Exhibit 1.3
945,875 Shares
(subject to increase up to 1,087,756 shares
in the event of an oversubscription)
FLATBUSH FEDERAL BANCORP, INC.
(a federally chartered mid-tier stock holding company)
Common Stock
(par value $0.01 per share)
AGENCY AGREEMENT
______________ , 2003
SANDLER X'XXXXX & PARTNERS, L.P.
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Flatbush Federal Bancorp, Inc., a federally chartered mid-tier stock
holding company in formation (the "Company"), Flatbush Federal Bancorp, MHC, a
federally chartered mutual holding company in formation (the "MHC") and Flatbush
Federal Savings and Loan Association of Brooklyn, a federal savings and loan
association (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 945,875 shares (subject to increase up to 1,087,756
shares in the event of an oversubscription) of the Company's common stock, par
value $0.01 per share (the "Common Stock"). The shares of Common Stock to be
sold by the Company are hereinafter called the "Securities."
The Securities are being offered for sale in accordance with the plan
of conversion (the "Plan") adopted by the Board of Directors of the Bank
pursuant to which the Bank intends to reorganize from a federally chartered
mutual savings and loan association to a federally chartered stock savings bank
in the federal mutual holding company form of ownership and issue all of its
stock to the Company. As of the date hereof, the Company and the MHC are in
formation. Pursuant to the Plan, the Company is offering in a subscription
offering by way of nontransferable subscription rights, Common Stock for a
purchase price of $8.00 per share in descending order of priority to: (i)
depositors who had accounts at the Bank with aggregate balances of at least $50
at March 31, 2002; (ii) the Bank's tax qualified employee benefit plans,
including the Employee Stock Ownership Plan and Trust (the "ESOP")
(collectively, the "Employee Plans"); (iii) depositors who had accounts at the
Bank with aggregate balances of at least $50
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on June 30, 2003; and (iv) other depositors and borrower members of the Bank on
[voting record date], 2003 (the "Subscription Offering"). To the extent
Securities are not subscribed for in the Subscription Offering, such Securities
may be offered to certain members of the general public, with preference given
to certain natural persons residing in the counties in which the Bank's offices
are located, in a direct community offering (the "Community Offering" and
together with the Subscription Offering, as each may be extended or reopened
from time to time, the "Subscription and Community Offering") to be commenced
concurrently with, during or promptly after the Subscription Offering. It is
currently anticipated by the Bank, the Company and the MHC 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 conversion of the Bank from 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 stock by the MHC and
the Offerings are hereinafter referred to collectively as the "Reorganization."
It is acknowledged that the price of the Securities may be decreased and the
number of Securities to be sold in the Reorganization may be increased or
decreased as described in the Prospectus (as hereinafter defined). If the number
of Securities is increased or decreased in accordance with the Plan, the term
"Securities" shall mean such greater or lesser number, where applicable. In the
event that a holding company form of organization is not utilized, all pertinent
terms of this Agreement will apply to the conversion of the Bank from the mutual
to stock form of organization and the sale of the Bank's common stock.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form SB-2 (No. 333-106557), including
a related prospectus, for the registration of the Securities under the
Securities Act of 1933, as amended (the "Securities Act"), has filed such
amendments thereto, if any, and such amended prospectuses as may have been
required to the date hereof by the Commission in order to declare such
registration statement effective, and will file such additional amendments
thereto and such amended prospectuses and prospectus supplements as may
hereafter be required. Such registration statement (as amended to date, if
applicable, and as from time to time amended or supplemented hereafter) and the
prospectuses constituting a part thereof (including in each case all documents
incorporated or deemed to be incorporated by reference therein and the
information, if any, deemed to be a part thereof pursuant to the rules and
regulations of the Commission under the Securities Act, as from time to time
amended or supplemented pursuant to the Securities Act or otherwise (the
"Securities Act Regulations")), are hereinafter referred to as the "Registration
Statement" and the "Prospectus," respectively, except that if any revised
prospectus shall be used by the Company in connection with the Subscription 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.
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Concurrently with the execution of this Agreement, the Company is
delivering to the Agent copies of the Prospectus of the Company to be used in
the Subscription and Community Offering. Such prospectus contains information
with respect to the Bank, the Company, 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 Bank and the MHC, 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 Bank and the MHC
acknowledge appears only in the fifth sentence of the first paragraph
of the section captioned "Market for the Common Stock" and the second
paragraph of the section captioned "The Reorganization and the Stock
Offering - Plan of Distribution and Marketing Arrangements" of the
Prospectus).
(ii) The Company has filed with the Department of the
Treasury, Office of Thrift Supervision (the "OTS") the Company's
application for approval of its acquisition of the Bank (the "Holding
Company Application") on Form H-(e)1 promulgated under the savings and
loan holding company provisions of the Home Owners' Loan Act, as
amended ("HOLA") and the regulations promulgated thereunder. The
Company has received written notice from the OTS 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 OTS suspending or revoking such
approval and no proceedings therefor have been initiated or, to the
knowledge of the Company or the Bank, threatened by the OTS. At the
date of such approval and at the Closing Time referred to in Section 2,
the Holding Company Application complied and will comply in all
material respects with the applicable provisions of HOLA and the
regulations promulgated thereunder.
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(iii) Pursuant to the rules and regulations of the OTS
governing the reorganization of federally chartered mutual savings and
loan associations into the mutual holding company form of ownership
(the "MHC Regulations"), the Bank has filed with the OTS a Notice of
Mutual Holding Company Reorganization on Form MHC-1 and an Application
for Approval of a Minority Stock Issuance by a Savings Association
Subsidiary of a Mutual Holding Company on Form MHC-2, and has filed
such amendments thereto and supplementary materials as may have been
required to the date hereof (such application, as amended to date, if
applicable, and as from time to time amended or supplemented hereafter,
is hereinafter referred to as the "MHC Application"), including copies
of the Bank's Proxy Statement, dated ______________, 2003, relating to
the Reorganization (the "Proxy Statement"), and the Prospectus. The OTS
has, by letter dated __________, 2003, approved the MHC Application,
including the Proxy Statement and Prospectus, such approval remains in
full force and effect and no order has been issued by the OTS
suspending or revoking such approval and no proceedings therefor have
been initiated or, to the knowledge of the Company or the Bank,
threatened by the OTS. At the date of such approval and at the Closing
Time referred to in Section 2, the MHC Application complied and will
comply in all material respects with the applicable provisions of the
MHC Regulations.
(iv) At the time of their use, the Proxy Statement and any
other proxy solicitation materials will comply in all material respects
with the applicable provisions of the MHC Regulations and will not
contain an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
The Company, the Bank and the MHC will promptly file the Prospectus and
any supplemental sales literature with the Commission and the OTS. 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 MHC Regulations and,
at or prior to the time of their first use, will have received all
required authorizations of the OTS for use in final form.
(v) Neither the SEC nor the OTS has, by order or
otherwise, prevented or suspended the use of the Prospectus or any
supplemental sales literature authorized by the Company, the Bank or
the MHC for use in connection with the Offerings.
(vi) 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 MHC 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 OTS, or any other
regulatory authority, other than those which the regulatory authority
permits to be completed after the Reorganization.
(vii) R.P. Financial, which prepared the valuation of the
Bank as part of the Reorganization, has advised the Company, the MHC
and the Bank in writing that it satisfies all requirements for an
appraiser set forth in the MHC Regulations and any interpretations or
guidelines issued by the OTS with respect thereto. ___________, which
prepared the opinion filed as Exhibit ___ of the MHC Application as
required by the MHC Regulations, satisfies all requirements for an
"independent executive compensation expert" within the meaning of the
MHC Regulations.
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(viii) The accountants who certified the consolidated
financial statements and supporting schedules of the Bank included in
the Registration Statement have advised the Company, the Bank and the
MHC 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"), and such accountants are, with
respect to the Company, the Bank and each subsidiary of the Bank and
the MHC, independent certified public accountants as required by the
Securities Act and the Securities Act Regulations.
(ix) The only direct and indirect subsidiary of the Bank
is Flatbush Real Estate Investment Trust, Inc. (the "Subsidiary").
(x) The consolidated financial statements and the related
notes thereto included in the Registration Statement and the Prospectus
present fairly the financial position of the Company, the Bank, the
Subsidiary, and the MHC at the dates indicated and the results of
operations, retained earnings and cash flows for the periods specified,
and comply as to form in all material respects with the applicable
accounting requirements of the Securities Act Regulations and the MHC
Regulations; except as otherwise stated in the Registration Statement,
said financial statements have been prepared in conformity with
accounting principles generally accepted in the United States applied
on a consistent basis; and the supporting schedules and tables included
in the Registration Statement present fairly the information required
to be stated therein.
(xi) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as
otherwise stated therein (A) there has been no material adverse change
in the financial condition, results of operations, business affairs or
prospects of the Company, the Bank, the Subsidiary and the MHC,
considered as one enterprise, whether or not arising in the ordinary
course of business consistent with past practice, and (B) except for
transactions specifically referred to or contemplated in the
Prospectus, there have been no transactions entered into by the
Company, the Bank, the Subsidiary or the MHC, other than those in the
ordinary course of business consistent with past practice, which are
material with respect to the Company, the Bank, the Subsidiary and the
MHC, considered as one enterprise.
(xii) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the United
States with corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the Prospectus
and to enter into and perform its obligations under this Agreement; and
the Company is duly qualified as a foreign corporation to transact
business and is in good standing in the State of New York and in each
other jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of
business, except where the failure to so qualify would not have a
material adverse effect on the financial condition, results of
operations or business affairs or prospects of the Company, the Bank,
the Subsidiary and the MHC, considered as one enterprise. The Company
is a registered savings and loan holding company under HOLA.
