it
is not so qualified. In each jurisdiction in which the Securities have been so
qualified, the Company, the MHC 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 Dealer 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 covering a twelve month period beginning
not later than the first day of
18
the Company's fiscal quarter next following the effective date of the
Registration Statement (as defined in Rule 158 of the Securities Act
Regulations) that will satisfy the provisions of Section 11(a) of the Securities
Act.
(i) During the period ending on the third anniversary of the expiration
of the fiscal year during which the closing of the transactions contemplated
hereby occurs, the Company will furnish to its stockholders as soon as
practicable after the end of each such fiscal year an annual report (including
consolidated statements of financial condition and consolidated statements of
income, stockholders' equity and cash flows, certified by independent public
accountants) and, as soon as practicable after the end of each of the first
three quarters of each fiscal year (beginning with the fiscal quarter ending
after the effective date of the Registration Statement), the Company will make
available to its stockholders consolidated summary financial information of the
Company and the Bank 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 fifth anniversary of the expiration
of the fiscal year during which the closing of the transactions contemplated
hereby occurs, the Company will furnish to the Agent (i) as soon as publicly
available, a copy of each report or other document of the Company furnished
generally to stockholders of the Company or furnished to or filed with the
Commission under the Exchange Act or any national securities exchange or system
on which any class of securities of the Company is listed, and (ii) from time to
time, such other information concerning the Company as the Agent may reasonably
request.
(k) The Company, the MHC and the Bank will conduct the Reorganization
and the Offerings in all material respects in accordance with the Plan, the
Reorganization Regulations, the BHCA and the regulations promulgated thereunder,
the Securities Act Regulations and all other applicable regulations, decisions
and orders, including all applicable terms, requirements and conditions
precedent to the Offerings imposed upon the Company, the MHC or the Bank by the
Department, the FDIC, the FRB and the Commission.
(l) The Company, the MHC and the Bank will comply, at their own expense,
with all requirements imposed by the Commission, the Department, the FDIC, the
FRB and the Nasdaq National Market, or pursuant to the applicable Securities Act
Regulations, Reorganization Regulations, Department, FDIC, FRB and Nasdaq
National Market regulations, as from time to time in force.
(m) The Company will promptly inform the Agent upon its receipt of
service with respect to any litigation or administrative action instituted with
respect to the Offerings.
(n) Each of the Company and the Bank will use the net proceeds received
by it from the sale of the Securities in the manner specified in the Prospectus
under "Use of Proceeds."
19
(o) The Company will report the use of proceeds from the Offerings on
its first periodic report filed pursuant to Sections 13(a) and 15(d) of the
Exchange Act and on any subsequent periodic reports as may be required pursuant
to Rule 463 of the Securities Act Regulations.
(p) The Company will maintain the effectiveness of the Exchange Act
Registration Statement for not less than three years and will comply in all
material respects with its filing obligations under the Exchange Act. The
Company will use its best efforts to effect and maintain the listing of the
Common Stock on the Nasdaq National Market and, once listed on the Nasdaq
National Market, the Company will comply with all applicable corporate
governance standards required by the Nasdaq National Market. The Company will
file with the Nasdaq National Market all documents and notices required by the
Nasdaq National 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.
(q) 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 Rule 2790 of the National Association of Securities
Dealers, Inc.
(r) 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.
(s) During the period beginning on the date hereof and ending on the
later of the fifth anniversary of the Closing Time or the date on which the
Agent receives full payment in satisfaction of any claim for indemnification or
contribution to which it may be entitled pursuant to Sections 6 or 7,
respectively, none of the Company, the MHC or the Bank shall, without the prior
written consent of the Agent, take or permit to be taken any action that could
result in the Bank Common Stock becoming subject to any security interest,
mortgage, pledge, lien or encumbrance.
(t) The Company, the MHC and the Bank will comply with the conditions
imposed by or agreed to with the Department, the FDIC and the FRB in connection
with their approval of the Applications, the Interagency Merger Application and
the Bank Holding Company Application.
(u) During the period ending on the first anniversary of the Closing
Time, the Bank will comply with all applicable laws and regulations necessary
for the Bank to continue to be a "qualified thrift lender" within the meaning of
12 U.S.C. Section 1467a(m).
(v) The Company shall not deliver the Securities until the Company, the
MHC and the Bank have satisfied each condition set forth in Section 5 hereof,
unless such condition is waived by the Agent.
