Exhibit 1.2
Up to 1,840,000 Shares
NCRIC GROUP, INC.
(a District of Columbia corporation)
Common Stock
($.01 par value per share)
AGENCY AGREEMENT
_____________________, ▇▇▇▇
▇▇▇▇▇▇▇ ▇'▇▇▇▇▇ & PARTNERS, L.P.
Two World Trade Center, ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
NCRIC Group, Inc., a District of Columbia corporation (the "Company"),
NCRIC, a Mutual Holding Company, a District of Columbia Mutual Insurance Holding
Company (the "MHC") and NCRIC, Inc., a District of Columbia stock insurance
company ("NCRIC"), hereby confirm their agreement with Sandler ▇'▇▇▇▇▇ &
Partners, L.P. ("Sandler ▇'▇▇▇▇▇" or the "Agent") with respect to the offer and
sale by the Company of up to 1,840,000 shares of the Company's Common Stock,
$.01 par value per share (the "Common Stock"). The shares of Common Stock to be
sold by the Company are hereinafter called the "Securities."
The MHC is the holding company for NCRIC Holdings, Inc. ("Holdings"), which
is the holding company for the Company. The Company is the holding company for
NCRIC and its subsidiaries, as well as the holding company for NCRIC MSO, Inc.
("MSO") and its subsidiary.
The Securities to be issued will be offered by the Company at $7.00 per
share (the "Purchase Price") in a subscription offering (the "Subscription
Offering") pursuant to nontransferable subscription rights in the following
order of priority: (1) named insureds under policies of insurance issued by
NCRIC and in force as of the close of business on March 15, 1999 and extended
reporting endorsement holders as of such date ("Eligible Holders"); (2) the
Company's tax-qualified employee stock ownership plan (the "ESOP") and Stock
Award Plan; and (3) directors, officers and employees of the MHC and the MHC's
subsidiaries. Associates of an Eligible Holder may also purchases shares of
common stock offered to the Eligible Holder. "Associates" are pension plans,
other employee benefit plans, trusts and other entities established for the
benefit of an insured.
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Subject to the prior rights of holders of subscription rights, any
Securities not subscribed for in the Subscription Offering may be offered to
members of the general public at the Purchase Price in a direct community
offering (the "Community Offering," and together with the Subscription Offering,
as each may be extended, the "Subscription and Community Offering") to be
commenced concurrently with the Subscription Offering. Preference will be given
in the Community Offering to (1) named insureds under NCRIC policies issued
after March 15, 1999; (2) providers of goods and services to the Company and its
subsidiaries; and (3) residents of the District of Columbia, Maryland and
Virginia.
It is currently anticipated by the Company and NCRIC that any Securities
not subscribed for in the Subscription and Community Offering will be offered,
subject to Section 3 hereof, in a syndicated community offering (the "Syndicated
Community Offering"). The Subscription and Community Offering and the Syndicated
Community Offering are hereinafter referred to collectively as the "Offerings."
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form SB-2 (No. 333-69537), including a
related prospectus, for the registration of the Securities under the Securities
Act of 1933, as amended (the "Securities Act"), has filed such amendments
thereto and such amended prospectuses as may have been required to the date
hereof by the Commission in order to declare such registration statement
effective, and will file such additional amendments thereto and such amended
prospectuses and prospectus supplements as may hereafter be required. Such
registration statement (as amended to date, if applicable, and as from time to
time amended or supplemented hereafter) and the prospectuses constituting a part
thereof (including in each case all documents incorporated or deemed to be
incorporated by reference therein and the information, if any, deemed to be a
part thereof pursuant to the rules and regulations of the Commission under the
Securities Act, as from time to time amended or supplemented pursuant to the
Securities Act or otherwise (the "Securities Act Regulations")), are hereinafter
referred to as the "Registration Statement" and the "Prospectus," respectively,
except that if any revised prospectus shall be used by the Company in connection
with the Subscription and Community Offering or the Syndicated Community
Offering which differs from the Prospectus on file at the Commission at the time
the Registration Statement becomes effective (whether or not such revised
prospectus is required to be filed by the Company pursuant to Rule 424(b) of the
Securities Act Regulations), the term "Prospectus" shall refer to such revised
prospectus from and after the time it is first provided to the Agent for such
use.
Concurrently with the execution of this Agreement, the Company is
delivering to the Agent copies of the Prospectus of the Company to be used in
the Subscription and Community Offering. Such prospectus contains information
with respect to NCRIC, the Company, the MHC, the Subscription and Community
Offering, and the Common Stock.
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SECTION 1. REPRESENTATIONS AND WARRANTIES.
(a) The Company, the MHC and NCRIC jointly and severally represent and
warrant to the Agent as of the date hereof as follows:
(i) The Registration Statement has been declared effective by the
Commission, no stop order has been issued with respect thereto and no
proceedings therefor have been initiated or, to the knowledge of the
Company, the MHC or NCRIC, threatened by the Commission. At the time the
Registration Statement became effective and at the Closing Time referred to
in Section 2 hereof, the Registration Statement complied and will comply
in all material respects with the requirements of the Securities Act and
the Securities Act Regulations and did not and will not contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading. At the date hereof the Prospectus does not and at the Closing
Time referred to in Section 2 hereof, will not include an untrue statement
of a material fact or omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under which
they were made, not misleading; provided, however, that the representations
and warranties in this subsection shall not apply to statements in or
omissions from the Registration Statement or Prospectus made in reliance
upon and in conformity with information with respect to the Agent furnished
to the Company in writing by the Agent expressly for use in the
Registration Statement or Prospectus (the "Agent Information," which the
Company, the MHC and NCRIC acknowledge appears in the Prospectus only in
the sections captioned "Purchases in the Stock Offering--Subscription
Agent" and "Market for Common Stock").
(ii) NCRIC has filed with the District of Columbia Department of
Insurance and Securities (the "Department") a letter requesting approval of
the terms of the Offerings, and has filed such amendments thereto and
supplementary materials as may have been required to the date hereof (such
application, as amended to date, if applicable, and as from time to time
amended or supplemented hereafter, is hereinafter referred to as the
"Offering Application"). The Department has, by written order dated January
27, 1999, approved the Offering Application, such approval remains in full
force and effect and no order has been issued by the Department suspending
or revoking such approval and no proceedings therefor have been initiated
or, to the knowledge of the Company, the MHC or NCRIC, threatened by the
Department. At the date of such approval and at the Closing Time referred
to in Section 2, the Offering Application and the Offering complied and
will comply in all material respects with the applicable provisions of the
Reciprocal Insurance Company Conversion Act of 1998 (the "Conversion Act")
and regulations adopted thereunder.
(iii) The Company will promptly file the Prospectus and any
supplemental sales literature with the Commission. The Prospectus and all
supplemental sales literature,
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as of the date the Registration Statement became effective and at the
Closing Time referred to in Section 2, will have received all required
authorizations for use in final form.
(iv) Neither the Commission nor the Department has, by order or
otherwise, prevented or suspended the use of the Prospectus or any
supplemental sales literature authorized by the Company or NCRIC for use in
connection with the Offerings.
(v) At the Closing Time referred to in Section 2, the Company and
NCRIC will have completed the conditions precedent to the Offerings in
accordance with all applicable laws, regulations, decisions and orders,
including all material terms, conditions, requirements and provisions
precedent to the Offerings imposed upon the Company, the MHC or NCRIC by
any regulatory authority, other than those which the regulatory authority
permits to be completed after the Closing Time.
(vi) RP Financial, LC., which prepared the valuation of NCRIC as
part of the Offerings, is independent of the Company and NCRIC.
(vii) The accountants who certified the consolidated financial
statements and supporting schedules of NCRIC included in the Registration
Statement have advised the Company and NCRIC in writing that they are
independent public accountants within the meaning of the Code of Ethics of
the American Institute of Certified Public Accountants and such accountants
are, with respect to the Company and each of its subsidiaries, independent
certified public accountants as required by the Securities Act and the
Securities Act Regulations.
(viii) The only direct subsidiary of the MHC is Holdings. The
only direct subsidiary of Holdings is the Company. The only s direct
subsidiaries of the Company are NCRIC and MSO. The only direct subsidiaries
of NCRIC are National Capital Insurance Brokerage, Ltd., NCRIC Insurance
Agency, Inc. and Commonwealth Medical Liability Insurance Company, and the
only direct subsidiary of MSO is NCRIC Physicians Organization, Inc.
(ix) The consolidated financial statements and the related notes
thereto included in the Registration Statement and the Prospectus present
fairly the financial position of the NCRIC and their consolidated
subsidiaries at the dates indicated and the related statements of
operations, equity, and cash flows for the periods specified, and comply as
to form in all material respects with the applicable accounting
requirements of the Securities Act Regulations; except as otherwise stated
in the Registration Statement, said financial statements have been prepared
in conformity with generally accepted accounting principles applied on a
consistent basis; and the supporting schedules and tables included in the
Registration Statement present fairly the information required to be stated
therein. The
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consolidated financial statements and the related notes thereto included in
the Registration Statement and the Prospectus present fairly the financial
position of Healthcare Consulting, Inc., HCI Ventures, LLC and Employee
Benefits Services, Inc. at the dates indicated and the related statements
of operations, equity, and cash flows for the periods specified, and comply
as to form in all material respects with the applicable accounting
requirements of the Securities Act Regulations; except as otherwise stated
in the Registration Statement, said financial statements have been prepared
in conformity with generally accepted accounting principles applied on a
consistent basis; and the supporting schedules and tables included in the
Registration Statement present fairly the information required to be stated
therein. The pro forma consolidated financial data of the Company and NCRIC
included in the Registration Statement have been prepared and compiled in
all material respects on the pro forma basis described therein, and the pro
forma adjustments have in all material respects been properly and fairly
applied to the historical consolidated financial statements of the Company
and NCRIC for the periods to which they relate. The financial information
set forth in the Prospectus under "Selected Consolidated Financial and
Operating Data" presents fairly, on the basis stated in the Prospectus, the
information set forth therein.