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(xiii) The MHC has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the United
States of America with corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectus and to enter into and perform its obligations under this
Agreement; and the MHC is duly qualified as a foreign corporation to
transact business and is in good standing in the State of New York and
in each jurisdiction in which such qualification is required, whether
by reason of the ownership or leasing of property or the conduct of
business, except where the failure to so qualify would not have a
material adverse effect on the financial condition, results of
operations or business affairs of the Company, the Bank, the Subsidiary
and the MHC, considered as one enterprise. The MHC is a registered
savings and loan holding company under HOLA.
(xiv) Upon consummation of the Reorganization, the
authorized, issued and outstanding capital stock of the Company will be
as set forth in the Prospectus under "Capitalization" (except for
subsequent issuances, if any, pursuant to reservations, agreements or
employee benefit plans referred to in the Prospectus); no shares of
Common Stock or other capital stock of the Company have been or will be
issued and outstanding prior to the Closing Time referred to in Section
2; at the time of Reorganization, the Securities will have been duly
authorized for issuance and, when issued and delivered by the Company
pursuant to the Plan against payment of the consideration calculated as
set forth in the Plan and stated on the cover page of the Prospectus,
will be duly and validly issued and fully paid and non-assessable; the
terms and provisions of the Common Stock and the capital stock of the
Company conform to all statements relating thereto contained in the
Prospectus; the certificates representing the shares of Common Stock
conform to the requirements of applicable law and regulations; and the
issuance of the Securities is not subject to preemptive or other
similar rights.
(xv) 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.
(xvi) The Bank, as of the date hereof, is a federally
chartered savings and loan association in mutual form and upon
consummation of the Reorganization will be a federally chartered
savings and loan association in stock form, in both instances with full
corporate power and authority to own, lease and operate its properties
and to conduct its business as described in the Prospectus; the
Company, the Bank, the Subsidiary and the MHC have obtained all
licenses, permits and other governmental authorizations currently
required for the conduct of their respective businesses or required for
the conduct of their respective businesses as contemplated by the
Holding Company Application and the MHC Application, except where the
failure to obtain such licenses, permits or other governmental
authorizations would not have a material adverse effect on the
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financial condition, results of operations, business affairs or
prospects of the Company, the Bank, the Subsidiary and the MHC
considered as one enterprise; all such licenses, permits and other
governmental authorizations are in full force and effect and the
Company, the Bank, the Subsidiary and the MHC are in all material
respects in compliance therewith; neither the Company, the Bank, the
Subsidiary nor the MHC has received notice of any proceeding or action
relating to the revocation or modification of any such license, permit
or other governmental authorization which, singly or in the aggregate,
if the subject of an unfavorable decision, ruling or finding, might
have a material adverse effect on the financial condition, results of
operations, business affairs or prospects of the Company, the Bank, the
Subsidiary and the MHC, considered as one enterprise; and the Bank is
validly existing and in good standing under the laws of the United
States and is qualified to transact business as a foreign corporation
in any jurisdiction where the failure to so qualify would have a
material adverse effect on the financial condition, results of
operations, business affairs or prospects of the Company, the Bank, the
Subsidiary and the MHC considered as one enterprise.
(xvii) The deposit accounts of the Bank are insured by the
FDIC up to the applicable limits. Upon consummation of the
Reorganization, the liquidation account for the benefit of eligible
account holders and supplemental eligible account holders of the Bank
will be duly established in accordance with the requirements of the MHC
Regulations. The Bank is a "qualified thrift lender" within the meaning
of 12 U.S.C. Section 1467a(m).
(xviii) Upon consummation of the Reorganization, the
authorized capital stock of the Bank will be 9,000,000 shares of common
stock, par value $.01 per share (the "Bank Common Stock") and 1,000,000
shares of preferred stock, par value $.01 per share (the "Bank
Preferred Stock"), and the issued and outstanding capital stock of the
Bank will be [1,000] shares of Bank Common Stock and no shares of the
Bank Preferred Stock, and no shares of Bank Common Stock or Bank
Preferred Stock have been or will be issued prior to the Closing Time
referred to in Section 2; and as of the Closing Time referred to in
Section 2, all of the issued and outstanding capital stock of the Bank
will be duly authorized, validly issued and fully paid and
nonassessable and have been issued in compliance with all federal and
state securities laws. 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 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 and
the Bank Preferred 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.
(xix) The Subsidiary of the Bank has been duly incorporated
and is validly existing as a corporation in good standing under the
laws of the jurisdiction of its incorporation, has full corporate power
and authority to own, lease and operate its properties and to conduct
its business as described in the Registration Statement and Prospectus,
and is duly qualified to transact business and is in good standing in
each jurisdiction in which such qualification
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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 Bank, the Subsidiary and the MHC considered as one enterprise; the
activities of the Subsidiary are permitted to subsidiaries of a
federally chartered savings and loan association and a savings and loan
holding company by the rules, regulations, resolutions and practices of
the OTS; all of the issued and outstanding capital stock of the
Subsidiary has been duly authorized and validly issued, is fully paid
and nonassessable and is owned by the Bank, directly, free and clear of
any security interest, mortgage, pledge, lien, encumbrance or legal or
equitable claim; and there are no warrants, options or rights of any
kind to acquire shares of capital stock of the Subsidiary.
(xx) The Company, the MHC and the Bank have taken all
corporate action necessary for them to execute, deliver and perform
this Agreement, and this Agreement has been duly executed and delivered
by, and is the valid and binding agreement of, the Company, the MHC and
the Bank, enforceable in accordance with its terms, except as may be
limited by bankruptcy, insolvency or other laws affecting the
enforceability of the rights of creditors generally and judicial
limitations on the right of specific performance and except as the
enforceability of indemnification and contribution provisions may be
limited by applicable securities laws.
(xxi) Subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus
and prior to the Closing Time, except as otherwise may be indicated or
contemplated therein, none of the Company, the Bank, the Subsidiary or
the MHC 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 consistent 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 Bank, the Subsidiary and the MHC, considered as one
enterprise, excluding the origination, purchase and sale of loans or
the purchase or sale of investment securities or mortgaged-backed
securities in the ordinary course of business consistent with past
practice.
(xxii) 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 Agent,
except as may be required under the "blue sky" or state securities laws
of various jurisdictions.
(xxiii) Neither the Company, the Bank, the Subsidiary nor the
MHC is in violation of its certificate of incorporation, organization
certificate, articles of incorporation or charter, as the case may be,
or bylaws (and the Bank will not be in violation of its charter or
bylaws in stock form upon consummation of the Reorganization); and
neither the Company, the Bank, the Subsidiary nor the MHC 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
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any obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, loan agreement, note, lease or other
instrument to which the Company, the Bank, the Subsidiary or the MHC is
a party or by which it or any of them may be bound, or to which any of
the property or assets of the Company, the Bank, the Subsidiary or the
MHC is subject, except for such defaults that would not, individually
or in the aggregate, have a material adverse effect on the financial
condition, results of operations, business affairs or prospects of the
Company, the Bank, the Subsidiary and the MHC considered as one
enterprise; and there are no contracts or documents of the Company, the
Bank, the Subsidiary or the MHC which are required to be filed as
exhibits to the Registration Statement, the MHC Application or the
Holding Company Application which have not been so filed.
(xxiv) The consummation of 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 Bank, the Subsidiary and the MHC and do not and will not
conflict with or constitute a breach of, or default under, or result in
the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company, the Bank, the Subsidiary or the MHC
pursuant to, any contract, indenture, mortgage, loan agreement, note,
lease or other instrument to which the Company, the Bank, the
Subsidiary or the MHC is a party or by which it or any of them may be
bound, or to which any of the property or assets of the Company, the
Bank, the Subsidiary or the MHC is subject, except for such defaults
that would not, individually or in the aggregate, have a material
adverse effect on the financial condition, results of operations,
business affairs or prospects of the Company, the Bank, the Subsidiary
and the MHC considered as one enterprise; nor will such action result
in any violation of the provisions of the certificate of incorporation,
organization certificate, articles of incorporation or charter or
by-laws of the Company, the MHC, the Bank or the Subsidiary, or any
applicable law, administrative regulation or administrative or court
decree.
(xxv) No labor dispute with the employees of the Company,
the Bank, the Subsidiary or the MHC exists or, to the knowledge of the
Company, the MHC or the Bank, is imminent or threatened; and the
Company, the Bank and the MHC are not aware of any existing or
threatened labor disturbance by the employees of any of its principal
suppliers or contractors which might be expected to result in any
material adverse change in the financial condition, results of
operations, business affairs or prospects of the Company, the Bank, the
Subsidiary and the MHC considered as one enterprise.
(xxvi) Each of the Company, the Bank, the Subsidiary and the
MHC have good and marketable title to all properties and assets for
which ownership is material to the business of the Company, the Bank,
the Subsidiary or the MHC and to those properties and assets described
in the Prospectus as owned by them, free and clear of all liens,
charges, encumbrances or restrictions, except such as are described in
the Prospectus or are not material in relation to the business of the
Company, the Bank, the Subsidiary and the MHC considered as one
enterprise; and all of the leases and subleases material to the
business of the Company, the Bank, the Subsidiary or the MHC under
which the Company, the Bank, the Subsidiary or the MHC hold properties,
including those described in the Prospectus, are valid and binding
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agreements of the Company, the Bank, the Subsidiary and the MHC in full
force and effect, enforceable in accordance with their terms (except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization and similar laws of general applicability relating to or
affecting creditors' rights or general principles of equity).
