DRAFT
3,450,000 Shares
(subject to increase up to 3,967,500 shares
in the event of an increase in the pro forma market
value of the Company's Common Stock)
Brooklyn Federal Bancorp, Inc.
(a federal stock holding company)
Common Stock
(par value $.01 per share)
AGENCY AGREEMENT
___________________ ____, ▇▇▇▇
▇▇▇▇▇▇▇ ▇'▇▇▇▇▇ & PARTNERS, L.P.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Brooklyn Federal Bancorp, Inc., a federal stock holding company in
formation (the "Company"), BFS Bancorp, MHC, a federal mutual savings and loan
holding company in formation (the "MHC"), and Brooklyn Federal Savings Bank, a
federal savings bank (the "Bank"), each chartered under the laws of the United
States of America, 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 3,450,000 shares (subject to increase up to
3,967,500 shares in the event of an increase in the pro forma market value of
the Company's common stock) of the Company's common stock, par value $.01 per
share (the "Common Stock"). The shares of Common Stock to be sold by the Company
in the Offerings (as defined below) are hereinafter called the "Securities."
The Securities are being offered for sale in accordance with the Plan of
Reorganization and Minority Stock Issuance (the "Plan") adopted by the Boards of
Directors of the Company, the MHC and the Bank pursuant to which the Bank
intends to reorganize from a federally chartered mutual savings bank to a
federally chartered stock savings Bank in federal mutual holding company form of
ownership and issue all of its stock to the Company. which provides for a stock
offering, in compliance with regulations of the Office of Thrift Supervision
(the "OTS"), of up to 49.9% of the Common Stock of the Company. As a result of
the sale of stock under the Plan, the Bank will
1
become a wholly-owned subsidiary of the Company and the Company will be 70%
owned by the MHC.
Pursuant to the Plan, the Company will offer to certain depositors of
the Bank and to the Bank's tax qualified employee benefit plans, including the
Bank's employee stock ownership plan (the "ESOP") (collectively, the "Employee
Plans"), rights to subscribe for the Securities in a subscription offering (the
"Subscription Offering"). To the extent Securities are not subscribed for in the
Subscription Offering, such Securities may be offered to [borrowers of the Bank,
to certain members of the general public and to other persons in a community
offering (the "Community Offering"), with preference given first to certain
borrowers of the Bank, second to natural persons and trusts of natural persons
residing in [insert counties] ,] and third to other persons to whom the Company
delivers a Prospectus (as hereinafter defined). The Community Offering, which
together with the Subscription Offering, as each may be extended or reopened
from time to time, are herein referred to as the "Subscription and Community
Offering," may be commenced concurrently with, during or after, the Subscription
Offering. It is currently anticipated by the Bank and the Company that any
Securities not subscribed for in the Subscription and Community Offering will be
offered, subject to Section 2 hereof, in a syndicated community offering (the
"Syndicated Community Offering"). The Subscription and Community Offering and
the Syndicated Community Offering are hereinafter referred to collectively as
the "Offerings and the Reorganization of the Bank from mutual to stock form, the
formation of the Company and the MHC, the acquisition of the capital stock of
the Bank by the Company, the acquisition of the majority of the Company's common
stock by the MHC and the Offerings are hereinafter referred to collectively as
the "Reorganization"." The Securities may be offered to the general public in a
public offering (the "Public Offering") in lieu of or subsequent to the
Syndicated Community Offering. If there is a Public Offering, the Public
Offering will be governed by a separate definitive purchase agreement as
described in Section 2 hereof. It is acknowledged that the number of Securities
to be sold in the Offerings may be increased or decreased as described in the
Prospectus. If the number of Securities is increased or decreased in accordance
with the Plan, the term "Securities" shall mean such greater or lesser number,
where applicable. In the event that a mid-tier holding company form of
organization is not utilized, all pertinent terms of this Agreement will apply
to the Reorganization of the Bank from the mutual to stock form of organization
and the sale of the Bank's common stock..
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-1 (No. 333-_________),
including a related prospectus, for the registration of the Securities under the
Securities Act of 1933, as amended (the "Securities Act"), has filed such
amendments thereto, if any, and such amended prospectuses as may have been
required to the date hereof by the Commission in order to declare such
registration statement effective, and will file such additional amendments
thereto and such amended prospectuses and prospectus supplements as may
hereafter be required. Such registration statement (as amended to date, if
applicable, and as from time to time amended or supplemented hereafter) and the
prospectuses constituting a part thereof (including in each case all documents
incorporated or deemed to be incorporated by reference therein and the
information, if any, deemed to be a part thereof pursuant to the rules and
regulations of the Commission under the Securities Act, as from time to time
amended or supplemented pursuant to the Securities Act or otherwise (the
"Securities Act Regulations")), are hereinafter referred to as the "Registration
Statement" and the "Prospectus," respectively, except that if any revised
prospectus shall be used by the Company in connection with the Subscription and
Community Offering or the
2
Syndicated Community Offering which differs from the Prospectus on file at the
Commission at the time the Registration Statement becomes effective (whether or
not such revised prospectus is required to be filed by the Company pursuant to
Rule 424(b) of the Securities Act Regulations), the term "Prospectus" shall
refer to such revised prospectus from and after the time it is first provided to
the Agent for such use.
Concurrently with the execution of this Agreement, the Company is
delivering to the Agent copies of the Prospectus of the Company to be used in
the Offerings. Such Prospectus contains information with respect to the Bank,
the Company, the MHC and the Common Stock.
SECTION 1. REPRESENTATIONS AND WARRANTIES.
(a) The Company, the Bank and the MHC jointly and severally
represent and warrant to the Agent as of the date hereof as follows:
(i) The Registration Statement has been declared effective
by the Commission, no stop order has been issued with respect thereto
and no proceedings therefor have been initiated or, to the knowledge of
the Company, the MHC and the Bank, threatened by the Commission. At the
time the Registration Statement became effective and at the Closing Time
referred to in Section 2 hereof, the Registration Statement complied and
will comply in all material respects with the requirements of the
Securities Act and the Securities Act Regulations and did not and will
not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading. The Prospectus, at the date hereof
does not and at the Closing Time referred to in Section 2 hereof will
not, include an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
PROVIDED, HOWEVER, that the representations and warranties in this
subsection shall not apply to statements in or omissions from the
Registration Statement or Prospectus made in reliance upon and in
conformity with information with respect to the Agent furnished to the
Company in writing by the Agent expressly for use in the Registration
Statement or Prospectus (the "Agent Information," which the Company, the
MHC and the Bank acknowledge appears only in the [____ paragraph of the
section "The Stock Offering - Plan of Distribution and Marketing
Arrangements" of the Prospectus].)
(ii) The Company has filed with the OTS the Company's
application for approval of its acquisition of the Bank (the "Holding
Company Application") on Form H-(e)1-S promulgated under the savings and
loan holding company provisions of the Home Owners' Loan Act, as amended
("HOLA") and the regulations promulgated thereunder. The Company has
received written notice from the OTS of its approval of the acquisition
of the Bank, such approval remains in full force and effect and no order
has been issued by the OTS suspending or revoking such approval and no
proceedings therefor have been initiated or threatened by the OTS. At
the date of such approval and at the Closing Time referred to in Section
2, the Holding Company Application complied and will comply in all
material respects with the applicable provisions of HOLA and the
regulations promulgated thereunder and the Holding Company Application
is truthful and accurate in all material respects.
3
(iii) Pursuant to the rules and regulations of the OTS, as
from time to time amended or supplemented (the "OTS Regulations"), the
Company, the Bank and the MHC have filed with the OTS a Notice of Mutual
Holding Company Reorganization (Form MHC-1) and an Application for
Approval of a Minority Stock Issuance by a Savings Bank Subsidiary of a
Mutual Holding Company (Form MHC-2), and have filed such amendments
thereto and supplementary materials as may have been required to the
date hereof (the Form MHC-1 and the Form MHC-2, as amended to date, if
applicable, and as from time to time amended or supplemented hereafter,
is hereinafter collectively referred to as the "MHC Application")
including a proxy statement for the special meeting of members called to
approve the Plan (the "Proxy Statement");and the Prospectus and the MHC
Application are truthful and accurate in all material respects. The
Offerings and the Plan have been duly adopted by the Boards of Directors
of the Company, the Bank and the MHC and such adoption has not since
been rescinded or revoked. The MHC Application has been approved by the
OTS. The Prospectus has been approved for use by the OTS, such approval
remains in full force and effect and no order has been issued by the OTS
suspending or revoking such approval and no proceedings therefor have
been initiated or, to the knowledge of the Company, the MHC or the Bank,
threatened by the OTS. At the date of such approval and at the Closing
Time referred to in Section 2, the MHC Application complied and will
comply in all material respects with the applicable provisions of the
OTS Regulations.
(iv) At the time of their use, the Proxy Statement and any
other proxy solicitation materials will comply in all material respects
with the applicable provisions of the OTS Regulations and will not
contain an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
The Company, the MHC and the Bank have filed the Prospectus and any
supplemental sales literature with the Commission and the OTS. The
Prospectus and all supplemental sales literature, as of the date the
Registration Statement became effective and at the Closing Time referred
to in Section 2, complied and will comply in all material respects with
the applicable requirements of the OTS Regulations, and the Securities
Act Regulations and, at or prior to the time of their first use, will
have received all required authorizations of the OTS and Commission for
use in final form.
(v) None of the Commission, the OTS or any "Blue Sky"
authority has, by order or otherwise, prevented or suspended the use of
the Proxy Statement, the Prospectus or any supplemental sales literature
authorized by the Company, the MHC or the Bank for use in connection
with the Offerings, and no proceedings for such purposes are pending or
threatened.
(vi) The Offerings and other transactions contemplated hereby
do not and will not require any material consent, approval,
authorization or permit or filing with any other governmental agency or
regulatory authority, except as disclosed in the Prospectus.
(vii) At the Closing Time referred to in Section 2, the
Company, the Bank and the MHC will have completed the conditions
precedent to the Reorganization [and the establishment of the
Foundation] in accordance with the Plan, the applicable OTS
4
Regulations and all other applicable laws, regulations, decisions and
orders, including all material terms, conditions, requirements and
provisions precedent to the Reorganization imposed upon the Company, the
Bank or the MHC by the OTS, the Federal Deposit Insurance Corporation
(the "FDIC"), or any other regulatory authority, other than those which
the regulatory authority permits to be completed after the
Reorganization.
(viii) ____________, (the "Appraiser"), which prepared the
valuation of the Bank as part of the Plan, has advised the Company, the
MHC and the Bank in writing that it satisfies all requirements for an
appraiser set forth in the OTS Regulations and any interpretations or
guidelines issued by the OTS or its staff with respect thereto.
(ix) __________, the accountants who audited and reported on
the consolidated financial statements and supporting schedules of the
Bank and its subsidiaries included in the Registration Statement, have
advised the Company, the MHC and the Bank in writing that they are
independent public accountants within the meaning of the Code of Ethics
of the American Institute of Certified Public Accountants (the "AICPA"),
that they are registered with the Public Company Accounting Oversight
Board ("PCAOB") and such accountants are, with respect to the Company,
the MHC and the Bank, independent certified public accountants as
required by, and are not in violation of the auditors independence
requirements of, the Securities Act, the Securities Act Regulations and
OTS Regulations.