(x) Since the respective dates as of which information is given
in the Registration Statement and the Prospectus, except as otherwise
stated therein (A) there has been no material adverse change in the
financial condition, results of operations or business affairs of the MHC,
the Company and their subsidiaries considered as one enterprise, whether or
not arising in the ordinary course of business, and (B) except for
transactions specifically referred to or contemplated in the Prospectus,
there have been no transactions entered into by the MHC, or the Company, or
any of their subsidiaries which are material with respect to the MHC, the
Company and their subsidiaries, considered as one enterprise.
(xi) The MHC, the Company, NCRIC and each of their subsidiaries
have been duly incorporated and is validly existing as a corporation in
good standing under the laws of its respective jurisdiction of
incorporation with full corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectus; and the MHC, the Company, NCRIC and each of their subsidiaries
are duly qualified as a foreign corporation to transact business and are in
good standing in each jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the conduct of
business, except where the failure to so qualify would not have a material
adverse effect on the financial condition, results of operations or
business affairs of the MHC, the Company, NCRIC and each of their
subsidiaries, considered as one enterprise. NCRIC has all requisite power
and authority to carry on an insurance business pursuant to and to the
extent of the certificates of authority issued under the laws of the
District of Columbia and the State of Maryland. CML has all requisite
power and authority to carry on an insurance business pursuant to and to
the extent of the certificates of authority issued under the laws of the
District of Columbia and the States of Maryland, Virginia, West
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Virginia and Delaware. Each of the MHC, the Company and the other
subsidiaries has all requisite power, authority and licenses to carry on
their respective businesses. Except as disclosed in the Prospectus, the
authority of each of NCRIC and CML to write the classes and lines of
insurance authorized by such licenses, certificates, permits and other
authorizations and described in the Prospectus is unrestricted and neither
the MHC, the Company nor any of their subsidiaries is a party to any
agreement, formal or informal, with any regulatory official or other person
limiting the ability of any of the MHC, the Company, NCRIC or their
subsidiaries from making full use of the licenses, certificates, permits
and other authorizations issued to them or requiring the MHC, the Company
or any of their subsidiaries to comply with regulatory standards or
procedures or requirements different from those applicable to companies
with comparable or similar licenses, certificates, permits and other
authorizations, except where such restriction, limitation or requirement
would not have a material adverse effect on the financial condition,
results of operations or business affairs of the Company and its
subsidiaries, considered as one enterprise.
(xii) The MHC, the Company, NCRIC and each of their subsidiaries
conducts their business in compliance in all material respects with
applicable federal, state, local and foreign laws and regulations, except
where the failure to be in compliance would not have a material adverse
effect on the financial condition, results of operations or business
affairs of the MHC, the Company and their subsidiaries, considered as one
enterprise. The MHC, the Company and each of their subsidiaries have
obtained all licenses, permits and other governmental authorizations
currently required for the conduct of their respective businesses or
required for the conduct of their respective businesses as described in the
Prospectus, except where the failure to obtain such licenses, permits or
other governmental authorizations would not have a material adverse effect
on the financial condition, results of operations or business affairs of
the MHC, the Company and their subsidiaries considered as one enterprise;
all such licenses, permits and other governmental authorizations are in
full force and effect and the MHC, the Company and each of their
subsidiaries are in all material respects in compliance therewith; neither
the MHC, the Company nor any of their subsidiaries has received notice of
any proceeding or action relating to the revocation or modification of any
such license, permit or other governmental authorization which, singly or
in the aggregate, if the subject of an unfavorable decision, ruling or
finding, might have a material adverse effect on the financial condition,
results of operations or business affairs of the MHC, the Company and their
subsidiaries, considered as one enterprise.
(xiii) At the Closing Time, the authorized, issued and
outstanding capital stock of the Company will be as set forth in the
Prospectus under "Capitalization"(except for subsequent issuances, if any,
pursuant to reservations, agreements or employee benefit plans referred to
in the Prospectus); except for 1,000 shares of Common Stock which are
currently held by Holdings, no shares of Common Stock have been or will be
issued and outstanding prior to the Closing Time referred to in Section 2;
at the Closing Time, the Securities will
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have been duly authorized for issuance and, when issued and delivered by
the Company against payment of the consideration calculated as set forth on
the cover page of the Prospectus, will be duly and validly issued and fully
paid and non-assessable; the terms and provisions of the Common Stock and
the capital stock of the Company conform to all statements relating thereto
contained in the Prospectus; the certificates representing the shares of
Common Stock conform to the requirements of applicable law and regulations;
and the issuance of the Securities is not subject to preemptive or other
similar rights. There are no options, agreements, contracts or other rights
in existence to acquire from the Company any shares of Common Stock, except
as set forth in the Prospectus.
(xiv) The authorized capital stock of NCRIC is 1,000 shares of
common stock, par value $.01 per share (the "NCRIC Common Stock"), and
1,000 shares of NCRIC Common Stock have been issued to the Company. No
other shares of NCRIC Common Stock will be issued prior to the Closing Time
referred to in Section 2. The shares of NCRIC Common Stock issued to the
Company have been duly authorized for issuance and are duly and validly
issued and fully paid and nonassessable, and all such NCRIC Common Stock is
owned beneficially and of record by the Company free and clear of any
security interest, mortgage, pledge, lien, encumbrance or legal or
equitable claim; the certificates representing the shares of NCRIC Common
Stock conform with the requirements of applicable laws and regulations; and
the issuance of NCRIC Common Stock was not subject to preemptive or similar
rights. The authorized capital stock of MSO is 1,000 shares of common
stock, par value $50 per share (the "MSO Common Stock"), and 1,000 shares
of MSO Common Stock have been issued to the Company. No other shares of MSO
Common Stock will be issued prior to the Closing Time referred to in
Section 2. The shares of MSO Common Stock issued to the Company have been
duly authorized for issuance and are duly and validly issued and fully paid
and nonassessable, and all such MSO Common Stock is owned beneficially and
of record by the Company free and clear of any security interest, mortgage,
pledge, lien, encumbrance or legal or equitable claim; the certificates
representing the shares of MSO Common Stock conform with the requirements
of applicable laws and regulations; and the issuance of MSO Common Stock
was not subject to preemptive or similar rights.
(xv) All of the issued and outstanding capital stock of each
subsidiary of the MHC has been duly authorized and validly issued, is fully
paid and nonassessable and is owned by each subsidiary's direct parent,
respectively, free and clear of any security interest, mortgage, pledge,
lien, encumbrance or legal or equitable claim.
(xvi) The Company, the MHC and NCRIC have the corporate power to
enter into and to perform this Agreement and have taken all corporate
action necessary for them to execute, deliver and perform this Agreement,
and this Agreement has been duly executed and delivered by, and is the
valid and binding agreement of, the Company, the MHC and NCRIC, enforceable
in accordance with its terms, except as may be limited by bankruptcy,
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insolvency or other laws affecting the enforceability of the rights of
creditors generally and judicial limitations on the right of specific
performance and except as the enforceability of indemnification and
contribution provisions may be limited by applicable securities laws.
(xvii) Subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus and prior to the
Closing Time, except as otherwise may be indicated or contemplated therein,
none of the MHC, the Company or any of their subsidiaries will have (A)
issued any securities or incurred any liability or obligation, direct or
contingent, or borrowed money, except borrowings in the ordinary course of
business from the same or similar sources and in similar amounts as
indicated in the Prospectus, or (B) entered into any transaction or series
of transactions which is material in light of the business of the MHC, the
Company and their subsidiaries considered as one enterprise.
(xviii) No approval of any regulatory or supervisory or other
public authority is required in connection with the execution and delivery
of this Agreement or the issuance of the Securities that has not been
obtained and a copy of which has been delivered to the Agent, except as may
be required under the securities laws of various jurisdictions.
(xix) Neither the MHC, the Company nor any of their subsidiaries
is in violation of their certificate of incorporation, organization
certificate, articles of incorporation or charter, as the case may be, or
bylaws; and neither the MHC, the Company nor any of their subsidiaries is
in default (nor has any event occurred which, with notice or lapse of time
or both, would constitute a default) in the performance or observance of
any obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or other instrument to
which the MHC, the Company or any of their subsidiaries is a party or by
which it or any of them may be bound, or to which any of the property or
assets of the MHC, the Company or any of their subsidiaries is subject,
except for such defaults that would not, individually or in the aggregate,
have a material adverse effect on the financial condition, results of
operations or business of the MHC, the Company and its subsidiaries
considered as one enterprise; and there are no contracts or documents of
the Company or any of its subsidiaries which are required to be filed as
exhibits to the Registration Statement or the Offering Application which
have not been so filed.
