^ EXHIBIT 1
RIDGEWOOD FINANCIAL, INC.
(a New Jersey-chartered Stock Corporation - in Formation)
Up to 1,405,300 Shares
(Subject to Increase Up to 1,616,095 Shares)
COMMON STOCK ($.10 Par Value)
Subscription Price $10.00 Per Share
AGENCY AGREEMENT
----------------
September ____, 1998
Xxxx, Xxxx & Co., Inc.
000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000-0000
Ladies and Gentlemen:
Ridgewood Financial, Inc., Inc., a New Jersey-chartered stock holding
corporation in formation (the "Holding Company"), Ridgewood Financial, MHC, a
New Jersey-chartered mutual savings bank holding company in formation (the
"MHC") and Ridgewood Savings Bank of New Jersey, a New Jersey-chartered mutual
savings bank (the "Bank") (collectively, the "Primary Parties") hereby confirm,
jointly and severally their agreement with Xxxx, Xxxx & Co., Inc. (the "Agent"),
as follows:
Section 1. The Offering. The Holding Company is offering up to
1,405,300 shares of common stock, par value $ .10 per share (the "Common Stock")
(subject to an increase up to 1,616,095 shares), in (i) a subscription offering
(the "Subscription Offering"), and, if necessary, (ii) a Community Offering (the
"Community Offering") and (iii) a public and/or Public/Syndicated Community
Offering (the "Public/Syndicated Community Offering"), in connection with the
conversion and reorganization of the Bank from a mutual savings bank to a stock
savings bank and wholly-owned subsidiary of the Holding Company (the
"Reorganization"), all pursuant to the Plan of Reorganization and Stock Issuance
Plan from a State Mutual Savings Bank to a State Mutual Savings Bank Holding
Company (the "Plan"). References to the Bank herein shall include the Bank in
its current mutual form and/or post-Reorganization stock form as a wholly-owned
subsidiary of the Holding Company.
Pursuant to the Plan, the Holding Company will offer and sell shares of
its Common Stock (the "Conversion Shares" or "Shares") in the Subscription
Offering, Community Offering, and Public/Syndicated Community Offering
(collectively, the "Conversion Offerings" or "Offering") so that, upon
completion of the Conversion Offerings, the purchasers of Conversion Shares in
the Conversion Offerings will own 47% of the outstanding Common Stock and the
MHC will own 53% of the outstanding Common Stock. The Holding Company will issue
the Shares at a purchase price of $ 10.00 per share (the "Purchase Price"). If
the number of Conversion Shares is increased or decreased in accordance with the
Plan, the term "Shares" shall mean such greater or
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lesser number, where applicable.
In the Subscription Offering, non-transferable rights to subscribe for
between 1,038,700 and 1,405,300 shares (subject to an increase up to 1,616,095
shares) of the Common Stock ("Subscription Rights") will be granted, in the
following priority: (1) the Bank's depositors with account balances of $50.00 or
more as of May 31, 1997 ("Eligible Account Holders"); (2) the Bank's
tax-qualified Employee Stock Ownership Plan ("ESOP"); (3) the Bank's depositors
with account balances of $50.00 or more as of September 30, 1998 ("Supplemental
Eligible Account Holders"); and (4) depositors (other than Eligible Account
Holders and Supplemental Eligible Account Holders) as of the date for
determining members entitled to vote on the approval of the Plan (the "Voting
Record Date") ("Other Members"), subject to the priorities and purchase
limitations set forth in the Plan. The Holding Company may offer shares of
Common Stock offered but not subscribed for in the Subscription Offering to
members of the general public, with first preference given to residents of the
Bank's local community in Bergen County, New Jersey. In the event a Community
Offering is held, it may be held at any time during or immediately after the
Subscription Offering. Depending on market conditions, shares not subscribed for
in the Subscription Offering or purchased in the Community Offering may be
offered in the Public/Syndicated Community Offering to eligible members of the
general public on a best efforts basis by a group of approved broker-dealer
firms organized by Xxxx, Xxxx ("Assisting Brokers") which are members of the
National Association of Securities Dealers, Inc. ("NASD").
The Holding Company has filed with the U.S. Securities and Exchange
Commission (the "Commission") a Registration Statement on Form SB-2 (File No.
333-_________) in order to register the Shares under the Securities Act of 1933,
as amended (the " 1933 Act"), and has filed such amendments thereto as have been
required to the date hereof (the "Registration Statement"). The prospectus, as
amended, included in the Registration Statement at the time it initially became
effective is hereinafter called the "Prospectus", except that if any prospectus
is filed by the Holding Company pursuant to Rule 424(b) or (c) of the
regulations of the Commission under the 1933 Act differing from the prospectus
included in the Registration Statement at the time it initially becomes
effective, the term "Prospectus" shall refer to the prospectus filed pursuant to
Rule 424(b) or (c) from and after the time said prospectus is filed with the
Commission and shall include any supplements and amendments thereto from and
after their dates of effectiveness or use, respectively.
In connection with the Reorganization, the Bank filed with the Federal
Deposit Insurance Corporation (the "FDIC"), pursuant to Title 12, Section 333.4
___________ of the Code of Federal Regulations (the "Federal Regulations"),
a Notice of Mutual Holding Company Reorganization and Application for Approval
of an Issuance by a Subsidiary of a Mutual Holding Company, including exhibits
and the Prospectus, and has filed amendments thereto as required by the FDIC (as
so amended, the "MHC Notice and Application"). The Holding Company filed with
the Board of Governors of the Federal Reserve System (the "FRB") its application
on Form FRY- 3 (the "Holding Company Application") to acquire the Bank under the
Bank Holding Company Act of 1956, as amended, and the regulations promulgated
thereunder ("BHCA"). In addition,
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the Bank has filed copies of the MHC Notice and Application and the FRY-3 with
the New Jersey Department of Banking and Insurance (the "DOBI") for approval of
the proposed transaction pursuant to the New Jersey Banking Act of 1948 and the
regulations promulgated thereunder (the "State Regulations", and together with
Federal Regulations, the "Conversion Regulations"), and has filed an application
with the DOBI for approval of the formation of an Interim Stock Savings Bank and
the merger of Interim Stock Savings Bank with and into the Bank (the "Merger
Application"). The MHC Notice and Application, the Holding Company Application
and the Merger Application may, from time-to-time, collectively be referred to
herein as the Applications.
Section 2. Appointment of Agent. Subject to the terms and conditions of
this Agreement, the Primary Parties hereby appoint Agent as their financial
advisor and marketing agent to utilize its best efforts to solicit subscriptions
for the Conversion Shares and to advise and assist the Primary Parties with
respect to the sale of the Conversion Shares in the Conversion Offerings.
On the basis of the representations and warranties of the Primary
Parties contained in, and subject to the terms and conditions of, this
Agreement, the Agent accepts such appointment and agrees to consult with and
advise the MHC, the Holding Company and the Bank as to the matters set forth in
the letter agreement ("Letter Agreement"), dated May 26, 1998, between the Bank
and Agent (a copy of which is attached hereto as Exhibit A). It is acknowledged
by the Primary Parties that the Agent shall not be obligated to purchase any
Shares and shall not be obligated to take any action which is inconsistent with
any applicable law, regulation, decision or order. Subscriptions for Conversion
Shares will be offered by means of order forms as described in the Prospectus.
Except as provided in the last paragraph of this Section 2, the appointment of
the Agent hereunder shall terminate upon consummation of the Offerings.
If selected broker-dealers are used to assist in the sale of Conversion
Shares in the Public/Syndicated Community Offering, the Primary Parties hereby
appoint, subject to the terms and conditions of this Agreement, Agent to manage
such broker-dealers in this Public/Syndicated Community Offering. On the basis
of the representations and warranties of the Primary Parties contained in, and
subject to the terms and conditions of, this Agreement, Agent accepts such
appointment and agrees to manage the selling group of broker-dealers in the
Public/Syndicated Community Offering.
Agent agrees to make available to the Bank, MHC and the Holding Company
for a period of 12 months following the consummation of the Reorganization its
Strategic Advisory Services ("STARS") program. If the Bank elects to participate
in the STARS program, the Agent will meet with the Bank at its request and will
render general advice on the financial matters listed in Paragraph 9 of the
Letter Agreement (but not including (i) any in-depth merger and acquisition
analysis or studies which are available under Agent's normal fee schedule, or
(ii) advice with respect to a specific acquisition transaction by, or sale of,
the Bank or the Holding Company). If the Bank elects to participate in the STARS
program, the Agent will waive the regular retainer fee and hourly charges for
the first 12 months of such participation. The Bank would be required,
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however, to reimburse Agent for its reasonable out-of-pocket expenses incurred
in conjunction with the performance of these services. Such out-of-pocket
expenses include travel, legal and other miscellaneous expenses. Agent would not
be permitted to incur any single expense in excess of $500 pursuant to this
paragraph without the prior approval of the Bank. If negotiations for a
transaction conducted during the 12-month participation period result in the
execution of a definitive agreement and/or consummation of a transaction for
which Agent customarily would be entitled to a fee for its advisory or other
investment banking services, Agent shall receive a contingent advisory fee in
accordance with the terms of a separate engagement letter to be entered into
with respect to such transaction. Nothing in this Agreement shall require the
Holding Company or the Bank to obtain such financial advisory services from
Agent. After the completion of such 12-month participation period, if the
parties wish to continue the relationship, a fee will be negotiated and an
agreement with respect to specific advisory services will be entered into at
this time.
Section 3. Refund of Purchase Price. In the event that the
Reorganization is not consummated for any reason, including but not limited to
the inability to sell the Conversion Shares during the Offerings (including any
permitted extension thereof), this Agreement shall terminate and any persons who
have subscribed for any of the Conversion Shares shall have refunded to them the
full amount which has been received from such person, together with interest at
the Bank's current annual passbook rate, from the date payment is received to
the date said refund is made as provided in the Prospectus. Upon termination of
this Agreement, neither the Agent nor the Primary Parties shall have any
obligation to the other except that (i) the Primary Parties shall remain liable
for any amounts due pursuant to Sections 8, 10 and 11 hereof, unless the
transaction is not consummated due to the breach by the Agent of a warranty,
representation or covenant, (ii) the Agent shall remain liable for any amount
due pursuant to Sections 10 and 11 hereof, unless the transaction is not
consummated due to the breach by the Primary Parties of a warranty,
representation or covenant; and (iii) the Agent shall be entitled to retain the
$25,000 fee it has received pursuant to Section 4(a) hereof.
Section 4. Fees. In addition to the expenses specified in Section 8
hereof, as compensation for the Agent's services under this Agreement, the Agent
has received or will receive the following fees from the Primary Parties:
(a) An advisory and marketing services fee in the amount of
$150,000. As of the date hereof, the Primary Parties have paid $25,000 of this
fee. Such fee has been earned. The remaining portion of this fee shall be paid
by the Primary Parties to the Agent upon the closing of the transaction as
specified under Section 5 hereof.
(c) A fee not to exceed 5.5% of the aggregate Purchase Price
of the Conversion Shares sold by Assisting Brokers in any Public/Syndicated
Community Offering. The Agent will pay the Assisting Brokers that assist in the
purchase of Conversation Shares in the Public/Syndicated Community Offering a
fee competitive with gross underwriting discounts charged at such time for
comparable amounts of stock sold at a comparable price per share in a
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similar market environment. Assisting Brokers will not be utilized without the
prior approval of the Primary Parties, and it is agreed that Agent will manage
the Assisting Brokers in the Syndicated Offering.