(x) The only direct and indirect subsidiaries of the Company
is the Bank and___________; the only direct and indirect subsidiaries of
the Bank are _________________ (collectively, the "Subsidiaries").
Except for the Subsidiaries, none of the Company, the MHC or the Bank,
directly or indirectly, controls any other corporation, limited
liability company, partnership, joint venture, association, trust or
other business organization.
(xi) The consolidated financial statements and the related
schedules and notes thereto included in the Registration Statement and
the Prospectus present fairly the financial position of the Bank and its
subsidiaries at the dates indicated and the results of operations,
retained earnings, equity and cash flows for the periods specified, and
comply as to form with the applicable accounting requirements of the
Securities Act Regulations and the OTS Regulations; except as otherwise
stated in the Registration Statement and Prospectus, 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 and
Prospectus present fairly the information required to be stated therein.
The other financial, statistical and pro forma information and related
notes included in the Prospectus present fairly the information shown
therein on a basis consistent with the audited and unaudited financial
statements included in the Prospectus, and as to the pro forma
adjustments, the adjustments made therein have been consistently applied
on the basis described therein.
5
(xii) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as
otherwise stated therein (A) there has been no material adverse change
in the financial condition, results of operations, business affairs or
prospects of the Company, the MHC, the Bank and the Subsidiaries,
considered as one enterprise, whether or not arising in the ordinary
course of business, (B) except for transactions specifically referred to
or contemplated in the Registration Statement and Prospectus, there have
been no transactions entered into by the Company, the MHC or the Bank,
other than those in the ordinary course of business consistent with past
practice, which are material with respect to the Company, the MHC, the
Bank and the Subsidiaries, considered as one enterprise, (C) the
capitalization, liabilities, assets, properties and business of the
Company, the MHC and the Bank conform in all material respects to the
descriptions contained in the Prospectus and none of the Company, the
MHC or the Bank has any material liabilities of any kind, contingent or
otherwise, except as disclosed in the Registration Statement or the
Prospectus and (D) none of the Company, the MHC or the Bank will have
(A) issued any securities or incurred any liability or obligation,
direct or contingent, or borrowed money, except borrowings in the
ordinary course of business consistent with past practice from the same
or similar sources and in similar amounts as indicated in the
Prospectus.
(xiii) The Company, upon completion of its formation, and in
any event no later than the Closing Time will have has been duly
organized and is validly existing as a federal stock holding company
chartered under the laws of the United States of America with full
corporate power and authority to own, lease and operate its properties,
to conduct its business as described in the Registration Statement and
the Prospectus, and to enter into and perform its obligations under this
Agreement and the transactions contemplated hereby; and the Company is
duly qualified to transact business and is in good standing under the
laws of the United States of America, in the State of ___________ and in
each other jurisdiction in which such qualification is required, whether
by reason of the ownership or leasing of property or the conduct of
business, except where the failure to so qualify would not have a
Material Adverse Effect on the financial condition, results of
operations, business affairs or prospects of the Company, the MHC and
the Subsidiaries, considered as one enterprise (a "Material Adverse
Effect").
(xiv) Upon completion of the Offerings as described in the
Prospectus, the issued and outstanding capital stock of the Company will
be within the range as set forth in the Prospectus under
"Capitalization" (except for subsequent issuances, if any, pursuant to
reservations, agreements or employee benefit plans referred to in the
Prospectus). The authorized capital stock of the Company consists of
_______shares of Common Stock and __________ shares of preferred stock,
par value $.01 per share of which no shares are issued and outstanding
capital stock of the Company at the date hereof is ____ shares of Common
Stock, all of which are beneficially owned and of record by MHC free and
clear of any security interest, mortgage, pledge, lien, encumbrance or
legal or equitable claim; at the date hereof and at the Closing Time,
the Securities will have been duly authorized for issuance and, when
issued and delivered by the Company pursuant to the Plan against payment
of the consideration calculated as set forth in the Plan and stated on
the cover page of the Prospectus, will be duly and validly issued and
fully paid and nonassessable; the terms and
6
provisions of the Common Stock and the other capital stock of the
Company conform to all statements relating thereto contained in the
Prospectus; the certificates representing the shares of Common Stock
will conform to the requirements of applicable law and regulations; and
the issuance of the Securities is not subject to preemptive or other
similar rights, except for subscription rights granted pursuant to the
Plan in accordance with the OTS Regulations.
(xv) The MHC, upon completion of its formation, and in any
event no later than the Closing Time will have been, has been duly
organized and is validly existing as a federal mutual savings and loan
holding company chartered under the laws of the United States of America
with full corporate power and authority to own, lease and operate its
properties, to conduct its business as described in the Registration
Statement and the Prospectus, and to enter into and perform its
obligations under this Agreement and the transactions contemplated
thereby; and the MHC is duly qualified to transact business and is in
good standing under the laws of the United States of America, in the
State of _________ and in each other jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing
of property or the conduct of business, except where the failure to so
qualify would not have a Material Adverse Effect on the financial
condition, results of operations, business affairs or prospects of the
Company, the MHC and the Bank, considered as one enterprise.
(xvi) The MHC has no capital stock. All holders of the
savings, demand or other authorized accounts of the Bank are members of
the MHC. As of the Closing Time referred to in Section 2, the MHC will
not own any equity securities or any equity interest in any business
enterprise except as described in the Prospectus.
(xvii) The Bank has been duly organized and is validly existing
as a federal savings bank in mutual form chartered under the laws of the
United States of America and upon consummation of the Reorganization
will be a federal savings and loan bank in stock form, in both instances
with full corporate power and authority to own, lease and operate its
properties, to conduct its business as described in the Registration
Statement and the Prospectus, and to enter into and perform its
obligations under this Agreement and the transactions contemplated
hereby; and the Bank is duly qualified to transact business and is in
good standing under the laws of the United States of America and in each
other jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of
business, except where the failure to so qualify would not have a
Material Adverse Effect on the financial condition, results of
operations or business affairs or prospects of the Company, the MHC and
the Bank, considered as one enterprise.
(xviii) Upon consummation of the Offerings described in the
Prospectus, the authorized capital stock of the Bank will be
________shares of common stock, par value $[.01] per share ("Bank Common
Stock"), and _____ shares of serial preferred stock, par value $[.01]
per share ("Bank Preferred Stock"), and the issued and outstanding
capital stock of the Bank is 100 shares of common stock, and no shares
of Bank Preferred Stock. No shares of Bank Common Stock and no shares of
Bank Preferred Stock have been or will be issued prior to the Closing
Time referred to in Section 2 hereof. As of the Closing Time
7
referred to in Section 2 hereof, the shares of Bank Common Stock to be
issued to the Company will have been duly authorized for issuance and,
when issued and delivered by the Bank pursuant to the Plan against
payment of the consideration calculated as set forth in the Plan and as
described in the Prospectus, will be duly and validly issued and fully
paid and nonassessable, and all such Bank Common Stock will be owned
beneficially and of record by the Company free and clear of any security
interest, mortgage, pledge, lien, encumbrance or legal or equitable
claim; the terms and provisions of the Bank Common Stock conform to all
statements relating thereto contained in the Prospectus, and the
certificates representing the shares of the Bank Common Stock will
comply with the requirements of applicable laws and regulations; and the
issuance of the Bank Common Stock is not subject to preemptive or
similar rights; and there are no other warrants, options or rights of
any kind to acquire additional shares of Bank Common Stock or any shares
of Bank Preferred Stock.
(xix) The Company, the MHC, the Bank and the Subsidiaries have
each obtained all licenses, permits and other governmental
authorizations currently required for the conduct of their respective
businesses, or required for the conduct of their respective businesses
as contemplated by the Holding Company Application and the MHC
Application, except where the failure to obtain such licenses, permits
or other governmental authorizations would not have a Material Adverse
Effect on the financial condition, results of operations, business
affairs or prospects of the Company, the MHC, the Bank and the
Subsidiaries, considered as one enterprise; all such licenses, permits
and other governmental authorizations are in full force and effect and
the Company, the MHC, the Bank and the Subsidiaries are in all material
respects in compliance therewith; none of the Company, the MHC, the Bank
or any Subsidiary 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.
(xx) Each Subsidiary has been duly organized and is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has full corporate power and
authority to own, lease and operate its properties and to conduct its
business as described in the Registration Statement and Prospectus, and
is duly qualified as a foreign corporation to transact business and is
in good standing in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or
the conduct of business, except where the failure to so qualify would
not have a Material Adverse Effect; the activities of each Subsidiary
are permitted to subsidiaries of a federally chartered savings bank and
a federally chartered mutual holding company by the rules, regulations,
resolutions and practices of the OTS; all of the issued and outstanding
capital stock of each Subsidiary has been duly authorized and validly
issued, is fully paid and nonassessable and is owned by the MHC or the
Bank, as the case may be, directly, free and clear of any security
interest, mortgage, pledge, lien, encumbrance or legal or equitable
claim; and there are no warrants, options or rights of any kind to
acquire shares of capital stock of any Subsidiary.
(xxi) The Bank is a member in good standing of the Federal
Home Loan Bank of ________; the deposit accounts of the Bank are insured
by the FDIC up to the applicable
8
limits. The Bank is a "qualified thrift lender" within the meaning of 12
U.S.C. Section 1467a(m).
(xxii) The Company, the MHC and the Bank have taken all
corporate action necessary for them to execute, deliver and perform this
Agreement and the transactions contemplated hereby, and this Agreement
has been duly executed and delivered by, and is the valid and binding
agreement of, the Company, the MHC and the Bank, enforceable against
each of them in accordance with its terms, except as may be limited by
bankruptcy, insolvency or similar laws and the availability of equitable
remedies.
(xxiii) Subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus
and prior to the Closing Time, except as otherwise may be indicated or
contemplated therein, or (B) entered into any transaction or series of
transactions which is material in light of the business of the Company,
the MHC, the Bank and any subsidiary, considered as one enterprise.
(xxiv) No approval of any regulatory or supervisory or other
public authority is required in connection with the execution and
delivery of this Agreement or the issuance of the Securities that has
not been obtained and a copy of which has been delivered to the Agent,
except as may be required under the "Blue Sky" or securities laws of
various jurisdictions.
(xxv) None of the Company, the MHC, the Bank or any of the
Subsidiaries is in violation of their respective certificate of
incorporation, organization certificate, articles of incorporation or
charter, as the case may be, or bylaws or other written corporate
governance requirements or guidelines (and the Bank will not be in
violation of its charter or bylaws in stock form upon consummation of
the Reorganization); and none of the Company, the MHC, the Bank or any
of the Subsidiaries is in default (nor has any event occurred which,
with notice or lapse of time or both, would constitute a default) in the
performance or observance of any obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which the Company, the
MHC, the Bank or any of the Subsidiaries is a party or by which it or
any of them may be bound, or to which any of the property or assets of
the Company, the MHC, the Bank or any of the 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, business affairs or prospects of the Company, the
MHC, and the Bank, considered as one enterprise; and there are no
contracts or documents of the Company, the MHC or the Bank which are
required to be filed as exhibits to the Registration Statement, the
Holding Company Application or the Application which have not been so
filed.