(xxvii) None of the Company, the MHC, the Bank nor the
Subsidiary are in violation of any directive from the Commission, the
OTS or any other governmental entity to make any material change in the
method of conducting their respective businesses; the Company, the MHC,
the Bank and the Subsidiary have conducted and are conducting their
business so as to comply in all material respects with all applicable
statutes, regulations and administrative and court decrees (including,
without limitation, all regulations, decisions, directives and orders
of the Commission, the FDIC and the OTS). Neither the Company, the MHC,
the Bank nor the Subsidiary 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 in any
material respect the conduct of their business or that in any material
manner relates to their capital adequacy, their credit policies, their
management or their business (each, a "Regulatory Agreement"), nor has
the Company, the MHC, the Bank or the Subsidiary been advised by any
Regulatory Agency that it is considering issuing or requesting 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, the
Bank or the Subsidiary which, in the reasonable judgment of the
Company, the MHC or the Bank, is expected to result in a material
adverse effect on the financial condition, results of operations, or
business affairs or prospects of the Company, the Bank, the Subsidiary
and the MHC, considered as one enterprise. 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 Bank, the MHC or the Subsidiary.
(xxviii) There is no action, suit or proceeding before or by
any court or governmental agency or body, domestic or foreign, now
pending, or, to the knowledge of the Company, the MHC or the Bank,
threatened, against or affecting the Company, the Bank, the Subsidiary
or the MHC which is required to be disclosed in the Registration
Statement (other than as disclosed therein), or which might result in
any material adverse change in the financial condition, results of
operations, business affairs or prospects of the Company, the Bank, the
Subsidiary and the MHC considered as one enterprise, or which might
materially and adversely affect the properties or assets thereof or
which might materially and adversely affect the consummation of the
Reorganization or the performance of this Agreement; all pending legal
or governmental proceedings to which the Company, the Bank, the
Subsidiary or the MHC is a party or of which any of their respective
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property or assets is the subject which are not described in the
Registration Statement, including ordinary routine litigation
incidental to the business, are considered in the aggregate not
material; and there are no contracts or documents of the Company or any
of its subsidiaries which are required to be filed as exhibits to the
Registration Statement, the Holding Company Application or the MHC
Application which have not been so filed.
(xxix) The Bank has obtained opinions of its outside legal
and tax counsel, Xxxx Xxxxxx Xxxxxxxx & Xxxxxx, P.C., with respect to
the legality of the Securities to be issued and the New York state and
local income tax and federal income tax consequences of the
Reorganization (including franchise tax, sales or use tax, license fee
on foreign corporations, stock transfer tax, real property transfer
gain tax and real estate transfer tax), copies of which are filed as
exhibits to the Registration Statement; all material aspects of the
aforesaid opinions are accurately summarized in the Prospectus; the
facts and representations upon which such opinions are based are
truthful, accurate and complete in all material respects; and neither
the Company, the Bank (including the Subsidiary) nor the MHC has taken
or will take any action inconsistent therewith.
(xxx) The Bank has received a letter from _______ ("____")
with respect to the tax consequences of the Reorganization under the
laws of the State of New York; the facts and representations upon which
such letter is based are truthful, accurate and complete in all
material respects; and neither the Bank (including the Subsidiary), the
MHC nor the Company has taken or will take any action inconsistent
therewith.
(xxxi) The Company is not and, upon completion of the
Reorganization and the Offerings and sale of the Common Stock and the
application of the net proceeds therefrom, will not be, required to be
registered under the Investment Company Act of 1940, as amended.
(xxxii) All of the loans represented as assets on the most
recent consolidated financial statements or consolidated selected
financial and other 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 Bank,
the Subsidiary and the MHC considered as one enterprise.
(xxxiii) 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 shares of Common Stock in an
amount of up to 8.0% of the Common Stock issued in the Reorganization,
none of the Company, the Bank, the MHC or employees of the Bank have
made any payment of funds of the Company, the Bank or the MHC as a loan
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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.
(xxxiv) To the knowledge of the Company, 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 Company's officers or directors.
(xxxv) Each of the Company, the Bank, the Subsidiary and the
MHC 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 of their respective properties as is customary
for companies engaged in similar industries.
(xxxvi) The Company, the Bank, the Subsidiary and the MHC
each maintain 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.
(xxxvii) Each of the Company, the Bank, the Subsidiary and the
MHC is in compliance in all material respects with the applicable
financial recordkeeping and reporting requirements of the Currency and
Foreign Transaction Reporting Act of 1970, as amended, and the rules
and regulations thereunder. 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 in all material respects 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.
(xxxviii) 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 Reorganization.
(xxxix) The records of eligible account holders, supplemental
eligible account holders, and other depositors are accurate and
complete in all material respects.
(xl) Each of the Company, the Bank, the Subsidiary and the
MHC is in compliance in all material respects 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
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in ERISA) for which the Company, the Bank, the Subsidiary or the MHC,
respectively, would have any liability; each of the Company, the Bank,
the Subsidiary or the MHC 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 Bank, the Subsidiary and
the MHC would have any liability that is intended to be qualified under
Section 401(a) of the Code is so qualified in all material respects and
nothing has occurred, whether by action or by failure to act, which
would cause the loss of such qualification.
(xli) None of the Company, the Bank, the Subsidiary nor the
MHC nor any properties owned or operated by the Company, the Bank, the
Subsidiary or the MHC is in violation of or liable under any
Environmental Law (as defined below), except for such violations or
liabilities that, individually or in the aggregate, would not have a
material adverse effect on the financial condition, results of
operations or business affairs of the Company, the MHC, the Bank and
the Subsidiary, considered as one enterprise. There are no actions,
suits or proceedings, or demands, claims, notices or investigations
(including, without limitation, notices, demand letters or requests for
information from any environmental agency) instituted or pending, or to
the knowledge of the Company, the MHC, the Bank or the Subsidiary
threatened, relating to the liability of any property owned or operated
by the Company, the MHC, the Bank or the Subsidiary thereof, under any
Environmental Law. For purposes of this subsection, the term
"Environmental Law" means any federal, state, local or foreign law,
statute, ordinance, rule, regulation, code, license, permit,
authorization, approval, consent, order, judgment, decree, injunction
or agreement with any regulatory authority relating to (i) the
protection, preservation or restoration of the environment (including,
without limitation, air, water, vapor, surface water, groundwater,
drinking water supply, surface soil, subsurface soil, plant and animal
life or any other natural resource), and/or (ii) the use, storage,
recycling, treatment, generation, transportation, processing, handling,
labeling, production, release or disposal of any substance presently
listed, defined, designated or classified as hazardous, toxic,
radioactive or dangerous, or otherwise regulated, whether by type or by
quantity, including any material containing any such substance as a
component.
(xlii) The Company, the MHC, the Bank and the Subsidiary
have filed all federal income and state and local franchise tax returns
required to be filed and have made timely payments of all taxes shown
as due and payable in respect of such returns, and no deficiency has
been asserted with respect thereto by any taxing authority. The
Company, the MHC and the Bank have no knowledge of any tax deficiency
which has been asserted or could be asserted against the Company, the
Bank, the Subsidiary or the MHC.
(xliii) The Company has received approval, subject to
regulatory approval to consummate the Offerings and issuance, to have
the Securities quoted on the Over-the-Counter Bulletin Board (the "OTC
Bulletin Board") effective as of the Closing Time referred to in Secion
2 hereof.
-14-
(xliv) The Company has filed a registration statement for
the Common Stock under Section 12(g) of the Securities Exchange Act of
1934, as amended (the "Exchange Act") and such registration statement
was declared effective concurrent with the effectiveness of the
Registration Statement.
(xlv) The Company is in compliance with the applicable
provisions of the Xxxxxxxx-Xxxxx Act and will use its best efforts to
comply with those provisions of the Xxxxxxxx- Xxxxx Act that will
become effective in the future upon their effectiveness.
(b) Any certificate signed by any officer of the Company, the
Bank, the Subsidiary or the MHC and delivered to either of the Agent to
counsel for the Agent shall be deemed a representation and warranty by
the Company, the MHC or the Bank to each Agent and, for purposes of the
opinion to be delivered to the Agent pursuant to Section 5(b)(2)
hereof, to the counsel fo the Agent as to the matters covered thereby.
SECTION 2. APPOINTMENT OF SANDLER X'XXXXX; SALE AND DELIVERY OF THE
SECURITIES; CLOSING.
On the basis of the representations and warranties herein contained and
subject to the terms and conditions herein set forth, the Company hereby
appoints Sandler X'Xxxxx as its Agent to consult with and advise the Company,
and to assist the Company with the solicitation of subscriptions and purchase
orders for Securities, in connection with the Company's sale of Common Stock in
the Subscription and Community Offering and the Syndicated Community Offering.
On the basis of the representations and warranties herein contained, and subject
to the terms and conditions herein set forth, Sandler X'Xxxxx accepts such
appointment and agrees to use its best efforts to assist the Company with the
solicitation of subscriptions and purchase orders for Securities in accordance
with this Agreement; provided, however, that the Agent shall not be obligated to
take any action which is inconsistent with any applicable laws, regulations,
decisions or orders. The services to be rendered by Sandler X'Xxxxx pursuant to
this appointment include the following: (i) consulting as to the securities
marketing implications of any aspect of the Plan or related corporate documents;
(ii) reviewing with the Bank's Board of Directors the independent appraiser's
appraisal of the common stock; (iii) reviewing all offering documents, including
the Prospectus, stock order form and related offering materials (it being
understood that preparation and filing of such documents is the sole
responsibility of the Company, the Bank and the MHC and their counsel); (iv)
assisting in the design and implementation of a marketing strategy for the
Offerings; (v) assisting the Company, the Bank and the MHC in obtaining all
requisite regulatory approvals; (vi) assisting Bank management in preparing for
meetings with potential investors and broker-dealers; and (vii) providing such
other general advice and assistance as may be requested to promote the
successful completion of the Offerings.
The appointment of the Agent hereunder shall terminate upon the earlier
to occur of (a) 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 OTS agrees 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.