(xx) The execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated herein do not and
will not conflict with or constitute a breach of, or default under, or
result in the creation or imposition of any lien, charge or encumbrance
upon any property or assets of the MHC, the Company or any of their
subsidiaries pursuant to any contract, indenture, mortgage, loan agreement,
note, lease or other instrument to which the MHC, the Company or any of
their subsidiaries is a party or by which it or any of them may be bound,
or to which any of the property or assets of the
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MHC, the Company or any of their subsidiaries is subject, except for such
defaults that would not, individually or in the aggregate, have a material
adverse effect on the financial condition, results of operations or
business affairs of the MHC, the Company and its subsidiaries considered as
one enterprise; nor will such action result in any violation of the
provisions of certificate of incorporation, organization certificate,
articles of incorporation or charter or bylaws of the MHC, the Company or
any of their subsidiaries, or any applicable law, administrative regulation
or administrative or court decree.
(xxi) No labor dispute with the employees of the MHC, the Company
or any of their subsidiaries exists or, to the knowledge of the MHC, the
Company or NCRIC, is imminent or threatened; and the MHC, the Company and
NCRIC are not aware of any existing or threatened labor disturbance by the
employees of any of its principal suppliers or contractors which might be
expected to result in any material adverse change in the financial
condition, results of operations or business affairs of the Company and its
subsidiaries considered as one enterprise.
(xxii) Each of the MHC, the Company and their subsidiaries has
good and marketable title to all properties and assets for which ownership
is material to the business of the MHC, the Company or any of their
subsidiaries and to those properties and assets described in the Prospectus
as owned by them, free and clear of all liens, charges, encumbrances or
restrictions, except such as are described in the Prospectus or are not
material in relation to the business of the Company or any of its
subsidiaries considered as one enterprise; and all of the leases and
subleases material to the business of the Company or any of its
subsidiaries under which the Company or any of its subsidiaries hold
properties, including those described in the Prospectus, are valid and
binding agreements of the Company and its subsidiaries, enforceable in
accordance with their terms.
(xxiii) Neither the MHC, the Company nor any of their
subsidiaries is in violation of any directive from the Department or any
other regulatory authority to make any material change in the method of
conducting their respective businesses; the MHC, the Company and their
subsidiaries have conducted and are conducting their business so as to
comply in all material respects with all applicable statutes, regulations
and administrative and court decrees (including, without limitation, all
regulations, decisions, directives and orders of the Department).
(xxiv) There is no action, suit or proceeding before or by any
court or governmental agency or body, domestic or foreign, now pending,
or, to the knowledge of the MHC, the Company or NCRIC, threatened, against
or affecting the MHC, the Company or any of their subsidiaries which is
required to be disclosed in the Registration Statement (other than as
disclosed therein), or which might result in any material adverse change in
the financial condition, results of operations or business affairs of the
Company and its
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subsidiaries considered as one enterprise, or which might materially and
adversely affect the properties or assets thereof or which might materially
and adversely affect the consummation of the Offerings; all pending legal
or governmental proceedings to which the MHC, the Company or any of their
subsidiaries is a party or of which any of their respective property or
assets is the subject which are not described in the Registration
Statement, including ordinary routine litigation incidental to the
business, are considered in the aggregate not material.
(xxv) The Company has obtained an opinion of its counsel, Arent
Fox ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇, PLLC ("Arent Fox"), with respect to the
legality of the Securities to be issued in the Offerings, a copy of which
is filed as an exhibit to the Registration Statement. NCRIC has obtained
from the Internal Revenue Service a private letter ruling (the "PLR")
concerning the material tax effects of its Mutual Holding Company
Reorganization. All material aspects of the aforesaid opinion and PLR are
accurately summarized in the Prospectus; the facts and representations upon
which such opinion and PLR are based are truthful, accurate and complete
in all material respects; and neither the MHC, NCRIC nor the Company has
taken or will take any action inconsistent therewith.
(xxvi) The Company is not required to be registered under the
Investment Company Act of 1940, as amended.
(xxvii) To the knowledge of the MHC, the Company and NCRIC, with
the exception of the intended loan to NCRIC's ESOP by the Company to enable
the ESOP to purchase shares of Common Stock in an amount of up to 10% of
the Common Stock issued in the Offerings, none of the MHC, the Company,
NCRIC or employees of any of the MHC's subsidiaries has made any payment of
funds of the Company or any of its subsidiaries as a loan for the purchase
of the Common Stock or made any other payment of funds prohibited by law,
and no funds have been set aside to be used for any payment prohibited by
law.
(xxviii) Neither the MHC, the Company nor any of their
subsidiaries nor any properties owned or operated by the MHC, the Company
or any of their subsidiaries is in violation of or liable under any
Environmental Law (as defined below), except for such violations or
liabilities that, individually or in the aggregate, would not have a
material adverse effect on the financial condition, results of operations
or business affairs of the MHC, the Company and their subsidiaries
considered as one enterprise. There are no actions, suits or proceedings,
or demands, claims, notices or investigations (including, without
limitation, notices, demand letters or requests for information from any
environmental agency) instituted or pending, or to the knowledge of the
MHC, the Company or any of their subsidiaries, threatened, relating to the
liability of any property owned or operated by the MHC, the Company or any
of their subsidiaries, under any Environmental Law. For purposes of this
subsection, the term "Environmental Law" means any federal, state, local or
foreign
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law, statute, ordinance, rule, regulation, code, license, permit,
authorization, approval, consent, order, judgment, decree, injunction or
agreement with any regulatory authority relating to (i) the protection,
preservation or restoration of the environment (including, without
limitation, air, water, vapor, surface water, groundwater, drinking water
supply, surface soil, subsurface soil, plant and animal life or any other
natural resource), and/or (ii) the use, storage, recycling, treatment,
generation, transportation, processing, handling, labeling, production,
release or disposal of any substance presently listed, defined, designated
or classified as hazardous, toxic, radioactive or dangerous, or otherwise
regulated, whether by type or by quantity, including any material
containing any such substance as a component.
(xxix) The MHC, Company and their subsidiaries have filed all
federal income and state and local franchise tax returns required to be
filed and have made timely payments of all taxes shown as due and payable
in respect of such returns, and no deficiency has been asserted with
respect thereto by any taxing authority.
(xxx) The Company has received approval, subject to completion of
the Offerings, to have the Securities quoted on the Nasdaq SmallCap Market
effective as of the Closing Time referred to in Section 2 hereof.
(xxxi) The Company has filed a registration statement on Form 8-A
to register the Common Stock under Section 12(g) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act").
(xxxii) There is no contract or other document of a character
required to be described in the Registration Statement or the Prospectus or
to be filed as an exhibit to the Registration Statement which is not
described or filed as required.
(xxxiii) The Company and each of its subsidiaries maintains a
system of internal accounting controls sufficient to provide reasonable
assurances that (i) transactions are executed in accordance with
management's general or specific authorizations, (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain
accountability for assets, (iii) access to cash and other liquid assets is
permitted only in accordance with management's general or specific
authorization, and (iv) the recorded ledger assets are compared with
existing assets at reasonable intervals and appropriate action is taken
with respect to any differences.
(xxxiv) Except as described in the Prospectus, there are no
contractual encumbrances or restrictions on the ability (i) of the Company
to pay dividends or make any other distributions on the Company's capital
stock or (ii) of the Company or any of its
SANDLER ▇'▇▇▇▇▇ & PARTNERS, L.P.
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subsidiaries (A) to pay any indebtedness owed, or (B) to make any loans or
advances to, or investments in, any of its subsidiaries, or (C) to transfer
any of its property or assets to the Company or any of its subsidiaries.
(xxxv) The accountants who certified the consolidated financial
statements and supporting schedules of Healthcare Consulting, Inc., HCI
Ventures, LLC and Employee Benefits Services, Inc. included in the
Registration Statement have advised Healthcare Consulting, Inc., HCI
Ventures, LLC and Employee Benefits Services, Inc. in writing that they are
independent public accountants within the meaning of the Code of Ethics of
the American Institute of Certified Public Accountants and such accountants
are, with respect to the Company and each of its subsidiaries, independent
certified public accountants as required by the Securities Act and the
Securities Act Regulations.
(b) Any certificate signed by any officer of the MHC, the Company or
NCRIC and delivered to either of the Agent or to counsel for the Agent shall be
deemed a representation and warranty by the MHC, the Company or NCRIC to the
Agent as to the matters covered thereby.
SECTION 2. APPOINTMENT OF SANDLER ▇'▇▇▇▇▇; SALE AND DELIVERY OF THE SECURITIES;
CLOSING.
On the basis of the representations and warranties herein contained and
subject to the terms and conditions herein set forth, the Company hereby
appoints Sandler ▇'▇▇▇▇▇ as its Agent to consult with and advise the Company,
and to assist the Company with the solicitation of subscriptions and purchase
orders for Securities, in connection with the Company's sale of Common Stock in
the Subscription and Community Offering and the Syndicated Community Offering.
On the basis of the representations and warranties herein contained, and subject
to the terms and conditions herein set forth, Sandler ▇'▇▇▇▇▇ accepts such
appointment and agrees to use its best efforts to assist the Company with the
solicitation of subscriptions and purchase orders for Securities in accordance
with this Agreement; provided, however, that the Agent shall not be obligated to
take any action which is inconsistent with any applicable laws, regulations,
decisions or orders. The services to be rendered by Sandler ▇'▇▇▇▇▇ pursuant to
this appointment include the following: (i) consulting as to the securities
marketing implications of any aspect of the Plan and related corporate
documents; (ii) reviewing with the Board of Directors the independent
appraiser's appraisal of the Common Stock; (iii) reviewing all offering
documents, including the Prospectus, stock order form and related offering
materials (it being understood that preparation and filing of such documents is
the sole responsibility of the Company and NCRIC and their counsel); (iv)
assisting in the design and implementation of a marketing strategy for the
Offerings; (v) assisting in obtaining all requisite regulatory approvals; (vi)
assisting management in preparing for meetings with potential investors and
broker-dealers; and (vii) providing such other general advice and assistance as
may be requested to promote the successful completion of the Offerings.