(xxvi) The Reorganization, execution, delivery and performance
of this Agreement and the consummation of the transactions contemplated
herein, have been duly authorized by all necessary corporate action on
the part of the Company, the MHC, and the Bank, and do not and will not
conflict with or constitute a breach of, or default under, or result in
the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company, the MHC or the Bank pursuant to, any
contract, indenture, mortgage,
9
loan agreement, note, lease or other instrument to which the Company,
the MHC or the Bank is a party or by which it or any of them may be
bound, or to which any of the property or assets of the Company, the MHC
or the Bank is subject, except for such conflicts, breaches or defaults
that would not, individually or in the aggregate, have a Material
Adverse Effect nor will such action result in any violation of the
provisions of the respective charter or bylaws of the Company, the MHC
or the Bank, or any applicable law, administrative regulation or
administrative or court decree.
(xxvii) No labor dispute with the employees of the Company, the
MHC, the Bank or the Subsidiaries exists or, to the knowledge of the
Company, the MHC, the Bank or the Subsidiaries, is imminent or
threatened; and the Company, the MHC and the Bank are not aware of any
existing or threatened labor disturbance by the employees of any of its
principal suppliers or contractors which might be expected to have a
Material Adverse Effect.
(xxviii) Each of the Company, the MHC, the Bank and the
Subsidiaries has good and marketable title to all of its properties and
assets for which ownership is material to the business of the Company,
the MHC, the Bank or the Subsidiaries and to those properties and assets
described in the Prospectus as owned by them, free and clear of all
liens, charges, encumbrances or restrictions, except such as are
described in the Prospectus or are not material in relation to the
business of the Company, the MHC, the Bank or the Subsidiaries,
considered as one enterprise; and all of the leases and subleases
material to the business of the Company, the MHC, the Bank or the
Subsidiaries under which the Company, the MHC, the Bank or the
Subsidiaries hold properties, including those described in the
Prospectus, are valid and binding agreements of the Company, the MHC,
the Bank or the Subsidiaries, in full force and effect, enforceable in
accordance with their terms except as may be limited by bankruptcy,
insolvency or simlar laws and availability of equitable remedies
(xxix) None of the Company, the MHC or the Bank is in
violation of any order or directive from the OTS, the Commission or any
regulatory authority to make any material change in the method of
conducting its respective businesses; the Company, the MHC, the Bank,
and each of the Subsidiaries have conducted and are conducting their
business so as to comply with all applicable statutes, regulations and
administrative and court decrees (including, without limitation, all
regulations, decisions, directives and orders of the OTS, the FDIC and
the Commission). Neither the Company, the MHC, the Bank nor any of the
Subsidiaries is subject or is party to, or has received any notice or
advice that any of them may become subject or party to, any
investigation with respect to any cease-and-desist order, agreement,
consent agreement, memorandum of understanding or other regulatory
enforcement action, proceeding or order with or by, or is a party to any
commitment letter or similar undertaking to, or is subject to any
directive by, or has been a recipient of any supervisory letter from, or
has adopted any board resolutions at the request of, any Regulatory
Agency (as defined below) that currently restricts the conduct of their
business or that in any manner relates to their capital adequacy, their
credit policies, their management or their business (each, a "Regulatory
Agreement"), nor has the Company, the MHC, the Bank or any of the
Subsidiaries been advised by any Regulatory Agency that it is
considering issuing or requesting the issuance of any such Regulatory
Agreement; and there is no unresolved violation, criticism or exception
by any Regulatory Agency with respect to any
10
report or statement relating to any examinations of the Company, the
MHC, the Bank or any of the Subsidiaries which is expected to have a
Material adverse Effect, or which might materially and adversely affect
the properties or assets thereof or which might adversely affect the
consummation of the Offerings or the performance of this Agreement. As
used herein, the term "Regulatory Agency" means any federal or state
agency charged with the supervision or regulation of depositary
institutions or holding companies of depositary institutions, or engaged
in the insurance of depositary institution deposits, or any court,
administrative agency or commission or other governmental agency,
authority or instrumentality having supervisory or regulatory authority
with respect to the Company, the MHC, the Bank or any of the
Subsidiaries.
(xxx) There is no action, suit or proceeding before or by any
court or governmental agency or body, domestic or foreign, now pending,
or, to the knowledge of the Company, the MHC, or the Bank, threatened,
against or affecting the Company, the MHC or the Bank which is required
to be disclosed in the Registration Statement (other than as disclosed
therein), or which might result in any material adverse change in the
financial condition, results of operations, business affairs or
prospects of the Company, the MHC and the Bank, considered as one
enterprise, or which might materially and adversely affect the
properties or assets thereof, or which might adversely affect the
consummation of the Offerings, or the performance of this Agreement; all
pending legal or governmental proceedings to which the Company, the MHC,
the Bank or any Subsidiary is a party or of which any of their
respective property or assets is the subject which are not described in
the Registration Statement, including ordinary routine litigation
incidental to their business, are considered in the aggregate not
material.
(xxxi) The Company, MHC and the Bank have obtained (i) an
opinion of its counsel, ________________, with respect to the legality
of the Securities to be issued and certain federal income tax
consequences of the Offerings and the Plan, and (ii) the opinion of with
respect to the certain state and local income tax consequences of the
Offerings and the Plan, copies of which are filed as exhibits to the
Registration Statement; all material aspects of the aforesaid opinions
are accurately summarized in the Prospectus under "The Stock Offering -
Material Income Tax Consequences," the facts and representations upon
which such opinions are based are truthful, accurate and complete in all
material respects; and neither the Company, the MHC, nor the Bank has
taken or will take any action inconsistent therewith.
(xxxii) The Company is not and, upon completion of the
Reorganization and sale of the Securities and the application of the net
proceeds therefrom, will not be, required to be registered as an
"investment company" as that term is defined under the Investment
Company Act of 1940, as amended.
(xxxiii) All of the loans represented as assets on the most
recent consolidated financial statements or consolidated selected
financial information of the Bank included in the Prospectus meet or are
exempt from all requirements of federal, state or local law pertaining
to lending, including without limitation truth in lending (including the
requirements of Regulations Z and 12 C.F.R. Part 226 and Section
563.99), real estate
11
settlement procedures, consumer credit protection, equal credit
opportunity and all disclosure laws applicable to such loans, except for
violations which, if asserted, would not result in a Material Adverse
Effect.
(xxxiii) To the knowledge of the Company, the MHC, the Bank and
each Subsidiary, with the exception of the intended loan to the Bank's
ESOP by the Company to enable the ESOP to purchase up to [8.0]% of the
Securities sold in the Offerings, none of the Company, the MHC, the Bank
or their employees has made any payment of funds of the Company, the MHC
or the Bank as a loan for the purchase of the Common Stock or made any
other payment of funds prohibited by law, and no funds have been set
aside to be used for any payment prohibited by law.
(xxxiv) Each of the Company, the MHC, the Bank and each of the
Subsidiaries maintains a system of internal accounting controls
sufficient to provide reasonable assurance that (a) transactions are
executed in accordance with management's general or specific
authorizations; (b) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset accountability; (c)
access to assets is permitted only in accordance with management's
general or specific authorization; and (d) the recorded accountability
for assets is compared with the existing assets at reasonable intervals
and appropriate action is taken with respect to any differences.
(xxxiv) The Company, the MHC, the Bank and each Subsidiary are
in compliance with the applicable financial recordkeeping and reporting
requirements of the Currency and Foreign Transaction Reporting Act of
1970, as amended, and the rules and regulations thereunder. The Bank has
established compliance programs and is in compliance with the
requirements of the USA Patriot Act and all applicable regulations
promulgated thereunder. The Bank is in compliance with the USA Patriot
Act and all applicable regulations promulgated thereunder, and there is
no charge, investigation, action, suit or proceeding before any court,
regulatory authority or governmental agency or body pending or, to the
best knowledge of the Company, the MHC, and the Bank, threatened
regarding the Bank's compliance with the USA Patriot Act or any
regulations promulgated thereunder.
(xxxv) None of the Company, the MHC, the Bank or any Subsidiary
nor any properties owned or operated by the Company, the MHC, the Bank
or any Subsidiary is in violation of or liable under any Environmental
Law (as defined below). There are no actions, suits or proceedings, or
demands, claims, notices or investigations (including, without
limitation, notices, demand letters or requests for information from any
environmental agency) instituted or pending, or to the knowledge of the
Company, the MHC, the Bank or any Subsidiary threatened, relating to the
liability of any property owned or operated by the Company, the MHC, the
Bank or any Subsidiary, under any Environmental Law, except for such
actions, suits or proceedings, or demands, claims, notices or
investigations that, individually or in the aggregate, would not have a
Material Adverse Effect. For purposes of this subsection, the term
"Environmental Law" means any federal, state, local or foreign law,
statute, ordinance, rule, regulation, code, license, permit,
authorization, approval, consent, order, judgment, decree, injunction or
agreement with any regulatory authority relating to (i)
12
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.
(xxxvi) The Company, the MHC, the Bank and each Subsidiary have
filed all federal, state and local income and franchise tax returns
required to be filed and have made timely payments of all taxes shown as
due and payable in respect of such returns, and no deficiency has been
asserted with respect thereto by any taxing authority. No tax deficiency
has been asserted, and the Company, the MHC and the Bank have no
knowledge of any tax deficiency which could be asserted against the
Company, the MHC, the Bank or the Subsidiaries.
(xxxvii) The Company has received all approvals required to
consummate the Offerings, and to have the Securities quoted on the
Nasdaq National Market effective as of the Closing Time referred to in
Section 2 hereof.
(xxxviii) The Company has filed a registration statement for the
Securities under Section 12(g) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), and such registration statement was
declared effective concurrent with the effectiveness of the Registration
Statement.
(xxxix) There are no affiliations or associations (as such terms
are defined by the National Association of Securities Dealers, Inc.
("NASD")) between any member of the NASD and any of the MHC's, Company's
or Bank's officers or directors.
(xl) The Company, the MHC, the Bank and each Subsidiary
carries, or is covered by, insurance in such amounts and covering such
risks as is adequate for the conduct of their respective businesses and
the value for their respective properties as is customary for companies
engaged in similar industries.
(xli) The Company, the MHC and the Bank have not relied on
Agent or its counsel for any legal, tax or accounting advice in
connection with the Offerings.
(xlii) The records of eligible account holders, supplemental
eligible account holders, and other depositors are accurate and complete
in all material respects.