Section 5. Closing. If the minimum number of Conversion Shares
permitted to be sold is the Reorganization on the basis of the most recently
updated Appraisal (as defined in Section 6(h)) are subscribed for at or before
the termination of the Offerings, and the other conditions to the completion of
the Reorganization are satisfied, the Holding Company agrees to issue the Shares
on the Closing Date (as hereinafter defined) against payment therefor by the
means authorized by the Plan and to deliver certificates evidencing ownership of
the Conversion Share in such authorized denominations and registered in such
names as may be indicated on the subscription order forms directly to the
purchasers thereof as promptly as practicable after the Closing Date. The
Closing shall be held at the offices of special counsel to the Primary Parties,
or at such other place as shall be agreed upon among the Primary Parties and the
Agent, at 10:00 a.m. on the business day selected by the Holding Company, which
business day shall be no less than two business days following the giving of
prior notice by the Holding Company to the Agent or at such other time as shall
be agreed upon by the Primary Parties and the Agent. At the Closing, the Primary
Parties shall deliver to the Agent in same-day funds the commissions, fees and
expenses owing to the Agent as set forth in Sections 4 and 8 hereof and the
opinions required hereby and other documents deemed reasonably necessary by the
Agent shall be executed and delivered to effect the sale of the Shares as
contemplated hereby and pursuant to the terms of the Prospectus. The Holding
Company shall notify the Agent when funds shall have been received for the
minimum number of shares of the Common Stock. The date upon which the Holding
Company shall release the Conversion Shares for delivery in accordance with the
terms hereof is referred to herein as the "Closing Date."
Section 6. Representations and Warranties of the Primary Parties. The
Primary Parties jointly and severally represent and warrant to the Agent that:
(a) The Bank has, and as of the Closing Date, the MHC and the Holding
Company will have, all such power, authority, authorizations, approvals and
orders as may be required to enter into this Agreement, to carry out the
provisions and conditions hereof and to issue and sell the Shares as provided
herein and as described in the Prospectus. The consummation of the
Reorganization, the execution, delivery and performance of this Agreement and
the consummation of the transactions herein contemplated have been duly and
validly authorized by all necessary corporate action on the part of the Bank
and, as of the Closing Date, will have been duly and validly authorized by all
necessary corporate action on the part of the MHC and the Holding Company. This
Agreement had been validly executed and delivered by the Holding Company, the
MHC and the Bank, and is a valid, legal and binding obligation of the Bank, the
Holding Company and the MHC, in each case enforceable in accordance with its
terms, except to the extent, if any, that the provisions of Sections 10 and 11
hereof may be unenforceable as against public policy, and except to the extent
that such enforceability may be limited by bankruptcy laws, insolvency laws, or
other laws affecting the enforcement of creditors' rights generally, or the
rights of creditors of savings institutions insured by the FDIC (including the
laws relating to the rights of the contracting parties to equitable remedies).
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(b) The Plan has been approved by the FDIC and the DOBI.
(c) The Registration Statement was declared effective by the Commission
on __________, 1998; and no stop order has been issued with respect thereto and
no proceedings therefor have been initiated or, to the best knowledge of the
Primary Parties, threatened by the Commission. At the time the Registration
Statement, including the Prospectus contained therein (including any amendment
or supplement thereto), became effective, the Registration Statement complied as
to form in all material respects with the 1933 Act and the regulations
promulgated thereunder and the Registration Statement, including the Prospectus
contained therein (including any amendment or supplement thereto), any Blue Sky
Application or any Sales Information (as such terms are defined in Section 10
hereof) authorized by the Primary Parties for use in connection with the
Offerings did 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, in light of the circumstances under which they were made,
not misleading, and at the time any Rule 424(b) or (c) Prospectus was filed with
the Commission and at the Closing Date referred to in Section 5, the
Registration Statement, including the Prospectus contained therein (including
any amendment or supplement thereto), and any Blue Sky Application or any Sales
Information authorized by the Primary Parties for use in connection with the
Offerings will not contain an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading; provided,
however, that the representations and warranties in this Section 6(c) shall not
apply to statements or omissions made in reliance upon and in conformity with
written information furnished to the Primary Parties by the Agent expressly
regarding the Agent for use under the captions "Market for the Common Stock" and
"The Reorganization and Offering--Plan of Distribution and Selling Commissions"
or written statements or omissions from any sales information or information
filed pursuant to state securities or blue sky laws or regulations provided the
Primary Parties in writing by the Agent.
(d) The MHC Notice and Application, including the Prospectus, was
approved by the FDIC on _________, 1998 and by the DOBI on , 1998; and the Proxy
Statement of the Bank relating to the special meeting of the members of the Bank
at which the Plan shall be considered for approval by the Bank's eligible voting
members (including any amendment or supplement thereto) (the "Proxy Statement"),
was authorized for use by the FDIC and the DOBI and at all times subsequent
thereto until the Closing Date, the MHC Notice and Application, including the
Prospectus, did and will comply as to form in all material respects with the
Conversion Regulations and any other applicable rules and regulations of the
FDIC and the DOBI (except as modified or waived in writing by the FDIC and the
DOBI). At the time of the approval of the MHC Notice and Application, including
the Prospectus (including any amendment or supplement thereto), did not and does
not include any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading; provided, however, that representations or warranties in this
subsection (d) shall not apply to statements or omissions
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made in reliance upon and in conformity with written information furnished to
the Primary Parties by the Agent expressly regarding the Agent for use in
Prospectus contained in the Application for Conversion under the captions
"Market for the Common Stock" and "The Reorganization and Offering--Plan of
Distribution and Selling Commissions" or written statements or omissions from
any sales information or information filed pursuant to state securities or blue
sky laws or regulations provided the Primary Parties by the Agent regarding the
Agent.
(e) No order has been issued by the FDIC, the DOBI, the Commission, or
any state regulatory authority, preventing or suspending the use of the
Prospectus and no action by or before any such government entity to revoke any
approval, authorization or order of effectiveness related to the Reorganization
is pending or, to the best knowledge of the Primary Parties, threatened.
(f) The Plan has been duly adopted by the Board of Directors of the
Bank. To the best knowledge of the Primary Parties, no person has, or at the
Closing Date will have, sought to obtain review of the final action of the FDIC
or the DOBI in approving the Plan, the Reorganization, or the Applications,
pursuant to any statute or regulation.
(g) The Holding Company has filed with the FRB the Holding Company
Application and as of the Closing Date the FRB will have approved of the Holding
Company's acquisition of the Bank.
(h) FinPro, Inc., which prepared the appraisal of the aggregate pro
forma market value of the Holding Company and the Bank on which the Offerings
were based (the "Appraisal"), has advised the Primary Parties in writing that it
is independent with respect to each of the Primary Parties within the meaning of
the Conversion Regulations.
(i) KPMG Peat Marwick, L.L.P., which certified the financial statements
filed as part of the Registration Statement and the MHC Notice and Application,
has advised the Primary Parties that it is, with respect to each of the Primary
Parties, an independent certified public accountant under the 1933 Act and the
regulations promulgated thereunder.
(j) The financial statements and the notes thereto which are included
in the Registration Statement and which are a part of the Prospectus present
fairly the financial condition and retained earnings of the Bank as of the dates
indicated and the results of operations and cash flows for the periods
specified. The financial statements comply in all material respects with
Regulation S-X of the Commission and generally accepted accounting principles
("GAAP") applied on a consistent basis during the periods presented, except as
otherwise noted therein, and present fairly in all material respects the
information required to be stated therein. The other financial, statistical and
pro forma information and related notes included in the Prospectus present
fairly the information shown therein on a basis consistent with the audited and
unaudited financial statements included in the Prospectus, and as to the pro
forma adjustments, the adjustments made therein have been properly applied on
the basis described therein.
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(k) Since the respective dates as of which information is given in the
Registration Statement, including the Prospectus; (i) there has not been any
material adverse change in the financial condition or in the earnings, capital,
properties or business affairs of any of the Primary Parties or of the Primary
Parties considered as one enterprise, whether or not arising in the ordinary
course of business; (ii) there has not been any change in total assets of the
Bank in an amount greater than $20.0 million, any material increase in the
aggregate amount of loans past due ninety (90) days or more, or any real estate
acquired by foreclosure or loans characterized as "in substance foreclosure";
nor has the Bank issued any securities or incurred any liability or obligation
for borrowings other than in the ordinary course of business; (iii) there have
not been any material transactions entered into by any of the Primary Parties,
other than those in the ordinary course of business; and (iv) the
capitalization, liabilities, assets, properties and business of the Primary
Parties conform in all material respects to the descriptions thereof contained
in the Prospectus and none of the Primary Parties has any material liabilities
of any kind, contingent or otherwise, except as disclosed in Registration
Statement or the Prospectus.
(l) As of the Closing Date, the Holding Company will be a corporation
duly organized and in good standing under the laws of the State of New Jersey,
with corporate power authority to own its properties and to conduct its business
as described in the Prospectus, and will be qualified to transact business and
in good standing in each jurisdiction in which the conduct of business requires
such qualification, unless the failure to qualify in one or more of such
jurisdictions would not have a material adverse effect on the financial
condition, earnings, capital, properties or business affairs of the Primary
Parties. As of the Closing Date, the Holding Company will have obtained all
licenses, permits and other governmental authorizations required for the conduct
of its business, except those that individually or in the aggregate would not
materially adversely affect the financial condition, earnings, capital, assets
or properties of the Primary Parties taken as a whole; and as of the Closing
Date, all such licenses, permits and governmental authorizations will be in full
force and effect, and the Holding Company will be in compliance therewith in all
material respects.
(m) As of the Closing Date, the MHC will be duly organized and will be
validly existing as a mutual holding company under the laws of the State of New
Jersey, duly authorized to conduct its business and own its property as
described in the Registration Statement and the Prospectus; as of the Closing
Date, the MHC will have obtained all licenses, permits and other governmental
authorizations required for the conduct of its business, except those that
individually or in the aggregate would not materially adversely affect the
financial condition, earnings, capital, assets or properties of the Primary
Parties taken as a whole; as of the Closing Date, all such licenses, permits and
governmental authorizations will be in full force and effect and the MHC will be
in compliance therewith in all material respects; as of the Closing Date, the
MHC will be duly qualified as a foreign corporation to transact business in each
jurisdiction in which the failure to be so qualified in one or more of such
jurisdictions would have a material adverse effect on the financial condition,
earnings, capital, assets properties or business of the Primary Parties.
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(n) The MHC does not, and as of the Closing Date, will not own any
equity securities or any equity interest in any business enterprise except as
described in the Prospectus.
(o) The MHC is not authorized to issue any shares of capital stock.
(p) The Bank is a duly organized and validly existing New Jersey
chartered savings bank in mutual form, duly authorized to conduct its business
as described in the Prospectus; the activities of the Bank are permitted by the
rules, regulations and practices of the FDIC, and the DOBI and under New Jersey
law; the Bank has obtained all licenses, permits and other governmental
authorizations currently required for the conduct of its business, except those
that individually or in the aggregate would not materially adversely affect the
financial condition of the Primary Parties taken as a whole; all such licenses,
permits and other governmental authorizations are in full force and effect and
the Bank is in good standing under the laws of the State of New Jersey and is
duly qualified as a foreign corporation to transact business in each
jurisdiction in which failure to so qualify would have a material adverse effect
upon the financial condition, earnings, capital, properties or business affairs
of the Bank; all of the issued and outstanding capital stock of the Bank after
the Reorganization will be duly and validly issued and fully paid and
non-assessable; and the Holding Company will directly own all of such capital
stock free and clear of any mortgage, pledge, lien, encumbrance, claim or
restriction. The Bank does not own equity securities or any equity interest in
any other business enterprise except as otherwise described in the Prospectus.