20
(w) The Company, the MHC and 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 Company which have been read by
Deloitte & Touche, LLP, as stated in their letters to be furnished pursuant to
subsections (f) and (g) of Section 5 hereof.
(x) Each of the Company, the MHC and the Bank will conduct its business
in compliance in all material respects with all applicable federal and state
laws, rules, regulations, decisions, directives and orders, including all
decisions, directives and orders of the Commission, the Nasdaq National Market,
the Department, the FDIC and the FRB.
(y) The Bank will not amend the Plan in any manner that would affect the
sale of the Securities or the terms of this Agreement without the consent of the
Agent.
(z) The Company, the MHC and the Bank will not, prior to the Closing
Time, incur any liability or obligation, direct or contingent, or enter into any
material transaction, other than in the ordinary course of business consistent
with past practice, except as contemplated by the Prospectus.
(aa) The Company, the MHC and the Bank will use all reasonable efforts to
comply with, or cause to be complied with, the conditions precedent to the
several obligations of the Agent specified in Section 5 hereof.
(bb) The Company, the MHC and the Bank will provide the Agent with any
information necessary to carry out the allocation of the Securities in the event
of an oversubscription, and such information will be accurate and reliable in
all material respects.
(cc) The Company, the MHC and the Bank will notify the Agent when funds
have been received for the minimum number of Securities set forth in the
Prospectus.
(dd) At the Closing Time, (i) the Company, the MHC and the Bank will have
completed the conditions precedent to the Reorganization and the Offerings in
accordance with the Plan, the applicable Reorganization Regulations and all
other applicable laws, regulations, decisions and orders, including all material
terms, conditions, requirements and provisions precedent to the Offerings
imposed upon the Company, the MHC or the Bank by the Commission, the Department,
the FDIC, the FRB or any other regulatory authority or Blue Sky authority, and
will comply with those which the regulatory authority permits to be completed
after the Reorganization and the Offerings; (ii) the Offerings will have been
effected in the manner described in the Prospectus and in accordance with the
Plan, the Reorganization Regulations and all other applicable material laws,
regulations, decisions and orders, including in compliance with all terms,
conditions, requirements and provisions precedent to the Offerings imposed upon
the Company, the MHC and the Bank by the Commission, the Department, the FRB,
the FDIC or any other regulatory or Blue Sky authority.
SECTION 4. PAYMENT OF EXPENSES. The Company, the MHC and the Bank jointly
and severally agree to pay all expenses incident to the performance of their
21
obligations under this Agreement, including but not limited to (i) the cost of
obtaining all securities and bank regulatory approvals, (ii) the preparation,
printing and filing of the Registration Statement and the Plan as originally
filed and of each amendment thereto, (iii) the preparation, issuance and
delivery of the certificates for the Securities purchased in the Offerings, (iv)
the fees and disbursements of the Company's, the MHC's and the Bank's counsel,
conversion agent, accountants, appraiser and other advisors, (v) the
qualification of the Securities under securities laws in accordance with the
provisions of Section 3(f) hereof, including filing fees and the fees and
disbursements of 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 (in such quantities as the Agent shall reasonably request), (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 Company, the MHC or the Bank, the Bank will reimburse
the Agent for such fees and expenses whether or not the Offerings are
consummated; provided, however, that the Agent shall not incur any substantial
expenses on behalf of the Company, the MHC or the Bank pursuant to this Section
without the prior approval of the Bank.
The Company, the MHC 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 Offerings are consummated, including
(i) the filing fees paid or incurred by the Agent in connection with all filings
with the NASD, and (ii) all reasonable out-of-pocket expenses incurred by the
Agent relating to the Offerings, including without limitation, fees and expenses
of the Agent's counsel, advertising, promotional, syndication and travel
expenses. All fees and expenses to which the Agent is entitled to reimbursement
under this paragraph of this Section 4 shall be due and payable upon receipt by
the Company, the MHC 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 MHC, 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, the MHC and the Bank herein
contained as of the date hereof and the Closing Time, to the accuracy of the
statements of officers and directors of the Company, the MHC and the Bank made
pursuant to the provisions hereof, to the performance by the Company, the MHC
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, Department, the FDIC, the
FRB or any state authority, 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 Commission or any state
22
authority, 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
Elias, Matz, Xxxxxxx & Xxxxxxx, L.L.P., counsel for the Company, the
MHC and the Bank, in form and substance satisfactory to counsel for
the Agent, to the effect that:
(i) Upon completion of the Reorganization, the Company
will be duly organized and validly existing as a stock holding
company chartered under the laws of the Commonwealth of
Pennsylvania; upon completion of the Reorganization, the MHC
will be duly organized and validly existing as a mutual
holding company chartered under the laws of the Commonwealth
of Pennsylvania; the Bank is duly organized and is validly
existing as a savings bank in mutual form chartered under the
laws of the Commonwealth of Pennsylvania and at the Closing
Time will be duly organized and validly existing in stock
form.