(xliii) The Company, the MHC, the Bank and each Subsidiary is in
compliance with all presently applicable provisions of the Employee
Retirement Income Security Act of 1974, as amended, including the
regulations and published interpretations thereunder ("ERISA"); no
"reportable event" (as defined in ERISA) has occurred with respect to
any "pension plan" (as defined in ERISA) for which the Company, the MHC,
the Bank or any Subsidiary, respectively, would have any liability; each
of the Company, the MHC, the Bank, and each Subsidiary has not incurred
and does not expect to incur liability under (i) Title IV
13
of ERISA with respect to termination of, or withdrawal from, any
"pension plan" or (ii) Sections 412 or 4971 of the Internal Revenue Code
of 1986, as amended, including the regulations and published
interpretations thereunder (the "Code"); and each "pension plan" for
which the Company, the MHC, the Bank and any Subsidiary would have any
liability that is intended to be qualified under Section 401(a) of the
Code is so qualified and nothing has occurred, whether by action or by
failure to act, which would cause the loss of such qualification.
(xliv) The Company is in compliance with the applicable
provisions of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act, the rules and regulations of the
Commission thereunder, and the Nasdaq corporate governance rules
applicable to the Company, and will use its best efforts to comply with
those provisions of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act and the Nasdaq corporate
governance rules that will become effective in the future upon their
effectiveness.
(xlv) Any certificate signed by any officer of the Company,
the MHC, the Bank or any Subsidiary and delivered to either of the Agent
or counsel for the Agent shall be deemed a representation and warranty
by the Company, the MHC or the Bank to the Agent as to the matters
covered thereby.
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 Offerings. 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
or related corporate documents; (ii) reviewing with the Board of Directors of
the Company, the MHC and the Bank financial and securities marketing
implications of the Appraiser's appraisal of the Common Stock; (iii) reviewing
all offering documents, including the Prospectus, stock order forms and related
offering materials (it being understood that preparation and filing of such
documents is the sole responsibility of the Company and the Bank and their
counsel); (iv) assisting in the design and implementation of a marketing
strategy for the Offerings; (v) assisting management of the Company and the Bank
in preparing for meetings with potential investors and broker-dealers; and (vi)
providing such other general advice and assistance regarding financial and
marketing aspects of the Offering as may be requested to promote the successful
completion of the Offering.
The appointment of the Agent hereunder shall terminate upon the earlier
to occur of (a) forty-five (45) days after the last day of the Subscription and
Community Offering, unless
14
the Company and the Agent agree in writing to extend such period and the OTS
agrees to extend the period of time in which the Securities may be sold, or (b)
the receipt and acceptance of subscriptions and purchase orders for all of the
Securities, or (c) the completion of the Syndicated Community Offering.
If any of the Securities remain available after the expiration of the
Subscription and Community Offering, at the request of the Company and the Bank,
Sandler ▇'▇▇▇▇▇ will seek to form a syndicate of registered brokers or dealers
("Selected Dealers") to assist in the solicitation of purchase orders of such
Securities on a best efforts basis. Sandler ▇'▇▇▇▇▇ will endeavor to limit the
aggregate fees to be paid by the Company, the MHC and the Bank to an amount
competitive with gross underwriting discounts charged at such time for
underwritings of comparable amounts of stock sold at a comparable price per
share in a similar market environment; PROVIDED, HOWEVER, that the aggregate
fees payable to Sandler ▇'▇▇▇▇▇ and Selected Dealers shall not exceed 7.0% of
the aggregate dollar amount of the Securities sold in the Syndicated Community
Offering by such Selected Dealers. Sandler ▇'▇▇▇▇▇ will endeavor to distribute
the Securities among the Selected Dealers in a fashion which best meets the
distribution objective of the Company and the Bank, which may result in limiting
the allocation of stock to certain Selected Dealers. It is understood that in no
event shall Sandler ▇'▇▇▇▇▇ be obligated to act as a Selected Dealer or to take
or purchase any Securities.
If any of the Securities remain available after the expiration of the
Offerings, the Company agrees to offer the Agent the first right to act as lead
managing underwriter for the Public Offering. The terms of the Public Offering
will be set forth in a separate definitive purchase agreement in a form
satisfactory to Sandler ▇'▇▇▇▇▇ and containing customary representations,
warranties, conditions, agreements and indemnities, which purchase agreement,
when executed, will supersede and replace this Agreement with respect to
Securities sold thereunder (the "Purchase Agreement"). This Agreement is not
intended to constitute, and should not be construed as, an agreement or
commitment between the Company, the Bank and Sandler ▇'▇▇▇▇▇ relating to the
firm commitment underwriting of any securities, and Sandler ▇'▇▇▇▇▇ may, in its
sole judgment and discretion, determine at any time not to proceed with the
proposed firm commitment underwriting. Such proposed underwriting will be
subject, among other things, to: (i) satisfactory completion by Sandler ▇'▇▇▇▇▇
of such due diligence investigation or inquiries as it may deem appropriate,
(ii) market conditions, which, in the sole judgment of Sandler ▇'▇▇▇▇▇, shall be
satisfactory, and (iii) the execution and delivery of a definitive agreement.
In the event the Company is unable to sell at least the total minimum of
the Securities, as set forth on the cover page of the Prospectus, within the
period herein provided, this Agreement shall terminate and the Company shall
refund to any persons who have subscribed for any of the Securities the full
amount which it may have received from them, together with interest as provided
in the Prospectus, and no party to this Agreement shall have any obligation to
the others hereunder, except for the obligations of the Company, the MHC and the
Bank as set forth in Sections 4, 6(a) and 7 hereof and the obligations of the
Agent as provided in Sections 6(b) and 7 hereof. Appropriate arrangements for
placing the funds received from subscriptions for Securities or other offers to
purchase Securities in
15
special interest-bearing accounts with the Bank until all Securities are sold
and paid for were made prior to the commencement of the Subscription Offering,
with provision for refund to the purchasers as set forth above, or for delivery
to the Company if all Securities are sold.
If at least the total minimum of Securities, as set forth on the cover
page of the Prospectus, are sold, the Company agrees to issue or have issued the
Securities sold and to release for delivery certificates for such Securities at
the Closing Time against payment therefor by release of funds from the special
interest-bearing accounts referred to above. The closing shall be held at the
offices of _________________________, at 10:00 a.m., Eastern Standard Time, or
at such other place and time as shall be agreed upon by the parties hereto, on a
business day to be agreed upon by the parties hereto. The Company shall notify
the Agent by telephone, confirmed in writing, when funds shall have been
received for all the Securities. Certificates for Securities shall be delivered
directly to the purchasers thereof in accordance with their directions.
Notwithstanding the foregoing, certificates for Securities purchased through
Selected Dealers shall be made available to the Agent for inspection at least 48
hours prior to the Closing Time at such office as the Agent shall designate. The
hour and date upon which the Company shall release for delivery all of the
Securities, in accordance with the terms hereof, is herein called the "Closing
Time."
The Company will pay any stock issue and transfer taxes which may be
payable with respect to the sale of the Securities.
In addition to the reimbursement of the expenses specified in Section 4
hereof, the Agent will receive the following compensation for its services
hereunder:
(a) ___ percent (1.00%) of the aggregate purchase price of the
Securities sold in the Subscription and Community Offering, excluding in each
case shares purchased by (i) any employee benefit plan of the Company or the
Bank established for the benefit of their respective directors, officers and
employees, and (ii) any director, officer or employee of the Company or the Bank
or members of their immediate families (which term shall mean parents,
grandparents, spouse, siblings, children and grandchildren); and
(b) With respect to any Securities sold by a National Association of
Securities Dealers, Inc. ("NASD") member firm (other than Sandler ▇'▇▇▇▇▇) in
the Syndicated Community Offering, (i) the compensation payable to Selected
Dealers, (ii) any sponsoring dealer's fees; and (iii) a management fee to
Sandler ▇'▇▇▇▇▇ of ___ percent (____%) of the aggregate purchase price of the
Securities sold in the Syndicated Community Offering. Any fees payable to
Sandler ▇'▇▇▇▇▇ for Securities sold by Sandler ▇'▇▇▇▇▇ under any such agreement
shall be limited to an aggregate of ____ percent (_____%) of the purchase price
of the Securities sold by Sandler ▇'▇▇▇▇▇ and other NASD member firms.
If this Agreement is terminated by the Agent in accordance with the
provisions of Section 9(a) hereof, no fee shall be payable by the Company to
Sandler ▇'▇▇▇▇▇; provided, however, that the Company shall reimburse the Agent
for all of its reasonable out-of-pocket expenses incurred prior to termination,
including the reasonable fees and disbursements of counsel for the Agent in
accordance with the provisions of Section 4 hereof. In addition, the
16
Company shall be obligated to pay the fees and expenses as contemplated by the
provisions of Section 4 hereof in the event of any such termination.
All fees payable to the Agent hereunder shall be payable in immediately
available funds at Closing Time, or upon the termination of this Agreement, as
the case may be. [In recognition of the long lead times involved in the
conversion process, the Bank agrees to make advance payments to the Agent in the
aggregate amount of $__________, $____________ of which has been previously paid
and the remaining $_________ of which shall be payable upon the execution
hereof, which shall be credited against any fees or reimbursement of expenses
payable hereunder and any unearned portion thereof shall be refunded. ]
SECTION 3. COVENANTS OF THE COMPANY, THE MHC AND THE BANK. The Company,
the MHC and the Bank covenant with the Agent as follows:
(a) The Company, the MHC and the Bank will prepare and file such
amendments or supplements to the Registration Statement, the Prospectus, the
Holding Company, the MHC Application and the Proxy Statement as may hereafter be
required by the Securities Act Regulations or the OTS Regulations or as may
hereafter be requested by the Agent. Following completion of the Subscription
and Community Offering, in the event of a Syndicated Community Offering, the
Company, the MHC and the Bank will (i) promptly prepare and file with the
Commission a post-effective amendment to the Registration Statement relating to
the results of the Subscription and Community Offering, any additional
information with respect to the proposed plan of distribution and any revised
pricing information or (ii) if no such post-effective amendment is required,
will file with the Commission a prospectus or prospectus supplement containing
information relating to the results of the Subscription and Community Offering
and pricing information pursuant to Rule 424 of the Securities Act Regulations,
in either case in a form acceptable to the Agent. The Company, the MHC and the
Bank will notify the Agent immediately, and confirm the notice in writing, (i)
of the effectiveness of any post-effective amendment of the Registration
Statement, the filing of any supplement to the Prospectus and the filing of any
amendment to the Plan, (ii) of the receipt of any comments from the OTS or the
Commission with respect to the transactions contemplated by this Agreement or
the Plan, (iii) of any request by the Commission or the OTS for any amendment to
the Registration Statement or the Plan or any amendment or supplement to the
Prospectus or for additional information, (iv) of the issuance by the OTS of any
order suspending the Offerings or the use of the Prospectus or the initiation of
any proceedings for that purpose, (v) of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement or the
initiation of any proceedings for that purpose, and (vi) of the receipt of any
notice with respect to the suspension of any qualification of the Securities for
offering or sale in any jurisdiction. The Company, the MHC and the Bank will
take all necessary action to prevent the issuance of any stop order and, if any
stop order is issued, to obtain the lifting thereof at the earliest possible
moment.