(q) The Bank is a member of the Federal Home Loan Bank of New York
("FHLB"); the deposit accounts of the Bank are insured by the FDIC up to
applicable limits. Upon consummation of the Reorganization, the rights of the
members of the Bank in its mutual form shall be transferred to MHC in accordance
with the Plan and the requirements of the Conversion Regulations and New Jersey
law and regulations of the DOBI.
(r) The Bank is not authorized to issue any shares of capital stock.
(s) Upon consummation of the Reorganization, the authorized, issued and
outstanding equity capital of the Holding Company will be within the range set
forth in the Prospectus under the caption "Capitalization" and, except for the
shares of Common Stock held by MHC, no shares of Common Stock have been or will
be issued and outstanding prior to the Closing Date; and the shares of Common
Stock to be subscribed for in the Offering have been duly and validly authorized
for issuance and, when issued and delivered by the Holding Company pursuant to
the Plan against payment of the consideration calculated as set forth in the
Plan and the Prospectus, will be duly and validly issued and fully paid and
non-assessable; the issuance of the Shares is not subject to preemptive rights,
except for the Subscription Rights granted pursuant to the Plan; and the terms
and provisions of the shares of Common Stock will conform in all material
respects to the description thereof contained in the Prospectus. Upon issuance
of the Shares, good title to the Shares will be transferred from the Holding
Company to the purchasers of Shares against payment therefor in the Offering as
set forth in the Plan and the Prospectus.
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(t) The Bank is not, and as of the Closing Date neither the Holding
Company nor the MHC will be, in violation of their respective articles of
incorporation or charter or their respective bylaws, or in material default in
the performance or observance of any obligation, agreement, covenant, or
condition contained in any contract, lease, loan agreement, indenture or other
instrument to which they are a party or by which they, or any of their
respective property, may be bound which would result in a material adverse
change in the condition (financial or otherwise), earnings, capital, properties
or assets of any of them. The consummation of the transactions herein
contemplated will not (i) conflict with or constitute a breach of, or default
under, the Articles of Incorporation, charter or bylaws of the Bank or, as of
the Closing Date, the Holding Company or the MHC, or materially conflict with or
constitute a material breach of, or default under, any material contract, lease
or other instrument to which any of the Primary Parties has a beneficial
interest, or any applicable law, rule, regulation or order that is material to
the financial condition of the Bank; (ii) violate any authorization, approval,
judgment, decree, order, statute, rule or regulation applicable to the Primary
Parties except for such violations which would not have a material adverse
effect on the financial condition and results of operations of the Bank; or
(iii) result in the creation of any material lien, charge or encumbrance upon
any property of the Primary Parties.
(u) No material default exists, and no event has occurred which with
notice or lapse of time, or both, would constitute a material default on the
part of any of the Primary Parties, in the due performance and observance of any
term, covenant or condition of any indenture, mortgage, deed of trust, note,
bank loan or credit agreement or any other material instrument or agreement to
which any of the Primary Parties is a party or by which any of them or any of
their property is bound or affected in any respect which, in any such case, is
material to the Primary Parties individually or considered as one enterprise,
and such agreements are in full force and effect; and no other party to any such
agreements has instituted or, to the best knowledge of the Primary Parties,
threatened any action or proceeding wherein any of the Primary Parties is
alleged to be in default thereunder under circumstances where such action or
proceeding, if determined adversely to any of the Primary Parties, would have a
material adverse effect upon the Primary Parties individually or considered as
one enterprise.
(v) The Primary Parties have good and marketable title to all assets
which are material to the businesses of the Primary Parties and to those assets
described in the Prospectus as owned by them, free and clear of all material
liens, charges, encumbrances, restrictions or other claims, except such as are
described in the Prospectus or which do not have a material adverse effect on
the businesses of the Primary Parties taken as a whole; and all of the leases
and subleases which are material to the businesses of the Primary Parties, as
described in the Registration Statement or Prospectus, are in full force and
effect.
(w) The Primary Parties are not in material violation of any directive
from the FDIC, the DOBI, the FRB, the Commission or any other agency to make any
material change in the method of conducting their respective businesses; the
Primary Parties have conducted and are conducting their respective businesses so
as to comply in all respects with all applicable statutes
10
and regulations (including, without limitation, regulations, decisions,
directives and orders of the DOBI, the FRB, the Commission and the FDIC), except
where the failure to so comply would not reasonably be expected to result in any
material adverse change in the financial condition, results of operations,
capital, properties or business affairs of the Primary Parties considered as one
enterprise and, there is no charge, investigation, action, suit or proceeding
before or by any court, regulatory authority or governmental agency or body
pending or, to the best knowledge any of the Primary Parties, threatened, which
would reasonably be expected to materially and adversely affect the
Reorganization, the performance of this Agreement, or the consummation of the
transactions contemplated in the Plan as described in the Registration
Statement, or which would reasonably be expected to result in any material
adverse change in the financial condition, results of operations, capital,
properties or business affairs of the Primary Parties considered as one
enterprise.
(x) Prior to the Closing Date, the Primary Parties will have received
an opinion of their special counsel, Xxxxxxx, Spidi, Sloane & Xxxxx, P.C.
("Xxxxxxx, Spidi"), with respect to the federal income tax consequences of the
Reorganization, as described in the Registration Statement and the Prospectus,
and with respect to the tax consequences of the proposed transaction under the
laws of the State of New Jersey; and the facts and representations upon which
such opinions are based are truthful, accurate and complete, and none of the
Primary Parties will take any action inconsistent therewith.
(y) The Bank has timely filed all required federal and state tax
returns, has paid all taxes that have become due and payable in respect of such
returns, except where permitted to be extended, has made adequate reserves for
similar future tax liabilities, and no deficiency has been asserted with respect
thereto by any taxing authority.
(z) No approval, authorization, consent or other order of any
regulatory or supervisory or other public authority is required for the
execution and delivery by the Primary Parties of this Agreement, or the issuance
of the Shares, except for the approval of the FDIC, the DOBI and the Commission
(which have been received) and any necessary qualification, notification, or
registration or exemption under the securities or blue sky laws of the various
states in which the Shares are to be offered.
(aa) None of the Primary Parties has: (i) issued any securities within
the last 18 months (except for (a) notes to evidence bank loans or other
liabilities in the ordinary course of business or as described in the
Prospectus, and (b) shares of Common Stock issued with respect to the initial
capitalization of the Holding Company); (ii) had any dealings with respect to
sales of securities within the 12 months prior to the date hereof with any
member of the NASD, or any person related to or associated with such member,
other than discussions and meetings relating to the Offering and purchases and
sales of U.S. government and agency and other securities in the ordinary course
of business; (iii) entered into a financial or management consulting agreement
except for the Letter Agreement and as contemplated hereunder; or (iv) engaged
any intermediary between the Agent and the Primary Parties in connection with
the Offering or the offering of
11
shares of the common stock of the Bank, and no person is being compensated in
any manner for such services.
(ab) Neither the Primary Parties nor, to the best knowledge of the
Primary Parties, any employee of the Primary Parties has made any payment of
funds of the Primary Parties as a loan to any person for the purchase of
Conversion Shares except for the Holding Company's loan to the ESOP the proceeds
of which will be used to purchase Conversion Shares, or has 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.
(ac) The Bank complies in all material respects with the applicable
financial record keeping and reporting requirements of the Currency and Foreign
Transactions Reporting Act of 1970, as amended, and the regulations and rules
thereunder.
(ad) The Primary Parties have not relied upon Agent or its counsel for
any legal, tax or accounting advice in connection with the Reorganization.
(ae) The records of Eligible Account Holders, Supplemental Eligible
Account Holders and Other Members are accurate and complete in all material
respects.
(af) The Primary Parties comply with all laws, rules and regulations
relating to environmental protection, and none of them has been notified or is
otherwise aware that any of them is potentially liable, or is considered
potentially liable, under the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended, or any other Federal, state or local
environmental laws and regulations, including, but not limited to the New Jersey
Industrial Site Recovery Act; no action, suit, regulatory investigation or other
proceeding is pending or threatened against the Primary Parties relating to
environmental protection, nor do the Primary Parties have any reason to believe
any such proceedings may be brought against any of them; and no disposal,
release or discharge of hazardous or toxic substances, pollutants or
contaminants, including petroleum and gas products, as any of such terms may be
defined under federal, state or local law, has occurred on, in, at or about any
facilities or properties owned or leased by any of the Primary Parties or, to
the best knowledge of the Bank, in which the Bank has a security interest.
(ag) All of the loans represented as assets on the most recent
financial statements or selected financial information of the Bank included in
the Prospectus meet or are exempt from all requirements of federal, state and
local law pertaining to lending, including, without limitation, truth in lending
(including the requirements of Regulations Z and 12 C.F.R. Part 226), real
estate settlement procedures, consumer credit protection, equal credit
opportunity and all disclosure laws applicable to such loans, except for
violations which, if asserted, would not result in a material adverse effect on
the financial condition, results of operations or business of the Primary
Parties taken as a whole.
12
(ah) None of the Primary Parties are required to be registered as an
investment company under the Investment Company Act of 1940.
(ai) As of the date hereof, the charter of the MHC has been filed with
the DOBI, but is not yet effective or otherwise in force.
Any certificates signed by an officer of any of the Primary Parties and
delivered to the Agent or its counsel that refer to this Agreement shall be
deemed to be a representation and warranty by the Primary Parties to the Agent
as to the matters covered thereby with the same effect as if such representation
and warranty were set forth herein.
Section 6.A. Representations and Warranties of the Agent. Agent
represents and warrants to the Primary Parties that:
(a) Agent is a corporation and is validly existing in good standing
under the laws of the State of New Jersey with full power and authority to
provide the services to be furnished to the Primary Parties hereunder.
(b) The execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby have been duly and validly authorized by
all necessary action on the part of Agent, and this Agreement is the legal,
valid and binding agreement of Agent, enforceable in accordance with its terms
except as the legality, validity, binding nature and enforceability thereof may
be limited by (i) bankruptcy, insolvency, moratorium, reorganization,
conservatorship, receivership or other similar laws relating to or affecting the
enforcement of creditors' rights generally, (ii) general equity principles
regardless of whether such enforceability is considered in a proceeding in
equity or at law, and (iii) the extent, if any, that the provisions of Sections
10 or 11 hereof may be unenforceable as against public policy.
(c) Except for licenses, approvals and permits required by the State of
Arkansas or required by the another jurisdiction solely because the Offering is
being made in such jurisdiction, each of Agent and its employees, agents and
representatives who shall perform any of the services hereunder shall have, and
until the Reorganization is completed or terminated shall maintain all licenses,
approvals and permits necessary to perform such services.
(d) No action, suit, charge or proceeding before the Commission, the
NASD, any state securities commission or any court is pending, or to the
knowledge of Agent threatened, against Agent which, if determined adversely to
Agent, would have a material adverse effect upon the ability of Agent to perform
its obligations under this Agreement.
(e) Agent is registered as a broker/dealer pursuant to Section 15(b) of
the Securities Exchange Act of 1934, as amended (the "1934 Act") and is a member
of the National Association of Securities Dealers, Inc.