SANDLER ▇'▇▇▇▇▇ & PARTNERS, L.P.
Page 13
The appointment of the Agent hereunder shall terminate upon the earlier to
occur of (a) ninety (90 ) days after the last day of the Subscription and
Community Offering, unless the Company and the Agent agree in writing to extend
such period, or (b) the receipt and acceptance of subscriptions and purchase
orders for all of the Securities, or (c) the completion of the Syndicated
Community Offering.
If any of the Securities remain available after the expiration of the
Subscription and Community Offering, at the request of the Company and NCRIC,
Sandler ▇'▇▇▇▇▇ will seek to form a syndicate of registered brokers or dealers
("Selected Dealers") to assist in the solicitation of purchase orders of such
Securities on a best efforts basis, subject to the terms and conditions set
forth in a selected dealers' agreement (the "Selected Dealers' Agreement"),
substantially in the form set forth in Exhibit A to this Agreement. Sandler
▇'▇▇▇▇▇ will endeavor to limit the aggregate fees to be paid by the Company and
NCRIC under any such Selected Dealers' Agreement to an amount competitive with
gross underwriting discounts charged at such time for underwritings of
comparable amounts of stock sold at a comparable price per share in a similar
market environment; provided, however, that the aggregate fees payable to ▇▇▇▇▇▇
▇'▇▇▇▇▇ and Selected Dealers shall not exceed 5.5% of the aggregate Purchase
Price of the Securities sold by such Selected Dealers. Sandler ▇'▇▇▇▇▇ will
endeavor to distribute the Securities among the Selected Dealers in a fashion
which best meets the distribution objective of the Company and the requirements
of the Plan, which may result in limiting the allocation of stock to certain
Selected Dealers. It is understood that in no event shall Sandler ▇'▇▇▇▇▇ be
obligated to act as a Selected Dealer or to take or purchase any Securities.
In the event the Company is unable to sell at least the total minimum of
the Securities, as set forth on the cover page of the Prospectus, within the
period herein provided, this Agreement shall terminate and the Company shall
refund to any persons who have subscribed for any of the Securities the full
amount which it may have received from them, without interest, and no party to
this Agreement shall have any obligation to the others hereunder, except for the
obligations of the Company and NCRIC as set forth in Sections 4, 6(a) and 7
hereof and the obligations of the Agent as provided in Sections 6(b) and 7
hereof. Arrangements for placing the funds received from subscriptions for
Securities or other offers to purchase Securities in a separate escrow account
with Summit Bank until all Securities are sold and paid for were made prior to
the commencement of the Subscription Offering, with provision for refund to the
purchasers as set forth above, or for delivery to the Company if all Securities
are sold.
If at least the total minimum of Securities, as set forth on the cover page
of the Prospectus, are sold, the Company agrees to issue or have issued the
Securities sold and to release for delivery certificates for such Securities at
the Closing Time against payment therefor by release of funds from the escrow
account referred to above. The closing shall be held at the District of Columbia
offices of Arent Fox, at 10:00 a.m., local time, or at such other place and time
as shall be agreed upon by the parties hereto, on a business day to be agreed
upon by the parties hereto. The Company shall notify the Agent by telephone,
confirmed in writing, when funds shall have been received for all the
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Page 14
Securities. Certificates for Securities shall be delivered directly to the
purchasers thereof in accordance with their directions. Notwithstanding the
foregoing, certificates for Securities purchased through Selected Dealers shall
be made available to the Agent for inspection at least 48 hours prior to the
Closing Time at such office as the Agent shall designate. The hour and date upon
which the Company shall release for delivery all of the Securities, in
accordance with the terms hereof, is herein called the "Closing Time."
The Company will pay any stock issue and transfer taxes which may be
payable with respect to the sale of the Securities.
In addition to reimbursement of the expenses specified in Section 4 hereof,
the Agent will receive the following compensation for its services hereunder:
(a) an advisory and marketing fee of $50,000
(b) two percent (2%) of the aggregate Purchase Price of the Securities
sold in the Subscription and Community Offering; and
(c) with respect to any Securities sold by an NASD member firm
(including Sandler ▇'▇▇▇▇▇) under the Selected Dealers' Agreement in the
Syndicated Community Offering, (i) sales commission payable to Selected
Dealers under any Selected Dealers' Agreement, (ii) any sponsoring dealer's
fees; and (iii) a management fee to Sandler ▇'▇▇▇▇▇ of two percent (2.0%).
If this Agreement is terminated by the Agent in accordance with the
provisions of Section 9(a) hereof or the Offerings are terminated by the
Company, the Company shall be obligated to reimburse the Agent any unpaid amount
of the advisory and marketing fee and reimburse the Agent for all of its
reasonable out-of-pocket expenses incurred prior to termination, including the
reasonable fees and disbursements of counsel for the Agent in accordance with
the provisions of Section 4 hereof.
All fees payable to the Agent hereunder shall be payable in immediately
available funds at Closing Time, or upon the termination of this Agreement, as
the case may be. In recognition of the long lead times involved in the offering
process, NCRIC has made advance payments to the Agent in the aggregate amount of
$25,000, which shall be credited against any fees or reimbursement of expenses
payable hereunder.
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Page 15
SECTION 3. COVENANTS OF THE MHC, THE COMPANY AND NCRIC. The MHC, the Company and
NCRIC covenant with the Agent as follows:
(a) The Company and NCRIC will prepare and file such amendments or
supplements to the Registration Statement, the Prospectus and the Offering
Application as may hereafter be required by the Securities Act Regulations
or the Department or as may hereafter be requested by the Agent. Following
completion of the Offerings, the Company and NCRIC will promptly prepare
and file with the Commission a post-effective amendment to the Registration
Statement relating to the results of the updated valuation of NCRIC
prepared by RP Financial, LC. The Company and NCRIC will notify the Agent
immediately, and confirm the notice in writing, (i) of the effectiveness of
any post-effective amendment of the Registration Statement, the filing of
any supplement to the Prospectus and the filing of any amendment to the
Offering Application, (ii) of the receipt of any comments from the
Department or the Commission with respect to the transactions contemplated
by this Agreement or the Plan, (iii) of any request by the Commission or
the Department for any amendment to the Registration Statement or the
Offering Application or any amendment or supplement to the Prospectus or
for additional information, (iv) of the issuance by the Department of any
order suspending the Offerings or the use of the Prospectus or the
initiation of any proceedings for that purpose, (v) of the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement or the initiation of any proceedings for that
purpose, and (vi) of the receipt of any notice with respect to the
suspension of any qualification of the Securities for offering or sale in
any jurisdiction. The MHC, the Company and NCRIC will make every reasonable
effort to prevent the issuance of any stop order and, if any stop order is
issued, to obtain the lifting thereof at the earliest possible moment.
(b) The Company and NCRIC will give the Agent notice of its intention
to file or prepare any amendment to the Offering Application or
Registration Statement (including any post-effective amendment) or any
amendment or supplement to the Prospectus (including any revised prospectus
which the Company proposes for use in connection with the Syndicated
Community Offering of the Securities which differs from the prospectus on
file at the Commission at the time the Registration Statement becomes
effective, whether or not such revised prospectus is required to be filed
pursuant to Rule 424(b) of the Securities Act Regulations), will furnish
the Agent with copies of any such amendment or supplement a reasonable
amount of time prior to such proposed filing or use, as the case may be,
and will not file any such amendment or supplement or use any such
prospectus to which the Agent or counsel for the Agent may object.
(c) The Company and NCRIC will deliver to the Agent as many signed
copies and as many conformed copies of the Reorganization Application and
the Registration Statement as originally filed and of each amendment
thereto (including exhibits filed therewith or
SANDLER ▇'▇▇▇▇▇ & PARTNERS, L.P.
Page 16
incorporated by reference therein) as the Agent may reasonably request, and
from time to time such number of copies of the Prospectus as the Agent may
reasonably request.
(d) During the period when the Prospectus is required to be delivered,
the MHC, the Company and NCRIC will comply, at their own expense, with all
requirements imposed upon them by the Department, by the Conversion Act, as
from time to time in force, and by the Securities Act, the Securities Act
Regulations, the Exchange Act, and the rules and regulations of the
Commission promulgated thereunder, including, without limitation,
Regulation M under the Exchange Act, so far as necessary to permit the
continuance of sales or dealing in shares of Common Stock during such
period in accordance with the provisions hereof and the Prospectus.
(e) If any event or circumstance shall occur as a result of which it
is necessary, in the opinion of counsel for the Agent, to amend or
supplement the Prospectus in order to make the Prospectus not misleading in
the light of the circumstances existing at the time it is delivered to a
purchaser, the Company and NCRIC will forthwith amend or supplement the
Prospectus (in form and substance satisfactory to counsel for the Agent) so
that, as so amended or supplemented, the Prospectus will not include an
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances existing at the time it is delivered to a purchaser, not
misleading, and the Company and NCRIC will furnish to the Agent a
reasonable number of copies of such amendment or supplement. For the
purpose of this subsection, the Company and NCRIC will each furnish such
information with respect to itself as the Agent may from time to time
reasonably request.