(b) The Company, the MHC and the Bank will give the Agent notice of
its intention to file or prepare any amendment to the Plan or Registration
Statement (including
17
any post-effective amendment) or any amendment or supplement to the Prospectus
(including any revised prospectus which the Company proposes for use in
connection with the Syndicated Community Offering of the Securities which
differs from the prospectus on file at the Commission at the time the
Registration Statement becomes effective, whether or not such revised prospectus
is required to be filed pursuant to Rule 424(b) of the Securities Act
Regulations), will furnish the Agent with copies of any such amendment or
supplement a reasonable amount of time prior to such proposed filing or use, as
the case may be, and will not file any such amendment or supplement or use any
such prospectus to which the Agent or counsel for the Agent may object.
(c) The Company, the MHC and the Bank will deliver to the Agent as
many signed copies and as many conformed copies of the Application and the
Registration Statement as originally filed and of each amendment thereto
(including exhibits filed therewith or incorporated by reference therein) as the
Agent may reasonably request, and from time to time such number of copies of the
Prospectus as the Agent may reasonably request.
(d) During the period when the Prospectus is required to be
delivered, the Company, the MHC and the Bank will comply, at their own expense,
with all requirements imposed upon them by the OTS, by the OTS Regulations, as
from time to time in force, and by the Nasdaq National Market, the Securities
Act, the Securities Act Regulations, the Exchange Act, and the rules and
regulations of the Commission promulgated thereunder, including, without
limitation, Regulation M under the Exchange Act, so far as necessary to permit
the continuance of sales or dealing in shares of the Securities during such
period in accordance with the provisions hereof and the Prospectus.
(e) If any event or circumstance shall occur as a result of which it
is necessary, in the opinion of counsel for the Agent, to amend or supplement
the Registration Statement or Prospectus in order to make the Prospectus not
misleading in the light of the circumstances existing at the time it is
delivered to a purchaser, the Company, the MHC and the Bank will forthwith amend
or supplement the Registration Statement or Prospectus (in form and substance
satisfactory to counsel for the Agent) so that, as so amended or supplemented,
the Registration Statement or Prospectus will not include an untrue statement of
a material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances existing at the time it is
delivered to a purchaser, not misleading, and the Company, the MHC and the Bank
will furnish to the Agent a reasonable number of copies of such amendment or
supplement. For the purpose of this subsection, the Company, the MHC and the
Bank will each furnish such information with respect to itself as the Agent may
from time to time reasonably request.
(f) The Company, the MHC and the Bank will take all necessary
action, in cooperation with the Agent, to qualify the Securities for offering
and sale under the applicable securities laws of such states of the United
States and other jurisdictions as the OTS Regulations may require and as the
Agent and the Company have agreed; PROVIDED, HOWEVER, that none of the Company,
the MHC or the Bank shall be obligated to file any general consent to service of
process or to qualify as a foreign corporation in any jurisdiction
18
in which it is not so qualified. In each jurisdiction in which the Securities
have been so qualified, the Company, the MHC and the Bank will file such
statements and reports as may be required by the laws of such jurisdiction to
continue such qualification in effect for a period of not less than one year
from the effective date of the Registration Statement.
(g) The Company authorizes Sandler ▇'▇▇▇▇▇ and any Selected Dealer
to act as agent of the Company in distributing the Prospectus to persons
entitled to receive subscription rights and other persons to be offered
Securities having record addresses in the states or jurisdictions set forth in a
survey of the securities or "blue sky" laws of the various jurisdictions in
which the Offerings will be made (the "Blue Sky Survey").
(h) The Company will make generally available to its security
holders as soon as practicable, but not later than 60 days after the close of
the period covered thereby, an earnings statement covering a twelve month period
beginning not later than the first day of the Company's fiscal quarter next
following the effective date of the Registration Statement (as defined in Rule
158 of the Securities Act Regulations) that will satisfy the provisions of
Section 11(a) of the Securities Act.
(i) During the period ending on the third anniversary of the
expiration of the fiscal year during which the closing of the transactions
contemplated hereby occurs, the Company will furnish to its stockholders as soon
as practicable after the end of each such fiscal year an annual report
(including consolidated statements of financial condition and consolidated
statements of income, stockholders' equity and cash flows, certified by
independent public accountants) and, as soon as practicable after the end of
each of the first three quarters of each fiscal year (beginning with the fiscal
quarter ending after the effective date of the Registration Statement), the
Company will make available to its stockholders consolidated summary financial
information of the Company and the Bank for such quarter in reasonable detail.
In addition, such annual report and quarterly consolidated summary financial
information shall be made public through the issuance of appropriate press
releases at the same time or prior to the time of the furnishing thereof to
stockholders of the Company.
(j) During the period ending on the fifth anniversary of the
expiration of the fiscal year during which the closing of the transactions
contemplated hereby occurs, the Company will furnish to the Agent (i) as soon as
publicly available, a copy of each report or other document of the Company
furnished generally to stockholders of the Company or furnished to or filed with
the Commission under the Exchange Act or any national securities exchange or
system on which any class of securities of the Company is listed, and (ii) from
time to time, such other information concerning the Company as the Agent may
reasonably request.
(k) The Company, the MHC and the Bank will comply, at their own
expense, with all requirements imposed by the Commission, the OTS and the Nasdaq
National Market, or pursuant to the applicable Securities Act Regulations, OTS
Regulations and Nasdaq National Market Regulations, as from time to time in
force.
19
(l) The Company will promptly inform the Agent upon its receipt of
service with respect to any material litigation or administrative action
instituted with respect to the Offerings.
(m) Each of the Company and the Bank will use the net proceeds
received by it from the sale of the Securities in the manner specified in the
Prospectus under "Use of Proceeds."
(n) The Company will report the use of proceeds from the Offerings
on its first periodic report filed pursuant to Sections 13(a) and 15(d) of the
Exchange Act and on any subsequent periodic reports as may be required pursuant
to Rule 463 of the Securities Act Regulations.
(o) The Company will maintain the effectiveness of the Exchange Act
Registration Statement for not less than three years and will comply in all
material respects with its filing obligations under the Exchange Act. The
Company will use its best efforts to effect and maintain the listing of the
Common Stock on the Nasdaq National Market and, once listed on the Nasdaq
National Market, the Company will comply with all applicable corporate
governance standards required by the Nasdaq National Market. The Company will
file with the Nasdaq National Market all documents and notices required by the
Nasdaq National Market of companies that have issued securities that are traded
in the over-the-counter market and quotations for which are reported by the
Nasdaq National Market.
(p) The Company and the Bank will take such actions and furnish such
information as are reasonably requested by the Agent in order for the Agent to
ensure compliance with Rule 2790 of the National Association of Securities
Dealers, Inc.
(q) 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 [and the
Foundation Shares] for a period of 180 days following the Closing Time.
(r) During the period beginning on the date hereof and ending on the
later of the fifth anniversary of the Closing Time or the date on which the
Agent receives full payment in satisfaction of any claim for indemnification or
contribution to which it may be entitled pursuant to Sections 6 or 7,
respectively, none of the Company, the MHC or the Bank shall, without the prior
written consent of the Agent, take or permit to be taken any action that could
result in the Bank Common Stock becoming subject to any security interest,
mortgage, pledge, lien or encumbrance.
(s) The Company, the MHC and the Bank will comply with the
conditions imposed by or agreed to with the OTS in connection with its approval
of the Holding Company and the MHC Application including the Plan.
20
(t) During the period ending on the first anniversary of the Closing
Time, the Bank will comply with all applicable laws and regulations necessary
for the Bank to continue to be a "qualified thrift lender" within the meaning of
12 U.S.C. Section 1467a(m).
(u) The Company shall not deliver the Securities until the Company,
the MHC and the Bank have satisfied each condition set forth in Section 5
hereof, unless such condition is waived by the Agent.
(v) The Company, the MHC and the Bank will furnish to Sandler
▇'▇▇▇▇▇ as early as practicable prior to the Closing Date, but no later than two
(2) full business days prior thereto, a copy of the latest available unaudited
interim consolidated financial statements of the Company which have been read by
__________________, as stated in their letters to be furnished pursuant to
subsections (f) and (g) of Section 5 hereof.
(w) Each of the Company, the MHC and the Bank will conduct its
business in compliance in all material respects with all applicable federal and
state laws, rules, regulations, decisions, directives and orders, including all
decisions, directives and orders of the Commission, the Nasdaq National Market
and the OTS.
(x) The Bank will not amend the Plan in any manner that would affect
the sale of the Securities or the terms of this Agreement without the consent of
the Agent.
(y) The Company, the MHC and the Bank will not, prior to the Closing
Time, incur any liability or obligation, direct or contingent, or enter into any
material transaction, other than in the ordinary course of business consistent
with past practice, except as contemplated by the Prospectus.
(z) The Company, the MHC and the Bank will use all reasonable
efforts to comply with, or cause to be complied with, the conditions precedent
to the several obligations of the Agent specified in Section 5 hereof.
(aa) The Company, the MHC and the Bank will provide the Agent with
any information necessary to carry out the allocation of the Securities in the
event of an oversubscription, and such information will be accurate and reliable
in all material respects.
(bb) The Company, the MHC and the Bank will notify the Agent when
funds have been received for the minimum number of Securities set forth in the
Prospectus.
(cc) At the Closing Time, (i) the Company, the MHC and the Bank will
have completed the conditions precedent to the Offerings [and the establishment
of the Foundation] in accordance with the Plan, the applicable OTS Regulations
and all other applicable laws, regulations, decisions and orders, including all
material terms, conditions, requirements and provisions precedent to the
Reorganization and the Offerings imposed upon the Company, the MHC or the Bank
by the Commission, the OTS or any other regulatory authority or Blue Sky
authority, and will comply with those which the regulatory authority permits to
be completed after the Reorganization and the Offerings; (ii) the Reorganization
and the Offerings [and the establishment of the Foundation] will have been
effected in the
21
manner described in the Prospectus and in accordance with the Plan, the OTS
Regulations and all other applicable material laws, regulations, decisions and
orders, including in compliance with all terms, conditions, requirements and
provisions precedent to the Reorganization and the Offerings imposed upon the
Company, the MHC and the Bank by the Commission, the OTS, the FDIC or any other
regulatory or Blue Sky authority.
SECTION 4. PAYMENT OF EXPENSES. The Company, the MHC and the Bank
jointly and severally agree to pay all expenses incident to the performance of
their obligations under this Agreement, including but not limited to (i) the
cost of obtaining all securities and bank regulatory approvals, (ii) the
preparation, printing and filing of the Registration Statement and the Plan as
originally filed and of each amendment thereto, (iii) the preparation, issuance
and delivery of the certificates for the Securities purchased in the Offerings,
(iv) the fees and disbursements of the Company's, the MHC's and the Bank's
counsel, conversion agent, accountants, appraiser and other advisors, (v) the
qualification of the Securities under securities laws in accordance with the
provisions of Section 3(f) hereof, including filing fees and the fees and
disbursements of counsel in connection therewith and in connection with the
preparation of the Blue Sky Survey, (vi) the printing and delivery to the Agent
of copies of the Registration Statement as originally filed and of each
amendment thereto and the printing and delivery of the Prospectus and any
amendments or supplements thereto to the purchasers in the Offerings and the
Agent (in such quantities as the Agent shall reasonably request), (vii) the
printing and delivery to the Agent of copies of a Blue Sky Survey, and (viii)
the fees and expenses incurred in connection with the listing of the Securities
on the Nasdaq National Market. In the event the Agent incurs any such fees and
expenses on behalf of the Company, the MHC or the Bank, the Bank will reimburse
the Agent for such fees and expenses whether or not the Offerings are
consummated; PROVIDED, HOWEVER, that the Agent shall not incur any substantial
expenses on behalf of the Company, the MHC or the Bank pursuant to this Section
without the prior approval of the Bank.