13
(f) Any funds received in the Offering by the Agent will be handled by
the Agent in accordance with Rule 15c2-4 under the 1934 Act to the extent
applicable.
Section 7. Covenants of the Primary Parties. The Primary Parties hereby
jointly and severally covenant with the Agent as follows:
(a) The Holding Company will not, at any time after the date the
Registration Statement is declared effective, file any amendment or supplement
to the Registration Statement without providing the Agent and its counsel an
opportunity to review such amendment or file any amendment or supplement to
which amendment the Agent or its counsel shall reasonably object.
(b) The Primary Parties will not, at any time after the date any
Application is approved, file any amendment or supplement to such Application
without providing the Agent and its counsel an opportunity to review such
amendment or supplement or file any amendment or supplement to which the Agent
or its counsel shall reasonably object.
(c) The Primary Parties will use their best efforts to cause the FRB to
approve the Holding Company's acquisition of the Bank, and will use their best
efforts to cause any post-effective amendment to the Registration Statement to
be declared effective by the Commission and any post-effective amendment to the
Applications to be approved by the FDIC and the DOBI, and will immediately upon
receipt of any information concerning the events listed below notify the Agent
(i) when the Registration Statement, as amended, has become effective; (ii) when
the MHC Notice and Application, as amended, have been approved by the FDIC and
the DOBI; (iii) when the Holding Company Application, as amended, has been
approved by the FRB; (iv) when the Merger Application has been approved by the
DOBI; (v) of the receipt of any comments from the Commission, the FDIC and the
DOBI, or any other governmental entity with respect to the Reorganization or the
transactions contemplated by this Agreement; (vi) of any request by the
Commission, the FRB, the FDIC, the DOBI or any other governmental entity for any
amendment or supplement to the Registration Statement or the Applications or for
additional information; (vii) of the issuance by the Commission, the FDIC or the
DOBI, or any other governmental agency of any order or other action suspending
the Offerings or the use of the Registration Statement or the Prospectus or any
other filing of the Primary Parties under the Conversion Regulations or other
applicable law, or the threat of any such action; (viii) of the issuance by the
Commission, the FDIC or the DOBI, or any state authority of any stop order
suspending the effectiveness of the Registration Statement or of the initiation
or threat of initiation or threat of any proceedings for that purpose; or (ix)
of the occurrence of any event mentioned in paragraph (f) below. The Primary
Parties will make every reasonable effort to prevent the issuance by the
Commission, the FDIC or the DOBI, or any state authority of any order referred
to in (vii) and (viii) above and, if any such order shall at any time be issued,
to obtain the lifting thereof at the earliest possible time.
(d) The Primary Parties will deliver to the Agent and to its counsel
conformed copies of each of the following documents, with all exhibits: each of
the Applications as originally filed
14
and of each amendment or supplement thereto, and the Registration Statement, as
originally filed and each amendment thereto. Further, the Primary Parties will
deliver such additional copies of the foregoing documents to counsel to the
Agent as may be required for any NASD filings. In addition, the Primary Parties
will also deliver to the Agent such number of copies of the Prospectus, as
amended or supplemented, as the Agent may reasonably request.
(e) The Primary Parties will comply in all material respects with any
and all terms, conditions, requirements and provisions with respect to the
Reorganization and the transactions contemplated thereby imposed by the
Commission, by applicable state law and regulations, and by the 1933 Act, the
1934 Act, and the rules and regulations of the Commission promulgated under such
statutes, to be complied with prior to or subsequent to the Closing Date; and
when the Prospectus is required to be delivered, the Primary Parties will comply
in all material respects, at their own expense, with all material requirements
imposed upon them by the FDIC, the DOBI, the Conversion Regulations (except as
modified or waived in writing by the FDIC and the DOBI), the Commission, by
applicable state law and regulations and by the 1933 Act, the 1934 Act and the
rules and regulations of the Commission promulgated under such statutes, in each
case as from time to time in force, 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.
(f) Each of the Primary Parties will inform the Agent of any event or
circumstances of which it is or becomes aware as a result of which the
Registration Statement and/or Prospectus, as then supplemented or amended, would
include an untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein not misleading. If it is
necessary, in the reasonable opinion of counsel for the Primary Parties, to
amend or supplement the Registration Statement or the Prospectus in order to
correct such untrue statement of a material fact or to make the statements
therein not misleading in light of the circumstances existing at the time of
their use, the Primary Parties will, at their expense, prepare, file with the
Commission, the FDIC and the DOBI, and furnish to the Agent, a reasonable number
of copies of an amendment or amendments of, or a supplement or supplements to,
the Registration Statement and the Prospectus (in form and substance reasonably
satisfactory to counsel for the Agent after a reasonable time for review) which
will amend or supplement the Registration Statement and or the Prospectus so
that as amended or supplemented it will not contain an untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein, in light of the circumstances existing at the time, not
misleading. For the purpose of this subsection, each of the Primary Parties will
furnish such information with respect to itself as the Agent may from time to
time reasonably request.
(g) Pursuant to the terms of the Plan, the Holding Company will
endeavor in good faith, in cooperation with the Agent, to register or to qualify
the Shares for offering and sale or to exempt such Shares from registration and
to exempt the Holding Company and its officers, directors and employees from
registration as broker-dealers, under the applicable securities laws of the
jurisdictions in which the Offering will be conducted; provided, however, that
the Holding Company shall not be obligated to file any general consent to
service of process or to qualify to do business in any jurisdiction in which it
is not so qualified. In each jurisdiction where any of the Shares shall have
been registered or qualified as above provided, the Holding Company will make
15
and file such statements and reports in each year as are or may be required by
the laws of such jurisdictions.
(h) The Holding Company will not sell or issue, contract to sell or
otherwise dispose of, for a period of 90 days after the date hereof any shares
of Common Stock, without the Agent's prior written consent, which consent shall
not be unreasonably withheld other than in connection with any plan or
arrangement described in the Prospectus.
(i) For the period of three years from the date of this Agreement, the
Holding Company will furnish to the Agent upon request (i) a copy of each report
of the Holding Company furnished to or filed with the Commission under the 1934
Act or any national securities exchange or system on which any class of
securities of the Holding Company is listed or quoted, (ii) a copy of each
report of the Holding Company mailed to holders of Common Stock or
non-confidential report filed with the Commission or the FRB or any other
supervisory or regulatory authority or any national securities exchange or
system on which any class of the securities of the Holding Company is listed or
quoted, and (iii) from time-to-time, such other publicly available information
concerning the Primary Parties as the Agent may reasonably request.
(j) The Primary Parties will use the net proceeds from the sale of the
Common Stock in the manner set forth in the Prospectus under the caption "Use of
Proceeds."
(k) The Holding Company and the Bank will distribute the Prospectus or
other offering materials in connection with the offering and sale of the Common
Stock only in accordance with the Conversion Regulations, the 1933 Act and the
1934 Act and the rules and regulations promulgated under such statutes, and the
laws of any state in which the shares are qualified for sale.
(l) Prior to the Closing Date, the Holding Company shall register its
Common Stock under Section 12(g) of the 1934 Act. The Holding Company shall
maintain the effectiveness of such registration for not less than three years or
such shorter period as permitted by the FDIC.
(m) For so long as the Common Stock is registered under the 1934 Act,
the Holding Company will furnish to its stockholders as soon as practicable
after the end of each fiscal year such reports and other information as are
required to be furnished to its stockholders under the 1934 Act (including
consolidated financial statements of the Holding Company and its subsidiaries,
certified by independent public accountants).
(n) The Holding Company will report the use of proceeds of the Offering
in accordance with Rule 463 under the 0000 Xxx.
(o) The Primary Parties will maintain appropriate arrangements for
depositing all funds received from persons mailing subscriptions for or orders
to purchase Conversion Shares on an
16
interest bearing basis at the rate described in the Prospectus until the Closing
Date and satisfaction of all conditions precedent to the release of the Holding
Company's obligation to refund payments received from persons subscribing for or
ordering Conversion Shares in the Conversion Offerings, in accordance with the
Plan as described in the Prospectus, or until refunds of such funds have been
made to the persons entitled thereto or withdrawal authorizations canceled in
accordance with the Plan and as described in the Prospectus. The Primary Parties
will maintain such records of all funds received to permit the funds of each
subscriber to be separately insured by the FDIC (to the maximum extent
allowable) and to enable the Primary Parties to make the appropriate refunds of
such funds in the event that such refunds are required to be made in accordance
with the Plan and as described in the Prospectus.
(p) The Primary Parties 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 "Interpretation of the Board of Governors of the NASD
on Free Riding and Withholding."
(q) The Primary Parties will conduct their businesses in compliance in
all material respects with all applicable federal and state laws, rules,
regulations, decisions, directives and orders including, all decisions,
directives and orders of the Commission, the FDIC, the DOBI and the FRB.
(r) The Primary Parties will not amend the Plan without notifying the
Agent prior thereto.
(s) The Holding Company shall provide the Agent with any information
necessary to carry out the allocation of the Conversion Shares in the event of
an over subscription, and such information shall be accurate and reliable.
(t) The Holding Company will not deliver the Shares until the Primary
Parties have satisfied or caused to be satisfied each condition set forth in
Section 9 hereof, unless such condition is waived in writing by the Agent.
(u) Immediately upon completion of the sale by the Holding Company of
the Shares contemplated by the Plan and the Prospectus, (i) the MHC shall have
been formed pursuant to the Plan and shall own at all times more than 50% of the
issued and outstanding shares of Common Stock, (ii) all of the issued and
outstanding shares of capital stock of the Bank shall be owned by the Holding
Company, (iii) the Holding Company shall have no direct subsidiaries other than
the Bank, and (iv) the Reorganization shall have been effected in accordance
with all applicable statutes, regulations, decisions and orders; and all terms,
conditions, requirements and provisions with respect to the Reorganization
(except those that are conditions subsequent) imposed by the Commission, the
FDIC, the DOBI, the FRB or any other governmental agency, if any, shall have
been complied with by the Primary Parties in all material respects or
appropriate waivers shall have been obtained and all notice and waiting periods
shall have been satisfied, waived or elapsed.
17
(v) Prior to the Closing Date, the Plan shall have been approved by the
eligible voting members of the Bank in accordance with the Conversion
Regulations and the provisions of the Bank's charter and bylaws.
(w) As of the Closing Date, the Primary Parties shall have completed
all conditions precedent to the Reorganization in accordance with the Plan and
shall have complied in all material respects with applicable laws, regulations
(except as modified or waived in writing by the FDIC and/or the DOBI), decisions
and orders, including all terms, conditions, requirements and provisions
precedent to the Reorganization imposed upon it by the FDIC and DOBI as set
forth in correspondence received from the FDIC and/or the DOBI.
(x) On or before the Closing Date, the Primary Parties will have
completed all conditions precedent to the Reorganization specified in the Plan
and the offer and sale of the Shares will have been conducted in all material
respects in accordance with the Plan, the Conversion Regulations (except as
modified or waived in writing by the FDIC and/or the DOBI) and with all other
applicable laws, regulations, decisions and orders, including all terms,
conditions, requirements and provisions precedent to the Reorganization imposed
upon any of the Primary Parties by the FDIC and/or the DOBI, the Commission, the
FRB or any other regulatory authority and in the manner described in the
Prospectus.