-15-
If any of the Securities remain available after the expiration of the
Subscription and Community Offering, at the request of the Company, the Bank and
the MHC, Sandler X'Xxxxx will seek to form a syndicate of registered brokers or
dealers ("Selected Dealers") to assist in the solicitation of purchase orders of
such Securities on a best efforts basis, subject to the terms and conditions set
forth in a selected dealers' agreement (the "Selected Dealers' Agreement"),
substantially in the form set forth in Exhibit A to this Agreement. Sandler
X'Xxxxx will endeavor to limit the aggregate fees to be paid by the Company, the
Bank and the MHC under any such Selected Dealers' Agreement to an amount
competitive with gross underwriting discounts charged at such time for
underwritings of comparable amounts of stock sold at a comparable price per
share in a similar market environment; provided, however, that the aggregate
fees payable to Xxxxxx X'Xxxxx and Selected Dealers shall not exceed 7% of the
actual purchase price of the Securities sold by such Selected Dealers. Xxxxxx
X'Xxxxx will endeavor to distribute the Securities among the Selected Dealers in
a fashion which best meets the distribution objective of the Company and the
requirements of the Plan and applicable law, which may result in limiting the
allocation of stock to certain Selected Dealers. It is understood that in no
event shall Sandler X'Xxxxx be obligated to act as a Selected Dealer or to take
or purchase any Securities.
In the event the Company is unable to sell at least the 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 Bank and
the MHC 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 Xxxx Xxxxxx Xxxxxxxx & Xxxxxx, P.C., at 10:00 a.m., local time, or at
such other place and time as shall be agreed upon by the parties hereto, on a
business day to be agreed upon by the parties hereto. The Company shall notify
the Agent by telephone, confirmed in writing, when funds shall have been
received for all the Securities. Certificates for Securities shall be delivered
directly to the purchasers thereof in accordance with their directions.
Notwithstanding the foregoing, certificates for Securities purchased through
Selected Dealers shall be made available to the Agent for inspection at least 48
hours prior to the Closing Time at such office as the Agent shall designate.
-16-
The hour and date upon which the Company shall release for delivery all of the
Securities, in accordance with the terms hereof, is herein called the "Closing
Time."
The Company will pay any stock issue and transfer taxes which may be
payable with respect to the sale of the Securities.
In addition to the reimbursement of the expenses specified in Section 4
hereof, the Agent will receive the following compensation for its services
hereunder:
(a) a financial advisory fee of $200,000 if the Reorganization
and Offering are consummated; and
(b) with respect to any Securities sold by an NASD member firm
(including Sandler X'Xxxxx) under the Selected Dealers' Agreement in
the Syndicated Community Offering, (i) the compensation payable to
Selected Dealers under any Selected Dealers' Agreement, (ii) any
sponsoring dealer's fees, and (iii) a management fee to Sandler X'Xxxxx
referred to in paragraph (a) above. Any fees payable to Sandler X'Xxxxx
and other NASD member firms in the Syndicated Community Offering for
Securities sold by Sandler X'Xxxxx or such firms under any such
agreement shall be limited to an aggregate of seven percent (7%) of the
actual purchase price of such Securities.
If this Agreement is terminated by the Agent in accordance with the
provisions of Section 9(a) hereof or the Reorganization is terminated by the
Company, no fee shall be payable by the Company to Sandler X'Xxxxx; however, the
Company shall reimburse the Agent for all of its reasonable out-of-pocket
expenses incurred prior to termination, including the reasonable fees and
disbursements of counsel for the Agent in accordance with the provisions of
Section 4 hereof.
All fees payable to the Agent hereunder shall be payable in immediately
available funds at Closing Time, or upon the termination of this Agreement, as
the case may be. In recognition of the long lead times involved in the
conversion process, the Bank has made an advance payment to the Agent in the
amount of $25,000, which shall be credited against any fees or reimbursement of
expenses payable hereunder.
SECTION 3. COVENANTS OF THE COMPANY. The Company and the Bank covenant
with the Agent as follows:
(a) The Company, the Bank and the MHC will prepare and file
such amendments or supplements to the Registration Statement, the
Prospectus, the MHC Application, the Holding Company Application and
the Proxy Statement as may hereafter be required by the Securities Act
Regulations or the MHC Regulations or as may hereafter be requested by
the Agent. Following completion of the Subscription and Community
Offering, in the event of a Syndicated Community Offering, the Company,
the Bank and the MHC will (i) promptly prepare and file with the
Commission a post-effective amendment to the Registration Statement
relating to the results of theSubscription 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
-17-
required, will file with, or mail for filing to, the Commission a
prospectus or prospectus supplement containing information relating to
the results of the Subscription and Community 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 Bank
and the MHC 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 MHC Application and
the Holding Company Application, (ii) of the receipt of any comments
from the OTS or the Commission with respect to the transactions
contemplated by this Agreement or the Plan, (iii) of any request by the
Commission or the OTS for any amendment to the Registration Statement,
the MHC Application or the Holding Company Application or any amendment
or supplement to the Prospectus or for additional information, (iv) of
the issuance by the OTS 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 Bank and the MHC will make every reasonable effort to prevent the
issuance of any stop order and, if any stop order is issued, to obtain
the lifting thereof at the earliest possible moment.
(b) The Company, the Bank and the MHC will give the Agent
notice of its intention to file or prepare any amendment to the MHC
Application, the 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 Bank and the MHC will deliver to the
Agent as many signed copies and as many conformed copies of the MHC
Application, the Holding Company Application and the Registration
Statement as originally filed and of each amendment thereto (including
exhibits filed therewith or incorporated by reference therein) as the
Agent may reasonably request, and from time to time such number of
copies of the Prospectus as the Agent may reasonably request.
(d) During the period when the Prospectus is required to be
delivered, the Company, the Bank and the MHC will comply, at their own
expense, with all requirements imposed upon them by the OTS, by the
applicable MHC Regulations, as from time to time in force, and by the
Securities Act, the Securities Act Regulations, the Securities Exchange
-18-
Act of 1934, as amended (the "Exchange Act"), and the rules and
regulations of the Commission promulgated thereunder, including,
without limitation, Regulation M under the Exchange Act, so far as
necessary to permit the continuance of sales or dealing in shares of
Common Stock during such period in accordance with the provisions
hereof and the Prospectus.
(e) If any event or circumstance shall occur as a result of
which it is necessary, in the opinion of counsel for the Agent, to
amend or supplement the Prospectus in order to make the Prospectus not
misleading in the light of the circumstances existing at the time it is
delivered to a purchaser, the Company, the Bank and the MHC will
forthwith amend or supplement the Prospectus (in form and substance
satisfactory to counsel for the Agent) so that, as so amended or
supplemented, the Prospectus will not include an untrue statement of a
material fact or omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances existing
at the time it is delivered to a purchaser, not misleading, and the
Company, the Bank and the MHC will furnish to the Agent a reasonable
number of copies of such amendment or supplement. For the purpose of
this subsection, the Company, the Bank and the MHC will each furnish
such information with respect to itself as the Agent may from time to
time reasonably request.
(f) The Company, the Bank and the MHC 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 MHC Regulations may
require and as the Agent and the Company have agreed; provided,
however, that the Company, the Bank and the MHC shall not be obligated
to file any general consent to service of process or to qualify as a
foreign corporation in any jurisdiction in which it is not so
qualified. In each jurisdiction in which the Securities have been so
qualified, the Company, the Bank and the MHC will file such statements
and reports as may be required by the laws of such jurisdiction to
continue such qualification in effect for a period of not less than one
year from the effective date of the Registration Statement.
(g) The Company authorizes Sandler X'Xxxxx and any Selected
Dealers to act as agent of the Company in distributing the Prospectus
to persons entitled to receive subscription rights and other persons to
be offered Securities having record addresses in the states or
jurisdictions set forth in a survey of the securities or "blue sky"
laws of the various jurisdictions in which the Offerings will be made
(the "Blue Sky Survey").
(h) The Company will make generally available to its security
holders as soon as practicable, but not later than 60 days after the
close of the period covered thereby, an earnings statement (in form
complying with the provisions of Rule 158 of the 1933 Act Regulations)
covering a twelve-month period beginning not later than the first day
of the Company's fiscal quarter next following the "effective date" (as
defined in said Rule 158) of the Registration Statement.
(i) During the period ending on the third anniversary of the
expiration of the fiscal year during which the closing of the
transactions contemplated hereby occurs, the Company will furnish
-19-
to its stockholders as soon as practicable after the end of each such
fiscal year an annual report (including consolidated statements of
financial condition and consolidated statements of income,
stockholders' equity and cash flows, certified by independent public
accountants) and, as soon as practicable after the end of each of the
first three quarters of each fiscal year (beginning with the fiscal
quarter ending after the effective date of the Registration Statement),
consolidated summary financial information of the Company, the MHC, the
Bank and the Subsidiary for such quarter in reasonable detail. In
addition, such annual report and quarterly consolidated summary
financial information shall be made public through the issuance of
appropriate press releases at the same time or prior to the time of the
furnishing thereof to stockholders of the Company.
(j) During the period ending on the third anniversary of the
expiration of the fiscal year during which the closing of the
transactions contemplated hereby occurs, the Company will furnish to
the Agent (i) as soon as publicly available, a copy of each report or
other document of the Company furnished generally to stockholders of
the Company or furnished to or filed with the Commission under the
Exchange Act or any national securities exchange or system on which any
class of securities of the Company is listed, and (ii) from time to
time, such other information concerning the Company as the Agent may
reasonably request.
(k) The Company, the Bank and the MHC will conduct the
Reorganization in all material respects in accordance with the Plan,
the MHC Regulations and all other applicable regulations, decisions and
orders, including all applicable terms, requirements and conditions
precedent to the Reorganization imposed upon the Company, the Bank or
the MHC by the OTS.