The Company, the MHC and the Bank jointly and severally agree to pay
certain expenses incident to the performance of the Agent's obligations under
this Agreement, regardless of whether the Offerings are consummated, including
(i) the filing fees paid or incurred by the Agent in connection with all filings
with the NASD, and (ii) all reasonable out-of-pocket expenses incurred by the
Agent relating to the Offerings, including without limitation, fees and expenses
of the Agent's counsel, advertising, promotional, syndication and travel
expenses. All fees and expenses to which the Agent is entitled to reimbursement
under this paragraph of this Section 4 shall be due and payable upon receipt by
the Company, the MHC or the Bank of a written accounting therefor setting forth
in reasonable detail the expenses incurred by the Agent.
SECTION 5. CONDITIONS OF AGENT'S OBLIGATIONS. The Company, the MHC, the
Bank and the Agent agree that the issuance and the sale of Securities and all
obligations of the Agent hereunder are subject to the accuracy of the
representations and warranties of the Company, the MHC and the Bank herein
contained as of the date hereof and the Closing Time, to the accuracy of the
statements of officers and directors of the Company,
22
the MHC and the Bank made pursuant to the provisions hereof, to the performance
by the Company, the MHC and the Bank of their obligations hereunder, and to the
following further conditions:
(a) No stop order suspending the effectiveness of the Registration
Statement shall have been issued under the Securities Act or proceedings
therefor initiated or threatened by the Commission, no order suspending the
Offerings or authorization for final use of the Prospectus shall have been
issued or proceedings therefor initiated or threatened by the Commission or the
OTS, and no order suspending the sale of the Securities in any jurisdiction
shall have been issued.
(b) At Closing Time, the Agent shall have received:
(1) The favorable opinion, dated as of Closing Time, of
______________, counsel for the Company, the MHC and the Bank, in form
and substance satisfactory to counsel for the Agent, to the effect that:
(i) The Company has been duly organized and is
validly existing as a federal stock holding company chartered
under the laws of the United States of America; the MHC has been
duly organized and is validly existing as a federal mutual
holding company chartered under the laws of the United States of
America; the Bank has been duly organized and is validly
existing as a federal savings bank chartered under the laws of
the United States of America and at the closing time will be
duly organized and validly existing in stock form.
(ii) Each of the Company, the MHC and the Bank has
full corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the
Registration Statement and the Prospectus and to enter into and
perform its obligations under this Agreement and the
transactions contemplated hereby.
(iii) Each of the Company, the MHC and the Bank is
duly qualified as a domestic or foreign corporation to transact
business and is in good standing under the laws of the United
States of America, in the State of ___________and in each other
jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of
business, except where the failure to so qualify would not have
a Material Adverse Effect.
(iv) The authorized capital stock of the Company
consists of _______ shares of Common Stock and ___________
shares of preferred stock, par value $.01 per share, and the
issued and outstanding capital stock of the Company is ____
shares of Common Stock, all of which are owned beneficially and
of record by the MHC free and clear of any security interest,
mortgage, pledge, lien, encumbrance or legal or equitable claim;
upon consummation of the
23
Offerings[, and the issuance of the Foundation Shares to the
Foundation immediately upon completion thereof,] the authorized
issued and outstanding capital stock of the Company will be
within the range set forth in the Prospectus under
"Capitalization".
(v) The authorized capital stock of the Bank
consists of _________shares of common stock, par value $[.01]
per share, and _____ shares of serial preferred stock, par value
$[.01] per share, and the issued and outstanding capital stock
of the Bank is _____ shares of common stock, all of which are
owned beneficially and of record by the Company free and clear
of any security interest, mortgage, pledge, lien, encumbrance or
legal or equitable claim. All of the issued and outstanding
capital stock of the Bank has been duly authorized, validly
issued and fully paid and nonassessable and has been issued in
compliance with all federal and state securities laws.
(vi) The Securities have been duly and validly
authorized for issuance and sale; the Securities, when issued
and delivered by the Company pursuant to the Plan against
payment of the consideration calculated as set forth in the
Plan, will be duly and validly issued and fully paid and
nonassessable.
(vii) The issuance of the Securities is not subject to
preemptive or other similar rights arising by operation of the
law or, to counsel's knowledge after due inquiry, otherwise,
except for subscription rights granted pursuant to the Plan.
(viii) The issuance of the Securities is in compliance
with all conditions imposed upon the Company, the MHC and the
Bank by the OTS under the terms of their written approval or
notice of intention not to object, as applicable.
(ix) Each of the Company and the MHC is registered as
a savings and loan holding company under the Home Owners Loan
Act.
(x) The Bank is a member in good standing of the
Federal Home Loan Bank of ______ and the deposit accounts of the
Bank are insured by the FDIC up to the applicable limits.
(xi) Each Subsidiary has been duly incorporated and
is validly existing as a corporation in good standing under the
laws of the jurisdiction of its incorporation, and each of the
Subsidiaries has full corporate power and authority to own,
lease and operate its properties and to conduct its business as
described in the Registration Statement and Prospectus, and is
duly qualified as a foreign
24
corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of
business, except where the failure to so qualify would not have
a Material Adverse Effect; the activities of each Subsidiary are
permitted to subsidiaries of a federally chartered savings bank,
in the case of the Bank, and a federally chartered stock holding
company, in the case of the Company, by the rules, regulations,
resolutions and practices of the OTS; all of the issued and
outstanding capital stock of each Subsidiary has been duly
authorized and validly issued, is fully paid and non-assessable
and is owned by the MHC or the Bank, as the case may be,
directly, free and clear of any security interest, mortgage,
pledge, lien, encumbrance, or legal or equitable claim.
(xii) The OTS has duly approved the Holding Company
Application and the MHC Application, including the Plan; such
approval remains in full force and effect and no action is
pending, or to the best of such counsel's knowledge, threatened
respecting the Plan. such approval remains in full force and
effect and no action is pending, or to such counsel's knowledge,
threatened respecting the Holding Company Application and the
MHC Application, including the Plan; the Holding Company
Application and the MHC Application, including the Plan comply
as to form in all material respects with the applicable
requirements of the OTS, includes all documents required to be
filed as exhibits thereto, and is, to such counsel's knowledge,
truthfully, accurate and complete (other than the financial
statements, notes to financial statements and tabular,
statistical and appraisal data included therein, as to which no
opinion need be rendered) and the Company is duly authorized to
own all of the issued and outstanding capital stock of the Bank
to be issued pursuant to the Plan.
(xiii) The execution and delivery of this Agreement,
the incurrence of the obligations herein set forth, and the
consummation of the transactions contemplated hereby, (A) have
been duly and validly authorized by all necessary action on the
part of each of the Company, the MHC and the Bank, and this
Agreement constitutes the legal, valid and binding agreement of
each of the Company, the MHC and the Bank, enforceable in
accordance with its terms, except as rights to indemnity and
contribution hereunder may be limited under applicable law (it
being understood that such counsel may avail itself of customary
exceptions concerning the effect of bankruptcy, insolvency or
similar laws and the availability of equitable remedies); (B)
will not result in any violation of the provisions of the
certificate of incorporation, reorganization certificate,
articles of incorporation or charter, as the case may be, or
bylaws of the Company, the MHC,
25
the Bank or any Subsidiary; and, (C) will not conflict with or
constitute a breach of, or default under, and no event has
occurred which, with notice or lapse of time or both, would
constitute a default under, or result in the creation or
imposition of any lien, charge or encumbrance, that,
individually or in the aggregate, would have a Material Adverse
Effect or a material adverse effect upon any property or assets
of the Company, the MHC, the Bank or the Subsidiaries pursuant
to any contract, indenture, mortgage, loan agreement, note,
lease or other instrument to which the Company, the MHC, the
Bank or the Subsidiaries is a party or by which any of them may
be bound, or to which any of the property or assets of the
Company, the MHC, the Bank or the Subsidiaries is subject.
(xiv) The Prospectus and the Proxy Statement has been
duly authorized by the OTS for final use pursuant to the OTS
Regulations and no action has been taken or is pending, or to
the best of such counsel's knowledge after due inquiry, is
threatened, by the OTS to revoke such authorization.
(xv) The Registration Statement is effective under
the Securities Act and no stop order suspending the
effectiveness of the Registration Statement has been issued
under the Securities Act or, proceedings therefor initiated or,
to the best of such counsel's knowledge, threatened by the
Commission.
(xvi) No further approval, authorization, consent or
other order of any public board or body is required in
connection with the execution and delivery of this Agreement,
the issuance of the Securities and the consummation of the Plan,
except as may be required under the securities or "Blue Sky"
laws of various jurisdictions as to which no opinion need be
rendered.
(xvii) At the time the Registration Statement became
effective, the Registration Statement (other than the financial
statements and statistical data included therein, as to which no
opinion need be rendered) complied as to form in all material
respects with the requirements of the Securities Act and the
Securities Act Regulations and the OTS Regulations.
(xviii) The Common Stock conforms to the description
thereof contained in the Prospectus, and the form of certificate
used to evidence the Common Stock is in due and proper form and
complies with all applicable statutory requirements.
(xix) There are no legal or governmental proceedings
pending or threatened against or affecting the Company, the MHC,
26
the Bank or the 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 Company,
the MHC, the Bank or any Subsidiary is a party or to which any
of their property is subject which are not described in the
Registration Statement, including ordinary routine litigation
incidental to the business, are, considered in the aggregate,
not material.
(xx) The information in the Prospectus under "Risk
Factors - _________will own a majority of our common stock and
will be able to exercise voting control over most matters put to
a vote of shareholders, including preventing a sale, a merger or
a second-step conversion transaction you may find advantageous,"
"- Office of Thrift Supervision policy on remutualization
transactions could prohibit acquisition of ___________, which
may lower our stock price," "- We operate in a highly regulated
environment and we may be adversely affected by changes in law
and regulations," "Our Dividend Policy," "Regulation and
Supervision," "Federal and State Taxation," "The Stock
Offering," "Restrictions on Acquisition of _________"
"Description of _________Capital Stock," and "Legal and Tax
Opinions" to the extent that it constitutes matters of law,
summaries of legal matters, documents or proceedings, or legal
conclusions, has been reviewed by them and is complete and
accurate in all material respects.
(xxi) There are no contracts, indentures, mortgages,
loan agreements, notes, leases or other instruments required to
be described or referred to in the Registration Statement and
Prospectus or to be filed as exhibits thereto other than those
described or referred to therein or filed as exhibits thereto
and the descriptions thereof or references thereto are correct,
and no default exists, and in no event has occurred which, with
notice or lapse of time or both, would constitute a default, in
the due performance or observance of any material obligation,
agreements, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or other
instrument so described, referred to or filed.