Section 8. Payment of Expenses. Whether or not the Reorganization is
completed or the sale and exchange of the Shares by the Holding Company is
consummated, the Primary Parties will pay for all expenses incident to the
performance of this Agreement, including without limitation: (a) the preparation
and filing of the Applications; (b) the preparation, printing, filing, delivery
and shipment of the Registration Statement, including the Prospectus, and all
amendments and supplements thereto; (c) all filing fees and expenses in
connection with the qualification or registration of the Shares for offer and
sale by the Holding Company under the securities or "blue sky" laws, including
without limitation filing fees, reasonable legal fees and disbursements of
counsel in connection therewith, and in connection with the preparation of a
blue sky law survey; (d) the filing fees of the NASD; and (e) the reasonable
expenses of the Agent. Notwithstanding the foregoing, the Primary Parties shall
not be required to reimburse Agent for more than $30,000 in legal fees and
$15,000 in non-legal out-of-pocket expenses, except in the event of any material
delay in the Offering that would require an update of the financial information
in tabular form contained in the Registration Statement, as amended or
supplemented, to reflect a period later than that set forth in the original
Registration Statement. Not later than three days prior to the Closing Date, the
Agent will provide the Bank with a detailed accounting of all reimbursable
expenses to be paid at the Closing.
Section 9. Conditions to the Agent's obligations. The obligations of
the Agent hereunder and the occurrence of the Closing and the Reorganization are
subject to the condition that all representations and warranties and other
statements of the Primary Parties herein contained are, at and as of the
commencement of the Offering and at and as of the Closing Date, true and
correct, the condition that the Primary Parties shall have performed all of
their
18
obligations hereunder to be performed on or before such dates and to the
following further conditions:
(a) The Registration Statement shall have been declared effective by
the Commission and the prospectus and proxy statement contained in the MHC
Notice and Application shall have been approved by the FDIC and the DOBI for
mailing prior to the commencement of the Offering, the Holding Company
Application shall have been approved, and no stop order or other action
suspending the effectiveness of the Registration Statement shall have been
issued under the 1933 Act or proceedings therefor initiated or, to any of the
Primary Parties' best knowledge, threatened by the Commission or any state
authority and no order or other action suspending the authorization for use of
the Prospectus or the consummation of the Reorganization shall have been issued
or proceedings therefor initiated or, to any of the Primary Parties' best
knowledge, threatened by the FDIC, the DOBI, the FRB, the Commission, or any
other governmental body.
(b) At the Closing Date, the Agent shall have received:
(1) The favorable opinion, dated as of the Closing Date, of
Xxxxxxx, Spidi, and/or local counsel acceptable to the Agent in form and
substance satisfactory to counsel for the Agent to the effect that:
(i) The Holding Company is a corporation duly organized
and validly existing and in good standing under the laws of the State of New
Jersey, with corporate power and authority to own its properties and to conduct
its business as described in the Prospectus, and is duly qualified to transact
business and is in good standing in each jurisdiction in which the conduct of
its business requires such qualification and in which the failure to qualify
would have a material adverse effect on the financial condition, earnings,
capital, properties or business affairs of the Primary Parties.
(ii) The Bank is a duly organized and validly existing
New Jersey chartered mutual savings bank with full power and authority to own
its properties and to conduct its business as described in the Prospectus and to
enter into this Agreement and perform its obligations hereunder; the activities
of the Bank as described in the Prospectus are permitted by New Jersey law and
the rules, regulations and practices of the FDIC and the DOBI; the issuance and
sale of the capital stock of the Bank to the Holding Company in the
Reorganization has been duly and validly authorized by all necessary corporate
action on the part of the Holding Company and the Bank and, upon payment
therefor in accordance with the terms of the Plan, will be validly issued, fully
paid and non-assessable; and will be owned of record and beneficially by the
Holding Company, free and clear of any mortgage, pledge, lien, encumbrance,
claim or restriction.
(iii) The Bank is a member of the FHLB and the Bank is
an insured
depository institution under the provisions of the Federal Deposit Insurance
Act, as amended, and to such counsel's knowledge no proceedings for the
termination or revocation of such insurance are pending or threatened.
19
(iv) Upon consummation of the Reorganization, the MHC
will have been
duly organized and will be validly existing as a mutual holding company under
New Jersey law, duly authorized to conduct its business and own its properties
as described in the Registration Statement and Prospectus.
(v) Upon consummation of the Reorganization, (a) the
authorized, issued and outstanding capital stock of the Holding Company will be
within the range set forth in the Prospectus under the caption "Capitalization,"
and no shares of Common Stock have been or will be issued and outstanding prior
to the Closing Date (except for the shares issued upon incorporation of the
Holding Company); (b) the shares of Common Stock of the Holding Company issued
to the MHC will have been duly and validly authorized for issuance and will be
fully paid and non-assessable; (c) the shares of Common Stock of the Holding
Company to be subscribed for in the Offering will have been duly and validly
authorized for issuance, and when issued and delivered by the Holding Company
pursuant to the Plan against payment of the consideration calculated as set
forth in the Plan, will be fully paid and non-assessable; and (d) the issuance
of the shares of Common Stock is not subject to preemptive rights under the
charter, articles of incorporation or bylaws of any of the Primary Parties, or
arising or outstanding by operation of law or, to the best knowledge of such
counsel, under any contract, indenture, agreement, instrument or other document,
except for the subscription rights under the Plan.
(vi) The execution and delivery of this Agreement and
the consummation
of the transactions contemplated hereby have been duly authorized by all
necessary corporate action on the part of the Primary Parties; and this
Agreement constitutes a valid, legal and binding obligation of each of the
Primary Parties, enforceable in accordance with its terms, except to the extent
that the provisions of Sections l0 and 1 l hereof may be unenforceable as
against public policy, and except to the extent that such enforceability may be
limited by bankruptcy laws, insolvency laws, or other laws affecting the
enforcement of creditors' rights generally, or the rights of creditors of
savings institutions insured by the FDIC (including the laws relating to the
rights of the contracting parties to equitable remedies).
20
(vii) The Plan has been duly adopted by the board of
directors of the Bank and by the members of the Bank, in the manner required by
the Conversion Regulations and the Bank's charter and bylaws.
(viii) The Applications have been approved by the FDIC,
the DOBI and the FRB and the Prospectus and the Proxy Statement have been
authorized for use by the FDIC and the DOBI, and subject to the satisfaction of
any conditions set forth in such approvals, no further approval, registration,
authorization, consent or other order of any federal or state regulatory agency,
public board or body is required in connection with the execution and delivery
of this Agreement, the offer, sale and issuance of the Shares and the
consummation of the Reorganization.
(ix) The purchase by the Holding Company of all of the
issued and
outstanding capital stock of the Bank has been authorized by the FRB and no
action has been taken, or, to such counsel's knowledge, is pending or
threatened, to revoke any such authorization or approval.
(x) The Registration Statement has become effective
under the 1933 Act, no stop order suspending the effectiveness of the
Registration Statement has been issued, and, to the best of such counsel's
knowledge, no proceedings for that purpose have been instituted or threatened.
(xi) The material tax consequences of the
Reorganization are set forth in the Prospectus under the caption "The
Reorganization and Offering -- Tax Effects of the Reorganization." The
information in the Prospectus under the caption "The Reorganization and Offering
-- Tax Effects of the Reorganization" has been reviewed by such counsel and
fairly describes such opinions rendered by such counsel to the Primary Parties
with respect to such matters.
(xii) The terms and provisions of the shares of Common
Stock conform to
the description thereof contained in the Registration Statement and the
Prospectus, and the forms of certificates proposed to be used to evidence the
shares of Common Stock are in due and proper form.
(xiii) At the time the MHC Notice and Application was
approved, the
MHC Notice and Application (as amended or supplemented) including the Prospectus
contained therein, complied as to form in all material respects with the
requirements of the Conversion Regulations and all applicable laws, rules and
regulations and decisions and orders of the FDIC and the DOBI, except as
modified or waived in writing by the FDIC and/or the DOBI (other than the
financial statements, notes to financial statements, financial tables and other
financial and statistical data included therein and the appraisal valuation as
to which counsel need express no opinion). To such counsel's knowledge, no
person has sought to obtain regulatory or judicial review of the final action of
the FDIC, DOBI or FRB approving the Applications.
21
(xiv) At the time that the Registration Statement
became effective the Registration Statement, including the Prospectus contained
therein (as amended or supplemented) (other than the financial statements, notes
to financial statements, financial tables or other financial and statistical
data included therein and the appraisal valuation as to which counsel need
express no opinion), complied as to form in all material respects with the
requirements of the l 933 Act and the rules and regulations promulgated
thereunder.
(xv) There are no legal or governmental proceedings
pending or to the best of such counsel's knowledge, threatened (i) asserting the
invalidity of this Agreement or (ii) seeking to prevent the Reorganization or
the offer, sale or issuance of the Shares.
(xvi) The information in the Prospectus under the
captions "Regulation," "Taxation," "Restrictions on the Acquisition of the
Company and the Bank -Provisions of the Company's Charter and Bylaws --
Authorization of Preferred Stock," "Description of Capital Stock of the
Company," and "The Reorganization and Offering," to the extent that it
constitutes matters of law, summaries of legal matters, documents or
proceedings, or legal conclusions, has been reviewed by such counsel and is
accurate in all material respects (except as to the financial statements and
other financial data included therein as to which such counsel need express no
opinion). (xvii) None of the Primary Parties are required to be registered as an
investment company under the Investment Company Act of l 940.
(xviii) The Bank has duly adopted a New Jersey stock
charter and bylaws effective upon consummation of the Reorganization, and none
of the Primary Parties is in violation of its articles of incorporation or its
charter, as the case may be, or its bylaws or, to the best of such counsel's
knowledge, any material obligation, agreement, covenant or condition contained
in any material contract, indenture, mortgage, loan agreement, note, lease or
other instrument filed as an exhibit to, or incorporated by reference in, the
Registration Statement, which violation would have a material adverse effect on
the financial condition of the Primary Parties considered as one enterprise, or
on the earnings, capital, properties or business affairs of the Primary Parties
considered as one enterprise. In addition, the execution and delivery of and
performance under this Agreement by the Primary Parties, the incurrence of the
obligations set forth herein and the consummation of the transactions
contemplated herein will not result in any material violation of the provisions
of the articles of incorporation or charter, as the case may be, or the bylaws
of any of the Primary Parties or any material violation of any applicable law,
act, regulation, or to such counsel's knowledge, order or court order, writ,
injunction or decree.
The opinion may be limited to matters governed by the laws of the
United States, and in the case of local counsel, the State of New Jersey. In
rendering such opinion, such counsel may rely (A) as to matters involving the
application of laws of any jurisdiction other than the United States, to the
extent such counsel deems proper and specified in such opinion, upon the opinion
of other counsel of good standing, as long as such other opinion indicates that
the Agent may rely on the opinion, and (B) as to matters of fact, to the extent
such counsel deems proper, on certificates
22
of responsible officers of the Primary Parties and public officials; provided
copies of any such opinion(s) or certificates of public official are delivered
to Agent together with the opinion to be rendered hereunder by special counsel
to the Primary Parties. The opinion of such counsel for the Primary Parties
shall state that it has no reason to believe that the Agent is not justified in
relying thereon.