(f) The Company and NCRIC will take all necessary action, in
cooperation with the Agent, to qualify the Securities for offering and sale
under the applicable securities laws of such states of the United States
and other jurisdictions as may be required and as the Agent and the Company
have agreed; provided, however, that the Company and NCRIC shall not be
obligated to file any general consent to service of process or to qualify
as a foreign corporation in any jurisdiction in which it is not so
qualified. In each jurisdiction in which the Securities have been so
qualified, the Company and NCRIC will file such statements and reports as
may be required by the laws of such jurisdiction to continue such
qualification in effect for a period of not less than one year from the
effective date of the Registration Statement.
(g) The Company authorizes Sandler ▇'▇▇▇▇▇ and any Selected Dealers to
act as agent of the Company in distributing the Prospectus to persons
entitled to receive subscription rights and other persons to be offered
Securities having record addresses in the states or jurisdictions set forth
in a survey of the securities or "blue sky" laws of the various
jurisdictions in which the Offerings will be made (the "Blue Sky Survey").
SANDLER ▇'▇▇▇▇▇ & PARTNERS, L.P.
Page 17
(h) The Company will make generally available to its security holders
as soon as practicable, but not later than 60 days after the close of the
period covered thereby, an earnings statement (in form complying with the
provisions of Rule 158 of the Securities Act Regulations) covering a twelve
month period beginning not later than the first day of the Company's fiscal
quarter next following the "effective date" (as defined in said Rule 158)
of the Registration Statement.
(i) During the period ending on the third anniversary of the
expiration of the fiscal year during which the closing of the transactions
contemplated hereby occurs, the Company will furnish to its shareholders as
soon as practicable after the end of each such fiscal year an annual report
(including consolidated statements of financial condition and consolidated
statements of income, shareholders' equity and cash flows, certified by
independent public accountants) and, as soon as practicable after the end
of each of the first three quarters of each fiscal year (beginning with the
fiscal quarter ending after the effective date of the Registration
Statement), consolidated summary financial information of the Company and
its subsidiaries for such quarter in reasonable detail. In addition, such
annual report and quarterly consolidated summary financial information
shall be made public through the issuance of appropriate press releases at
the same time or prior to the time of the furnishing thereof to
shareholders of the Company.
(j) During the period ending on the third anniversary of the
expiration of the fiscal year during which the closing of the transactions
contemplated hereby occurs, the Company will furnish to the Agent (i) as
soon as publicly available, a copy of each report or other document of the
Company furnished generally to shareholders of the Company or furnished to
or filed with the Commission under the Exchange Act or any national
securities exchange or system on which any class of securities of the
Company is listed, and (ii) from time to time, such other information
concerning the Company as the Agent may reasonably request.
(k) The Company and NCRIC will conduct the Offerings in all material
respects in accordance with the Offering Application, the Conversion Act
and all other applicable regulations, decisions and orders, including all
applicable terms, requirements and conditions precedent to the Offerings
imposed upon the Company or NCRIC by the Department.
(l) The Company and NCRIC will use the net proceeds received from the
sale of the Securities in the manner specified in the Prospectus under "Use
of Proceeds."
(m) The Company will file with the Nasdaq Stock Market all documents
and notices required by the Nasdaq Stock Market of companies that have
issued securities that are traded in the Nasdaq SmallCap Market and
quotations for which are reported by the Nasdaq SmallCap Market.
SANDLER ▇'▇▇▇▇▇ & PARTNERS, L.P.
Page 18
(n) The Company and NCRIC will take such actions and furnish such
information as are reasonably requested by the Agent in order for the Agent
to ensure compliance with the National Association of Securities Dealers,
Inc.'s "Interpretation Relating to Free-Riding and Withholding."
(o) Other than in connection with any employee benefit plan or
arrangement described in the Prospectus, the Company will not, without the
prior written consent of the Agent, sell or issue, contract to sell or
otherwise dispose of, any shares of Common Stock other than the Securities
for a period of 180 days following the Closing Time.
(p) During the period beginning on the date hereof and ending on the
later of the third anniversary of the Closing Time or the date on which the
Agent receives full payment in satisfaction of any claim for
indemnification or contribution to which it may be entitled pursuant to
Sections 6 or 7, respectively, neither the MHC, the Company nor NCRIC
shall, without the prior written consent of the Agent, which consent shall
not be unreasonably withheld, take or permit to be taken any action that
could result in NCRIC Common Stock becoming subject to any security
interest, mortgage, pledge, lien or encumbrance.
(q) The MHC, the Company and NCRIC will comply with any conditions
imposed by or agreed to with the Department in connection with their
approval of the Offering Application.
(r) The Company shall not deliver the Securities until the Company and
NCRIC have satisfied each condition set forth in Section 5 hereof, unless
such condition is waived by the Agent.
(s) The Company or NCRIC will furnish to Sandler ▇'▇▇▇▇▇ as early as
practicable prior to the delivery of the letters to be furnished by
Deloitte & Touche LLP pursuant to subsections (e) and (f) of Section 5
hereof, but no later than two (2) full business days prior thereto, a copy
of the latest available unaudited interim consolidated financial statements
of NCRIC and the Subsidiaries which have been read by Deloitte & Touche
LLP, as stated in their letters to be furnished pursuant to subsections (e)
and (f) of Section 5 hereof.
(t) The Company, NCRIC and the MHC will conduct any demutualization
transaction that may be pursued following the Offerings in all material
respects in the manner specified in the Prospectus and in accordance with
the order of the Department, dated January 27, 1999, including without
limitation (i) the issuance to eligible policyholders of rights to
subscribe for additional shares of the new stock holding company that would
be formed in the demutualization, and (ii) the exchange of each share of
the Company's Common Stock outstanding and held by persons other than the
MHC into shares of common stock of the new stock holding company pursuant
to an exchange ratio that ensures that after the transaction
SANDLER ▇'▇▇▇▇▇ & PARTNERS, L.P.
Page 19
the percentage of the to-be-outstanding shares of the new stock holding
company owned by the stockholder in exchange for his or her Company Common
Stock equals the percentage of the outstanding shares of the Company Common
Stock owned by the stockholder immediately prior to the demutualization.
SECTION 4. PAYMENT OF EXPENSES.
The MHC, the Company and NCRIC jointly and severally agree to pay all
expenses incident to the performance of their obligations under this Agreement,
including but not limited to (i) the cost of obtaining all securities and
insurance regulatory approvals, (ii) the printing and filing of the Registration
Statement as originally filed and of each amendment thereto, (iii) the
preparation, issuance and delivery of the certificates for the Securities to the
purchasers in the Offerings, (iv) the fees and disbursements of the Company's
and NCRIC's counsel, accountants, appraiser and other advisors, (v) the
qualification of the Securities under securities laws in accordance with the
provisions of Section 3(f) hereof, including filing fees and the fees and
disbursements of counsel in connection therewith and in connection with the
preparation of the Blue Sky Survey, (vi) the printing and delivery to the Agent
of copies of the Registration Statement as originally filed and of each
amendment thereto and the printing and delivery of the Prospectus and any
amendments or supplements thereto to the purchasers in the Offerings and the
Agent, (vii) the printing and delivery to the Agent of copies of a Blue Sky
Survey, and (viii) the fees and expenses incurred in connection with the listing
of the Securities on the Nasdaq SmallCap Market. In the event the Agent incurs
any such fees and expenses on behalf of NCRIC, the MHC or the Company, NCRIC
will reimburse the Agent for such fees and expenses whether or not the Offerings
are consummated; provided, however, that the Agent shall not incur any
substantial expenses on behalf of NCRIC or the Company pursuant to this Section
without the prior approval of NCRIC.
The MHC, the Company and NCRIC jointly and severally agree to pay certain
expenses incident to the performance of the Agent's obligations under this
Agreement, regardless of whether the Offerings are consummated, including (i)
the filing fees paid or incurred by the Agent in connection with all filings
with the National Association of Securities Dealers, Inc., and (ii) all
reasonable out of pocket expenses incurred by the Agent relating to the
Offerings, including, without limitation, advertising, promotional, syndication
and travel expenses and fees and expenses of the Agent's counsel, up to a
maximum amount of $60,000 for legal fees and expenses of the Agent's counsel.
All fees and expenses to which the Agent is entitled to reimbursement under this
paragraph of this Section 4 shall be due and payable upon receipt by the Company
or NCRIC of a written accounting therefor setting forth in reasonable detail the
expenses incurred by the Agent.
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Page 20
SECTION 5. CONDITIONS OF AGENT'S OBLIGATIONS.
The MHC, the Company, NCRIC and the Agent agree that the issuance and the
sale of Securities and all obligations of the Agent hereunder are subject to the
accuracy of the representations and warranties of the MHC, the Company and NCRIC
herein contained as of the date hereof and the Closing Time, to the accuracy of
the statements of officers and directors of the MHC, the Company and NCRIC made
pursuant to the provisions hereof, to the performance by the MHC, the Company
and NCRIC of their obligations hereunder, and to the following further
conditions:
(a) No stop order suspending the effectiveness of the Registration
Statement shall have been issued under the Securities Act or proceedings
therefor initiated or threatened by the Commission, no order suspending the
Offerings shall have been issued or proceedings therefor initiated or
threatened by the Department, and no order suspending the sale of the
Securities in any jurisdiction shall have been issued.