(xxii) The Plan has been approved by the requisite vote
of the Bank's members and, the OTS's approval of the Plan
remains in full force and effect; the Company, the MHC and the
Bank have conducted the Offerings in all material respects in
accordance with applicable requirements of the OTS Regulations,
the Plan and all other applicable regulations, decisions and
orders thereunder, including all material applicable terms,
conditions, requirements and conditions precedent to the
Offerings imposed upon the Company, the
27
MHC or the Bank by the OTS and, no order has been issued by the
OTS to suspend the Offerings and no action for such purpose has
been instituted or threatened by the OTS; and, to the best of
such counsel's knowledge after due inquiry, no person has sought
to obtain review of the final action of the OTS in approving the
Plan.
(xxiii) To the best of such counsel's knowledge after
due inquiry, the Company, the MHC and the Bank have obtained all
licenses, permits and other governmental approvals and
authorizations currently required for the conduct of their
respective businesses as described in the Registration Statement
and Prospectus, and all such licenses, permits and other
governmental authorizations are in full force and effect, and
the Company, the MHC, the Bank and the Subsidiaries are in all
material respects complying therewith.
(xxv) (A) None of the Company, the MHC, the Bank or
any of the Subsidiaries is in violation of their respective
certificates of incorporation, organization certificate,
articles of incorporation or charter, as the case may be, or
bylaws and (B) to the best of such counsel's knowledge, the
Company, the MHC, the Bank and the Subsidiaries are not in
default (nor has any event occurred which, with notice or lapse
of time or both, would constitute a default) in the performance
or observance of any obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which the Company,
the MHC, the Bank or the Subsidiaries is a party or by which the
Company, the MHC, the Bank, the Subsidiaries or any of their
property may be bound.
(xxvi) The Company is in compliance with the applicable
provisions of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act.
(xxvii) The Company is not and, upon completion of the
Reorganization and the Offerings and the sale of the Common
Stock and the application of the net proceeds therefrom, will
not be required to be registered as an investment company under
the Investment Company Act of 1940.
(2) The favorable opinion, dated as of Closing Time, of
________________________, counsel for the Agent, with respect to the
matters set forth in Section 5(b)(1)(i), (iv), (v), (vi), (ix), (xi),
(xv) and (xvii) and such other matters as the Agent may reasonably
require.
(3) In addition to giving their opinions required by
subsections (b)(l) and (b)(2), respectively, of this Section, ________
and _________ shall each additionally state that nothing has come to
their attention that would lead
28
them to believe that the Registration Statement (except for financial
statements and schedules and other financial or statistical data
included therein, as to which counsel need make no statement), at the
time it became effective, contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading or that the
Prospectus (except for financial statements and schedules and other
financial or statistical data included therein, as to which counsel need
make no statement), at the time the Registration Statement became
effective or at Closing Time, included an untrue statement of a material
fact or omitted to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading.
In giving their opinions, ___________ and __________ may rely as to
matters of fact on certificates of officers and directors of the Company, the
MHC, the Bank and the Subsidiaries and certificates of public officials, and
__________ may also rely on the opinion of _____________ with respect to matters
set forth in paragraphs (i), (iv), (v), (vi), (vii), (viii), (ix), (xi), (xiii),
(xiv), (xv), (xvi) and (xvii).
(c) At Closing Time referred to in Section 2, the Company, the MHC
and the Bank shall have completed in all material respects the conditions
precedent to the Reorganization and the Offerings in accordance with the Plan,
the applicable OTS Regulations and all other applicable laws, regulations,
decisions and orders, including all terms, conditions, requirements and
provisions precedent to the Reorganization and the Offerings imposed upon the
Company, the MHC or the Bank by the OTS, or any other regulatory authority other
than those which the OTS permits to be completed after the Reorganization and
the Offerings.
(d) At Closing Time, there shall not have been, since the date
hereof or since the respective dates as of which information is given in the
Registration Statement and the Prospectus, any material adverse change in the
financial condition, results of operations, business affairs or prospects of the
Company, the MHC, the Bank and the Subsidiaries, considered as one enterprise,
whether or not arising in the ordinary course of business consistent with past
practice, and the Agent shall have received a certificate of the President and
Chief Executive Officer of the Company, of the MHC and of the Bank and the chief
financial or chief accounting officer of the Company, of the MHC and of the
Bank, dated as of Closing Time, to the effect that (i) there has been no such
material adverse change, (ii) there shall have been no material transaction
entered into by the Company, the MHC or the Bank from the latest date as of
which the financial condition of the Company, the MHC or the Bank, as set forth
in the Registration Statement and the Prospectus other than transactions
referred to or contemplated therein and transactions in the ordinary course of
business consistent with past practice (iii) neither the Company, the MHC nor
the Bank shall have received from the OTS any order or direction (oral or
written) to make any material change in the method of conducting its business
with which it has not complied (which order or direction, if any, shall have
been disclosed in writing to the Agent) or which materially and adversely would
affect the business, financial condition, results of operations or prospects of
the Company, the MHC or the Bank, considered as one enterprise, (iv) the
representations and warranties in Section 1 hereof are true and correct with the
same force and effect as though expressly made at and as of the Closing Time,
(v)
29
each of the Company, the MHC and the Bank have complied with all agreements and
satisfied all conditions on their part to be performed or satisfied at or prior
to Closing Time, (vi) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that purpose have
been initiated or threatened by the Commission, and (vii) no order suspending
the Subscription and Community Offering or Syndicated Community Offering or the
authorization for final use of the Prospectus has been issued and no proceedings
for that purpose have been initiated or threatened by the OTS and no person has
sought to obtain regulatory or judicial review of the action of the OTS in
approving the Plan in accordance with the OTS Regulations nor has any person
sought to obtain regulatory or judicial review of the action of the OTS in
approving the Plan.
(e) At the Closing Time, the Agent shall have received a certificate
of the Chief Executive Officer and President of the Company, of the MHC and of
the Bank and the Chief Financial Officer of the Company, of the MHC and of the
Bank, dated as of Closing Time, to the effect that (i) they have reviewed the
contents of the Registration Statement and the Prospectus; (ii) based on each of
their knowledge, the Registration Statement and the Prospectus do not contain
any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements made therein, in light of the
circumstances under which such statements were made, not misleading; (iii) based
on each of their knowledge, the financial statements and other financial
information included in the Registration Statement and the Prospectus fairly
present the financial condition and results of operations of the Bank and the
Subsidiaries as of and for the dates and periods covered by the Registration
Statement and the Prospectus; (iv) they are responsible for establishing and
maintaining internal controls; (v) they have designed such internal controls to
ensure that material information relating to the Company, the MHC, the Bank and
the Subsidiaries is made known to them; (vi) they have evaluated the
effectiveness of their internal controls; and (vii) they have disclosed to
____________ and the audit committee (A) all significant deficiencies in the
design or operation of internal controls which could adversely affect the
Company's, the MHC's and the Bank's ability to record, process, summarize, and
report financial data, and have identified for the Company's, the MHC's and the
Bank's auditors any material weaknesses in internal controls and (B) any fraud,
whether or not material, that involves management or other employees who have a
significant role in the Company's, the MHC's and the Bank's internal controls.
(f) At the time of the execution of this Agreement, the Agent shall
have received from __________ a letter dated such date, in form and substance
satisfactory to the Agent, to the effect that: (i) they are independent public
accountants with respect to the Company, the MHC, the Bank and the Subsidiaries
within the meaning of the Code of Ethics of the AICPA, the Securities Act and
the Securities Act Regulations and the OTS Regulations, they are registered with
the PCAOB, and they are not in violation of the auditor independence
requirements of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ 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 _________________set forth in detail
in such letter, nothing has come to their attention which causes them to believe
that (A) the unaudited consolidated financial statements and supporting
schedules of the Company included in the Registration Statement do not comply as
to form in all material respects with the applicable accounting requirements of
the Securities Act, the Securities Act Regulations and the OTS Regulations or
are not presented in conformity with generally accepted
30
accounting principles applied on a basis substantially consistent with that of
the audited consolidated financial statements included in the Registration
Statement and the Prospectus, (B) the unaudited amounts of net interest income
and net income set forth under "Selected Financial and Other Data" in the
Registration Statement and Prospectus do not agree with the amounts set forth in
unaudited consolidated financial statements as of and for the dates and periods
presented under such captions or such amounts were not determined on a basis
substantially consistent with that used in determining the corresponding amounts
in the audited financial statements included in the Registration Statement, (C)
at a specified date not more than five (5) business days prior to the date of
this Agreement, there has been any increase in the consolidated long-term or
short-term debt of the Company or any decrease in consolidated total assets, the
allowance for loan losses, total deposits or net worth of the Company, in each
case as compared with the amounts shown in the consolidated statements of
financial conditions included in the Registration Statement or, (D) during the
period from December 31, 2003 to a specified date not more than five (5)
business days prior to the date of this Agreement, there were any decreases, as
compared with the corresponding period in the preceding fiscal year, in total
interest income, net interest income, net interest income after provision for
loan losses, income before income tax expense or net income of the Company,
except in all instances for increases or decreases which the Registration
Statement and the Prospectus disclose have occurred or may occur; and (iv) in
addition to the examination referred to in their opinions and the limited
procedures referred to in clause (iii) above, they have carried out certain
specified procedures, not constituting an audit, with respect to certain
amounts, percentages and financial information which are included in the
Registration Statement and Prospectus and which are specified by the Agent, and
have found such amounts, percentages and financial information to be in
agreement with the relevant accounting, financial and other records of the
Company, the MHC and the Bank identified in such letter.
(g) At Closing Time, the Agent shall have received from ____________
a letter, dated as of Closing Time, to the effect that they reaffirm the
statements made in the letter furnished pursuant to subsection (f) of this
Section, except that the specified date referred to shall be a date not more
than five (5) days prior to Closing Time.
(h) At Closing Time, the Securities shall have been approved for
quotation on the Nasdaq National Market upon notice of issuance.
(i) At Closing Time, the Agent shall have received a letter from the
Appraiser, dated as of the Closing Time, confirming its appraisal.
(j) At Closing Time, counsel for the Agent shall have been furnished
with such documents and opinions as they may require for the purpose of enabling
them to pass upon the issuance and sale of the Securities [and the Foundation
Shares] as herein contemplated and related proceedings, or in order to evidence
the accuracy of any of the representations or warranties, or the fulfillment of
any of the conditions, herein contained; and all proceedings taken by the
Company in connection with the issuance and sale of the Securities [and the
Foundation Shares] as herein contemplated shall be satisfactory in form and
substance to the Agent and counsel for the Agent.
(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
31
hostilities or escalation thereof or other calamity or crisis the effect of
which, in the judgment of the Agent, is so material and adverse as to make it
impracticable to market the Securities or to enforce contracts, including
subscriptions or orders, for the sale of the Securities, and (ii) trading
generally on either the American Stock Exchange, the New York Stock Exchange or
the Nasdaq Stock Market shall not have been suspended, and minimum or maximum
prices for trading shall not have been fixed, or maximum ranges for prices for
securities have been required, by either of said Exchanges or by order of the
Commission or any other governmental authority, and a banking moratorium shall
not have been declared by either Federal, ____________ or New York authorities.