(2) The letter of Xxxxxxx, Spidi in form and substance
to the effect that during the preparation of the Registration Statement and the
Prospectus, Xxxxxxx, Spidi participated in conferences with certain officers of
and other representatives of the Primary Parties, counsel to the Agent,
representatives of the independent public accountants for the Primary Parties
and representatives of the Agent at which the contents of the Registration
Statement and the Prospectus and related matters were discussed and has
considered the matters required to be stated therein and the statements
contained therein and, although (subject to the requirements of Section 9(b)(1))
Xxxxxxx, Spidi has not independently verified the accuracy, completeness or
fairness of the statements contained in the Registration Statement and
Prospectus, on the basis of the foregoing, nothing has come to the attention of
Xxxxxxx, Spidi that caused Xxxxxxx, Spidi to believe that the Registration
Statement at the time it was declared effective by the SEC and as of the date of
such letter, contained or contains any untrue statement of a material fact or
omitted to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading (it being understood that counsel need express no comment
or opinion with respect to the financial statements, schedules and other
financial and statistical data included, or statistical or appraisal methodology
employed, in the Registration Statement or Prospectus).
(3) The favorable opinion, dated as of the Closing
Date, of Jamieson, Moore, Xxxxxx & Xxxxxx, P.C., counsel for the Agent, with
respect to such matters as the Agent may reasonably require; such opinion may
rely, as to matters of fact, upon certificates of officers and directors of the
Primary Parties delivered pursuant hereto or as such counsel may reasonably
request.
(c) Concurrently with the execution of this Agreement, the
Agent shall receive a letter from KPMG Peat Marwick, L.L.P., dated the date
hereof and addressed to the Agent, confirming that KPMG Peat Marwick, L.L.P. is
a firm of independent public accountants within the meaning of the Code of
Professional Ethics of the American Institute of Certified Public Accountants
and the 1933 Act, and no information concerning its relationship with or
interests in the Primary Parties is required by the Applications or Item 13 of
the Registration Statement, and stating in effect that in KPMG Peat Marwick,
L.L.P.'s opinion the financial statements of the Bank included in the Prospectus
comply as to form in all material respects with the applicable accounting
requirements of the 1933 Act, the 1934 act and the related published rules and
regulations of the Commission thereunder and the Conversion Regulations and
generally accepted accounting principles consistently applied; (ii) stating in
effect that, on the basis of certain agreed upon procedures (but not an audit
examination in accordance with generally accepted auditing standards) consisting
of a reading of the latest available unaudited interim financial statements of
23
the Bank prepared by the Bank, a reading of the minutes of the meetings of the
Board of Directors of the Bank and the members of the Bank, a review of interim
financial information in accordance with Statement on Auditing Standards No. 71,
and consultations with officers of the Bank responsible for financial and
accounting matters, nothing came to their attention which caused them to believe
that: (A) such unaudited financial statements, including recent developments, if
any, are not in conformity with generally accepted accounting principles applied
on a basis substantially consistent with that of the audited financial
statements included in the Prospectus; or (B) during the period from the date of
the latest unaudited consolidated financial statements included in the
Prospectus to a specified date not more than three business days prior to the
date hereof, there was any increase in borrowings (defined as advances from the
FHLB, securities sold under agreements to repurchase and any other form of debt
other than deposits) of the Bank or in nonperforming loans of the Bank; or (C)
there was any decrease in retained earnings of the Bank at the date of such
letter as compared with amounts shown in the latest unaudited statement of
condition included in the Prospectus or there was any decrease in net income or
net interest income of the Bank for the number of full months commencing
immediately after the period covered by the latest unaudited income statement
included in the Prospectus and ended on the latest month end prior to the date
of the Prospectus or in such letter as compared to the corresponding period in
the preceding year; and (iii) stating that, in addition to the audit examination
referred to in its opinion included in the Prospectus and the performance of the
procedures referred to in clause (ii) of this subsection (c), they have compared
with the general accounting records of the Bank, which are subject to the
internal controls of the accounting system of the Bank and other data prepared
by the Primary Parties directly from such accounting records, to the extent
specified in such letter, such amounts and/or percentages set forth in the
Prospectus as the Agent may reasonably request, and they have found such amounts
and percentages to be in agreement therewith (subject to rounding).
(d) At the Closing Date, the Agent shall receive a letter from
KPMG Peat Marwick, L.L.P. dated the Closing Date, addressed to the Agent,
confirming the statements made by its letter delivered by it pursuant to
subsection (c) of this Section 9, the "specified date" referred to in clause
(ii)(B) thereof to be a date specified in such letter, which shall not be more
than three business days prior to the Closing Date.
(e) At the Closing Date, counsel to the Agent shall have been
furnished with such documents and opinions as counsel for the Agent may require
for the purpose of enabling them to advise the Agent with respect to the
issuance and sale of the Common Stock as herein contemplated and related
proceedings, or in order to evidence the accuracy of any of the representations
and warranties, or the fulfillment of any of the conditions herein contained.
(f) At the Closing Date, the Agent shall receive a certificate
of the Chief Executive Officer and Chief Financial Officer of each of the
Primary Parties, dated the Closing Date, to the effect that: (i) they have
examined the Prospectus and at the time the Prospectus became authorized for
final use, the Prospectus did 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
24
of the circumstances under which they were made, not misleading; (ii) there has
not been, since the respective dates as of which information is given in the
Prospectus, any material adverse change in the financial condition or in the
earnings, capital, properties, business prospects or business affairs of the
Primary Parties, considered as one enterprise, whether or not arising in the
ordinary course of business; (iii) the representations and warranties contained
in Section 6 of this Agreement are true and correct with the same force and
effect as though made at and as of the Closing Date; (iv) the Primary Parties
have complied in all material respects with all material agreements and
satisfied all conditions on its part to be performed or satisfied at or prior to
the Closing Date including the conditions contained in this Section 9; (v) no
stop order has been issued or, to the best of their knowledge, is threatened, by
the Commission or any other governmental body; (vi) no order suspending the
Offering, the Reorganization, the acquisition of all of the shares of the Bank
by the Holding Company, the acquisition by the MHC of shares of the Common Stock
or the effectiveness of the Prospectus has been issued and to the best of their
knowledge, no proceedings for any such purpose have been initiated or threatened
by the FDIC, the DOBI, the FRB, the Commission, or any other federal or state
authority; (vii) to the best of their knowledge, no person has sought to obtain
regulatory or judicial review of the action of the FDIC in approving the Plan or
to enjoin the Reorganization.
(g) At the Closing Date, the Agent shall receive a letter from
FinPro, Inc., dated as of the Closing Date, (i) confirming that said firm is
independent of the Primary Parties and is experienced and expert in the area of
corporate appraisals within the meaning of the Conversion Regulations, (ii)
stating in effect that the Appraisal complies in all material respects with the
applicable requirements of the Conversion Regulations, and (iii) further stating
that its opinion of the aggregate pro forma market value of the Primary Parties,
as converted, expressed in the Appraisal as most recently updated, remains in
effect.
(h) None of the Primary Parties shall have sustained, since
the date of the latest audited financial statements included in the Registration
Statement and Prospectus, any material loss or interference with its business
from fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action, order or
decree, otherwise than as set forth in the Registration Statement and the
Prospectus, and since the respective dates as of which information is given in
the Registration Statement and the Prospectus, there shall not have been any
material change, or any development involving a prospective material change in,
or affecting the general affairs of, management, financial position, retained
earnings, long-term debt, stockholders' equity or results of operations of any
of the Primary Parties, otherwise than as set forth or contemplated in the
Registration Statement and the Prospectus, the effect of which, in any such case
described above, is in the Agent's reasonable judgment sufficiently material and
adverse as to make it impracticable or inadvisable to proceed with the Offering
or the delivery of the Shares on the terms and in the manner contemplated in the
Prospectus.
25
(i) Prior to and at the Closing Date: (i) in the reasonable opinion of
the Agent there shall have been no material adverse change in the financial
condition or in the earnings, capital, properties or business affairs of any of
the Primary Parties independently, or the Primary Parties considered as one
enterprise, from and as of the latest dates as of which such condition is set
forth in the Prospectus, except as referred to therein; (ii) there shall have
been no material transaction entered into by the Primary Parties, independently
or considered as one enterprise, from the latest date as of which the financial
condition of the Primary Parties is set forth in the Prospectus, other than
transactions referred to or contemplated therein; (iii)none of the Primary
Parties shall have received from the FDIC, the DOBI or the FRB any direction
(oral or written) to make any material change in the method of conducting their
business with which it has not complied in all material respects (which
direction, if any, shall have been disclosed to the Agent) and which would
reasonably be expected to have a material and adverse effect on the condition
(financial or otherwise) or on the earnings, capital, properties or business
affairs of the Primary Parties considered as one enterprise; (iv) none of the
Primary Parties shall have been in default (nor shall an event have occurred
which, with notice or lapse of time or both, would constitute a default) under
any provision of any agreement or instrument relating to any material
outstanding indebtedness; (v) no action, suit or proceeding, at law or in equity
or before or by any federal or state commission, board or other administrative
agency, shall be pending or, to the knowledge of the Primary Parties, threatened
against any of the Primary Parties or affecting any of their properties wherein
an unfavorable decision, ruling or finding would reasonably be expected to have
a material and adverse effect on the financial condition or on the earnings,
capital, properties or business affairs of the Primary Parties, considered as
one enterprise; and (vi) the Shares shall have been qualified or registered for
offering and sale under the securities or "blue sky" laws of the jurisdictions
requested by the Agent.
(j) At or prior to the Closing Date, the Agent shall receive
(i) a copy of the letters from the FDIC and the DOBI authorizing the use of the
Prospectus and approving the MHC Notice and Application, (ii) a copy of the
order from the Commission declaring the Registration Statement effective, (iii)
a certified copy of the certificate of incorporation of the Bank, (iv) a
certified copy of the certificate of incorporation of the Holding Company, (v) a
copy of the letter from the FRB approving the Holding Company Application, (vi)
a certificate from the FDIC evidencing the Bank's insurance of accounts, (vii) a
certificate of the FHLB evidencing the Bank's membership therein, (viii) a
certificate or other writing from the DOBI, in form and substance reasonably
satisfactory to Agent, evidencing the valid existence of the MHC as of the
Closing Date, (ix) a copy of the letter from the DOBI approving the Merger
Application and (x) any other documents that Agent shall reasonably request.
(k) Subsequent to the date hereof, there shall not have occurred any of
the following: (i) a suspension or limitation in trading in securities generally
on the New York Stock Exchange or American Stock Exchange or in the
over-the-counter market, or quotations halted generally on the NASDAQ Stock
Market, or minimum or maximum prices for trading have been fixed, or maximum
ranges for prices for securities have been required by either of such exchanges
or the NASD or by order of the Commission or any other governmental authority
other than temporary
26
trading halts (A) imposed as a result of intra-day changes in the Dow Xxxxx
Industrial Average, (B) lasting no longer than until the regularly scheduled
commencement of trading on the next succeeding business-day, and (C) which, when
combined with all other such halts occurring during the previous five business
days, total less than three; (ii) a general moratorium on the operations of
commercial banks or other federally-insured financial institutions or general
moratorium on the withdrawal of deposits from commercial banks or other
federally-insured financial institutions declared by either federal or state
authorities; (iii) the engagement by the United States in hostilities which have
resulted in the declaration, on or after the date hereof, of a national
emergency or war; or (iv) a material decline in the price of equity or debt
securities if the effect of any of (i) through (iv) herein, in the Agent's
reasonable judgment, makes it impracticable or inadvisable to proceed with the
offering or the delivery of the Shares on the terms and in the manner
contemplated in the Registration Statement and the Prospectus.