(b) At Closing Time, the Agent shall have received:
(1) The favorable opinion, dated as of Closing Time, of Arent
Fox, counsel for the MHC, the Company and NCRIC, in form and substance
satisfactory to counsel for the Agent, to the effect that:
(i) The Company, NCRIC and the MHC have been duly
incorporated and are validly existing as a corporation in good
standing under the laws of the District of Columbia with full
corporate power and authority to own, lease and operate their
properties and to conduct their business as described in the
Registration Statement and Prospectus and to enter into and perform
their obligations under this Agreement; and the MHC, NCRIC and the
Company, and each of their subsidiaries, are duly qualified as a
foreign corporation to transact business and are in good standing in
each other jurisdiction in which such qualification is required
whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure to so qualify would not
have a material adverse effect upon the financial condition, results
of operations or business affairs of the Company and its subsidiaries,
considered as one enterprise.
(ii) An opinion to the same general effect as subsection
(5)(b)(1)(i) in respect to Holdings, and each of the Company's
direct and indirect subsidiaries, except for NCRIC.
(iii) NCRIC has all requisite power and authority to carry
on an insurance business pursuant to and to the extent of the
certificates of authority
SANDLER ▇'▇▇▇▇▇ & PARTNERS, L.P.
Page 21
issued under the laws of the District of Columbia and the States of
Maryland and Virginia. CML has all requisite power and authority to
carry on an insurance business pursuant to and to the extent of the
certificates of authority issued under the laws of the District of
Columbia and the States of Maryland and Virginia. The MHC and each of
its subsidiaries has obtained all licenses, permits and other
governmental authorizations currently required for the conduct of
their respective businesses.
(iv) The Securities have been duly and validly authorized
for issuance and sale and, when issued and delivered by the Company
pursuant to the Plan against payment of the consideration calculated
as set forth in the Plan, will be duly and validly issued and fully
paid and non-assessable; and all corporate actions required to be
taken for the authorization, issue and sale of the Securities have
been validly and sufficiently taken.
(v) The issuance of the Securities is not subject to
preemptive or other similar rights arising by operation of law or, to
the best of their knowledge and information, otherwise.
(vi) Upon consummation of the Offerings, the authorized,
issued and outstanding capital stock of the Company will be as set
forth in the Prospectus under "Capitalization" and, except for 1,000
shares of Common Stock issued to NCRIC Holdings, Inc., no shares of
Common Stock have been or will be issued and outstanding prior to the
Closing Time.
(vii) All of the issued and outstanding capital stock of
each of the Subsidiaries has been duly authorized and validly issued
and, to such counsel's best knowledge, is fully paid and non-
assessable and is owned by the Company, NCRIC or MSO, respectively,
directly or through subsidiaries, free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity.
(viii) 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 each of
the MHC, the Company and NCRIC, and this Agreement constitutes the
legal, valid and binding agreement of each of the MHC, the Company and
NCRIC, enforceable in accordance with its terms, except as rights to
indemnity and contribution hereunder may be limited under applicable
law (it being understood that such counsel may avail itself of
customary exceptions concerning the effect of bankruptcy, insolvency
or similar laws and the
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Page 22
availability of equitable remedies); the execution and delivery of
this Agreement, the incurrence of the obligations herein set forth and
the consummation of the transactions contemplated herein, will not
result in any violation of the provisions of the charter or bylaws of
the MHC, the Company, NCRIC or any of their subsidiaries; and, to the
best of such counsel's knowledge, the execution and delivery of this
Agreement, the incurrence of the obligations herein set forth and the
consummation of the transactions contemplated herein, will not
conflict with or constitute a breach of, or default under, and no
event has occurred which, with notice or lapse of time or both, would
constitute a default under, or result in the creation or imposition of
any lien, charge or encumbrance, that, individually or in the
aggregate, would have a material adverse effect on the financial
condition, results of operations or business affairs of the MHC and
its subsidiaries considered as one enterprise, upon any property or
assets of the MHC or any of its subsidiaries pursuant to any contract,
indenture, mortgage, loan agreement, note, lease or other instrument
to which the MHC or any of its subsidiaries is a party or by which any
of them may be bound, or to which any of the property or assets of the
Company or any of its subsidiaries is subject.
(ix) The Registration Statement is effective under the
Securities Act and no stop order suspending the effectiveness of the
Registration Statement has been issued under the Securities Act or, to
the best of such counsel's knowledge, proceedings therefor initiated
or threatened by the Commission.
(x) The Offering Application has been approved by the
Department and no other suspending the effectiveness of the
Offering Application has been issued by the Department or, to the
best of such counsel's knowledge, proceeding therefor initiated
or threatened by the Department.
(xi) No further approval, authorization, consent or other
order of any public board or body is required in connection with the
execution and delivery of this Agreement, the issuance of the
Securities and the consummation of the Offerings, except as may be
required under the securities or Blue Sky laws of various
jurisdictions as to which no opinion need be rendered.
(xii) At the time the Registration Statement became
effective, the Registration Statement (other than the financial
statements and statistical data included therein, as to which no
opinion need be rendered) complied as to form in all material respects
with the requirements of the Securities Act and the Securities Act
Regulations and the Conversion Act.
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Page 23
(xiii) The Common Stock conforms to the description thereof
contained in the Prospectus, and the form of certificate used to
evidence the Common Stock is in due and proper form and complies with
all applicable statutory requirements.
(xiv) To the best of such counsel's knowledge, there are no
legal or governmental proceedings pending or threatened against or
affecting the MHC, the Company or any of their subsidiaries which are
required, individually or in the aggregate, to be disclosed in the
Registration Statement and Prospectus, other than those disclosed
therein, and all pending legal or governmental proceedings to which
the MHC, the Company or any of their subsidiaries is a party or to
which any of their property is subject which are not described in the
Registration Statement, including ordinary routine litigation
incidental to the business, are, considered in the aggregate, not
material.
(xv) The information in the Prospectus under "Business--
Regulation," and "-Conversion of NCRIC, a Mutual Holding Company to
the stock form of organization," "Purchases in the Stock Offering--Tax
Effects," "Management--Limitation of Liability and Indemnification
Matters," and "Description of Common Stock," to the extent that it
constitutes matters of law, summaries of legal matters, documents or
proceedings, or legal conclusions, has been reviewed by them and is
complete and accurate in all material respects.
(xvi) To the best of such counsel's knowledge, there are no
contracts, indentures, mortgages, loan agreements, notes, leases or
other instruments required to be described or referred to in the
Registration Statement or to be filed as exhibits thereto other than
those described or referred to therein or filed as exhibits thereto,
the descriptions thereof or references thereto are correct, and no
default exists, and no event has occurred which, with notice or lapse
of time or both, would constitute a default, in the due performance or
observance of any obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, loan agreement, note,
lease or other instrument so described, referred to or filed.
(xvii) The Offering Application complies with the applicable
requirements of the Conversion Act, includes all documents required to
be filed as exhibits thereto, and is, to the best of such counsel's
knowledge and information, truthful, accurate and complete. To the
best of such counsel's knowledge, the MHC, the Company and NCRIC have
conducted the
SANDLER ▇'▇▇▇▇▇ & PARTNERS, L.P.
Page 24
Offerings in all material respects in accordance with applicable
requirements of the Conversion Act and all other applicable
regulations, decisions and orders thereunder, including all material
applicable terms, conditions, requirements and conditions precedent to
the Offerings imposed upon the MHC, the Company or NCRIC by the
Department and, to the best of such counsel's knowledge, no order has
been issued by the Department to suspend the Offerings and no action
for such purpose has been instituted or threatened by the Department;
and, to the best of such counsel's knowledge, no person has sought to
obtain review of the final action of the Department in approving the
Offerings.
(xviii) Neither the MHC, the Company nor any of their
subsidiaries is in violation of its certificate of incorporation,
organization certificate, articles of incorporation or charter, as the
case may be, or bylaws or, to the best of such counsel's knowledge, in
default (nor has any event occurred which, with notice or lapse of
time or both, would constitute a default) in the performance or
observance of any obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, loan agreement, note,
lease or other instrument to which the MHC , the Company or any of
their subsidiaries is a party or by which the MHC or any of its
subsidiaries or any of their property may be bound.
(xix) The Company is not required to be registered as an
investment company under the Investment Company Act of 1940.
(2) The favorable opinion, dated as of Closing Time, of ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, P.C., counsel for the Agent, with respect
to such matters as the Agent may reasonably require.
(3) In giving their opinions required by subsections (b)(l) and
(b)(2), respectively, of this Section, Arent Fox and ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, P.C., shall each additionally state that nothing has
come to their attention that would lead them to believe that the
Registration Statement (except for financial statements and schedules and
other financial or statistical data included therein, as to which counsel
need make no statement), at the time it became effective, contained an
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading or that the Prospectus (except for financial statements and
schedules and other financial or statistical data included therein, as to
which counsel need make no statement), at the time the Registration
Statement became effective or at Closing Time, included an untrue statement
of a material fact or omitted to state a material fact necessary in
SANDLER ▇'▇▇▇▇▇ & PARTNERS, L.P.
Page 25
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading. In giving their opinions, Arent
Fox and ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, P.C., may rely as to matters
of fact on certificates of officers and directors of the MHC, the Company
and NCRIC and certificates of public officials, which opinions shall be in
form and substance satisfactory to counsel for the Agent.
(c) At Closing Time referred to in Section 2, the Company and NCRIC shall
have completed in all material respects the conditions precedent to the
Offerings in accordance with the Conversion Act and all other applicable laws,
regulations, decisions and orders, including all terms, conditions, requirements
and provisions precedent to the Offerings imposed upon the Company or NCRIC by
the Department, or any other regulatory authority, other than those which the
Department permits to be competed after the Closing Time.