SECTION 6. INDEMNIFICATION.
(a) The Company, the MHC and the Bank, jointly and severally, agree
to indemnify and hold harmless the Agent, each person, if any, who controls the
Agent, within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act, and its respective partners, directors, officers, employees
and agents as follows:
(i) from and against any and all loss, liability, claim,
damage and expense whatsoever, as incurred, related to or arising out of
the Offerings [(including the establishment of the Foundation and the
contribution of the Foundation Shares thereto by the Company)] or any
action taken by the Agent where acting as agent of the Company, the MHC
or the Bank or otherwise as described in Section 2 hereof;
(ii) from and against any and all loss, liability, claim,
damage and expense whatsoever, as incurred, based upon or arising out of
any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement (or any amendment thereto), or
the omission or alleged omission therefrom of a material fact required
to be stated therein or necessary to make the statements therein not
misleading or arising out of any untrue statement or alleged untrue
statement of a material fact contained in the Prospectus (or any
amendment or supplement thereto) or the omission or alleged omission
therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading;
(iii) from and against any and all loss, liability, claim,
damage and expense whatsoever, as incurred, to the extent of the
aggregate amount paid in settlement of any litigation, or any
investigation or proceeding by any governmental agency or body,
commenced or threatened, or of any claim whatsoever described in clauses
(i) or (ii) above, if such settlement is effected with the written
consent of the Company, the MHC or the Bank, which consent shall not be
unreasonably withheld; and
(iv) from and against any and all expense whatsoever, as
incurred (including, subject to Section 6(c) hereof, the fees and
disbursements of counsel chosen by the Agent), reasonably incurred in
investigating, preparing or defending against any litigation, or any
investigation, proceeding or inquiry by any governmental agency or body,
commenced or threatened, or any claim pending or threatened whatsoever
described in clauses (i) or (ii) above, to the extent that any such
expense is not paid under clause (i), (ii) or (iii) above;
32
PROVIDED, HOWEVER, that the indemnification provided for in this paragraph (a)
shall not apply to any loss, liability, claim, damage or expense to the extent
arising out of any untrue statement or alleged untrue statement of a material
fact contained in the Prospectus (or any amendment or supplement thereto) or the
omission or alleged omission therefrom of a material fact necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading which was made in reliance upon and in conformity with
the Agent Information.
(b) The Agent agrees to indemnify and hold harmless the Company, the
MHC and the Bank, their directors, each of their officers who signed the
Registration Statement, and each person, if any, who controls the Company within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act against any and all loss, liability, claim, damage and expense described in
the indemnity contained in subsection (a) of this Section, as incurred, but only
with respect to untrue statements or omissions, or alleged untrue statements or
omissions, of a material fact made in the Prospectus (or any amendment or
supplement thereto) in reliance upon and in conformity with the Agent
Information.
(c) Each indemnified party shall give notice as promptly as
reasonably practicable to each indemnifying party of any action commenced
against it in respect of which indemnity may be sought hereunder, but failure to
so notify an indemnifying party shall not relieve such indemnifying party from
any liability which it may have otherwise than on account of this indemnity
agreement. An indemnifying party may participate at its own expense in the
defense of any such action. In no event shall the indemnifying parties be liable
for fees and expenses of more than one counsel (in addition to no more than one
local counsel in each separate jurisdiction in which any action or proceeding is
commenced) separate from their own counsel for all indemnified parties in
connection with any one action or separate but similar or related actions in the
same jurisdiction arising out of the same general allegations or circumstances.
(d) The Company, the MHC and the Bank also agree that the Agent
shall not have any liability (whether direct or indirect, in contract or tort or
otherwise) to the MHC and its members, the Bank, the Company's, the MHC's or the
Bank's creditors relating to or arising out of the engagement of the Agent
pursuant to, or the performance by the Agent of the services contemplated by,
this Agreement.
(e) In addition to, and without limiting, the provisions of Section
(6)(a)(iv) hereof, in the event that the Agent, any person, if any, who controls
the Agent within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act or any of its partners, directors, officers, employees or
agents is requested or required to appear as a witness or otherwise gives
testimony in any action, proceeding, investigation or inquiry brought by or on
behalf of or against the Company, the MHC, the Bank, the Agent or any of its
respective affiliates or any participant in the transactions contemplated hereby
in which the Agent or such person or agent is not named as a defendant, the
Company, the MHC, and the Bank, jointly and severally, agree to reimburse the
Agent and its partners, directors, officers, employees or agents for all
reasonable and necessary out-of-pocket expenses incurred by them in connection
with preparing or appearing as a witness or otherwise giving testimony and to
compensate the Agent and its partners, directors, officers, employees or agents
in an amount to be mutually agreed upon.
33
SECTION 7. CONTRIBUTION. In order to provide for just and equitable
contribution in circumstances in which the indemnity agreement provided for in
Section 6 hereof is for any reason held to be unenforceable by the indemnified
parties although applicable in accordance with its terms, the Company, the MHC,
the Bank, and the Agent shall contribute to the aggregate losses, liabilities,
claims, damages and expenses of the nature contemplated by said indemnity
agreement incurred by the Company, the MHC or the Bank and the Agent, as
incurred, in such proportions (i) that the Agent is responsible for that portion
represented by the percentage that the maximum aggregate marketing fees
appearing on the cover page of the Prospectus bears to the maximum aggregate
gross proceeds appearing thereon and the Company, the MHC and the Bank are
jointly and severally responsible for the balance or (ii) if, but only if, the
allocation provided for in clause (i) is for any reason held unenforceable, in
such proportion as is appropriate to reflect not only the relative benefits to
the Company, the MHC and the Bank on the one hand and the Agent on the other, as
reflected in clause (i), but also the relative fault of the Company, the MHC and
the Bank on the one hand and the Agent on the other, as well as any other
relevant equitable considerations; PROVIDED, HOWEVER, that no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this Section, each
person, if any, who controls the Agent within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act shall have the same rights to
contribution as the Agent, and each director of the Company, the MHC and the
Bank, each officer of the Company who signed the Registration Statement, and
each person, if any, who controls the Company, the MHC or the Bank within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act
shall have the same rights to contribution as the Company, the MHC and the Bank.
Notwithstanding anything to the contrary set forth herein, to the extent
permitted by applicable law, in no event shall the Agent be required to
contribute an aggregate amount in excess of the aggregate marketing fees to
which the Agent is entitled and actually paid pursuant to this Agreement.
SECTION 8. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE
DELIVERY. All representations, warranties and agreements contained in this
Agreement, or contained in certificates of officers of the Company, the MHC or
the Bank submitted pursuant hereto, shall remain operative and in full force and
effect, regardless of any investigation made by or on behalf of the Agent or any
controlling person, or by or on behalf of the Company, and shall survive
delivery of the Securities.
SECTION 9. TERMINATION OF AGREEMENT.
(a) The Agent may terminate this Agreement, by notice to the
Company, at any time at or prior to Closing Time (i) if there has been, since
the date of this Agreement or since the respective dates as of which information
is given in the Registration Statement, any material adverse change in the
financial condition, results of operations, business affairs or prospects of the
Company, the MHC or the Bank, considered as one enterprise, whether or not
arising in the ordinary course of business, (ii) if there has occurred any
material adverse change in the financial markets in the United States or
elsewhere or any outbreak of hostilities or escalation thereof or other calamity
or crisis the effect of which, in the judgment of the Agent, is so material and
adverse as to make it impracticable to market the Securities or to enforce
contracts, including subscriptions or orders, for the sale of the Securities,
(iii) if trading generally on the Nasdaq National Market, the American Stock
Exchange or the New
34
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 changes in the condition or
prospects of the Company, the MHC or the Bank or the prospective market for the
Company's Securities as in the Agent's good faith opinion would make it
inadvisable to proceed with the offering, sale or delivery of the Securities;
(vi) if, in the Agent's good faith opinion, the price for the Securities
established by the Appraiser is not reasonable or equitable under then
prevailing market conditions, or (vii) if the Offerings are not consummated on
or prior to __________________.
(b) If this Agreement is terminated pursuant to this Section, such
termination shall be without liability of any party to any other party except as
provided in Sections 2 and 4 hereof relating to the reimbursement of expenses
and except that the provisions of Sections 6 and 7 hereof shall survive any
termination of this Agreement.
SECTION 10. NOTICES. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the Agent
shall be directed to the Agent at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇, attention of General Counsel, with a copy to ; notices to the
Company, the MHC and the Bank shall be directed to any of them at
_________________.
SECTION 11. PARTIES. This Agreement shall inure to the benefit of and be
binding upon the Agent, the Company, the MHC and the Bank and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Agent, the Company, the MHC and the Bank and their respective successors and the
controlling persons and the partners, officers and directors referred to in
Sections 6 and 7 and their heirs and legal representatives, any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision herein or therein contained. This Agreement and all conditions and
provisions hereof and thereof are intended to be for the sole and exclusive
benefit of the Agent, the Company, the MHC and the Bank and their respective
successors, and said controlling persons, partners, officers and directors and
their heirs, partners, legal representatives, and for the benefit of no other
person, firm or corporation.
SECTION 12. ENTIRE AGREEMENT; AMENDMENT. This Agreement represents the
entire understanding of the parties hereto with reference to the transactions
contemplated hereby and supersedes any and all other oral or written agreements
heretofore made, except for the engagement letter dated ______________________,
by and between the Agent and the Bank, relating to the Agent's providing
conversion agent services to the Company and the Bank. No waiver, amendment or
other modification of this Agreement shall be effective unless in writing and
signed by the parties hereto.
SECTION 13. GOVERNING LAW AND TIME. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York applicable to
agreements made and
35
to be performed in said State without regard to the conflicts of laws provisions
thereof. Unless otherwise noted, specified times of day refer to Eastern time.
SECTION 14. SEVERABILITY. Any term or provision of this Agreement which
is invalid or unenforceable in any jurisdiction shall, as to that jurisdiction,
be ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of this
Agreement is so broad as to be unenforceable, the provision shall be interpreted
to be only so broad as is enforceable.
SECTION 15. HEADINGS. Sections headings are not to be considered part of
this Agreement, are for convenience and reference only, and are not to be deemed
to be full or accurate descriptions of the contents of any paragraph or
subparagraph.
[The next page is the signature page]
36
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
between the Agent on the one hand, and the Company, the MHC and the Bank on the
other in accordance with its terms.
Very truly yours,
BROOKLYN FEDERAL BANCORP, INC.
By:
---------------------------------
Name:
Title:
BROOKLYN FEDERAL SAVINGS BANK
By:
---------------------------------
Name:
Title:
BFS BANCORP, MHC
By:
---------------------------------
Name:
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
SANDLER ▇'▇▇▇▇▇ & PARTNERS, L.P.
By: Sandler ▇'▇▇▇▇▇ & Partners Corp.,
the sole general partner
By:_______________________________
Name:
Vice President