(ii) Each of the Company and the MHC, upon completion
of the Reorganization, will have, and the Bank 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 the Prospectus and to enter into
and perform its obligations under this Agreement and the
transactions contemplated hereby.
(iii) Each of the Company, the MHC and the Bank is duly
qualified as a domestic or foreign corporation to transact
business and is in good standing under the laws of the
Commonwealth of Pennsylvania 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.
(iv) The authorized capital stock of the Company
consists of 40,000,000 shares of Common Stock and 10,000,000
shares of preferred stock, par value $.01 per share, of which
no shares are issued and outstanding; upon consummation of the
Reorganization and the Offerings the authorized, issued and
outstanding capital stock of the Company will be within the
range set forth in the Prospectus under "Capitalization" and
no shares have been or will be issued prior thereto.
(v) The authorized capital stock of the Bank consists
of _________shares of common stock, par value $[.01] per
share, and
23
_____ shares of serial preferred stock, par value $[.01] per
share, of which no shares are issued and outstanding; upon
consummation of the Offerings, the issued and outstanding
capital stock of the Bank will be _____ shares of common
stock, all of which will be owned beneficially and of record
by the Company free and clear of any security interest,
mortgage, pledge, lien, encumbrance or legal or equitable
claim. When issued in accordance with the Plan, all of the
issued and outstanding capital stock of the Bank has been duly
authorized, validly issued, fully paid and nonassessable and
issued in compliance with all federal and state securities
laws.
(vi) The Securities have been duly and validly
authorized for issuance and sale; the Securities, when issued
and delivered by the Company pursuant to the Plan against
payment of the consideration calculated as set forth in the
Plan, will be duly and validly issued and fully paid and
nonassessable.
(vii) The issuance of the Securities is not subject to
preemptive or other similar rights arising by operation of the
law or, to counsel's knowledge after due inquiry, otherwise,
except for subscription rights granted pursuant to the Plan.
(viii) The issuance of the Securities is in compliance
with all conditions imposed upon the Company, the MHC and the
Bank by the Department, the FDIC and the FRB under the terms
of their written approval or notice of intention not to
object, as applicable.
(ix) Upon completion of the Reorganization, each of the
Company and the MHC will be registered as a bank holding
company under the BHCA.
(x) The Bank is a member in good standing of the
Federal Home Loan Bank of Pittsburgh and the deposit accounts
of the Bank are insured by the FDIC up to the applicable
limits.
(xi) The Applications, including the Plan, have been
duly approved by the Department and the FDIC; the FRB has
approved the Bank Holding Company Application and the purchase
by the Company of all of the issued and outstanding capital
stock of the Bank; the FDIC has duly approved the Interagency
Merger Application and the purchase by the Company of all of
the issued and outstanding capital stock of the Bank; such
approvals remain in full force and effect and no action is
pending, or to the best of such counsel's knowledge,
threatened respecting the Applications, including the Plan,
the Bank Holding Company Application and the Interagency
Merger Application; each of the Applications, the Bank Holding
Company Application and the Interagency Merger
24
Application complies with the applicable requirements of the
Department, the FDIC, the FRB and the BHCA, includes all
documents required to be filed as exhibits thereto, and is, to
the best of such counsel's knowledge after due inquiry,
truthfully, accurate and complete and the Company is duly
authorized to own all of the issued and outstanding capital
stock of the Bank to be issued pursuant to the Plan.