(d) At Closing Time, there shall not have been, since the date hereof or
since the respective dates as of which information is given in the Registration
Statement and the Prospectus, any material adverse change in the financial
condition, results of operations or business affairs of the Company and its
subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business, and the Agent shall have received a certificate of
the President and Chief Executive Officer of the Company and of NCRIC and the
chief financial or chief accounting officer of the MHC, the Company and of
NCRIC, dated as of Closing Time, to the effect that (i) there has been no such
material adverse change, (ii) there shall have been no material transaction
entered into by the MHC, the Company or NCRIC from the latest date as of which
the financial condition of the MHC, the Company or NCRIC as set forth in the
Registration Statement and the Prospectus other than transactions referred to or
contemplated therein and transactions in the ordinary cause of business, (iii)
neither the MHC, the Company nor NCRIC shall have received from the Department
any direction (oral or written) to make any material change in the method of
conducting its business with which it has not complied (which direction, if any,
shall have been disclosed to the Agent) or which materially and adversely would
affect the business, financial condition or results of operations of the MHC,
the Company or NCRIC, (iv) the representations and warranties in Section 1
hereof are true and correct with the same force and effect as though expressly
made at and as of the Closing Time, (v) the MHC, the Company and NCRIC have
complied with all agreements and satisfied all conditions on their part to be
performed or satisfied at or prior to Closing Time,(vi) no stop order suspending
the effectiveness of the Registration Statement has been issued and no
proceedings for that purpose have been initiated or threatened by the Commission
and (vii) no order suspending any of the Offerings or the authorization for
final use of the Prospectus has been issued and no proceedings for that purpose
have been initiated or threatened by the Department and no person has sought to
obtain regulatory or judicial review of the action of the Department in
approving the Offerings in accordance with the Conversion Act.
SANDLER ▇'▇▇▇▇▇ & PARTNERS, L.P.
Page 26
(e) At the time of the execution of this Agreement, the Agent shall have
received from Deloitte & Touche LLP a letter dated such date, in form and
substance satisfactory to the Agent, to the effect that (i) they are independent
public accountants with respect to the Company and its subsidiaries within the
meaning of the Code of Ethics of the American Institute of Certified Public
Accountants, the Securities Act and the Securities Act Regulations and the
Conversion Act; (ii) it is their opinion that the consolidated financial
statements and supporting schedules included in the Registration Statement and
covered by their opinions therein comply as to form in all material respects
with the applicable accounting requirements of the Securities Act and the
Securities Act Regulations; (iii) based upon limited procedures as agreed upon
by the Agent and Deloitte & Touche LLP set forth in detail in such letter,
nothing has come to their attention which causes them to believe that (A) the
unaudited financial statements and supporting schedules of NCRIC and included in
the Registration Statement do not comply as to form in all material respects
with the applicable accounting requirements of the Securities Act, the
Securities Act Regulations and the Conversion Act or are not presented in
conformity with generally accepted accounting principles applied on a basis
substantially consistent with that of the audited financial statements included
in the Registration Statement and the Prospectus, (B) the unaudited pro forma
consolidated financial data of the Company included in the Registration
Statement is not fairly presented on a basis substantially consistent with that
of the audited financial statements included in the Registration Statement, or
that such unaudited pro forma consolidated financial data has not been properly
compiled on the pro forma basis described therein, or that the pro forma
adjustments were not properly applied to the applicable historical combined
financial statements, (C) at a specified date not more than five days prior to
the date of this Agreement, there has been any increase in the consolidated long
term or short term debt of its subsidiaries or any decrease in consolidated
total assets or net worth of its subsidiaries, in each case as compared with the
amounts shown in the December 31, 1998 balance sheet included in the
Registration Statement or, (D) during the period from the date of such balance
sheet to a specified date not more than five days prior to the date of this
Agreement, there were any decreases, as compared with the corresponding period
in the preceding year, in consolidated net income of NCRIC, except in all
instances for increases or decreases which the Registration Statement and the
Prospectus disclose have occurred or may occur; and (iv) in addition to the
examination referred to in their opinions and the limited procedures referred to
in clause (iii) above, they have carried out certain specified procedures, not
constituting an audit, with respect to certain amounts, percentages and
financial information which are included in the Registration Statement and
Prospectus and which are specified by the Agent, and have found such amounts,
percentages and financial information to be in agreement with the relevant
accounting, financial and other records of the Company and its subsidiaries
identified in such letter.
(f) At Closing Time, the Agent shall have received from Deloitte & Touche
LLP a letter, dated as of Closing Time, to the effect that they reaffirm the
statements made in the letter furnished pursuant to subsection (d) of this
Section, except that the specified date referred to shall be a date not more
than five days prior to Closing Time.
SANDLER ▇'▇▇▇▇▇ & PARTNERS, L.P.
Page 27
(g) At Closing Time, the Securities shall have been approved for listing on
the Nasdaq SmallCap Market upon notice of issuance.
(h) At Closing Time, the Agent shall have received a letter from RP
Financial, LC., dated as of the Closing Time, confirming its appraisal.
(i) At Closing Time, counsel for the Agent shall have been furnished with
such documents and opinions as they may require for the purpose of enabling them
to pass upon the issuance and sale of the Securities as herein contemplated and
related proceedings, or in order to evidence the accuracy of any of the
representations or warranties, or the fulfillment of any of the conditions,
herein contained; and all proceedings taken by the Company in connection with
the issuance and sale of the Securities as herein contemplated shall be
satisfactory in form and substance to the Agent and counsel for the Agent.
(j) The Internal Revenue Service shall have provided a private letter
ruling to NCRIC, or Deloitte & Touche, LLP shall have provided an opinion to the
Company as described under the caption "Purchases in the Stock Offering--Tax
Effects" in the Prospectus.
(k) At any time prior to Closing Time,(i) there shall not have occurred any
material adverse change in the financial markets in the United States or
elsewhere or any outbreak of hostilities or escalation thereof or other calamity
or crisis the effect of which it, in the judgment of the Agent, are so material
and adverse as to make it impracticable to market the Securities or to enforce
contracts, including subscriptions or orders, for the sale of the Securities,
and (ii) trading generally on either the American Stock Exchange or the New York
Stock Exchange shall not have been suspended, and minimum or maximum prices for
trading shall not have been fixed, or maximum ranges for prices for securities
have been required, by either of said Exchanges or by order of the Commission or
any other governmental authority, and a banking moratorium shall not have been
declared by either Federal or New York authorities.
SECTION 6. INDEMNIFICATION.
(a) The MHC, the Company and NCRIC, jointly and severally, agree to
indemnify and hold harmless the Agent, each person, if any, who controls the
Agent, within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act, and its respective partners, directors, officers, employees
and agents as follows:
(i) from and against any and all loss, liability, claim, damage
and expense whatsoever, as incurred, related to or arising out of the
Offerings or any action taken by the Agent where acting as agent of the
MHC, the Company or NCRIC or otherwise as described in Section 2 hereof;
provided, however, that this indemnity agreement shall not apply to any
loss, liability, claim, damage or expense found in a final judgment by a
court of competent
SANDLER ▇'▇▇▇▇▇ & PARTNERS, L.P.
Page 28
jurisdiction to have resulted primarily from the bad faith or gross
negligence of the Agent seeking indemnification hereunder.
(ii) from and against any and all loss, liability, claim, damage
and expense whatsoever, as incurred, based upon or arising out of any
untrue statement or alleged untrue statement of a material fact contained
in the Registration Statement (or any amendment thereto), or the omission
or alleged omission therefrom of a material fact required to be stated
therein or necessary to make the statements therein not misleading or
arising out of any untrue statement or alleged untrue statement of a
material fact contained in the Prospectus (or any amendment or supplement
thereto) or the omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(iii) from and against any and all loss, liability, claim, damage
and expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or of any claim
whatsoever described in clauses (i) or (ii) above, if such settlement is
effected with the written consent of the MHC, the Company or NCRIC, which
consent shall not be unreasonably withheld; and
(iv) from and against any and all expense whatsoever, as incurred
(including, subject to Section 6(c) hereof, the fees and disbursements of
counsel chosen by the Agent), reasonably incurred in investigating,
preparing for or defending against any litigation, or any investigation,
proceeding or inquiry by any governmental agency or body, commenced or
threatened, or any claim whatsoever described in clauses (i) or (ii) above,
to the extent that any such expense is not paid under (i), (ii) or (iii)
above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or alleged untrue statement of a material fact contained in the
Prospectus (or any amendment or supplement thereto) or the omission or alleged
omission therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading which was made in reliance upon and in conformity with the Agent
Information furnished to the Company or NCRIC by the Agent expressly for use in
the Prospectus (or any amendment or supplement thereto).
(b) The Agent agrees to indemnify and hold harmless the MHC, the Company,
NCRIC, their directors, each of their officers who signed the Registration
Statement, and each person, if any, who controls the MHC within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act against any
and all loss, liability, claim, damage and expense described in the indemnity
contained in subsection (a) of this Section, as incurred, but only with respect
to untrue statements or omissions, or alleged untrue statements or omissions, of
a material fact made in the
SANDLER ▇'▇▇▇▇▇ & PARTNERS, L.P.
Page 29
Prospectus (or any amendment or supplement thereto) in reliance upon and in
conformity with the Agent Information.
(c) Each indemnified party shall give notice as promptly as reasonably
practicable to each indemnifying party of any action commenced against it in
respect of which indemnity may be sought hereunder, but failure to so notify an
indemnifying party shall not relieve such indemnifying party from any liability
which it may have otherwise than on account of this indemnity agreement. An
indemnifying party may participate at its own expense in the defense of any such
action. In no event shall the indemnifying parties be liable for fees and
expenses of more than one counsel (in addition to no more than one local counsel
in each separate jurisdiction in which any action or proceeding is commenced)
separate from their own counsel for all indemnified parties in connection with
any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances.