Section 10. Indemnification.
(a) The Primary Parties jointly and severally agree to
indemnify and hold harmless the Agent, its officers, directors, agents,
attorneys, servants and employees and each person, if any, who controls the
Agent within the meaning of Section 15 of the 1933 Act or Section 20(a) of the
1934 Act, against any and all loss, liability, claim, damage or expense
whatsoever (including but not limited to settlement expenses, subject to the
limitation set forth in the last sentence of paragraph (c) below), joint or
several, that the Agent or any of such officers, directors, agents, attorneys,
servants, employees and controlling Persons (collectively, the "Related
Persons") may suffer or to which the Agent or the Related Persons may become
subject under all applicable federal and state laws or otherwise, and to
promptly reimburse the Agent and any Related Persons upon written demand for any
reasonable expenses (including reasonable fees and disbursements of counsel)
incurred by the Agent or any Related Persons in connection with investigating,
preparing or defending any actions, proceedings or claims (whether commenced or
threatened) to the extent such losses, claims, damages, liabilities or actions:
(i) arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement (or any
amendment or supplement thereto), preliminary or final Prospectus (or any
amendment or supplement thereto), the Applications, or any blue sky application
or other instrument or document of the Primary Parties or based upon written
information supplied by any of the Primary Parties filed in any state or
jurisdiction to register or qualify any or all of the Shares under the
securities laws thereof (collectively, the "Blue Sky Applications"), or any
application or other document, advertisement, or communication ("Sales
Information") prepared, made or executed by or on behalf of any of the Primary
Parties with its consent or based upon written information furnished by or on
behalf of any of the Primary Parties, whether or not filed in any jurisdiction
in order to qualify or register the Shares under the securities laws thereof,
(ii) arise out of or are based upon the omission or alleged omission to state in
any of the foregoing documents or information, a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; (iii) arise from any
theory of liability whatsoever relating to or arising from or based upon the
Registration Statement (or any amendment or supplement thereto), preliminary
27
or final Prospectus (or any amendment or supplement thereto), the Applications,
any Blue Sky Applications or Sales Information or other documentation
distributed in connection with the Reorganization; or (iv) result from any
claims made with respect to the accuracy, reliability and completeness of the
records of Eligible Account Holders, Supplemental Eligible Account Holders and
Other Members or for any denial or reduction of a subscription or order to
purchase Common Stock, whether as a result of a properly calculated allocation
pursuant to the Plan or otherwise, based upon such records; provided, however,
that no indemnification is required under this paragraph (a) to the extent such
losses, claims, damages, liabilities or actions arise out of or are based upon
any untrue material statements or alleged untrue material statements in, or
material omission or alleged material omission from, the Registration Statement
(or any amendment or supplement thereto) or the preliminary or final Prospectus
(or any amendment or supplement thereto), the Applications, the Blue Sky
Applications or Sales Information or other documentation distributed in
connection with the Reorganization made in reliance upon and in conformity with
written information furnished to the Primary Parties by the Agent or its
representatives (including counsel) with respect to the Agent expressly for use
in the Registration Statement (or any amendment or supplement thereto) or
Prospectus (or any amendment or supplement thereto) under the captions "Market
for the Common Stock" and "The Offering -- Plan of Distribution/Marketing
Arrangements" or statistical information regarding the Holding Company prepared
by the Agent for use in the Sales Information, except for information derived
from the Prospectus, provided further, that the Primary Parties will not be
responsible for any loss, liability, claim, damage or expense to the extent they
result primarily from material oral misstatements by the Agent to a purchaser of
Shares which are not based upon information in the Registration Statement or
Prospectus, or from actions taken or omitted to be taken by the Agent in bad
faith or from the Agent's gross negligence or willful misconduct, and the Agent
agrees to repay to the Primary Parties any amounts advanced to it by the Primary
Parties in connection with matters as to which it is found not to be entitled to
indemnification hereunder.
(b) The Agent agrees to indemnify and hold harmless the Primary
Parties, their directors and officers, agents, servants and employees and each
person, if any, who controls any of the Primary Parties within the meaning of
Section 15 of the 1933 Act or Section 20(a) of the 1934 Act against any and all
loss, liability, claim, damage or expense whatsoever (including but not limited
to settlement expenses, subject to the limitation set forth in the last sentence
of paragraph (c) below), joint or several which they, or any of them, may suffer
or to which they, or any of them, may become subject under all applicable
federal and state laws or otherwise, and to promptly reimburse the Primary
Parties and any such persons upon written demand for any reasonable expenses
(including fees and disbursements of counsel) incurred by them in connection
with investigating, preparing or defending any actions, proceedings or claims
(whether commenced or threatened) to the extent such losses, claims, damages,
liabilities or actions arise out of or are based upon any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement (or any amendment of supplement thereto), the Applications or any Blue
Sky Applications or Sales Information or are based upon the omission or alleged
omission to state in any of the foregoing documents a material fact required to
be stated therein or necessary to make the statements therein, in the light of
the circumstances under which
28
they were made, not misleading; provided, however, that the Agent's obligations
under this Section 10(b) shall exist only if and only to the extent that such
untrue statement or alleged untrue statement was made in, or such material fact
or alleged material fact was omitted from, the Registration Statement (or any
amendment or supplement thereto) or the Prospectus (or any amendment or
supplement thereto) in reliance upon and in conformity with written information
furnished to the Primary Parties by the Agent or its representatives (including
counsel) expressly for use under the captions "Market for the Common Stock" and
"The Reorganization and Offering - Plan of Distribution and Selling Commissions"
or statistical information regarding the Holding Company prepared by the Agent
for use in the Sales information (except for statistical information derived
from the Prospectus).
(c) Each indemnified party shall give prompt written notice to each
indemnifying party of any action, proceeding, claim (whether commenced or
threatened), or suit instituted against it in respect of which indemnity may be
sought hereunder, but failure to so notify an indemnifying party shall not
relieve it from any liability which it may have on account of this Section 10,
Section 11 or otherwise. An indemnifying party may participate at its own
expense in the defense of such action. In addition, if it so elects within a
reasonable time after receipt of such notice, an indemnifying party, jointly
with any other indemnifying parties receiving such notice, may assume the
defense of such action with counsel chosen by it and approved by the indemnified
parties that are defendants in such action, unless such indemnified parties
reasonably object to such assumption on the ground that there may be legal
defenses available to them that are different from or in addition to those
available to such indemnifying party. If an indemnifying party assumes the
defense of such action, the indemnifying parties shall not be liable for any
fees and expenses of counsel for the indemnified parties incurred thereafter in
connection with such action, proceeding or claim, other than reasonable costs of
investigation. In no event shall the indemnifying parties be liable for the fees
and expenses of more than one separate firm of attorneys (unless an indemnified
party or parties shall have reasonably concluded that there may be defenses
available to it or them which are different from or in addition to those of
other indemnified parties) for all indemnified parties in connection with any
one action, proceeding or claim or separate but similar or related actions,
proceedings or claims in the same jurisdiction arising out of the same general
allegations or circumstances. No indemnifying party, shall be liable for any
settlement of any action, proceeding or suit, which settlement is effected
without its prior written consent.
(d) The agreements contained in this Section 10 and in Section 11
hereof and the representations and warranties of the Primary Parties set forth
in this Agreement shall remain operative and in full force and effect regardless
of (i) any investigation made by or on behalf of the Agent or its officers,
directors, controlling persons, agents or employees or by or on behalf of any of
the Primary Parties or any officers, directors, controlling persons, agents or
employees of any of the Primary Parties; (ii) delivery of and payment hereunder
for the Shares; or (iii) any termination of this Agreement.
Section 11. Contribution.
29
(a) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in Section 10 is due in
accordance with its terms but is for any reason held by a court to be
unavailable from the Primary Parties on the one hand, or the Agent on the other
hand, as the case may be, the Primary Parties on the one hand, or the Agent on
the other hand, as the case may be, shall contribute to the aggregate losses,
claims, damages and liabilities (including any investigation, legal and other
expenses incurred in connection therewith and any amount paid in settlement of
any action, suit or proceeding of any claims asserted, but after deducting any
contribution received by the Primary Parties on the one hand, or the Agent on
the other hand, as the case may be, from persons other than the other party
thereto, who may also be liable for contribution) in such proportion so that (i)
the Agent is responsible for that portion represented by the percentage that the
fees paid to the Agent pursuant to Section 4 of this Agreement (not including
expenses) ("Agent's Fees"), less any portion of Agent's Fees paid by Agent to
Assisting Brokers, bear to the total proceeds received by the Primary Parties
from the sale of the Conversion Shares in the Conversion Offerings, net of all
expenses of the Offerings except Agent's Fees, and (ii) the Primary Parties
shall be responsible for the balance. If, however, the allocation provided above
is not permitted by applicable law or if the indemnified party failed to give
the notice required under Section 10 above, then each indemnifying party shall
contribute to such amount paid or payable by such indemnified party in such
proportion as is appropriate to reflect not only such relative fault of the
Primary Parties on the one hand and the Agent on the other in connection with
the statements or omissions which resulted in such losses, claims, damages or
liabilities (or actions, proceedings or claims in respect thereof), but also the
relative benefits received by the Primary Parties on the one hand and the Agent
on the other from the Offering, as well as any other relevant equitable
considerations. The relative benefits received by the Primary Parties on the one
hand and the Agent on the other hand shall be deemed to be in the same
proportion as the total proceeds from the Conversion Offerings, net of all
expenses of the Conversion Offerings except Agent's Fees, received by the
Primary Parties bear, with respect to the Agent, to the total fees (not
including expenses) received by the Agent less the portion of such fees paid by
the Agent to Assisting Brokers. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Primary Parties on the one hand or the
Agent on the other and the parties relative intent, good faith, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The Primary Parties and the Agent agree that it would not be just and
equitable if contribution pursuant to this Section 11 were determined by
pro-rata allocation or by any other method of allocation which does not take
account of the equitable considerations referred to above in this Section 11.
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or action, proceedings or claims in respect
thereof) referred to above in this Section 11 shall be deemed to include any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action, proceeding or claim.
It is expressly agreed that the Agent shall not be liable for any loss,
liability, claim, damage or expense or be required to contribute any amount
which in the aggregate exceeds the amount paid (excluding reimbursable expenses)
to the Agent under this Agreement less the portion of such fees paid by the
Agent to Assisting Brokers. It is understood and agreed that the
30
above-stated limitation on the Agent's liability is essential to the Agent and
that the Agent would not have entered into this Agreement if such limitation had
not been agreed to by the parties to this Agreement. No person found guilty of
any fraudulent misrepresentation (within the meaning of Section 11 (f) of the
0000 Xxx) shall be entitled to contribution from any person who was not found
guilty of such fraudulent misrepresentation. The duties, obligations and
liabilities of the Primary Parties and the Agent under this Section 11 and under
Section 10 shall be in addition to any duties, obligations and liabilities which
the Primary Parties and the Agent may otherwise have. For purposes of this
Section 11, each of the Agent's and the Primary Parties' officers and directors
and each person, if any, who controls the Agent or any of the Primary Parties
within the meaning of the 1933 Act and the 1934 Act shall have the same rights
to contribution as the Primary Parties and the Agent. Any party entitled to
contribution, promptly after receipt of notice of commencement of any action,
suit, claim or proceeding against such party in respect of which a claim for
contribution may be made against another party under this Section 11, will
notify such party from whom contribution may be sought, but the omission to so
notify such party shall not relive the party from whom contribution may be
sought from any other obligation it may have hereunder or otherwise than under
this Section 11.