(xii) The execution and delivery of this Agreement, the
incurrence of the obligations herein set forth, and the
consummation of the transactions contemplated hereby, (A) have
been duly and validly authorized by all necessary action on
the part of each of the Company, the MHC and the Bank, and
this Agreement constitutes the legal, valid and binding
agreement of each of the Company, the MHC and the Bank,
enforceable in accordance with its terms, except as rights to
indemnity and contribution hereunder may be limited under
applicable law (it being understood that such counsel may
avail itself of customary exceptions concerning the effect of
bankruptcy, insolvency or similar laws and the availability of
equitable remedies); (B) will not result in any violation of
the provisions of the certificate of incorporation,
reorganization certificate, articles of incorporation or
charter, as the case may be, or bylaws of the Company, the MHC
or the Bank; and, (C) will not conflict with or constitute a
breach of, or default under, and no event has occurred which,
with notice or lapse of time or both, would constitute a
default under, or result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the
Company, the MHC or the Bank, pursuant to any contract,
indenture, mortgage, loan agreement, note, lease or other
instrument to which the Company, the MHC or the Bank 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 MHC or the Bank is
subject, that, individually or in the aggregate, would have a
Material Adverse Effect.
(xiii) The Prospectus and the Proxy Statement have been
duly authorized by the Department and the FDIC for final use
pursuant to the Reorganization Regulations and no action has
been taken or is pending, or to the best of such counsel's
knowledge after due inquiry, is threatened, by the Department
or the FDIC to revoke such authorization.
(xiv) The Registration Statement is effective under the
Securities Act and no stop order suspending the effectiveness
of the Registration Statement has been issued under the
Securities Act or, proceedings therefor initiated or, to the
best of such counsel's knowledge, threatened by the
Commission.
25
(xv) 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
Plan, except as may be required under the securities or "Blue
Sky" laws of various jurisdictions as to which no opinion need
be rendered.
(xvi) 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 Reorganization
Regulations.
(xvii) 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.
(xviii) There are no legal or governmental proceedings
pending or threatened against or affecting the Company, the
MHC or the Bank 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 Company,
the MHC or the Bank is a party or to which any of their
property is subject which are not described in the
Registration Statement, including ordinary routine litigation
incidental to the business, are, considered in the aggregate,
not material.
(xix) The information in the Prospectus under "Risk
Factors - Prudential Mutual Holding Company will own a
majority of Prudential Bancorp's outstanding common stock and
will be able to control the result of most matters put to a
vote of Prudential Bancorp's shareholders," "- Our common
stock value may suffer from anti-takeover provisions that may
impede potential takeovers that management opposes," "Our
Policy Regarding Dividends," "Regulation," "Taxation," "The
Offering," "Restrictions on Acquisition of Prudential Bancorp
and Prudential Savings Bank and Related Anti-takeover
Provisions" "Description of Prudential Bancorp Capital Stock,"
and "Legal and Tax Opinions" to the extent that it constitutes
matters of law, summaries of legal matters, documents or
proceedings, or legal conclusions, has been reviewed by them
and is complete and accurate in all material respects.
(xx) To the best of such counsel's knowledge, there are
no contracts, indentures, mortgages, loan agreements, notes,
leases or
26
other instruments required to be described or referred to in
the Registration Statement and Prospectus or to be filed as
exhibits thereto other than those described or referred to
therein or filed as exhibits thereto and the descriptions
thereof or references thereto are correct, and no default
exists, and in 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,
agreements, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or other
instrument so described, referred to or filed.
(xxi) The Plan has been duly authorized by the Boards of
Directors of the Company, the MHC and the Bank and approved by
the requisite vote of the Bank's members, and the Department's
and the FDIC's approval of the Plan remains in full force and
effect; the Company, the MHC and the Bank have conducted the
Reorganization and the Offerings in all material respects in
accordance with applicable requirements of the Reorganization
Regulations, the Plan and all other applicable regulations,
decisions and orders thereunder, including all material
applicable terms, conditions, requirements and conditions
precedent to the Offerings imposed upon the Company, the MHC
or the Bank by the Department or the FDIC and, no order has
been issued by the Department or the FDIC to suspend the
Reorganization and the Offerings and no action for such
purpose has been instituted or threatened by the Department or
the FDIC; and, to the best of such counsel's knowledge after
due inquiry, no person has sought to obtain review of the
final action of the Department or the FDIC in approving the
Applications (each of which includes the Plan).