(l) The Company, the Bank and the MHC will use the net
proceeds received by it from the sale of the Securities in the manner
specified in the Prospectus under "How we Intend to Use the Proceeds."
(m) The Company will file with the Commission such reports on
Form SR as may be required pursuant to Rule 463 of the Securities Act
Regulations, if such report or substantially similar report is required
by the SEC.
(n) The Company will 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 file with the Nasdaq Stock Market
all documents and notices required by the Nasdaq Stock Market of
companies that have issued securities that are traded in the
over-the-counter market and quotations for which are reported by the
Nasdaq Stock Market.
(o) The Company, the Bank and the MHC will take such actions
and furnish such information as are reasonably requested by the Agent
in order for the Agent to ensure compliance with the National
Association of Securities Dealers, Inc.'s "Interpretation Relating to
Free-Riding and Withholding."
-20-
(p) Other than in connection with any employee benefit plan or
arrangement described in the Prospectus, the Company will not, without
the prior written consent of the Agent, sell or issue, contract to sell
or otherwise dispose of, any shares of Common Stock other than the
Securities for a period of 180 days following the Closing Time.
(q) During the period beginning on the date hereof and ending
on the later of the 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, neither the Company, the
Bank nor the MHC 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; provided, however, that this covenant
shall be null and void if the Board of Governors of the Federal Reserve
System, by regulation, policy statement or interpretive release, or by
written order or written advice addressed to the Bank or the Agent
specifically addressing the provisions of Section 6(a) hereof, permits
indemnification of the Agent by the Bank as contemplated by such
provisions.
(r) The Company, the MHC and the Bank will comply with the
conditions imposed by or agreed to with the OTS in connection with its
approval of the Holding Company Application and the MHC Application.
(s) During the period ending on the first anniversary of the
Closing Time, the Bank will comply with all applicable law and
regulation necessary for the Bank to continue to be a "qualified thrift
lender" within the meaning of 12 U.S.C. Section 1467a(m).
(t) The Company shall not deliver the Securities until the
Company, the Bank and the MHC have satisfied each condition set forth
in Section 5 hereof, unless such condition is waived by the Agent.
(u) The Company, the Bank or the MHC will furnish to Sandler
X'Xxxxx as early as practicable prior to the Closing Date, but no later
than two (2) full business days prior thereto, a copy of the latest
available unaudited interim consolidated financial statements of the
Bank and the Subsidiary which have been read by Radics & Co., LLC, as
stated in their letters to be furnished pursuant to subsections (f) and
(g) of Section 5 hereof.
(v) 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 and the OTS.
(w) The Bank will not amend the Plan in any manner that would
affect the sale of the Securities or the terms of this Agreement.
(x) 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.
-21-
(y) 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.
(z) 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.
(aa) 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.
SECTION 4. PAYMENT OF EXPENSES. The Company, the Bank and the MHC
jointly and severally agree to pay all expenses incident to the performance of
their obligations under this Agreement, including but not limited to (i) the
cost of obtaining all securities and bank regulatory approvals, (ii) the
printing and filing of the Registration Statement as originally filed and of
each amendment thereto, (iii) the preparation, issuance and delivery of the
certificates for the Securities to the purchasers in the Offerings, (iv) the
fees and disbursements of the Company's and the Bank's and the MHC's counsel,
accountants appraiser and other advisors, (v) the qualification of the
Securities under securities laws in accordance with the provisions of Section
3(f) hereof, including filing fees and the fees and disbursements of counsel in
connection therewith and in connection with the preparation of the Blue Sky
Survey, (vi) the printing and delivery to the Agent of copies of the
Registration Statement as originally filed and of each amendment thereto and the
printing and delivery of the Prospectus and any amendments or supplements
thereto to the purchasers in the Offerings and the Agent, (vii) the printing and
delivery to the Agent of copies of a Blue Sky Survey and (viii) the fees and
expenses incurred in connection with the quotation of the Securities on the OTC.
In the event the Agent incurs any such fees and expenses on behalf of the Bank,
the Company or the MHC, the Bank will reimburse the Agent for such fees and
expenses whether or not the Conversion is consummated; provided, however, that
the Agent shall not incur any substantial expenses on behalf of the Bank, the
Company or the MHC pursuant to this Section without the prior approval of the
Bank.
The Company, the Bank and the MHC jointly and severally agree to pay
certain expenses incident to the performance of the Agent's obligations under
this Agreement, regardless of whether the Conversion is consummated, including
(i) the filing fees paid or incurred by the Agent in connection with all filings
with the National Association of Securities Dealers, Inc. and (ii) all
reasonable out of pocket expenses incurred by the Agent relating to the
Offerings, including, without limitation, advertising, promotional, syndication
and travel expenses and fees and expenses of the Agent's counsel, up to a
maximum of $50,000 with respect to the expenses contemplated by this clause
(ii); provided, however, that the Agent shall document the expenses contemplated
by clause (ii) to the reasonable satisfaction of the Bank. 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 Bank or the
MHC of a written accounting therefor setting forth in reasonable detail the
expenses incurred by the Agent.
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SECTION 5. CONDITIONS OF AGENT'S OBLIGATIONS. The Company, the Bank,
the MHC 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 Bank and the MHC 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 Bank and the MHC made
pursuant to the provisions hereof, to the performance by the Company, the Bank
and the MHC of their obligations hereunder, and to the following further
conditions:
(a) No stop order suspending the effectiveness of the
Registration Statement shall have been issued under the Securities Act
or proceedings therefor initiated or threatened by the Commission, no
order suspending the Offerings or authorization for final use of the
Prospectus shall have been issued or proceedings therefor initiated or
threatened by the OTS 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 Xxxx Xxxxxx Xxxxxxxx & Xxxxxx, P.C., counsel for the
Company, the Bank and the MHC, in form and substance
satisfactory to counsel for the Agent, to the effect that:
(i) The Company has been duly incorporated and
is validly existing as a corporation in good standing
under the laws of the United States of America as a
federally chartered mid-tier holding company.
(ii) The Company has full corporate power and
authority to own, lease and operate its properties
and to conduct its business as described in the
Registration Statement and Prospectus and to enter
into and perform its obligations under this
Agreement.
(iii) The Company is duly qualified as a foreign
corporation to transact business and is in good
standing in the State of New York and in each other
jurisdiction in which such qualification is required
whether by reason of the ownership or leasing of
property or the conduct of business, except where the
failure to so qualify would not have a material
adverse effect upon the financial condition, results
of operations, business affairs or prospects of the
Company, the Bank, the Subsidiary and the MHC,
considered as one enterprise. The Company is a
registered savings and loan holding company under
HOLA.
-23-
(iv) Upon consummation of the Reorganization, the
authorized, issued and outstanding capital stock of
the Company will be as set forth in the Prospectus
under "Capitalization" and no shares of Common Stock
have been or will be issued and outstanding prior to
the Closing Time.
(v) The Securities have been duly and validly
authorized for issuance and sale and, when issued and
delivered by the Company pursuant to the Plan against
payment of the consideration calculated as set forth
in the Plan, will be duly and validly issued and
fully paid and non-assessable.
(vi) The issuance of the Securities is not
subject to preemptive or other similar rights arising
by operation of law or, to the best of their
knowledge and information, otherwise.
(vii) Upon completion of the Reorganization, the
issuance of the Securities will be in compliance with
all conditions imposed upon the Company, the MHC and
the Bank and by the OTS under the terms of their
written approval or notice of intention not to
object, as applicable.
(viii) The Bank has been at all times since
__________ and prior to the Closing Time duly
organized, and is validly existing and in good
standing under the laws of the United States of
America as a federally chartered savings and loan
association of mutual form, and, at Closing Time, has
become duly organized, validly existing and in good
standing under the laws of the United States of
America as a federally chartered savings and loan
association of stock form, in both instances with
full corporate power and authority to own, lease and
operate its properties and to conduct its business as
described in the Registration Statement and the
Prospectus; and the Bank is duly qualified as a
foreign corporation to transact business and is in
good standing in each jurisdiction in which the
failure to so qualify would have a material adverse
effect upon the financial condition, results of
operations, business affairs or prospects of the
Bank..
(ix) The Bank is a member in good standing of the
Federal Home Loan Bank of New York and the deposit
accounts of the Bank are insured by the FDIC up to
the applicable limits.
(x) The Subsidiary of the Bank has been duly
incorporated and is validly existing as a corporation
in good standing under the laws of the jurisdiction
of its incorporation, and the Subsidiary has full
corporate power and authority to own, lease and
operate its properties and to conduct its business as
described in the Registration Statement and is duly
qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction
in which the failure to so qualify would have a
material adverse effect upon the financial condition,
results of operations, business affairs or prospects
of the Company, the MHC, the Bank and the Subsidiary,
considered as one enterprise; the activities of the
Subsidiary are permitted to subsidiaries of a savings
association holding company and of a federally
-24-
chartered savings bank by the rules, regulations,
resolutions and practices of the OTS; all of the
issued and outstanding capital stock of the
Subsidiary has been duly authorized and validly
issued, is fully paid and non-assessable and is owned
by the Bank, directly or through subsidiaries, free
and clear of any security interest, mortgage, pledge,
lien, encumbrance, claim or equity.
(xi) The MHC is a federal mutual holding company
and has been duly incorporated and is validly
existing as a as a corporation in good standing under
the laws of the United States and has full corporate
power and authority to own, lease and operate its
properties and to conduct its business as described
in the Registration Statement and Prospectus to enter
into and perform its obligations under this
Agreement. The MHC is a registered savings and loan
holding company under HOLA.
(xii) Upon consummation of the Reorganization, all
of the issued and outstanding capital stock of the
Bank when issued and delivered pursuant to the Plan
against payment of consideration calculated as set
forth in the Plan and set forth in the Prospectus,
will be duly authorized and validly issued and fully
paid and nonassessable, and all such capital stock
will be owned beneficially and of record by the
Company free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity.