Section 12. Representations, Warranties and Indemnities to Survive
Delivery. All representations, warranties and indemnities and other statements
contained in this Agreement, or contained in certificates of officers of the
Primary Parties or the Agent submitted pursuant hereto, shall remain operative
and in full force and effect, regardless of any termination or cancellation of
this Agreement or any investigation made by or on behalf of the Agent or its
controlling persons, or by or on behalf of the Primary Parties and shall survive
the issuance of the Shares, and any legal representative, successor or assign of
the Agent, any of the Primary Parties, and any indemnified person shall be
entitled to the benefit of the respective agreements, indemnities, warranties
and representations.
Section 13. Termination. Agent may terminate this Agreement by giving
the notice indicated below in this Section at any time after this Agreement
becomes effective as follows:
(a) In the event the Holding Company fails to sell the minimum
number of the Conversion Shares within the period specified in accordance with
the provisions of the Plan or as required by the Conversion Regulations and
applicable law, this Agreement shall terminate upon refund by the Primary
Parties to each person who has subscribed for or ordered any of the Conversion
Shares the full amount which it may have received from such person, together
with interest in accordance with Section 3, and no party to this Agreement shall
have any obligation to the other hereunder, except as set forth in Sections 3,
4, 8, 10 and 11 hereof.
(b) If any of the conditions specified in Section 9 shall not
have been fulfilled by June 30, 1998, this Agreement and all of the Agent's
obligations hereunder may be canceled by the Agent by notifying the Bank of such
cancellation in writing at any time at or prior to the Closing Date, and any
such cancellation shall be without liability of any party to any other party
except as otherwise provided in Sections 3, 4, 8, 10 and 11 hereof.
31
(c) If Agent elects to terminate this Agreement as provided in
this Section, the Bank shall be notified by the Agent as provided in Section 14
hereof.
(d) If this Agreement is terminated in accordance with the
provisions of this Agreement, the Primary Parties shall pay the Agent the fees
earned pursuant to Section 4 and will reimburse the Agent for its reasonable
expenses pursuant to Section 8, including without limitation accounting,
communication, legal and travel expenses.
Section 14. 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 Agent shall be
directed to Xxxx, Xxxx & Co., 000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxx Xxxxxx
00000, Attention: Xxx Xxxxxxx, President (with a copy to Xxxxxx X. Xxxxxxxx,
Esq., Jamieson, Moore, Xxxxxx & Xxxxxx, P.C., 000 Xxxxxxx Xxxxxx, Xxxxxxxxxx, XX
07960); notices to the Primary Parties shall be directed to Ridgewood Savings
Bank of New Jersey, 00 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxx X. Xxxxx, President and Chief Executive Officer (with a copy to
Xxxxxx Xxxxxxx, Esq., Xxxxxxx, Spidi Sloane & Xxxxx, P.C., Attorneys at Law, One
Franklin Square, 0000 X Xxxxxx, X.X., Xxxxx 000 Xxxx, Xxxxxxxxxx, D.C. 20005).
Section 15. Parties. This Agreement shall inure to the benefit of and
be binding upon the Agent and the Primary Parties, 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
parties hereto and their respective successors and the controlling persons and
officers and directors referred to in Sections 10 and 11 and their heirs and
legal representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provisions herein contained. It is understood
and agreed that this Agreement is the exclusive agreement among the parties,
supersedes any prior Agreement among the parties and may not be varied except by
a writing signed by all parties.
Section 16. Partial Invalidity. In the event that any term, provision
or covenant herein or the application thereof to any circumstances or situation
shall be invalid or unenforceable, in whole or in part, the remainder hereof and
the application of said term, provision or covenant to any other circumstance or
situation shall not be affected thereby, and each term, provision or covenant
herein shall be valid and enforceable to the full extent permitted by law.
Section 17. Construction. This Agreement shall be construed in
accordance with the laws of the State of New Jersey.
32
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us a counterpart hereof, whereupon this
instrument along with all counterparts will become a binding agreement between
you and us in accordance with its terms.
Very truly yours,
RIDGEWOOD FINANCIAL, INC.
(In Formation)
By: _____________________________
Xxxxx X. Xxxxx
President and
Chief Executive Officer
RIDGEWOOD FINANCIAL, MHC
(In Formation)
By: ______________________________
Xxxxx X. Xxxxx
President and
Chief Executive Officer
RIDGEWOOD SAVINGS BANK
OF NEW JERSEY
By: _______________________________
Xxxxx X. Xxxxx
President and
Chief Executive Officer
The foregoing Agency Agreement is
hereby confirmed and accepted
as of the date first set and above written.
XXXX, XXXX & CO., INC.
By:_________________________
Name: XXX XXXXXXX
Title: President
33
RIDGEWOOD FINANCIAL, INC.
(a New Jersey-chartered Stock Corporation - in Formation)
1,405,300 Shares
(Subject to Increase Up to 1,616,095 Shares)
COMMON STOCK ($.10 Par Value)
Subscription Price $10.00 Per Share
________________, 1998
Ladies and Gentlemen:
We have agreed to assist Ridgewood Financial, Inc., Inc., a New
Jersey-chartered stock holding corporation in formation (the "Holding Company"),
Ridgewood Financial, MHC, a New Jersey-chartered mutual savings bank holding
company in formation (the "MHC") and Ridgewood Savings Bank of New Jersey, a New
Jersey-chartered mutual savings bank (the "Bank"), in connection with the offer
and sale by the Holding Company of up to 1,616,095 shares of the common stock,
$.10 par value per share (the "Common Stock"). These shares are to be issued in
connection with the reorganization of the Bank from a mutual savings bank to a
stock savings bank and wholly owned subsidiary of the Holding Company (the
"Reorganization"), in accordance with the Plan of Reorganization from a Mutual
Savings Bank to Mutual Holding Company and Stock Issuance Plan (the "Plan").
Under the Plan, the Holding Company will become, upon consummation of the
Reorganization, a majority-owned subsidiary of Ridgewood Financial, MHC, a New
Jersey chartered mutual holding company. The offering price per share of the
Common Stock has been fixed at $ 10.00. The Common Stock and certain of the
terms on which it is being offered are more fully described in the enclosed
prospectus dated___________, 1998 (the "Prospectus"). Capitalized terms not
otherwise defined herein shall have the meaning ascribed to them in the
Prospectus.
In connection with the Reorganization, the Holding Company is offering
the Common Stock in a Subscription Offering to the Eligible Account Holders, the
ESOP, the Supplemental Eligible Account Holders and the Other Members. The
Holding Company is also offering all shares of Common Stock offered but not
subscribed for in the Subscription Offering in the Community Offering to members
of the general public, with preference given first to residents of the Bank's
local community in Bergen County, New Jersey. The Common Stock is also being
offered in accordance with the Plan by a selling group of broker-dealers in the
Public/Syndicated Community Offering.
We are offering the selected dealers (of which you are one) the
opportunity to participate in the solicitation of offers to buy the Common Stock
and we will pay you a fee in the amount of
percent (____%) of the dollar amount of the Common Stock sold on
behalf of the Holding Company by you, as evidenced by the authorized designation
of your firm on the order
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form or forms for such Common Stock accompanying the funds transmitted for
payment therefor to the special account established by the Bank for the purpose
of holding such funds. Any purchase of Common Stock made pursuant to this
Agreement is subject to the maximum purchase limitations provided for in the
Plan and described in the Prospectus. It is understood, of course, that payment
of your fee will be made to you directly by the Holding Company for the Common
Stock sold on behalf of the Holding Company by you, as evidenced in accordance
with the preceding sentence. As soon as practicable after the closing date of
the Offering, the Holding Company will remit to you the fees to which you are
entitled hereunder.
Each order form for the purchase of Common Stock must set forth the
identity and address of each person to whom the certificates for such Common
Stock should be issued and delivered. Such order form should clearly identify
your firm. You shall instruct any subscriber who elects to send his order form
to you to make any accompanying check payable to the Bank.
This offer is made subject to the terms and conditions herein set forth
and contained in the Plan and is made only to selected dealers who are (i)
members in good standing of the National Association of Securities Dealers, Inc.
(the "NASD") who are to comply with all applicable rules of the NASD, including,
without limitation, the NASD's Interpretation With Respect to Free-Riding and
Withholding and Section 24 of Article III of the NASD's Rules of Fair Practice,
or (ii) foreign dealers not eligible for membership in the NASD who agree (A)
not to sell any Common Stock within the United States, its territories or
possessions or to persons who are citizens thereof or resident therein and (B)
in making other sales to comply with the above-mentioned NASD Interpretation,
Sections 8, 24 and 36 of the above-mentioned Article III as if they were NASD
members and Section 2S of such Article III as it applies to non-member brokers
or dealers in a foreign country.
Orders for Common Stock will be strictly subject to confirmation and
we, acting on behalf of the Holding Company, reserve the right in our
unrestricted 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 Holding Company 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 Common Stock. No selected
dealer is authorized to act as agent for us when soliciting offers to buy the
Common Stock from the public or otherwise. No selected dealer shall engage in
any stabilizing (as defined in Regulation M promulgated under the Securities
Exchange Act of 1934) with respect to the Common Stock during the offering.
We and each selected dealer assisting in selling Common Stock pursuant
hereto agree to comply with the applicable requirements of the Securities
Exchange Act of 1934 and applicable state rules and regulations. In addition, we
and each selected dealer confirm that the Securities and Exchange Commission
interprets Rule 15c2-8 promulgated under the Securities Exchange Act of 1934 as
requiring that a Prospectus be supplied to each person who is expected to
receive a confirmation of sale 48 hours prior to delivery of such person's order
form.
35
We and each selected dealer within the meaning of Rule 15c3-l(a)(1)
further agree to the extent that our customers desire to pay for shares with
funds held by or to be deposited with us, in accordance with the interpretation
of the Securities and Exchange Commission of Rule 15c2-4 promulgated under the
Securities Exchange Act of 1934, either (a) upon receipt of an executed order
form or direction to execute an order form on behalf of a customer to forward
the offering price for the Common Stock ordered on or before twelve noon of the
business day following receipt or execution of an order form by us to the
Holding Company for deposit in a segregated account or (b) to solicit
indications of interest in which event (i) we will subsequently contact any
customer indicating interest to confirm the interest and give instructions to
execute and return an order form or to receive authorization to execute the
order form on the customer's 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 third 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 Holding Company on or before twelve noon on the next business
day following the Debit Date for deposit in a segregated account. We and each
selected dealer acknowledge that if the procedure in (b) is adopted, our
customers' funds are not required to be in their accounts until the Debit Date.
Unless earlier terminated by us, this Agreement shall terminate upon
the closing date of the Offering. 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.
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 of
Common Stock sold on behalf of the Holding Company by you under this Agreement.
We shall have full authority to take such actions as we may deem
advisable in respect of 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 Common Stock has 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 Common Stock 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.
36
This Agreement shall be construed in accordance with the laws of the
State of New Jersey.
Please confirm your agreement hereto by signing and returning the
confirmation accompanying this letter at once to us at Xxxx, Xxxx & Co., Inc.,
000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxx Xxxxxx 00000. The enclosed duplicate
copy will evidence the agreement between us.
XXXX, XXXX & CO., INC.
By:_________________________
Name:
Title:
Agreed and accepted as of_________________ , 1998
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