(d) The MHC, the Company and NCRIC also agree that the Agent shall not have
any liability (whether direct or indirect, in contract or tort or otherwise)
tothe MHC, NCRIC, the Company, its security holders or NCRIC's or the Company's
creditors relating to or arising out of the engagement of the Agent pursuant to,
or the performance by the Agent of the services contemplated by, this Agreement,
except to the extent that any loss, claim, damage or liability is found in a
final judgment by a court of competent jurisdiction to have resulted primarily
from the Agent's bad faith or gross negligence.
(e) In addition to, and without limiting, the provisions of Section
(6)(a)(iv) hereof, in the event that any Agent, any person, if any, who controls
the Agent within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act or any of its partners, directors, officers, employees or
agents is requested or required to appear as a witness or otherwise gives
testimony in any action, proceeding, investigation or inquiry brought by or on
behalf of or against the MHC, the Company, NCRIC, the Agent or any of its
respective affiliates or any participant in the transactions contemplated hereby
in which the Agent or such person or agent is not named as a defendant, the MHC,
the Company and NCRIC jointly and severally agree to reimburse the Agent for all
reasonable and necessary out-of-pocket expenses incurred by it in connection
with preparing or appearing as a witness or otherwise giving testimony and to
compensate the Agent in an amount to be mutually agreed upon.
SECTION 7. CONTRIBUTION.
In order to provide for just and equitable contribution in circumstances in
which the indemnity agreement provided for in Section 6 hereof is for any reason
held to be unenforceable by the indemnified parties although applicable in
accordance with its terms, the MHC, the Company, NCRIC and the Agent shall
contribute to the aggregate losses, liabilities, claims, damages and expenses of
the nature contemplated by said indemnity agreement incurred by the MHC, the
SANDLER ▇'▇▇▇▇▇ & PARTNERS, L.P.
Page 30
Company or NCRIC and the Agent, as incurred, in such proportions (i) that the
Agent is responsible for that portion represented by the percentage that the
maximum aggregate marketing fees appearing on the cover page of the Prospectus
bears to the maximum aggregate gross proceeds appearing thereon and the MHC, the
Company and NCRIC are jointly and severally responsible for the balance or (ii)
if, but only if, the allocation provided for in clause (i) is for any reason
held unenforceable, in such proportion as is appropriate to reflect not only the
relative benefits to the MHC, the Company and NCRIC on the one hand and the
Agent on the other, as reflected in clause (i), but also the relative fault of
the MHC, the Company and NCRIC on the one hand and the Agent on the other, as
well as any other relevant equitable considerations; provided, however, that no
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. For purposes of this
Section, each person, if any, who controls the Agent within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act shall have
the same rights to contribution as the Agent, and each director of the MHC, the
Company and of NCRIC, each officer of the Company who signed the Registration
Statement, and each person, if any, who controls the MHC, the Company or NCRIC
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act shall have the same rights to contribution as the MHC, the Company
and NCRIC. Notwithstanding anything to the contrary set forth herein, to the
extent permitted by applicable law, in no event shall the Agent be required to
contribute an aggregate amount in excess of the aggregate marketing fees to
which the Agent is entitled and actually paid pursuant to this Agreement.
SECTION 8. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE DELIVERY.
All representations, warranties and agreements contained in this Agreement,
or contained in certificates of officers of the MHC, the Company or NCRIC
submitted pursuant hereto, shall remain operative and in full force and effect,
regardless of any investigation made by or on behalf of any Agent or controlling
person, or by or on behalf of the MHC, the Company or NCRIC, and shall survive
delivery of the Securities.
SECTION 9. TERMINATION OF AGREEMENT.
(a) The Agent may terminate this Agreement, by notice to the Company, at
any time at or prior to Closing Time (i) if there has been, since the date of
this Agreement or since the respective dates as of which information is given in
the Registration Statement, any material adverse change in the financial
condition, results of operations or business affairs of the MHC, the Company or
NCRIC, or the MHC and its subsidiaries considered as one enterprise, whether or
not arising in the ordinary course of business, or (ii) if there has occurred
any material adverse change in the financial markets in the United States or
elsewhere or any outbreak of hostilities or escalation thereof or other calamity
or crisis the effect of which, in the judgment of the Agent, are so material and
adverse as
SANDLER ▇'▇▇▇▇▇ & PARTNERS, L.P.
Page 31
to make it impracticable to market the Securities or to enforce contracts,
including subscriptions or orders, for the sale of the Securities, (iii) or if
trading generally on either the American Stock Exchange or the New York Stock
Exchange has been suspended, or minimum or maximum prices for trading have been
fixed, or maximum ranges for prices for securities have been required, by either
of said Exchanges or by order of the Commission or any other governmental
authority, or if a banking moratorium has been declared by either Federal or New
York authorities, (iv) if any condition specified in Section 5 shall not have
been fulfilled when and as required to be fulfilled; (v) if there shall have
been such material adverse change in the condition or prospects of the Company
or NCRIC or the prospective market for the Company's securities as in the
Agent's good faith opinion would make it inadvisable to proceed with the
offering, sale or delivery of the Securities; (vi) if in the Agent's good faith
opinion, the price for the Securities established by RP Financial, LC. is not
reasonable or equitable under then prevailing market conditions, or (vii) if the
Offerings is not consummated on or prior to ____________________, 1999.
(b) If this Agreement is terminated pursuant to this Section 9, such
termination shall be without liability of any party to any other party except as
provided in Section 4 hereof relating to the reimbursement of expenses and
except that the provisions of Sections 6 and 7 hereof shall survive any
termination of this Agreement.
SECTION 10. NOTICES.
All notices and other communications hereunder shall be in writing and
shall be deemed to have been duly given if mailed or transmitted by any standard
form of telecommunication. Notices to the Agent shall be directed to the Agent
at Two World Trade Center, 104th Floor, New York, New York 10048, attention of
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Principal (with a copy to ▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq., ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, P.C.,, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇.▇. 20015); notices to the MHC, the Company and NCRIC shall be
directed to any of them at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇,
attention of R. ▇▇▇ ▇▇▇▇, ▇▇., President (with a copy to ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.,
Arent Fox ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇, PLLC, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.,
▇▇▇▇▇▇▇▇▇▇, D.C. 20036).
SECTION 11. PARTIES.
This Agreement shall inure to the benefit of and be binding upon the
Agent,the MHC, the Company and NCRIC and their respective successors. Nothing
expressed or mentioned in this Agreement is intended or shall be construed to
give any person, firm or corporation, other than the Agent, the MHC, the Company
and NCRIC and their respective successors and the controlling persons and
officers and directors referred to in Sections 6 and 7 and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision herein or therein contained. This
Agreement and all conditions and provisions hereof and thereof are intended to
be for the sole and exclusive benefit of the Agent, the MHC, the
SANDLER ▇'▇▇▇▇▇ & PARTNERS, L.P.
Page 32
Company and NCRIC and their respective successors, and said controlling persons
and officers and directors and their heirs and legal representatives, and for
the benefit of no other person, firm or corporation.
SECTION 12. ENTIRE AGREEMENT; AMENDMENT.
This Agreement represents the entire understanding of the parties hereto
with reference to the transactions contemplated hereby and supersedes any and
all other oral or written agreements heretofore made, except for the engagement
letter dated June 11, 1998, by and between the Agent and NCRIC, relating to the
Agent's providing conversion agent services to the Company and NCRIC in
connection with the Offerings. No waiver, amendment or other modification of
this Agreement shall be effective unless in writing and signed by the parties
hereto.
SECTION 13. GOVERNING LAW AND TIME.
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York applicable to agreements made and to be performed
in said State without regard to the conflicts of laws provisions thereof. Unless
otherwise noted, specified times of day refer to Eastern time.
SECTION 14. SEVERABILITY.
Any term or provision of this Agreement which is invalid or unenforceable
in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent
of such invalidity or unenforceability without rendering invalid or
unenforceable the remaining terms and provisions of this Agreement or affecting
the validity or enforceability of any of the terms or provisions of this
Agreement in any other jurisdiction. If any provision of this Agreement is so
broad as to be unenforceable, the provision shall be interpreted to be only so
broad as is enforceable.
SECTION 15. HEADINGS.
Sections headings are not to be considered part of this Agreement, are for
convenience and reference only, and are not to be deemed to be full or accurate
descriptions of the contents of any paragraph or subparagraph.
SANDLER ▇'▇▇▇▇▇ & PARTNERS, L.P.
Page 33
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement between
the Agent, the Company and NCRIC in accordance with its terms.
Very truly yours,
NCRIC, A MUTUAL HOLDING COMPANY
By:__________________________________________
R. ▇▇▇ ▇▇▇▇, ▇▇., President and
Chief Executive Officer
NCRIC GROUP, INC.
By:__________________________________________
R. ▇▇▇ ▇▇▇▇, ▇▇., President and
Chief Executive Officer
NCRIC, INC.
By:__________________________________________
R. ▇▇▇ ▇▇▇▇, ▇▇., President and
Chief Executive Officer
CONFIRMED AND ACCEPTED,
as of the date first above written:
SANDLER ▇'▇▇▇▇▇ & PARTNERS, L.P.
By: Sandler ▇'▇▇▇▇▇ & Partners Corp.,
the sole general partner
By:_______________________________