(xiii) The OTS has duly approved the Holding
Company Application and the MHC Application and no
action is pending, or to the best of such counsel's
knowledge after due inquiry, threatened respecting
the Holding Company Application or the MHC
Application or the acquisition by the Company of all
of the Bank's issued and outstanding capital stock;
the Holding Company Application and the MHC
Application comply as to form with the applicable
requirements of the OTS, include all documents
required to be filed as exhibits thereto, and are, to
the best of such counsel's knowledge after due
inquiry, truthful, accurate and complete; and the
Company is duly authorized to become a savings and
loan holding company and is duly authorized to own
all of the issued and outstanding capital stock of
the Bank to be issued pursuant to the Plan.
(xiv) The execution and delivery of this Agreement
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 Bank and the MHC, and this Agreement
constitutes the legal, valid and binding agreement of
each of the Company, the Bank and the MHC,
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
-25-
availability of equitable remedies); (B) will not
result in any violation of the provisions of the
charter or by-laws of the Company, the MHC, the Bank
or the Subsidiary; 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, that, individually or in the
aggregate, would have a material adverse effect on
the financial condition, results of operations,
business affairs or prospects of the Company, the
MHC, the Bank and the Subsidiary considered as one
enterprise, upon any property or assets of the
Company, the MHC, the Bank or the Subsidiary pursuant
to any contract, indenture, mortgage, loan agreement,
note, lease or other instrument to which the Company,
the MHC, the Bank or the Subsidiary 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, the
Bank or the Subsidiary is subject.
(xv) The Prospectus has been duly authorized by
the OTS for final use pursuant to the MHC Regulations
and no action is pending, or to the best of such
counsel's knowledge after due inquiry, is threatened,
by the OTS to revoke such authorization.
(xvi) The Registration Statement is effective
under the Securities Act and no stop order suspending
the effectiveness of the Registration Statement has
been issued under the Securities Act or, to the best
of such counsel's knowledge after due inquiry,
proceedings therefor initiated or threatened by the
Commission.
(xvii) 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
Reorganization, except as may be required under the
securities or Blue Sky laws of various jurisdictions
as to which no opinion need be rendered.
(xviii) 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 MHC
Regulations.
(xix) 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.
-26-
(xx) There are no legal or governmental
proceedings pending or threatened against or
affecting the Company, the MHC, the Bank or the
Subsidiary which are required, individually or in the
aggregate, to be disclosed in the Registration
Statement and Prospectus, other than those disclosed
therein, and all pending legal or governmental
proceedings to which the Company, the MHC, the Bank
or the Subsidiary is a party or to which any of their
property is subject which are not described in the
Registration Statement, including ordinary routine
litigation incidental to the business, are,
considered in the aggregate, not material.
(xxi) The information in the Prospectus under "Our
Policy Regarding Dividends," " Business of Flatbush
Federal Savings and Loan Association of Brooklyn -
Legal Proceedings," " Federal and State Taxation," "
Supervision and Regulation," "The Reorganization and
the Stock Offering," "Effects of the Reorganization
and Offering on Depositors and Borrowers of Flatbush
Federal," " Liquidation Rights," " Tax Effects of the
Reorganization," "Restrictions on Acquisitions of
Flatbush Federal Bancorp, Inc. and Flatbush Federal"
and "Description of Capital Stock of Flatbush Federal
Bancorp, Inc.," to the extent that it constitutes
matters of law, summaries of legal matters, documents
or proceedings, or legal conclusions, has been
reviewed by them and is complete and accurate in all
material respects.
(xxii) To the best of such counsel's knowledge,
there are no contracts, indentures, mortgages, loan
agreements, notes, leases or other instruments
required to be described or referred to in the
Registration Statement or to be filed as exhibits
thereto other than those described or referred to
therein or filed as exhibits thereto, the
descriptions thereof or references thereto are
correct, and no default exists, and no event has
occurred which, with notice or lapse of time or both,
would constitute a default, in the due performance or
observance of any material obligation, agreement,
covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or
other instrument so described, referred to or filed.
(xxiii) The Plan has been duly authorized by the
Board of Directors of the Company, the Board of
Directors of the Bank and the Board of Directors of
the MHC and, the OTS's approval of the Plan remains
in full force and effect; the Bank's charter has been
amended, effective upon consummation of the
Reorganization and the filing of such amended charter
with the OTS, to authorize the issuance of permanent
capital stock; the Company, the Bank and the MHC have
conducted the Reorganization in all material respects
in accordance with applicable requirements of the MHC
Regulations, the Plan and all other applicable
regulations, decisions and orders thereunder,
including all material applicable terms, conditions,
requirements and conditions precedent to the
Reorganization imposed upon the Company, the Bank or
the MHC by the OTS and, no order has been issued by
the OTS to suspend the Reorganization or the
Offerings and no action for such purpose has been
instituted or threatened by the OTS; and, to the best
of such counsel's knowledge after due inquiry,
-27-
no person has sought to obtain review of the final
action of the OTS in approving the Holding Company
Application or the MHC Application.
(xxiv) To the best of such counsel's knowledge
after due inquiry, the Company, the Bank, the
Subsidiary and the MHC have obtained all licenses,
permits and other governmental authorizations
currently required for the conduct of their
respective businesses as described in the
Registration Statement and Prospectus, and all such
licenses, permits and other governmental
authorizations are in full force and effect, and the
Company, the Bank, the Subsidiary and the MHC are in
all material respects complying therewith.
(xxv) Neither the Company, the Bank, the
Subsidiary nor the MHC is in violation of its
certificate of incorporation, organization
certificate, articles of incorporation or charter, as
the case may be, or bylaws (and the Bank will not be
in violation of its charter in stock form upon
consummation of the Reorganization) or in default
(nor has any event occurred which, with notice or
lapse of time or both, would constitute a default) in
the performance or observance of any obligation,
agreement, covenant or condition contained in any
contract, indenture, mortgage, loan agreement, note,
lease or other instrument to which the Company, the
Bank, the Subsidiary or the MHC is a party or by
which the Company, the Bank, the Subsidiary or the
MHC or any of their property may be bound.
(xxvi) The Company is not and, upon completion of
the Reorganization and the Offerings and the sale of
the Securities 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 LLP, counsel for the Agent,
with respect to the matters set forth in Section 5(b)(1)(i),
(iv), (v), (vi) (solely as to preemptive rights arising by
operation of law), (xii), (xiii), (xiv), (xvi) and (xvii) and
such other matters as the Agent may reasonably require.
(3) In giving their opinions required by
subsections (b)(l) and (b)(2), respectively, of this Section,
Xxxx Xxxxxx Xxxxxxxx & Xxxxxx, P.C. and Xxxxxxx Xxxxxx &
Xxxxxxxx LLP shall each additionally state that nothing has
come to their attention that would lead them to believe that
the Registration Statement (except for financial statements
-28-
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, Xxxx Xxxxxx Xxxxxxxx & Xxxxxx, P.C. and
Xxxxxxx Xxxxxx & Xxxxxxxx LLP may rely as to matters of fact
on certificates of officers and directors of the Company, the
Bank and the MHC and certificates of public officials, and
Xxxxxxx Xxxxxx & Xxxxxxxx LLP may also rely on the opinion of
Xxxx Xxxxxx Xxxxxxxx & Xxxxxx, P.C.
(c) At Closing Time referred to in Section 2, the Company, the
Bank and the MHC shall have completed in all material respects the conditions
precedent to the Reorganization in accordance with the Plan, the applicable MHC
Regulations and all other applicable laws, regulations, decisions and orders,
including all terms, conditions, requirements and provisions precedent to the
Reorganization imposed upon the Company, the Bank or the MHC by the OTS, or any
other regulatory authority other than those which the OTS permits to be
completed after the Reorganization.
(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 Bank, the Subsidiary and the MHC 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 Chief Executive
Officer, and the President of the Company, the Bank and the MHC and the chief
financial or chief accounting fficer of the Company, the Bank and the MHC, 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 Bank, the Subsidiary or the MHC from the latest date as of
which the financial condition of the Company, the Bank, the Subsidiary or the
MHC 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 Bank nor the MHC shall have received from the OTS any direction
(oral or written) to make any material change in the method of conducting its
business with which it has not complied (which direction, if any, shall have
been disclosed to the Agent) or which materially and adversely would affect the
business affairs, financial condition, results of operations or prospects of the
Company, the Bank, the Subsidiary or the MHC (iv) the representations and
warranties in Section 1 hereof are true and correct with the same force and
effect as though expressly made at and as of the Closing Time, (v) the Company,
the Bank and the MHC have complied with all agreements and satisfied all
conditions on their part to be performed or satisfied at or prior to Closing
Time, (vi) no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
initiated or threatened by the Commission and (vii) no order suspending the
Offerings or the authorization for final use of the Prospectus has been issued
and no proceedings for that purpose have been initiated or threatened by the
-29-
OTS or the FDIC and no person has sought to obtain regulatory or judicial review
of the action of the OTS in approving the Plan in accordance with the MHC
Regulations nor has any person sought to obtain regulatory or judicial review of
the action of the OTS in approving the Holdng Company Application.