(xxii) To the best of such counsel's knowledge after due
inquiry, the Company, the MHC and the Bank have obtained all
licenses, permits and other governmental approvals and
authorizations currently required for the conduct of their
respective businesses as described in the Registration
Statement and Prospectus, and all such licenses, permits and
other governmental authorizations are in full force and
effect, and the Company, the MHC and the Bank are in all
material respects complying therewith.
(xxiii) (A) None of the Company, the MHC or the Bank is
in violation of their respective certificates of
incorporation, organization certificate, articles of
incorporation or charter, as the case may be, or bylaws and
(B) to the best of such counsel's knowledge, the Company, the
MHC and the Bank are not 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
27
any obligation, agreement, covenant or condition contained in
any contract, indenture, mortgage, loan agreement, note, lease
or other instrument to which the Company, the MHC or the Bank
is a party or by which the Company, the MHC, the Bank or any
of their property may be bound.
(xxiv) The Company is in compliance with the applicable
provisions of the Xxxxxxxx-Xxxxx Act.
(xxv) The Company is not and, upon completion of the
Reorganization and the Offerings and the sale of the Common
Stock and the application of the net proceeds therefrom, will
not be required to be registered as an investment company
under the Investment Company Act of 1940.
(2) The favorable opinion, dated as of Closing Time, of
Xxxxxxx Xxxxxx Xxxxxxxx & Xxxxxxx LLP, counsel for the Agent, with
respect to the matters set forth in Section 5(b)(1)(i), (iv), (v),
(vi), (vii), (ix), (xi), (xii), (xiii), (xiv), (xv) and (xvi) and
such other matters as the Agent may reasonably require.
(3) In addition to giving their opinions required by
subsections (b)(l) and (b)(2), respectively, of this Section, Elias,
Matz, Xxxxxxx & Xxxxxxx, L.L.P. and Xxxxxxx Xxxxxx Xxxxxxxx &
Aguggia LLP 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, Elias, Matz, Xxxxxxx & Xxxxxxx, L.L.P. and
Xxxxxxx Xxxxxx Xxxxxxxx & Xxxxxxx LLP may rely as to matters of fact on
certificates of officers and directors of the Company, the MHC and the Bank and
certificates of public officials, and Xxxxxxx Xxxxxx Xxxxxxxx & Xxxxxxx LLP may
also rely on the opinion of Elias, Matz, Xxxxxxx & Xxxxxxx, L.L.P. with respect
to matters set forth in paragraphs (i), (iv), (v), (vi), (vii), (ix), (xii),
(xiii), (xiv), (xv) and (xvi).
(c) At Closing Time referred to in Section 2, the Company, the MHC and
the Bank shall have completed in all material respects the conditions precedent
to the Reorganization and the Offerings in accordance with the Plan, the
applicable Reorganization Regulations and all other applicable laws,
regulations, decisions and orders, including all terms, conditions, requirements
and
28
provisions precedent to the Reorganization and the Offerings imposed upon the
Company, the MHC or the Bank by the Department or the FDIC, or any other
regulatory authority other than those which the Department or the FDIC permits
to be completed after the Reorganization and the Offerings.
(d) At Closing Time, there shall not have been, since the date hereof or
since the respective dates as of which information is given in the Registration
Statement and the Prospectus, any material adverse change in the financial
condition, results of operations, business affairs or prospects of the Company,
the MHC and the Bank, considered as one enterprise, whether or not arising in
the ordinary course of business consistent with past practice, and the Agent
shall have received a certificate of the President and Chief Executive Officer
of the Company, of the MHC and of the Bank and the chief financial or chief
accounting officer of the Company, of the MHC 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, the MHC or the Bank from the latest date as of which the financial
condition of the Company, the MHC or the Bank, as set forth in the Registration
Statement and the Prospectus other than transactions referred to or contemplated
therein and transactions in the ordinary course of business consistent with past
practice (iii) neither the Company, the MHC nor the Bank shall have received
from the Department any order or direction (oral or written) to make any
material change in the method of conducting its business with which it has not
complied (which order or direction, if any, shall have been disclosed in writing
to the Agent) or which materially and adversely would affect the business,
financial condition, results of operations or prospects of the Company, the MHC
or the Bank, considered as one enterprise, (iv) the representations and
warranties in Section 1 hereof are true and correct with the same force and
effect as though expressly made at and as of the Closing Time, (v) each of the
Company, the MHC and the Bank has complied with all agreements and satisfied all
conditions on its 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 Subscription and
Community Offering or 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 Department or the FDIC and no person
has sought to obtain regulatory or judicial review of the action of the
Department or the FDIC in approving the Plan in accordance with the
Reorganization Regulations nor has any person sought to obtain regulatory or
judicial review of the action of the Department or the FDIC in approving the
Plan.
(e) At the Closing Time, the Agent shall have received a certificate of
the Chief Executive Officer and President of the Company, of the MHC and of the
Bank and the Chief Financial Officer of the Company, of the MHC and of the Bank,
dated as of Closing Time, to the effect that (i) they have reviewed the contents
of the Registration Statement and the Prospectus; (ii) based on each of their
knowledge, the Registration Statement and the Prospectus do not contain any
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements made therein, in light of the circumstances
under which such statements were made, not misleading; (iii) based on each of
their knowledge, the financial statements and other financial information
included in the Registration Statement and the Prospectus fairly present the
financial condition and results of operations of the Bank as of and for the
dates and periods covered by the Registration Statement and the Prospectus; (iv)
they are responsible for establishing and maintaining internal controls; (v)
they have designed such internal controls to ensure that material
29
information relating to the Company, the MHC and the Bank is made known to them;
(vi) they have evaluated the effectiveness of their internal controls; and (vii)
they have disclosed to Deloitte & Touche, LLP and the audit committee (A) all
significant deficiencies in the design or operation of internal controls which
could adversely affect the Company's, the MHC's and the Bank's ability to
record, process, summarize, and report financial data, and have identified for
the Company's, the MHC's and the Bank's auditors any material weaknesses in
internal controls and (B) any fraud, whether or not material, that involves
management or other employees who have a significant role in the Company's, the
MHC's and the Bank's internal controls.
(f) At the time of the execution of this Agreement, the Agent shall have
received from Deloitte & Touche, LLP a letter dated such date, in form and
substance satisfactory to the Agent, to the effect that: (i) they are
independent public accountants with respect to the Company, the MHC and the Bank
within the meaning of the Code of Ethics of the AICPA, the Securities Act and
the Securities Act Regulations and the Reorganization Regulations, they are
registered with the PCAOB, and they are not in violation of the auditor
independence requirements of the Xxxxxxxx-Xxxxx Act; (ii) it is their opinion
that the consolidated financial statements and supporting schedules included in
the Registration Statement and covered by their opinions therein comply as to
form in all material respects with the applicable accounting requirements of the
Securities Act and the Securities Act Regulations; (iii) based upon limited
procedures as agreed upon by the Agent and Deloitte & Touche, LLP set forth in
detail in such letter, nothing has come to their attention which causes them to
believe that (A) the unaudited consolidated financial statements and supporting
schedules of the Company 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 Reorganization
Regulations or are not presented in conformity with generally accepted
accounting principles applied on a basis substantially consistent with that of
the audited consolidated 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 and Other Data" 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 (5) business days prior to the date of
this Agreement, there has been any increase in the consolidated long-term or
short-term debt of the Company or any decrease in consolidated total assets, the
allowance for loan losses, total deposits or net worth of the Company, in each
case as compared with the amounts shown in the consolidated statements of
financial conditions included in the Registration Statement or, (D) during the
period from December 31, 2003 to a specified date not more than five (5)
business days prior to the date of this Agreement, there were any decreases, as
compared with the corresponding period in the preceding fiscal 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 Company,
except in all instances for increases or decreases which the Registration
Statement and the Prospectus disclose have occurred or may occur; and (iv) in
addition to the examination referred to in their opinions and the limited
procedures referred to in clause (iii) above, they have carried out certain
specified procedures, not constituting an audit, with respect to certain
amounts, percentages and financial information which are included in the
Registration Statement and Prospectus and which are specified by the Agent, and
have found such amounts, percentages and financial information to be in
30
agreement with the relevant accounting, financial and other records of the
Company, the MHC and the Bank identified in such letter.
(g) At Closing Time, the Agent shall have received from Deloitte &
Touche, LLP a letter, dated as of Closing Time, to the effect that they reaffirm
the statements made in the letter furnished pursuant to subsection (f) of this
Section, except that the specified date referred to shall be a date not more
than five (5) business days prior to Closing Time.
(h) At Closing Time, the Securities shall have been approved for
quotation on the Nasdaq National Market upon notice of issuance.
(i) At Closing Time, the Agent shall have received a letter from the
Appraiser, dated as of the Closing Time, confirming its appraisal.
(j) At Closing Time, counsel for the Agent shall have been furnished
with such documents and opinions as they may require for the purpose of enabling
them to pass upon the issuance and sale of the Securities as herein contemplated
and related proceedings, or in order to evidence the accuracy of any of the
representations or warranties, or the fulfillment of any of the conditions,
herein contained; and all proceedings taken by the Company in connection with
the issuance and sale of the Securities as herein contemplated shall be
satisfactory in form and substance to the Agent and counsel for the Agent.
(k) At 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, the New York
Stock Exchange or the Nasdaq Stock Market shall not have been suspended, and
minimum or maximum prices for trading shall not have been fixed, or maximum
ranges for prices for securities have been required, by either of said Exchanges
or by order of the Commission or any other governmental authority, and a banking
moratorium shall not have been declared by either Federal, Pennsylvania or New
York authorities.
SECTION 6. INDEMNIFICATION.
(a) The Company, the MHC 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
Offerings or any action taken by the Agent where acting as agent of the
Company, the MHC or the Bank or otherwise as described in Section 2
hereof;
(ii) from and against any and all loss, liability, claim, damage
and expense whatsoever, as incurred, based upon or arising out of any
untrue
31
statement or alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), or the omission or
alleged omission therefrom of a material fact required to be stated
therein or necessary to make the statements therein not misleading or
arising out of any untrue statement or alleged untrue statement of a
material fact contained in the Proxy Statement or Prospectus (or any
amendment or supplement thereto) or the omission or alleged omission
therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading;
(iii) from and against any and all loss, liability, claim, damage
and expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or proceeding
by any governmental agency or body, commenced or threatened, or of any
claim whatsoever described in clauses (i) or (ii) above, if such
settlement is effected with the written consent of the Company, the MHC 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 or defending against any litigation, or any investigation,
proceeding or inquiry by any governmental agency or body, commenced or
threatened, or any claim pending or threatened whatsoever described in
clauses (i) or (ii) above, to the extent that any such expense is not paid
under clause (i), (ii) or (iii) above;
provided, however, that the indemnification provided for in this paragraph (a)
shall not apply to any loss, liability, claim, damage or expense to the extent
arising out of any untrue statement or alleged untrue statement of a material
fact contained in the Prospectus (or any amendment or supplement thereto) or the
omission or alleged omission therefrom of a material fact necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading which was made in reliance upon and in conformity with
the Agent Information.
(b) The Agent agrees to indemnify and hold harmless the Company, the MHC
and the Bank, their directors, each of their officers who signed the
Registration Statement, and each person, if any, who controls the Company within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act against any and all loss, liability, claim, damage and expense described in
the indemnity contained in subsection (a) of this Section, as incurred, but only
with respect to untrue statements or omissions, or alleged untrue statements or
omissions, of a material fact made in the Prospectus (or any amendment or
supplement thereto) in reliance upon and in conformity with the Agent
Information.
(c) Each indemnified party shall give notice as promptly as reasonably
practicable to each indemnifying party of any action commenced against it in
respect of which indemnity may be sought hereunder, but failure to so notify an
indemnifying party shall not relieve such indemnifying party from any liability
which it may have otherwise than on account of this indemnity agreement. An
indemnifying party may participate at its own expense in the defense of any such
action. In no event shall the indemnifying parties be liable for fees and
expenses of more than one counsel (in addition to no more than one local counsel
in each separate jurisdiction in which any action or proceeding is commenced)
separate from their own counsel for all indemnified parties in connection
32
with any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances.
(d) The Company, the MHC 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 MHC and its members, the Bank, the Company's, the MHC's or the
Bank'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 the 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 MHC, the Bank, the Agent or any of its
respective affiliates or any participant in the transactions contemplated hereby
in which the Agent or such person or agent is not named as a defendant, the
Company, the MHC, and the Bank, jointly and severally, agree to reimburse the
Agent and its partners, directors, officers, employees or agents for all
reasonable and necessary out-of-pocket expenses incurred by them in connection
with preparing or appearing as a witness or otherwise giving testimony and to
compensate the Agent and its partners, directors, officers, employees or agents
in an amount to be mutually agreed upon.
SECTION 7. CONTRIBUTION. In order to provide for just and equitable
contribution in circumstances in which the indemnity agreement provided for in
Section 6 hereof is for any reason held to be unenforceable by the indemnified
parties although applicable in accordance with its terms, the Company, the MHC,
the Bank, and the Agent shall contribute to the aggregate losses, liabilities,
claims, damages and expenses of the nature contemplated by said indemnity
agreement incurred by the Company, the MHC 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, the MHC 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, the MHC 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, the MHC and
the Bank on the one hand and the Agent on the other, as well as any other
relevant equitable considerations; provided, however, that no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this Section, each
person, if any, who controls the Agent within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act shall have the same rights to
contribution as the Agent, and each director of the Company, the MHC and the
Bank, each officer of the Company who signed the Registration Statement, and
each person, if any, who controls the Company, the MHC 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
33
Company, the MHC 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, the MHC 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, business affairs or prospects of the Company,
the MHC or the Bank, 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 the Nasdaq National Market, the American Stock Exchange or
the New York Stock Exchange has been suspended, or minimum or maximum prices for
trading have been fixed, or maximum ranges for prices for securities have been
required, by either of said Exchanges or by order of the Commission or any other
governmental authority, or if a banking moratorium has been declared by either
Federal, Pennsylvania 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 changes in the condition or
prospects of the Company, the MHC 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 the Appraiser is not reasonable or equitable under then
prevailing market conditions, or (vii) if the Offerings are not consummated on
or prior to __________________.
(b) If this Agreement is terminated pursuant to this Section, such
termination shall be without liability of any party to any other party except as
provided in Sections 2 and 4 hereof relating to the reimbursement of expenses
and except that the provisions of Sections 6 and 7 hereof shall survive any
termination of this Agreement.
SECTION 10. NOTICES. All notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the Agent
shall be directed to the Agent at 000 Xxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx
Xxxx 00000, attention of General Counsel, with a copy to Xxxxxxx Xxxxxx Xxxxxxxx
& Xxxxxxx LLP, Attn: Xxxx X. Xxxxxxx; notices to the Company, the MHC and the
Bank shall be directed to any of them at Prudential Bancorp, Inc. of
Pennsylvania, Attn: Xxxxxx X.
34
Vento, President and Chief Executive Officer, 0000 Xxxxxx Xxxxxx, Xxxxxxxxxxxx,
Xxxxxxxxxxxx 00000.
SECTION 11. PARTIES. This Agreement shall inure to the benefit of and be
binding upon the Agent, the Company, the MHC 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, the MHC and the Bank and their respective successors and the
controlling persons and the partners, officers and directors referred to in
Sections 6 and 7 and their heirs and legal representatives, any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision herein or therein contained. This Agreement and all conditions and
provisions hereof and thereof are intended to be for the sole and exclusive
benefit of the Agent, the Company, the MHC and the Bank and their respective
successors, and said controlling persons, partners, officers and directors and
their heirs, partners, 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 June 9, 2004, by and
between the Agent and the Bank, relating to the Agent's providing conversion
agent services to the Company and the Bank. No waiver, amendment or other
modification of this Agreement shall be effective unless in writing and signed
by the parties hereto.
SECTION 13. GOVERNING LAW AND TIME. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York applicable to
agreements made and to be performed in said State without regard to the
conflicts of laws provisions thereof. Unless otherwise noted, specified times of
day refer to Eastern time.
SECTION 14. SEVERABILITY. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of this
Agreement is so broad as to be unenforceable, the provision shall be interpreted
to be only so broad as is enforceable.
SECTION 15. HEADINGS. Sections headings are not to be considered part of
this Agreement, are for convenience and reference only, and are not to be deemed
to be full or accurate descriptions of the contents of any paragraph or
subparagraph.
[The next page is the signature page]
35
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 on the one hand, and the Company, the MHC and the Bank on the
other in accordance with its terms.
Very truly yours,
PRUDENTIAL BANCORP, INC. OF PENNSYLVANIA
By:________________________
Name:
Title:
PRUDENTIAL SAVINGS BANK
By:________________________
Name:
Title:
PRUDENTIAL MUTUAL HOLDING COMPANY
By:________________________
Name:
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:_______________________________
Name:
An Officer of the Corporation