(e) At the Closing Time, the Agent shall have received a
certificate of the Chief Executive Officer and President of the Company, the MHC
and of the Bank and the Chief Financial Officer of the Company, 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 and the
Subsidiary 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 information relating to the Company, the MHC, the Bank and
the Subsidiary is made known to them; (vi) they have evaluated the effectiveness
of their internal controls; and (vii) they have disclosed to ____ 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 Radics & Co., LLC a letter dated such date, in form and
substance satisfactory to the Agent, to the effect that (i) they are independent
public accountants with respect to the Company, the Bank, the Subsidiary, and
the MHC within the meaning of the Code of Ethics of the AICPA, the Securities
Act and the Securities Act Regulations and the MHC Regulations 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
Radics & Co., LLC set forth in detail in such letter, nothing has come to their
attention which causes them to believe that (A) the unaudited financial
statements and supporting schedules of the Bank and the Subsidiary 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 MHC Regulations or are not presented in
conformity with generally accepted accounting principles applied on a basis
substantially consistent with that of the audited financial statements included
-30-
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 days prior to the date of
this Agreement, there has been any increase in the consolidated long term or
short term debt of the Bank and the Subsidiary or any decrease in consolidated
total assets, the allowance for loan losses, total deposits or net worth of the
Bank and the Subsidiary, in each case as compared with the amounts shown in the
March 31, 2003 balance sheet included in the Registration Statement or, (D)
during the period from March 31, 2003 to a specified date not more than five
days prior to the date of this Agreement, there were any decreases, as compared
with the corresponding period in the preceding year, in total interest income,
net interest income, net interest income after provision for loan losses, income
before income tax expense or net income of the Bank and the Subsidiary, except
in all instances for increases or decreases which the Registration Statement and
the Prospectus disclose have occurred or may occur; and (iv) in addition to the
examination referred to in their opinions and the limited procedures referred to
in clause (iii) above, they have carried out certain specified procedures, not
constituting an audit, with respect to certain amounts, percentages and
financial information which are included in the Registration Statement and the
Prospectus and which are specified by the Agent, and have found such amounts,
percentages and financial information to be in agreement with the relevant
accounting, financial and other records of the Company, the Bank, the Subsidiary
and the MHC identified in such letter.
(g) At Closing Time, the Agent shall have received from Radics
& Co. LLC a letter, dated as of Closing Time, to the effect that they reaffirm
the statements made in the letter furnished pursuant to subsection (e) of this
Section, except that the specified date referred to shall be a date not more
than five days prior to Closing Time.
(h) At Closing Time, the Securities shall have been approved
for listing on the Nasdaq Market or on the OTC Bulletin Board upon notice of
issuance.
(i) At Closing Time, the Agent shall have received a letter
from R.P. Financial, LC, 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.
-31-
(k) At Closing Time, the Agent shall have been furnished with
such other documents or certificates as the Agent may have reasonably requested,
including, without limitation, a certificate relating to compliance by the
Company, the Bank and the MHC in consummating the Reorganization with the
Uniting and Strengthening America by Providing Appropriate Tools Required to
Intercept and Obstruct Terrorism Act of 2001 and certificates of the Chief
Executive Officer and the Chief Financial Officer of the Company, the Bank and
the MHC in form and substance comparable to certifications to be required under
Section 302 of the Xxxxxxxx-Xxxxx Act of 2002.
(l) At any time prior to Closing Time, (i) there shall not
have occurred any material adverse change in the financial markets in the United
States or elsewhere or any outbreak of hostilities or escalation thereof or
other calamity or crisis the effect of which, in the judgment of the Agent, are
so material and adverse as to make it impracticable to market the Securities or
to enforce contracts, including subscriptions or orders, for the sale of the
Securities, and (ii) trading generally 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 or New York authorities.
-32-
SECTION 6. INDEMNIFICATION.
(a) The Company, the Bank and the MHC, 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 Reorganization or any action taken by the Agent where acting as
agent of the Company, the Bank or the MHC or otherwise as described in
Section 2 hereof.
(ii) from and against any and all loss, liability, claim,
damage and expense whatsoever, as incurred, based upon or arising out
of any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement (or any amendment thereto), or
the omission or alleged omission therefrom of a material fact required
to be stated therein or necessary to make the statements therein not
misleading or arising out of any untrue statement or alleged untrue
statement of a material fact contained in the Proxy Statement or
Prospectus (or any amendment or supplement thereto) or the omission or
alleged omission therefrom of a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading;
(iii) from and against any and all loss, liability, claim,
damage and expense whatsoever, as incurred, to the extent of the
aggregate amount paid in settlement of any litigation, or any
investigation or proceeding by any governmental agency or body,
commenced or threatened, or of any claim whatsoever described in
clauses (i) or (ii) above, if such settlement is effected with the
written consent of the Company, the Bank or the MHC, which consent
shall not be unreasonably withheld; and
(iv) from and against any and all expense whatsoever, as
incurred (including, subject to Section 6(c) hereof, the fees and
disbursements of counsel chosen by the Agent), reasonably incurred in
investigating, preparing for or defending against any litigation, or
any investigation, proceeding or inquiry by any governmental agency or
body, commenced or threatened, or any claim pending or threatened
whatsoever described in clauses (i) or (ii) above, to the extent that
any such expense is not paid under (i), (ii) or (iii) above;
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 . Notwithstanding the foregoing, the indemnification
provided for in this paragraph (a) shall not apply to the Bank to the extent
that such indemnification by the Bank would constitute a covered transaction
under Section 23A of the Federal Reserve Act.
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(b) The Agent agrees to indemnify and hold harmless the
Company, the Bank, the MHC and their directors and trustees, each of their
officers who signed the Registration Statement, and each person, if any, who
controls the Company within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act against any and all loss, liability, claim,
damage and expense described in the indemnity contained in subsection (a) of
this Section, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, of a material fact made in
the Prospectus (or any amendment or supplement thereto) in reliance upon and in
conformity with the Agent Information.
(c) Each indemnified party shall give notice as promptly as
reasonably practicable to each indemnifying party of any action commenced
against it in respect of which indemnity may be sought hereunder, but failure to
so notify an indemnifying party shall not relieve such indemnifying party from
any liability which it may have otherwise than on account of this indemnity
agreement. An indemnifying party may participate at its own expense in the
defense of any such action. In no event shall the indemnifying parties be liable
for fees and expenses of more than one counsel (in addition to no more than one
local counsel in each separate jurisdiction in which any action or proceeding is
commenced) separate from their own counsel for all indemnified parties in
connection with any one action or separate but similar or related actions in the
same jurisdiction arising out of the same general allegations or circumstances.
(d) The Company, the Bank and the MHC also agree that the
Agent shall not have any liability (whether direct or indirect, in contract or
tort or otherwise) to the MHC, the Bank, the Company, its security holders or
the Bank's, the MHC's or the Company's creditors relating to or arising out of
the engagement of the Agent pursuant to, or the performance by the Agent of the
services contemplated by, this Agreement, except to the extent that any loss,
claim, damage or liability is found in a final judgment by a court of competent
jurisdiction to have resulted primarily from the Agent's bad faith, willful
misconduct or gross negligence.
(e) In addition to, and without limiting, the provisions of
Section (6)(a)(iv) hereof, in the event that any Agent, any person, if any, who
controls the Agent within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act or any of its partners, directors, officers,
employees or agents is requested or required to appear as a witness or otherwise
gives testimony in any action, proceeding, investigation or inquiry brought by
or on behalf of or against the Company, the Bank, the MHC, 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 Bank and the MHC jointly and severally agree to reimburse the
Agent for all reasonable and necessary out-of-pocket expenses incurred by it in
connection with preparing or appearing as a witness or otherwise giving
testimony and to compensate the Agent in an amount to be mutually agreed upon.
SECTION 7. CONTRIBUTION. In order to provide for just and equitable
contribution in circumstances in which the indemnity agreement provided for in
Section 6 hereof is for any reason held to be unenforceable by the indemnified
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parties although applicable in accordance with its terms, the Company, the Bank,
the MHC 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 Bank or the MHC 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 Bank and the MHC 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 Bank and the MHC on the one hand and the Agent on the other, as
reflected in clause (i), but also the relative fault of the Company, the Bank
and the MHC 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 and the MHC, each
trustee of the Bank, each officer of the Company and the MHC who signed the
Registration Statement, and each person, if any, who controls the Company, the
Bank or the MHC within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act shall have the same rights to contribution as the
Company, the Bank and the MHC. 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
Bank or the MHC 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 Bank, the Subsidiary or the MHC or the Company, the Bank, the
Subsidiary and the MHC considered as one enterprise, whether or not arising in
the ordinary course of business, or (ii) if there has occurred any material
adverse change in the financial markets in the United States or elsewhere or any
outbreak of hostilities or escalation thereof or other calamity or crisis the
effect of which, in the judgment of the Agent, are so material and adverse as to
make it impracticable to market the Securities or to enforce contracts,
including subscriptions or orders, for the sale of the Securities, (iii) if
trading generally on the Nasdaq Stock Market, the American Stock Exchange or the
New York Stock Exchange has been suspended, or minimum or maximum prices for
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trading have been fixed, or maximum ranges for prices for securities have been
required, by either of said Exchanges or by order of the Commission or any other
governmental authority, or if a banking moratorium has been declared by either
Federal or New York authorities, (iv) if any condition specified in Section 5
shall not have been fulfilled when and as required to be fulfilled; (v) if there
shall have been such material adverse change in the condition or prospects of
the Company, the Bank, the Subsidiary or the MHC 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 R.P. Financial, LC is not reasonable or equitable under then
prevailing market conditions, or (vii) if the Reorganization is not consummated
on or prior to March 31, 2004.
(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 Xxxxxxxxx Xxxxxx, General Counsel, facsimile number
(000) 000-0000; notices to the Company, the Bank and the MHC shall be directed
to any of them at 0000 Xxxxxxxx Xxxxxx, Xxxxxxxx, Xxx Xxxx 00000, attention of
Xxxxxxx X. Xxxxxxxxxx, Chairman of the Board, President and Chief Executive
Officer, with a copy to Xxxx Xxxxxx at Xxxx Xxxxxx Xxxxxxxx & Xxxxxx, P.C., 0000
Xxxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxxx, X.X. 00000.
SECTION 11. PARTIES. This Agreement shall inure to the benefit of and
be binding upon the Agent, the Company, the Bank and the MHC 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 Bank and the MHC and their respective
successors and the controlling persons and partners, and officers and directors
referred to in Sections 6 and 7 and their heirs and legal representatives, any
legal or equitable right, remedy or claim under or in respect of this Agreement
or any provision herein or therein contained. This Agreement and all conditions
and provisions hereof and thereof are intended to be for the sole and exclusive
benefit of the Agent, the Company, the Bank and the MHC and their respective
successors, and said controlling persons and partners and officers and directors
and their heirs and legal representatives, and for the benefit of no other
person, firm or corporation.
SECTION 12. ENTIRE AGREEMENT; AMENDMENT. This Agreement represents the
entire understanding of the parties hereto with reference to the transactions
contemplated hereby and supersedes any and all other oral or written agreements
heretofore made, except for the engagement letter dated May 27, 2003, by and
between the Agent and the Company, the Bank and the MHC, relating to the Agent's
providing conversion agent services to the Company, the Bank and the MHC in
connection with the Reorganization. No waiver, amendment or other modification
of this Agreement shall be effective unless in writing and signed by the parties
hereto.
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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.
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If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
between the Agent, the Company and the Bank in accordance with its terms.
Very truly yours,
FLATBUSH FEDERAL BANCORP, MHC
By:______________________________________
Title:
FLATBUSH FEDERAL BANCORP, INC.
By:______________________________________
Title:
FLATBUSH FEDERAL SAVINGS AND LOAN
ASSOCIATION OF BROOKLYN
By:______________________________________
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
SANDLER X'XXXXX & PARTNERS, L.P.
By: Sandler X'Xxxxx & Partners Corp.,
the sole general partner
By:_____________________________________
[Name]
Vice President
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Exhibit A
[_____________________________]
______________ SHARES
(MAXIMUM OFFERED IN CONVERSION)
COMMON STOCK
(PAR VALUE $___ PER SHARE)
SELECTED DEALER'S AGREEMENT
_______________, 2003
We have agreed to assist Flatbush Federal Bancorp, Inc. (the "Company")
in connection with the offer and sale of shares (the "Shares") of common stock,
par value $0.01 per share (the "Common Stock"), of the Company, to be issued in
connection with the conversion of Flatbush Federal Savings and Loan Association
of Brooklyn, a federally chartered savings and loan association (the "Bank"),
from mutual to stock form. The Company in connection with its plan to effect
such conversion, offered 945,875 Shares for subscription by certain of the
Bank's depositors, the Bank's employee stock ownership plan and the Company's
and the Bank's directors, officers and employees who are not eligible depositors
in a subscription offering, and certain members of the general public in a
concurrent direct community offering. The Shares which were not subscribed for
pursuant to such subscription and direct community offerings are being offered
to the public in a syndicated community offering (the "Syndicated Community
Offering") in accordance with the conversion regulations of the Office of Thrift
Supervision (the "OTS"). The Shares, the bases on which the number of Shares to
be issued may change, and certain of the terms on which they are being offered
are more fully described in the enclosed Prospectus (the "Prospectus").
We are offering to Selected Dealers (of which you are one) the
opportunity to participate in the solicitation of offers to buy the Shares in
the Syndicated Community Offering and we will pay you a fee in the amount of
_____________ percent (________) of the dollar amount of the Shares sold on
behalf of the Company by you. The number of Shares sold by you shall be
determined based on the authorized designation of your firm on the order form or
forms for such Shares accompanying the funds transmitted for payment therefor
(whether in the form of a check payable to the Bank or a withdrawal from an
existing account at the Bank) to the special account established by the Company
for the purpose of holding such funds. It is understood, of course, that payment
of your fee will be made only out of compensation received by us for the Shares
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sold on behalf of the Company by you, as evidenced in accordance with the
preceding sentence. The Bank has requested us to invite you to become a
"Sponsoring Dealer," that is, a Selected Dealer who solicits offers which result
in the sale on behalf of the Bank of at least ___________ Shares. You may become
a Sponsoring Dealer (subject to your fulfillment of the requirement in the
preceding sentence) by checking the box on the confirmation at the end of this
letter. If you become a Sponsoring Dealer, you shall be entitled to an
additional fee in the amount of _______ percent (______%) of the dollar amount
of the Shares sold on behalf of the Company by you as evidenced in the manner
set forth above.
Each order form for the purchase of Shares must set forth the identity,
address and tax identification number of each person ordering Shares regardless
of whether the Shares will be registered in street name or in the purchaser's
name. Such order form should clearly identify your firm.
As soon as practicable after all the Shares are sold, we will remit to
you, out of our compensation as provided above, the fees to which you are
entitled hereunder, including your Sponsoring Dealer fee.
This offer is made subject to the terms and conditions herein set forth
and is made only to Selected Dealers which are (i) members in good standing of
the National Association of Securities Dealers, Inc. ("NASD") which agree to
comply with all applicable rules of the NASD, including, without limitation, the
NASD's Interpretation With Respect to Free-Riding and Withholding and Rule 2740
of the NASD's Conduct Rules, or (ii) foreign dealers not eligible for membership
in the NASD which agree (A) not to sell any Shares within the United States, its
territories or possessions or to persons who are citizens thereof or residents
therein and (B) in making other sales to comply with the above-mentioned NASD
Interpretation, Rules 2730, 2740 and 2750 of the above-mentioned Conduct Rules
as if they were NASD members and Rule 2420 of such Conduct Rules as it applies
to non-member brokers or dealers in a foreign country.
Orders for Shares will be strictly subject to confirmation and we,
acting on behalf of the Company, reserve the right in our absolute discretion to
reject any order in whole or in part, to accept or reject orders in the order of
their receipt or otherwise, and to allot. Neither you nor any other person is
authorized by the Company, the MHC, the Bank or by us to give any information or
make any representations other than those contained in the Prospectus in
connection with the sale of any of the Shares. No Selected Dealer is authorized
to act as agent for us when soliciting offers to buy the Shares from the public
or otherwise. No Selected Dealer shall engage in any transaction prohibited by
Regulation M promulgated under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), with respect to the Common Stock during the offering.
We and each Selected Dealer assisting in selling Shares pursuant hereto
agree to comply with the applicable requirements of the Exchange Act and
applicable rules and regulations issued by the Board of Governors of the Federal
Reserve System and the [_______________________]. In addition, we and each
Selected Dealer confirm that the Securities and Exchange Commission (the
"Commission") interprets Rule 15c2-8 promulgated under the Exchange Act as
requiring that a prospectus be supplied to each person who is expected to
receive a confirmation of sale 48 hours prior to delivery of such person's order
form.
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We and each Selected Dealer further agree to the extent that our
customers desire to pay for Shares with funds held by or to be deposited with
us, in accordance with the interpretation of the Commission of Rule 15c2-4
promulgated under the Exchange Act either (a) upon receipt of an executed order
form or direction to execute an order form on behalf of a customer to forward
the syndicated community offering price for the Shares ordered on or before
12:00 noon on the business day following receipt or execution of an order form
by us to the Bank for deposit in a segregated account or (b) to solicit
indications of interest in which event (i) we will subsequently contact any
customers indicating interest to confirm the interest and give instructions to
execute and return an order form or to receive authorization to execute an order
form on their behalf, (ii) we will mail acknowledgments of receipt of orders to
each customer confirming interest on the business day following such
confirmation, (iii) we will debit accounts of such customers on the fifth
business day (the "debit date") following receipt of the confirmation referred
to in (i), and (iv) we will forward completed order forms together with such
funds to the Bank on or before 12:00 noon on the next business day following the
debit date for deposit in a segregated account. We acknowledge that if the
procedure in (b) is adopted, our customer's funds are not required to be in
their accounts until the debit date. We and each Selected Dealer further
acknowledge that, in order to use the foregoing "sweep arrangements," we comply
with the net capital requirements for broker/dealers under Rule 15c3-1(a)(1) of
the Exchange Act.
Unless earlier terminated by us, this Agreement shall terminate 45 full
business days after the date hereof, but may be extended by us for an additional
period or periods not exceeding 30 full business days in the aggregate. We may
terminate this Agreement or any provisions hereof at any time by written or
telegraphic notice to you. Of course, our obligations hereunder are subject to
the successful completion of the offering, including the sale of all of the
Shares.
You agree that at any time or times prior to the termination of this
Agreement you will, upon our request, report to us the number of Shares sold on
behalf of the Company by you under this Agreement.
We shall have full authority to take such actions as we may deem
advisable in respect to all matters pertaining to the offering. We shall be
under no liability to you except for lack of good faith and for obligations
expressly assumed by us in this Agreement.
Upon application to us, we will inform you as to the states in which we
believe the Shares have been qualified for sale under, or are exempt from the
requirements of, the respective "blue sky" laws of such states, but we assume no
responsibility or obligation as to your rights to sell Shares in any state.
Additional copies of the Prospectus and any supplements thereto will be
supplied in reasonable quantities upon request.
Any notice from us to you shall be deemed to have been duly given if
mailed, telephoned or telegraphed to you at the address to which this Agreement
is mailed.
This Agreement shall be construed in accordance with the laws of the
State of New York.
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Please confirm your agreement hereto by signing and returning the
confirmation accompanying this letter at once to us at Sandler X'Xxxxx &
Partners, L.P., 000 Xxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000. The
enclosed duplicate copy will evidence the agreement between us.
Very truly yours,
SANDLER X'XXXXX & PARTNERS, L.P.
By: _____________________________________
Name:
Title:
CONFIRMED AND ACCEPTED
As of the date first above written:
[NAME OF SELECTED DEALER]
By: _______________________________
Name:
Title:
