Exhibit 1.1
GS FINANCIAL CORP.
2,990,000 Shares
COMMON SHARES
(No Par Value)
Subscription Price $10.00 Per Share
AGENCY AGREEMENT
February __, 1997
▇▇▇▇▇▇▇ ▇▇▇▇ & Company, a division of
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Ladies and Gentlemen:
GS Financial Corp., a Louisiana corporation (the "Company") and Guaranty
Savings and Homestead Association, a Louisiana chartered mutual savings
association (the "Association" references to the "Association" include the
Association in the mutual or stock form, as indicated by the context), with
its deposit accounts insured by the Savings Association Insurance Fund
("SAIF") administered by the Federal Deposit Insurance Corporation ("FDIC")),
hereby confirm their agreement with ▇▇▇▇▇▇▇ ▇▇▇▇ & Company, a division of
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, Inc. ("▇▇▇▇", "KBW" or "the Agent"), as follows:
Section 1. The Offering. The Association, in accordance with its plan
of conversion adopted by its Board of Directors (the "Plan"), intends to
convert from a Louisiana chartered mutual savings association to a Louisiana
chartered stock savings association, and will issue all of its issued and
outstanding capital stock to the Company. In addition, pursuant to the Plan,
the Company will offer and sell up to 2,990,000 shares of its common stock,
par value, $.01 per share (the "Shares" or "Common Shares"), in a
subscription offering (the "Subscription Offering") to (1) depositors of the
Association with Qualifying Deposits (as defined in the Association's Plan of
Conversion) as of September 30, 1995 ("Eligible Account Holders"), (2) the GS
Financial Corp. Employee Stock Ownership Plan (the "ESOP"), (3) depositors of
the Association with Qualifying Deposits as of December 31, 1996
("Supplemental Eligible Account Holders"), (4) the Association's Other
Eligible Members (as defined in the Association's Plan of Conversion) and (5)
employees, officers and directors of the Association. Subject to the prior
subscription rights of the above-listed parties, the Company is offering for
sale in a community offering (the "Community Offering" and when referred to
together with the Subscription Offering, the "Subscription and Community
Offering") conducted concurrently with the Subscription
Offering, the Shares not so subscribed for or ordered in the Subscription
Offering to members of the general public to whom a copy of the Prospectus
(as hereinafter defined) is delivered ("Other Subscribers"), with a
preference given to natural persons who reside in Orleans, St. Tammany and
Jefferson Parishes, Louisiana (all such offerees being referred to in the
aggregate as "Eligible Offerees"). It is anticipated that shares not
subscribed for in the Subscription and Community Offering will be offered to
certain members of the general public on a best efforts basis through a
selected dealers arrangement (the "Syndicated Community Offering") (the
Subscription Offering, Community Offering and Syndicated Community Offering
are collectively referred to as the "Offering"). It is acknowledged that the
purchase of Shares in the Offering is subject to the maximum and minimum
purchase limitations as described in the Plan and that the Company and the
Association may reject, in whole or in part, any orders received in the
Community Offering or Syndicated Community Offering. Collectively, these
transactions are referred to herein as the "Conversion."
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-1 (File No. 333-18841) (the
"Registration Statement") containing a prospectus relating to the Offering
for the registration of the Shares under the Securities Act of 1933 (the
"1933 Act"), and has filed such amendments thereof and such amended
prospectuses as may have been required to the date hereof. The term
"Registration Statement" shall include any documents incorporated by
reference therein and all financial schedules and exhibits thereto, as
amended, including post-effective amendments. The prospectus, as amended, on
file with the Commission at the time the Registration Statement initially
became effective is hereinafter called the "Prospectus," except that if any
Prospectus is filed by the Company pursuant to Rule 424(b) or (c) of the
rules and regulations of the Commission under the 1933 Act (the "1933 Act
Regulations") differing from the prospectus on file at the time the
Registration Statement initially becomes effective, the term "Prospectus"
shall refer to the prospectus filed pursuant to Rule 424(b) or (c) from and
after the time said prospectus is filed with the Commission.
In accordance with Title 12, Part 563b of the Code of Federal Regulations
(the "Conversion Regulations"), the Association has filed with the Office of
Thrift Supervision (the "OTS") and the Office of Financial Institutions of
the State of Louisiana (the "OFI") an Application for Approval of Conversion
on Form AC (the "Conversion Application"), including the Prospectus and the
Conversion Valuation Appraisal Report prepared by RP Financial, LC (the
"Appraisal") and has filed such amendments thereto as may have been required
by the OTS and the OFI. The Conversion Application has been approved by the
OTS and the OFI and the related Prospectus has been authorized for use by the
OTS and the OFI. In addition, the Company has filed with the OTS its
application on Form H-(e)1-S (the "Holding Company Application") to become a
registered savings and loan holding company under the Home Owners' Loan Act,
as amended ("HOLA"); and it has been approved.
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Section 2. Retention of Agent; Compensation; Sale and Delivery of the
Shares. Subject to the terms and conditions herein set forth, the Company and
the Association hereby appoint the Agent as their exclusive financial advisor
and marketing agent (i) to utilize its best efforts to solicit subscriptions
for Shares of the Company's Common Stock and to advise and assist the Company
and the Association with respect to the Company's sale of the Shares in the
Offering and (ii) to participate in the Offering in the areas of market
making, research coverage and in syndicate formation (if necessary).
On the basis of the representations, warranties, and agreements herein
contained, but subject to the terms and conditions herein set forth, the
Agent accepts such appointment and agrees to consult with and advise the
Company and the Association as to the matters set forth in the letter
agreement ("Letter Agreement"), dated September 26, 1996 between the
Association and ▇▇▇▇ (a copy of which is attached hereto as Exhibit A). It
is acknowledged by the Company and the Association that the Agent shall not
be required to purchase any Shares or be obligated to take any action which
is inconsistent with all applicable laws, regulations, decisions or orders.
The obligations of the Agent pursuant to this Agreement (other than those
set forth in Sections 2(d) and (e) hereof) shall terminate upon the
completion or termination or abandonment of the Plan by the Company or upon
termination of the Offering, but in no event later than 45 days after the
completion of the Subscription Offering (the "End Date"). All fees or
expenses due to the Agent but unpaid will be payable to the Agent in next day
funds at the earlier of the Closing Date (as hereinafter defined) or the End
Date. In the event the Offering is extended beyond the End Date, the
Company, the Association and the Agent may agree to renew this Agreement
under mutually acceptable terms.
In the event the Company is unable to sell a minimum of 2,210,000 Shares
within the period herein provided, this Agreement shall terminate and the
Company shall refund to any persons who have subscribed for any of the
Shares, the full amount which it may have received from them plus accrued
interest as set forth in the Prospectus; and none of the parties to this
Agreement shall have any obligation to the other parties hereunder, except as
set forth in this Section 2 and in Sections 6, 8 and 9 hereof.
In the event the Offering is terminated for any reason not attributable
to the action or inaction of the Agent, the Agent shall be paid the fees due
to the date of such termination pursuant to subparagraphs (a) and (d) below.
If all conditions precedent to the consummation of the Conversion,
including, without limitation, the sale of all Shares required by the Plan to
be sold, are satisfied, the Company agrees to issue, or have issued, the
Shares sold in the Offering and to release for delivery certificates for such
Shares on the Closing Date (as hereinafter defined) against payment to the
Company by any
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means authorized by the Plan; provided, however, that no funds shall be
released to the Company until the conditions specified in Section 7 hereof
shall have been complied with to the reasonable satisfaction of the Agent and
their counsel. The release of Shares against payment therefor shall be made
on a date and at a place acceptable to the Company, the Association and the
Agent. Certificates for shares shall be delivered directly to the purchasers
in accordance with their directions. The date upon which the Company shall
release or deliver the Shares sold in the Offering, in accordance with the
terms herein, is called the "Closing Date."
The Agent shall receive the following compensation for its services
hereunder:
(a) A management fee of $30,000 payable in four consecutive monthly
installments of $7,500, the first of which was due on September 26,
1996. Such fees shall be deemed to have been earned when due.
Should the Conversion be terminated for any reason not attributable
to the action or inaction of the Agent, the Agent shall have earned
and be entitled to be paid fees accruing through the stage at which
the termination occurred.
(b) A Success Fee of 1.50% of the aggregate Purchase Price of Common
Shares sold in the Subscription Offering and Community Offering
excluding shares purchased by the Association's officers, directors,
or employees (or members of their immediate families) plus any ESOP,
tax-qualified or stock based compensation plans (except IRA's) or
similar plan created by the Association for some or all of its
directors or employees. The management fee described in (a) above
will be applied against the Success Fee. The Success Fee shall
exceed $375,000.
(c) If any of the shares remain available after the Subscription
Offering, at the request of the Association, ▇▇▇▇ will seek to form
a syndicate of registered broker-dealers to assist in the sale of
such Common Shares on a best efforts basis, subject to the terms
and conditions set forth in the selected dealers agreement. ▇▇▇▇
will endeavor to distribute the Common Shares among dealers in a
fashion which best meets the distribution objectives of the
Association and the Plan of Conversion. ▇▇▇▇ will be paid a fee not
to exceed 5.5% of the aggregate Purchase Price of the Shares sold by
them. ▇▇▇▇ will pass onto selected broker-dealers, who assist in
the syndicated community, an amount competitive with gross
underwriting discounts charged at such time for comparable amounts
of stock sold at a comparable price per share in a similar market
environment. Fees with respect to purchases affected with the
assistance of a broker/dealer other than ▇▇▇▇ shall be transmitted
by ▇▇▇▇ to such broker/dealer. The decision to utilize selected
broker-
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dealers will be made by the Association upon consultation with ▇▇▇▇.
In the event, with respect to any purchases of Shares, fees paid
pursuant to this subparagraph 2(c), such fees shall be in lieu of,
and not in addition to, payment pursuant to subparagraph 2(a) and
2(b).
(d) The Association and the Company hereby agree to reimburse the Agent,
from time to time upon the Agent's request, for its reasonable
out-of-pocket expenses, which the Agent shall document, including
without limitation, accounting, legal counsel, and communication,
excluding travel, lodging and meal expenses. The Association will
bear the expenses of the Offering customarily borne by issuers
including, without limitation, OTS, SEC, "Blue Sky," and NASD
filings and registration fees; the fees of the Association's
accountants, conversion agent, attorneys, appraiser, transfer agent
and registrar, printing, mailing and marketing expenses associated
with the conversion; and the fees set forth under this Section 2.
Full payment of Agent's actual and accountable expenses, advisory fees
and compensation shall be made in next day funds on the earlier of the
Closing Date or a determination by the Association to terminate or abandon
the Plan.
Section 3. Prospectus; Offering. The Shares are to be initially offered
in the Offering at the Purchase Price as defined and set forth on the cover
page of the Prospectus.
Section 4. Representations and Warranties of the Company and the
Association. The Company and the Association jointly and severally represent
and warrant to and agree with the Agent as follows:
(a) The Registration Statement which was prepared by the
Company and the Association and filed with the Commission was
declared effective by the Commission on ________, 1997. At the
time the Registration Statement, including the Prospectus contained
therein (including any amendment or supplement), became effective,
the Registration Statement contained all statements that were
required to be stated therein in accordance with the 1933 Act and
the 1933 Act Regulations, complied in all material respects with
the requirements of the 1933 Act and the 1933 Act Regulations and
the Registration Statement, including the Prospectus contained
therein (including any amendment or supplement thereto), and any
information regarding the Company or the Association contained in
Sales Information (as such term is defined in Section 8 hereof)
authorized by the Company or the Association for use in connection
with the Offering, did not contain an untrue statement of a
material fact or
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omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, and at the
time any Rule 424(b) or (c) Prospectus was filed with the Commission
and at the Closing Date referred to in Section 2, the Registration
Statement, including the Prospectus contained therein (including any
amendment or supplement thereto), and any information regarding the
Company or the Association contained in Sales Information (as such
term is defined in Section 8 hereof) authorized by the Company or the
Association for use in connection with the Offering will contain all
statements that are required to be stated therein in accordance with
the 1933 Act and the 1933 Act Regulations and will not contain an
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading; provided,
however, that the representations and warranties in this Section 4(a)
shall not apply to statements or omissions made in reliance upon and
in conformity with written information furnished to the Company or the
Association by the Agent or its counsel expressly regarding the Agent
for use in the Prospectus under the caption "The Conversion-Plan of
Distribution" or statements in or omissions from any Sales Information
or information filed pursuant to state securities or blue sky laws or
regulations regarding the Agent.
(b) The Conversion Application which was prepared by the Company and the
Association and filed with the OTS and the OFI was approved by the OTS
on _________, 1997 and approved by the OFI on _______, 1997 and the
related Prospectus has been authorized for use by the OTS and the OFI.
At the time of the approval of the Conversion Application, including
the Prospectus (including any amendment or supplement thereto), by the
OTS and the OFI and at all times subsequent thereto until the Closing
Date, the Conversion Application, including the Prospectus (including
any amendment or supplement thereto), will comply in all material
respects with the Conversion Regulations, except to the extent waived
in writing by the OTS and the OFI. The Conversion Application,
including the Prospectus (including any amendment or supplement
thereto), does not include any untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading;
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provided, however, that the representations and warranties in this
Section 4(b) shall not apply to statements or omissions made in
reliance upon and in conformity with written information furnished
to the Company or the Association by the Agent or its counsel
expressly regarding the Agent for use in the Prospectus contained
in the Conversion Application under the caption "The
Conversion-Plan of Distribution" or statements in or omissions from
any sales information or information filed pursuant to state
securities or blue sky laws or regulations regarding the Agent. The
Holding Company Application for approval pursuant to the HOLA and
the regulations promulgated thereunder (the "Control Act
Regulations"), has been prepared by the Association and the Company
in material conformity with the requirements of the Control Act
Regulations and has been filed with and approved by the OTS. A
conformed copy of the Holding Company Application has been
delivered to the Agent.
(c) The Company has filed with the OTS the Holding Company Application,
and such Application was deemed complete by the OTS. As of the
Closing Date, approval of the Company's acquisition of the Association
will have been obtained from the OTS.
(d) No order has been issued by the OTS or the FDIC (hereinafter any
reference to the FDIC shall include the SAIF) preventing or suspending
the use of the Prospectus, and no action by or before any such
government entity to revoke any approval, authorization or order of
effectiveness related to the Conversion is, to the best knowledge of
the Company or the Association, pending or threatened.
(e) At the Closing Date, the Plan will have been adopted by the Boards of
Directors of both the Company and the Association and approved by the
members of the Association, and the offer and sale of the Shares will
have been conducted in all material respects in accordance with the
Plan, the Conversion Regulations, and all other applicable laws,
regulations, decisions and orders, including all terms, conditions,
requirements and provisions precedent to the Conversion imposed upon
the Company or the Association by the OTS, the Commission, or any
other regulatory authority and in the manner described in the
Prospectus. No person has sought to obtain review of the final action
of the OTS in approving the Plan or in approving the Conversion or the
Holding Company Application pursuant to the HOLA, or any other statute
or regulation.
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(f) The Association has been organized and is a validly existing Louisiana
chartered savings association in mutual form of organization and upon
the Conversion will become a duly organized and validly existing
Louisiana chartered savings association in capital stock form of
organization, in both instances duly authorized to conduct its
business and own its property as described in the Registration
Statement and the Prospectus; the Association has obtained all
material licenses, permits and other governmental authorizations
currently required for the conduct of its business; all such licenses,
permits and governmental authorizations are in full force and effect,
and the Association is in all material respects complying with all
laws, rules, regulations and orders applicable to the operation of its
business; the Association is existing under the laws of the federal
government and is duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in which its
ownership of property or leasing of property or the conduct of its
business requires such qualification, unless the failure to be so
qualified in one or more of such jurisdictions would not have a
material adverse effect on the condition, financial or otherwise, or
the business, operations or income of the Association. Following the
Association does not own equity securities or any equity interest in
any other business enterprise except as described in the Prospectus or
as would not be material to the operations of the Association. Upon
completion of the sale by the Company of the Shares contemplated by
the Prospectus, (i) the Association will be converted pursuant to the
Plan to a Louisiana chartered stock savings association, (ii) all of
the authorized and outstanding capital stock of the Association will
be owned by the Company, and (iii) the Company will have no direct
subsidiaries other than the Association. The Conversion will have
been effected in all material respects in accordance with all
applicable statutes, regulations, decisions and orders; and, except
with respect to the filing of certain post-sale, post-Conversion
reports, and documents in compliance with the 1933 Act Regulations,
the OTS' resolutions or letters of approval, all terms, conditions,
requirements and provisions with respect to the Conversion imposed by
the Commission, the OTS, and the FDIC, if any, will have been complied
with by the Company and the Association in all material respects or
appropriate waivers will have been obtained and all material notice
and waiting periods will have been satisfied, waived or elapsed.
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(g) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Louisiana
with 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 at the Closing Date the
Company will be qualified to do business as a foreign corporation in
each jurisdiction in which the conduct of its business requires such
qualification, except where the failure to so qualify would not have a
material adverse effect on the condition, financial or otherwise, or
the business, operations or income of the Company. The Company has
obtained all material licenses, permits and other governmental
authorizations currently required for the conduct of its business; all
such licenses, permits and governmental authorizations are in full
force and effect, and the Company is in all material respects
complying with all laws, rules, regulations and orders applicable to
the operation of its business.
(h) The Association has no subsidiaries.
(i) The Association is a member of the Federal Home Loan Bank of Dallas
("FHLB-Dallas"). The deposit accounts of the Association are insured
by the FDIC up to the applicable limits; and no proceedings for the
termination or revocation of such insurance are pending or, to the
best knowledge of the Company or the Association, threatened. Upon
consummation of the Conversion, the liquidation account for the
benefit of Eligible Account Holders will be duly established in
accordance with the requirements of the Conversion Regulations.
(j) The Company and the Association have good and marketable title to all
real property and good title to all other assets material to the
business of the Company and the Association, taken as a whole, and to
those properties and assets described in the Registration Statement
and Prospectus as owned by them, free and clear of all liens, charges,
encumbrances or restrictions, except such as are described in the
Registration Statement and Prospectus, or are not material to the
business of the Company and the Association, taken as a whole; and all
of the leases and subleases material to the business of the Company
and the Association, taken as a whole, under which the Company or the
Association hold properties, including those described in the
Registration Statement and Prospectus, are in full force and effect.
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(k) The Company and the Association have received an opinion of their
special counsel, Elias, Matz, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, L.L.P. with respect
to the federal income tax consequences of the Conversion and an
opinion of LaPorte, Sehrt, ▇▇▇▇▇ & Hand ("▇▇▇▇▇▇▇") with respect to
Louisiana income tax consequences of the Conversion; all material
aspects of the opinions of Elias, Matz, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, L.L.P. and
▇▇▇▇▇▇▇ are accurately summarized in the Registration Statement and
will be accurately summarized in the Prospectus; and further represent
and warrant that the facts upon which such opinions are based are
truthful, accurate and complete.
(l) The Company and the Association have all such power, authority,
authorizations, approvals and orders as may be required to enter into
this Agreement, to carry out the provisions and conditions hereof and
to issue and sell the Shares to be sold by the Company as provided
herein and as described in the Prospectus except approval or
confirmation by the OTS of the final appraisal of the Association.
The consummation of the Conversion, the execution, delivery and
performance of this Agreement and the consummation of the transactions
herein contemplated have been duly and validly authorized by all
necessary corporate action on the part of the Company and the
Association and this Agreement has been validly executed and delivered
by the Company and the Association and is the valid, legal and binding
agreement of the Company and the Association enforceable in accordance
with its terms (except as the enforceability thereof may be limited by
bankruptcy, insolvency, moratorium, reorganization or similar laws
relating to or affecting the enforcement of creditors' rights
generally or the rights of creditors of savings and loan holding
companies, the accounts of whose subsidiaries are insured by the FDIC
or by general equity principles regardless of whether such
enforceability is considered in a proceeding in equity or at law, and
except to the extent if any, that the provisions of Sections 8 and 9
hereof may be unenforceable as against public policy).
(m) The Company and the Association are not in violation of any directive
received from the OTS, the FDIC, or any other agency to make any
material change in the method of conducting their businesses so as to
comply in all material respects with all applicable statutes and
regulations (including, without limitation, regulations, decisions,
directives and orders of the OTS, and the FDIC)
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and, except as may be set forth in the Registration Statement and
the Prospectus, there is no suit or proceeding or charge or action
before or by any court, regulatory authority or governmental agency
or body, pending or, to the knowledge of the Company or the
Association, threatened, which might materially and adversely
affect the Conversion, the performance of this Agreement or the
consummation of the transactions contemplated in the Plan and as
described in the Registration Statement and the Prospectus or which
might result in any material adverse change in the condition
(financial or otherwise), earnings, capital or properties of the
Company or the Association, or which would materially affect their
properties and assets.
(n) The financial statements, schedules and notes related thereto which
are included in the Prospectus fairly present the consolidated balance
sheet, income statement, statement of changes in equity and cash flows
of the Association at the respective dates indicated and for the
respective periods covered thereby and comply as to form in all
material respects with the applicable accounting requirements of Title
12 of the Code of Federal Regulations and generally accepted
accounting principles (including those requiring the recording of
certain assets at their current market value). Such financial
statements, schedules and notes related thereto have been prepared in
accordance with generally accepted accounting principles consistently
applied through the periods involved, present fairly in all material
respects the information required to be stated therein and are
consistent with the most recent financial statements and other reports
filed by the Association with the OTS. 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 of the
Association included in the Prospectus, and as to the pro forma
adjustments, the adjustments made therein have been properly applied
on the basis described therein.
(o) Since the respective dates as of which information is given in the
Registration Statement including the Prospectus: (i) there has not
been any material adverse change, financial or otherwise, in the
condition of the Company or the Association and its subsidiaries
considered as one enterprise, or in the earnings, capital or
properties of the Company or the Association, whether or not arising
in the ordinary course of business; (ii) there has not
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been any material increase in the long-term debt of the Association or
in the principal amount of the Association's assets which are
classified by the Association as substandard, doubtful or loss or in
loans past due 90 days or more or real estate acquired by
foreclosure, by deed-in-lieu of foreclosure or deemed in-substance
foreclosure or any material decrease in retained earnings or total
assets of the Association nor has the Company or the Association
issued any securities (other than in connection with the
incorporation of the Company) or incurred any liability or
obligation for borrowing other than in the ordinary course of
business; (iii) there have not been any material transactions
entered into by the Company or the Association; (iv) there has not
been any material adverse change in the aggregate dollar amount of
the Association's deposits or its consolidated net worth or spread;
(v) there has been no material adverse change in the Company's or
the Association's relationship with its insurance carriers,
including, without limitation, cancellation or other termination of
the Company's or the Association's fidelity bond or any other type
of insurance coverage; (vi) except as disclosed in the Prospectus
there has been no material change in management of the Company or
the Association, neither of which has any material undisclosed
liability of any kind, contingent or otherwise; (vii) the Company or
the Association has not sustained any material loss or interference
with its respective business or properties from fire, flood,
windstorm, earthquake, accident or other calamity, whether or not
covered by insurance; (viii) the Company or the Association is not
in default in the payment of principal or interest on any
outstanding debt obligations; (ix) the capitalization, liabilities,
assets, properties and business of the Company and the Association
conform in all material respects to the descriptions thereof
contained in the Prospectus; and (x) neither the Company, the
Association nor its wholly owned subsidiary has any material
contingent liabilities, except as set forth in the Prospectus. All
documents made available to or delivered or to be made available to
or delivered by the Association or the Company or their
representatives in connection with the issuance and sale of the
Shares, including records of account holders, depositors, borrowers
and other members of the Association, or in connection with the
Agent's exercise of due diligence, except for those documents which
were prepared by parties other than the Association, the Company or
their representatives, to the best knowledge of the
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Association and the Company, were on the dates on which they were
delivered, or will be on the dates on which they are to be
delivered, true, complete and correct in all material respects.
(p) As of the date hereof and as of the Closing Date, neither the Company
nor the Association is (i) in violation of its articles of
incorporation or code of regulations or charter or bylaws,
respectively (and the Association will not be in violation of its
charter or bylaws in capital stock form upon consummation of the
Conversion), or (ii) in default in the performance or observance of
any material obligation, agreement, covenant, or condition contained
in any material contract, lease, loan agreement, indenture or other
instrument to which it is a party or by which it or any of its
property may be bound; the consummation of the Conversion, the
execution, delivery and performance of this Agreement and the
consummation of the transactions herein contemplated have been duly
and validly authorized by all necessary corporate action on the part
of the Company and the Association and this Agreement has been validly
executed and delivered by the Company and the Association and is a
valid, legal and binding Agreement of the Company and the Association
enforceable in accordance with its terms, except as the enforceability
thereof may be limited by (i) bankruptcy, insolvency, reorganization,
moratorium, conservatorship, receivership or other similar laws now or
hereafter in effect relating to or affecting the enforcement of
creditors' rights generally or the rights of creditors of federal
savings institutions, (ii) general equitable principles, (iii) laws
relating to the safety and soundness of insured depository
institutions, and (iv) applicable law or public policy with respect to
the indemnification and/or contribution provisions contained herein,
and except that no representation or warranty need be made as to the
effect or availability of equitable remedies or injunctive relief
(regardless of whether such enforceability is considered in a
proceeding in equity or at law). The consummation of the transactions
herein contemplated will not: (i) conflict with or constitute a breach
of, or default under, or result in the creation of any material lien,
charge or encumbrance (with the exception of the liquidation account
established in the Conversion) upon any of the assets of the Company
or the Association pursuant to the articles of incorporation and code
of regulations of the Company or the charter and bylaws of the
Association (in either mutual or capital stock form), or any material
contract, lease or other
13
instrument to which the Company or the Association has a beneficial
interest, or any applicable law, rule, regulation or order; (ii)
violate any authorization, approval, judgement, decree, order,
statute, rule or regulation applicable to the Company or the
Association, except for such violations which would not have a
material adverse effect on the financial condition and results of
operations of the Company and the Association on a consolidated
basis; or (iii) with the exception of the liquidation account
established in the Conversion, result in the creation of any
material lien, charge or encumbrance upon any property of the
Company or the Association.
(q) No default exists, and no event has occurred which with notice or
lapse of time, or both, would constitute a default, on the part of the
Company, the Association in the due performance and observance of any
term, covenant or condition of any indenture, mortgage, deed of trust,
note, bank loan or credit agreement or any other instrument or
agreement to which the Company or the Association is a party or by
which any of them or any of their property is bound or affected,
except such defaults which would not have a material adverse affect on
the financial condition or results of operations of the Company and
the Association on a consolidated basis; such agreements are in full
force and effect; and no other party to any such agreements has
instituted or, to the best knowledge of the Company and the
Association, threatened any action or proceeding wherein the Company
or the Association would or might be alleged to be in default
thereunder.
(r) Upon consummation of the Conversion, the authorized, issued and
outstanding equity capital of the Company will be within the range set
forth in the Prospectus under the caption "Capitalization," and no
Shares have been or will be issued and outstanding prior to the
Closing Date (other than in connection with the incorporation of the
Company); the Shares will have been duly and validly 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 in the Prospectus, will be duly and validly issued, fully
paid and non-assessable, except for shares purchased by the ESOP with
funds borrowed from the Company to the extent payment therefor in cash
has not been received by the Company; except to the extent that
subscription rights and priorities pursuant thereto exist pursuant to
the Plan, no preemptive rights
14
exist with respect to the Shares; and the terms and provisions of
the Shares will conform in all material respects to the description
thereof contained in the Registration Statement and the Prospectus.
To the best knowledge of the Company and the Association, upon the
issuance of the Shares, good title to the Shares will be
transferred from the Company to the purchasers thereof against
payment therefor, subject to such claims as may be asserted against
the purchasers thereof by third-party claimants.
(s) 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 Shares, except for the approval of
the Commission, the OTS, the OFI and any necessary qualification,
notification, registration or exemption under the securities or blue
sky laws of the various states in which the Shares are to be offered,
and except as may be required under the rules and regulations of the
NASD and/or The Nasdaq Stock Market ("Nasdaq").
(t) LaPorte, Sehrt, ▇▇▇▇▇ & Hand, which has certified the consolidated
audited financial statements and schedules of the Association included
in the Prospectus, has advised the Company and the Association in
writing that they are, with respect to the Company and the
Association, independent public accountants within the meaning of the
Code of Professional Ethics of the American Institute of Certified
Public Accountants and Title 12 of the Code of Federal Regulations and
Section 571.2(c)(3).
(u) RP Financial LC, which has prepared the Association's Conversion
Valuation Appraisal Report as of December __ 1996 (as amended or
supplemented, if so amended or supplemented) (the "Appraisal"), has
advised the Company in writing that it is independent of the Company
and the Association within the meaning of the Conversion Regulations.
(v) The Company and the Association have timely filed all required
federal, state and local tax returns; the Company and the Association
have paid all taxes that have become due and payable in respect of
such returns, except where permitted to be extended, have made
adequate reserves for similar future tax liabilities and no deficiency
has been asserted with respect thereto by any taxing authority.
(w) The Association is in compliance in all material respects with the
applicable financial
15
record-keeping and reporting requirements of the
Currency and Foreign Transactions Reporting Act of 1970, as amended,
and the regulations and rules thereunder.
(x) To the knowledge of the Company and the Association, neither the
Company, the Association nor employees of the Company or the
Association have made any payment of funds of the Company or the
Association as a loan for the purchase of the Shares 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.
(y) Prior to the Conversion, neither the Company nor the Association has:
(i) issued any securities within the last 18 months (except for notes
to evidence other bank loans and reverse repurchase agreements or
other liabilities in the ordinary course of business or as described
in the Prospectus, and except for any shares issued in connection with
the incorporation of the Company); (ii) had any material dealings
within the 12 months prior to the date hereof with any member of the
NASD, or any person related to or associated with such member, other
than discussions and meetings relating to the proposed Offering and
routine purchases and sales of United States government and agency
securities; (iii) entered into a financial or management consulting
agreement except as contemplated hereunder; and (iv) engaged any
intermediary between the Agent and the Company and the Association in
connection with the offering of the Shares, and no person is being
compensated in any manner for such service. Appropriate arrangements
have been made for placing the funds received from subscriptions for
Shares in a special interest-bearing account with the Association
until all Shares are sold and paid for, with provision for refund to
the purchasers in the event that the Conversion is not completed for
whatever reason or for delivery to the Company if all Shares are sold.
(z) The Company and the Association have not relied upon the Agent or its
legal counsel or other advisors for any legal, tax or accounting
advice in connection with the Conversion.
(aa) The Company is not required to be registered under the Investment
Company Act of 1940, as amended.
(bb) Any certificates signed by an officer of the Company or the Association
pursuant to the conditions of this Agreement and delivered to the Agent
or their counsel that refers to this Agreement shall be deemed to be a
16
representation and warranty by the Company or the Association to the
Agent as to the matters covered thereby with the same effect as if such
representation and warranty were set forth herein.
Section 5. Representations and Warranties of the Agent.
KBW represents and warrants to the Company and the Association that:
(i) it is a corporation and is validly existing in good standing
under the laws of the State of New York and licensed to conduct business in
the State of Ohio and that ▇▇▇▇ is an unincorporated division thereof with
full power and authority to provide the services to be furnished to the
Association and the Company hereunder.
(ii) The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly and
validly authorized by all necessary action on the part of the Agent, and
this Agreement has been duly and validly executed and delivered by the
Agent and is a legal, valid and binding agreement of the Agent, enforceable
in accordance with its terms.
(iii) Each of the Agent and its employees, agent and
representatives who shall perform any of the services hereunder shall be
duly authorized and empowered, and shall have all licenses, approvals and
permits necessary to perform such services.
(iv) The execution and delivery of this Agreement by the Agent,
the consummation of the transactions contemplated hereby and compliance
with the terms and provisions hereof will not conflict with, or result in a
breach of, any of the terms, provisions or conditions of, or constitute a
default (or an event which with notice or lapse of time or both would
constitute a default) under, the articles of incorporation of the Agent or
any agreement, indenture or other instrument to which the Agent is a party
or by which it or its property is bound.
(v) No approval of any regulatory or supervisory or other public
authority is required in connection with the Agent's execution and delivery
of this Agreement, except as may have been received.
(vi) There is no suit or proceeding or charge or action before or
by any court, regulatory authority or government agency or body or, to the
knowledge of the Agent, pending or threatened, which might materially
adversely affect the Agent's performance of this Agreement.
17
Section 5.l Covenants of the Company and the Association. The Company
and the Association hereby jointly and severally covenant with KBW as follows:
(a) The Company will not, at any time after the date the Registration
Statement is declared effective, file any amendment or supplement to
the Registration Statement without providing the Agent and its counsel
an opportunity to review such amendment or supplement or file any
amendment or supplement to which amendment or supplement the Agent or
its counsel shall reasonably object.
(b) The Association will not, at any time after the Conversion Application
is approved by the OTS and the OFI, file any amendment or supplement
to such Conversion Application without providing the Agent and its
counsel an opportunity to review such amendment or supplement or file
any amendment or supplement to which amendment or supplement the Agent
or its counsel shall reasonably object.
(c) The Company will not, at any time before the Holding Company
Application is approved by the OTS, file any amendment or supplement
to such Holding Company Application without providing the Agent and
its counsel an opportunity to review the nonconfidential portions of
such amendment or supplement or file any amendment or supplement to
which amendment or supplement the Agent or its counsel shall
reasonably object.
(d) The Company and the Association will use their best efforts to cause
any post-effective amendment to the Registration Statement to be
declared effective by the Commission and any post-effective amendment
to the Conversion Application to be approved by the OTS and will
immediately upon receipt of any information concerning the events
listed below notify the Agent: (i) when the Registration Statement, as
amended, has become effective; (ii) when the Conversion Application,
as amended, has been approved by the OTS and the OFI; (iii) any
comments from the Commission, the OTS, the OFI or any other
governmental entity with respect to the Conversion or the transactions
contemplated by this Agreement; (iv) of the request by the Commission,
the OTS, the OFI or any other governmental entity for any amendment or
supplement to the Registration Statement, the Conversion Application
or for additional information; (v) of the issuance by the Commission,
the OTS, the OFI or any other governmental entity of any order or
other action suspending the Offering or the use of the Registration
Statement or the Prospectus or any
18
other filing of the Company or the Association under the Conversion
Regulations, or other applicable law, or the threat of any such action;
(vi) the issuance by the Commission, the OTS, the OFI or any authority
of any stop order suspending the effectiveness of the Registration
Statement or of the initiation or threat of initiation or threat of
any proceedings for that purpose; or (vii) of the occurrence of any
event mentioned in paragraph (h) below. The Company and the
Association will make every reasonable effort (i) to prevent the
issuance by the Commission, the OTS, the OFI or any state authority
of any such order and, if any such order shall at any time be issued,
(ii) to obtain the lifting thereof at the earliest possible time.
(e) The Company and the Association will deliver to the Agent and to its
counsel two conformed copies of the Registration Statement, the
Conversion Application and the Holding Company Application, as
originally filed and of each amendment or supplement thereto,
including all exhibits. Further, the Company and the Association will
deliver such additional copies of the foregoing documents to counsel
to the Agent as may be required for any NASD and "blue sky" filings.
(f) The Company and the Association will furnish to the Agent, from time
to time during the period when the Prospectus (or any later prospectus
related to this offering) is required to be delivered under the 1933
Act or the Securities Exchange Act of 1934 (the "1934 Act"), such
number of copies of such Prospectus (as amended or supplemented) as
the Agent may reasonably request for the purposes contemplated by the
1933 Act, the 1933 Act Regulations, the 1934 Act or the rules and
regulations promulgated under the 1934 Act (the "1934 Act
Regulations"). The Company authorizes the Agent to use the Prospectus
(as amended or supplemented, if amended or supplemented) in any lawful
manner contemplated by the Plan in connection with the sale of the
Shares by the Agent.
(g) The Company and the Association will comply with any and all material
terms, conditions, requirements and provisions with respect to the
Conversion and the transactions contemplated thereby imposed by the
Commission, the OTS, the OFI or the Conversion Regulations, and by the
1933 Act, the 1933 Act Regulations, the 1934 Act and the 1934 Act
Regulations to be complied with prior to or subsequent to the Closing
Date and when the Prospectus is required to be delivered, and during
19
such time period the Company and the Association will comply, at their
own expense, with all material requirements imposed upon them by the
Commission, the OTS, the OFI or the Conversion Regulations, and by the
1933 Act, the 1933 Act Regulations, the 1934 Act and the 1934 Act
Regulations, including, without limitation, Rule 10b-5 under the 1934
Act, in each case as from time to time in force, so far as necessary
to permit the continuance of sales or dealing in the Common Shares
during such period in accordance with the provisions hereof and the
Prospectus.
(h) If, at any time during the period when the Prospectus relating to the
Shares is required to be delivered, any event relating to or affecting
the Company or the Association shall occur, as a result of which it is
necessary or appropriate, in the opinion of counsel for the Company
and the Association or in the reasonable opinion of the Agent's
counsel, to amend or supplement the Registration Statement or
Prospectus in order to make the Registration Statement or Prospectus
not misleading in light of the circumstances existing at the time the
Prospectus is delivered to a purchaser, the Company and the
Association will immediately so inform the Agent and prepare and file,
at their own expense, with the Commission, the OTS and OFI and
furnish to the Agent a reasonable number of copies of an amendment or
amendments of, or a supplement or supplements to, the Registration
Statement or Prospectus (in form and substance reasonably satisfactory
to the Agent and its counsel after a reasonable time for review) which
will amend or supplement the Registration Statement or Prospectus so
that as amended or supplemented it will not contain an untrue
statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in light of the
circumstances existing at the time the Prospectus is delivered to a
purchaser, not misleading. For the purpose of this Agreement, the
Company and the Association each will timely furnish to the Agent such
information with respect to itself as the Agent may from time to time
reasonably request.
(i) The Company and the Association will take all necessary actions, in
cooperating with the Agent, and furnish to whomever the Agent may
direct, such information as may be required to qualify or register the
Shares for offering and sale by the Company or to exempt such Shares
from registration, or to exempt the Company as a broker-dealer and its
officers, directors and employees as broker-dealers
20
or agents under the applicable securities or blue sky laws of such
jurisdictions in which the Shares are required under the Conversion
Regulations to be sold or as the Agent and the Company and the
Association may reasonably agree upon; provided, however, that the
Company shall not be obligated to file any general consent to service
of process, to qualify to do business in any jurisdiction in which it
is not so qualified, or to register its directors or officers as
brokers, dealers, salesmen or agents in any jurisdiction. In each
jurisdiction where any of the Shares shall have been qualified or
registered as above provided, the Company will make and file such
statements and reports in each fiscal period as are or may be required
by the laws of such jurisdiction.
(j) The liquidation account for the benefit of Eligible Account Holders
and Supplemental Eligible Account Holders will be duly established and
maintained in accordance with the requirements of the OTS and the OFI,
and such Eligible Account Holders and Supplemental Eligible Account
Holders who continue to maintain their savings accounts in the
Association will have an inchoate interest in their pro rata portion
of the liquidation account which shall have a priority superior to
that of the holders of the Common Shares in the event of a complete
liquidation of the Association.
(k) The Company and the Association will not sell or issue, contract to
sell or otherwise dispose of, for a period of 90 days after the
Closing Date, without the Agent's prior written consent, any common
shares other than the Shares or other than in connection with any plan
or arrangement described in the Prospectus, including existing stock
benefit plans.
(l) The Company shall register its Common Shares under Section 12(g) of
the 1934 Act concurrently with the Offering pursuant to the Plan and
shall request that such registration be effective prior to or upon
completion of the Conversion. The Company shall maintain the
effectiveness of such registration for not less than three years or
such shorter period as may be required by the OTS and the OFI.
(m) During the period during which the Company's Common Shares are
registered under the 1934 Act or for three (3) years from the date
hereof, whichever period is greater, the Company will furnish to its
shareholders as soon as practicable after the end of each fiscal year
an annual report of the Company
21
(including a consolidated balance sheet and statements of
consolidated income, shareholders' equity and cash flows of the
Company and its subsidiaries as at the end of and for such year,
certified by independent public accountants in accordance with
Regulation S-X under the 1933 Act and the 1934 Act).
(n) During the period of three years from the date hereof, the Company
will furnish to the Agent: (i) as soon as practicable after such
information is publicly available, a copy of each report of the
Company furnished to or filed with the Commission under the 1934 Act
or any national securities exchange or system on which any class of
securities of the Company is listed or quoted (including, but not
limited to, reports on Forms 10-K, 10-Q and 8-K and all proxy
statements and annual reports to stockholders), (ii) a copy of each
other non-confidential report of the Company mailed to its
stockholders or filed with the Commission, the OTS or any other
supervisory or regulatory authority or any national securities
exchange or system on which any class of securities of the Company is
listed or quoted, each press release and material news items and
additional documents and information with respect to the Company or
the Association as the Agent may reasonably request; and (iii) from
time to time, such other nonconfidential information concerning the
Company or the Association as the Agent may reasonably request.
(o) The Company and the Association will use the net proceeds from the
sale of the Shares in the manner set forth in the Prospectus under the
caption "Use of Proceeds."
(p) Other than as permitted by the Conversion Regulations, the HOLA, the
1933 Act, the 1933 Act Regulations, and the laws of any state in which
the Shares are registered or qualified for sale or exempt from
registration, neither the Company nor the Association will distribute
any prospectus, offering circular or other offering material in
connection with the offer and sale of the Shares.
(q) The Company will use its best efforts to (i) encourage and assist a
market maker to establish and maintain a market for the Shares and
(ii) list and maintain quotation of the Shares on a national or
regional securities exchange or on Nasdaq effective on or prior to the
Closing Date.
22
(r) The Association will maintain appropriate arrangements for depositing
all funds received from persons mailing subscriptions for or orders to
purchase Shares in the Offering on an interest-bearing basis at the
rate described in the Prospectus until the Closing Date and
satisfaction of all conditions precedent to the release of the
Association's obligation to refund payments received from persons
subscribing for or ordering Shares in the Offering in accordance with
the Plan and as described in the Prospectus or until refunds of such
funds have been made to the persons entitled thereto or withdrawal
authorizations canceled in accordance with the Plan and as described
in the Prospectus. The Association will maintain such records of all
funds received to permit the funds of each subscriber to be separately
insured by the FDIC (to the maximum extent allowable) and to enable
the Association to make the appropriate refunds of such funds in the
event that such refunds are required to be made in accordance with the
Plan and as described in the Prospectus.
(s) The Company will promptly take all necessary action to register as a
savings and loan holding company under the HOLA within 90 days of the
Closing Date.
(t) The Company and the Association will take such actions and furnish
such information as are reasonably requested by the Agent in order for
the Agent to ensure compliance with the NASD's "Interpretation
Relating to Free Riding and Withholding."
(u) Neither the Company nor the Association will amend the Plan of
Conversion without notifying the Agent prior thereto.
(v) The Company shall assist the Agent, if necessary, in connection with
the allocation of the Shares in the event of an oversubscription and
shall provide the Agent with any information necessary to assist the
Company in allocating the Shares in such event and such information
shall be accurate and reliable.
(w) Prior to the Closing Date, the Company and the Association will inform
the Agent of any event or circumstances of which it is aware as a
result of which the Registration Statement and/or Prospectus, as then
amended or supplemented, would contain an untrue statement of a
material fact or omit to state a material fact necessary in order to
make the statements therein not misleading.
23
(x) Subsequent to the date the Registration Statement is declared
effective by the Commission and prior to the Closing Date, except as
otherwise may be indicated or contemplated therein or set forth in an
amendment or supplement thereto, neither the Company nor the
Association will have: (i) issued any securities or incurred any
liability or obligation, direct or contingent, for borrowed money,
except borrowings from the same or similar sources indicated in the
Prospectus in the ordinary course of its business, or (ii) entered
into any transaction which is material in light of the business and
properties of the Company and the Association, taken as a whole.
(y) The facts and representations provided to Elias, Matz, ▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇ L.L.P. by the Association and the Company and upon which
Elias, Matz, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ L.L.P. will base its opinion under
Section 7(c)(1) are and will be truthful, accurate and complete.
Section 6. Payment of Expenses. Whether or not the Conversion is
completed or the sale of the Shares by the Company is consummated, the
Company and the Association jointly and severally agree to pay or reimburse
the Agent for: (a) all filing fees in connection with all filings related to
the Offering with the NASD; (b) any stock issue or transfer taxes which may
be payable with respect to the sale of the Shares; (c) all reasonable
expenses of the Conversion, including but not limited to the Company's and
the Association's, and the Agent's attorneys' fees and expenses, blue sky
fees, transfer agent, registrar and other agent charges, fees relating to
auditing and accounting or other advisors and costs of printing all documents
necessary in connection with the Conversion; and (d) all reasonable
out-of-pocket expenses incurred by the Agent not to exceed $10,000 (exclusive
of legal fees and expenses not to exceed $35,000). Such out-of-pocket
expenses include, but are not limited to, travel, lodging, meals,
communication and postage. However, such out-of-pocket expenses do not
include expenses incurred with respect to the matters set forth in (a) or (b)
above. In the event the Company is unable to sell a minimum of 2,210,000
Shares or the Conversion is terminated or otherwise abandoned, the Company
and the Association shall promptly reimburse the Agent in accordance with
Section 2 hereof.
Section 7. Conditions to the Agent's Obligations. The obligations of
the Agent hereunder, as to the Shares to be delivered at the Closing Date,
are subject, to the extent not waived in writing by the Agent, to the
condition that all representations and warranties of the Company and the
Association herein are, at and as of the commencement of the Offering and at
and as of the Closing Date, true and correct in all material respects, the
condition that the Company and the Association shall have performed all of
their obligations hereunder to be performed on or before such dates, and to
the following further conditions:
24
(a) At the Closing Date, the Company and the Association shall have
conducted the Conversion in all material respects in accordance with
the Plan, the Conversion Regulations, and all other applicable laws,
regulations, decisions and orders, including all terms, conditions,
requirements and provisions precedent to the Conversion imposed upon
them by the OTS.
(b) The Registration Statement shall have been declared effective by the
Commission and the Conversion Application approved by the OTS not
later than 5:30 p.m. on the date of this Agreement, or with the
Agent's consent at a later time and date; and at the Closing Date,
no stop order suspending the effectiveness of the Registration
Statement shall have been issued under the 1933 Act or proceedings
therefore initiated or threatened by the Commission or any state
authority, and no order or other action suspending the authorization
of the Prospectus or the consummation of the Conversion shall have
been issued or proceedings therefore initiated or, to the Company's
or the Association's knowledge, threatened by the Commission, the
OTS, the FDIC, or any state authority.
(c) At the Closing Date, the Agent shall have received:
(1) The favorable opinion, dated as of the Closing Date and
addressed to the Agent and for its benefit, of Elias, Matz,
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, L.L.P., special counsel for the Company and
the Association, in form and substance to the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation under the laws of the state of Louisiana.
(ii) The Company has 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.
(iii) The Association has been duly organized and is a
validly existing Louisiana chartered savings association in capital
stock form of organization, duly authorized to conduct its business
and own its property as described in the Registration Statement and
the Prospectus. All of the outstanding capital stock of the
Association upon completion of the Conversion will be duly authorized
and, upon payment therefor, will be validly issued, fully paid and
non-assessable and will be owned by the Company, free and clear of any
liens, encumbrances, claims or other restrictions.
25
(iv) The Association has no subsidiaries.
(v) The Association is a member of the FHLB-Dallas. The deposit
accounts of the Association are insured by the FDIC up to the maximum
amount allowed under law and no proceedings for the termination or
revocation of such insurance are pending or, to such counsel's Actual
Knowledge, threatened; the description of the liquidation account as
set forth in the Prospectus under the captions "The Conversion and
Reorganization-Effect on Liquidation Rights" and "- Liquidation
Rights," to the extent that such information constitutes matters of
law and legal conclusions, has been reviewed by such counsel and is
accurately described in all material respects.
(vi) Upon consummation of the Conversion, the authorized, issued
and outstanding capital stock of the Company will be within the range
set forth in the Prospectus under the caption "Capitalization," and,
no shares of Common Stock have been issued prior to the Closing Date;
at the time of the Conversion, the Shares subscribed for pursuant to
the Offering will have been duly and validly 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 Prospectus, will be duly and validly issued and fully paid
and non-assessable; the issuance of the Shares is not subject to
preemptive rights and the terms and provisions of the Shares conform
in all material respects to the description thereof contained in the
Prospectus. To such counsel's Actual Knowledge, upon the issuance of
the Shares, good title to the Shares will be transferred by the
Company to the purchasers thereof against payment therefor, subject to
such claims as may be asserted against the purchasers thereof by
third-party claimants.
(viii) The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly
and validly authorized by all necessary action on the part of the
Company and the Association; and this Agreement is a valid and binding
obligation of the Company and the Association, enforceable in
accordance with its terms, except as the enforceability thereof may be
limited by (i) bankruptcy, insolvency, reorganization, moratorium,
conservatorship, receivership or other similar laws now or hereafter
in effect relating to or affecting the enforcement of creditors'
rights generally or the rights of
26
creditors of federal savings institutions, (ii) general equitable
principles, (iii) laws relating to the safety and soundness of insured
depository institutions, and (iv) applicable law or public policy with
respect to the indemnification and/or contribution provisions contained
herein, including without limitation the provisions of Sections 23A and
23B of the Federal Reserve Act and except that no opinion need be
expressed as to the effect or availability of equitable remedies or
injunctive relief (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
(ix) The Conversion Application has been approved by the OTS and
the OFI and the Prospectus has been authorized for use by the OTS and
the OFI. The OTS has approved the Holding Company Application and
issued its order of approval under the savings and loan holding
company provisions of the HOLA, the purchase by the Company of all of
the issued and outstanding capital stock of the Association has been
authorized by the OTS and no action has been taken, and to such
counsel's Actual Knowledge none is pending or threatened, to revoke
any such authorization or approval.
(x) The Plan has been duly adopted by the required vote of the
directors of the Company and the Association, and based upon the
certificate of the inspector of election, by the stockholders of the
Association.
(xi) Subject to the satisfaction of the conditions to the OTS'
and the OFI's approval of the Conversion, no further approval,
registration, authorization, consent or other order of any federal
regulatory agency is required in connection with the execution and
delivery of this Agreement, the issuance of the Shares and the
consummation of the Conversion, except as may be required under the
securities or blue sky laws of various jurisdictions (as to which no
opinion need be rendered) and except as may be required under the
rules and regulations of the NASD and/or the Nasdaq National Market
(as to which no opinion need by rendered). To such counsel's Actual
Knowledge, the Conversion has been consummated in all material
respects in accordance with all applicable provisions of the HOLA and
the Conversion Regulations.
(xii) The Registration Statement is effective under the 1933
Act, and no stop order suspending the effectiveness has been issued
under the 1933 Act or proceedings therefor initiated or, to such
27
counsel's Actual Knowledge, threatened by the Commission.
(xiii) At the time the Conversion Application, including the
Prospectus contained therein, was approved by the OTS and the OFI, the
Conversion Application, including the Prospectus contained therein,
complied as to form in all material respects with the requirements of
the Conversion Regulations, federal law and all applicable rules and
regulations promulgated thereunder (other than the financial
statements, the notes thereto, and other tabular, financial,
statistical and appraisal data included therein, as to which no
opinion need be rendered).
(xiv) At the time that the Registration Statement became
effective, (i) the Registration Statement (as amended or supplemented,
if so amended or supplemented) (other than the financial statements,
the notes thereto, and other tabular, financial, statistical and
appraisal data included therein, as to which no opinion need be
rendered), complied as to form in all material respects with the
requirements of the 1933 Act and the 1933 Act Regulations, and (ii)
the Prospectus (other than the financial statements, the notes
thereto, and other tabular, financial, statistical and appraisal data
included therein, as to which no opinion need be rendered) complied as
to form in all material respects with the requirements of the 1933
Act, the 1933 Act Regulations, the Conversion Regulations and federal
law.
(xv) The terms and provisions of the Shares of the Company
conform, in all material respects, to the description thereof
contained in the Registration Statement and Prospectus, and the form
of certificate used to evidence the Shares is in due and proper form.
(xvi) There are no legal or governmental proceedings pending
or, to such counsel's Actual Knowledge, threatened which are required
to be disclosed in the Registration Statement and Prospectus, other
than those disclosed therein, and to such counsel's Actual Knowledge,
all pending legal and governmental proceedings to which the Company or
the Association is a party or of which any of their property is the
subject, which are not described in the Registration Statement and the
Prospectus, including ordinary routine litigation incidental to the
Company's or the Association's business, are, considered in the
aggregate, not material.
28
(xvii) To such counsel's Actual Knowledge, there are no
material contracts, indentures, mortgages, loan agreements, notes,
leases or other instruments required to be described or referred to in
the Conversion Application, the Registration Statement or the
Prospectus or required to be filed as exhibits thereto other than
those described or referred to therein or filed as exhibits thereto in
the Conversion Application, the Registration Statement or the
Prospectus. The description in the Conversion Application, the
Registration Statement and the Prospectus of such documents and
exhibits is accurate in all material respects and fairly presents the
information required to be shown.
(xviii) To such counsel's Actual Knowledge, the Company and the
Association have conducted the Conversion, in all material respects,
in accordance with all applicable requirements of the Plan and
applicable federal law. The Plan complies in all material respects
with all applicable federal laws, rules, regulations, decisions and
orders including, but not limited to, the Conversion Regulations; no
order has been issued by the OTS, the OFI, the Commission, the FDIC,
or any state authority to suspend the Offering or the use of the
Prospectus, and no action for such purposes has been instituted or, to
such counsel's Actual Knowledge, threatened by the OTS, the OFI, the
Commission, the FDIC, or any state authority and, to such counsel's
Actual Knowledge, no person has sought to obtain regulatory or
judicial review of the final action of the OTS, or the OFI, approving
the Plan, the Conversion Application, the Holding Company Application
or the Prospectus.
(xix) To such counsel's Actual Knowledge, the Company and the
Association have obtained all material licenses, permits and other
governmental authorizations currently required under federal and
Louisiana law for the conduct of their businesses and all such
licenses, permits and other governmental authorizations are in full
force and effect, and the Company and the Association are in all
material respects complying therewith, except where the failure to
have such licenses, permits and other governmental authorizations or
the failure to be in compliance therewith would not have a material
adverse effect on the business or operations of the Association and
the Company, taken as a whole.
29
(xx) To such counsel's Actual Knowledge, neither the Company nor
the Association is in violation of its articles of incorporation and
bylaws or its Charter and bylaws, as appropriate or, to such counsel's
Actual Knowledge, in default or violation of any obligation,
agreement, covenant or condition contained in any contract, indenture,
mortgage, loan agreement, note, lease or other instrument to which it
is a party or by which it or its property may be bound, except for
such defaults or violations which would not have a material adverse
impact on the financial condition or results of operations of the
Company or the Association on a consolidated basis; to such
counsel's Actual Knowledge, the execution and delivery of this
Agreement, the occurrence of the obligations herein set forth and the
consummation of the transactions contemplated herein will not conflict
with or constitute a breach of, or default under, or result in the
creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or the Association pursuant to any
material contract, indenture, mortgage, loan agreement, note, lease or
other instrument to which the Company or the Association is a party or
by which any of them may be bound, or to which any of the property or
assets of the Company or the Association are subject (other than the
establishment of the liquidation account); and, such action will not
result in any violation of the provisions of the certificate of
incorporation or bylaws of the Company or the Charter or bylaws of the
Association or, to such counsel's Actual Knowledge, result in any
violation of any applicable federal law, act, regulation (except that
no opinion with respect to the securities and blue sky laws of various
jurisdictions or the rules or regulations of the NASD and/or the
Nasdaq Stock Market need be rendered) or order or court order, writ,
injunction or decree.
(xxi) The Company's articles of incorporation and bylaws
comply in all materials respects with the Business Corporation Law
("BCL") of the State of Louisiana. The Association's charter and
bylaws comply in all material respects with the rules and regulations
of the OTS and the OFI.
(xxii) To such counsel's Actual Knowledge, neither the Company
nor the Association is in violation of any directive from the OTS or
the FDIC to make any material change in the method of conducting its
respective business.
30
(xxiii) The information in the Prospectus under the captions
"Regulation," "The Conversion," "Restrictions on Acquisition of the
Company and the Association" and "Description of Capital Stock of the
Company," to the extent that such information constitutes matters of
law, summaries of legal matters, documents or proceedings, or legal
conclusions, has been reviewed by such counsel and is correct in all
material respects. The description of the Conversion process under
the caption "The Conversion" in the Prospectus has been reviewed by
such counsel and fairly describes such process in all material
respects. The discussion of statutes or regulations described or
referred to in the Prospectus are accurate summaries and fairly
present the information required to be shown. The information under
the caption "The Conversion - Tax Aspects" has been reviewed by such
counsel and fairly describes the opinions rendered by Elias, Matz,
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, L.L.P. and LaPorte, Sehrt, ▇▇▇▇▇ & Hand to the
Company and the Association with respect to such matters.
In addition, such counsel shall state that during the preparation
of the Conversion Application, the Registration Statement and the
Prospectus, they participated in conferences with certain officers of,
the independent public and internal accountants for, and other
representatives of the Company and the Association, at which
conferences the contents of the Conversion Application, the
Registration Statement and the Prospectus and related matters were
discussed and, while such counsel have not confirmed the accuracy or
completeness of or otherwise verified the information contained in the
Conversion Application, the Registration Statement or the Prospectus,
and do not assume any responsibility for such information, based upon
such conferences and a review of documents deemed relevant for the
purpose of rendering their view (relying as to materiality as to
factual matters on certificates of officers and other factual
representations by the Company and the Association), nothing has come
to their attention that would lead them to believe that the Conversion
Application, the Registration Statement, the Prospectus, or any
amendment or supplement thereto (other than the financial statements,
the notes thereto, and other tabular, financial, statistical and
appraisal data included therein as to which no view need be rendered)
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, in light
31
of the circumstances under which they were made, not misleading.
In giving such opinion, such counsel may rely as to all matters
of fact on certificates of officers or directors of the Company and
the Association and certificates of public officials. Such counsel's
opinion shall be limited to matters governed by federal laws and by
the Louisiana Business Corporation Law. With respect to matters
involving the application of Louisiana law, such counsel may rely, to
the extent it deems proper and as specified in its opinion, solely
upon the opinion of local counsel. The opinion of Elias, Matz,
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, L.L.P. shall be governed by the Legal Opinion
Accord ("Accord") of the American Bar Association Section of Business
Law (1991). The term "Actual Knowledge" as used herein shall have the
meaning set forth in the Accord. For purposes of such opinion, no
proceedings shall be deemed to be pending, no order or stop order
shall be deemed to be issued, and no action shall be deemed to be
instituted unless, in each case, a director or executive officer of
the Company, the Association shall have received a copy of such
proceedings, order, stop order or action. In addition, such opinion
may be limited to present statutes, regulations and judicial
interpretations and to facts as they presently exist; in rendering
such opinion, such counsel need assume no obligation to revise or
supplement it should the present laws be changed by legislative or
regulatory action, judicial decision or otherwise; and such counsel
need express no view, opinion or belief with respect to whether any
proposed or pending legislation, if enacted, or any proposed or
pending regulations or policy statements issued by any regulatory
agency, whether or not promulgated pursuant to any such legislation,
would affect the validity of the Conversion or any aspect thereof.
Such counsel may assume that any agreement is the valid and binding
obligation of any parties to such agreement other than the Company or
the Association.
The favorable opinion, dated as of the Closing Date and addressed
to the Agent and for their benefit, of the Association's local
counsel, in form and substance to the effect that, to the best of such
counsel's knowledge, (i) the Company and the Association have good and
marketable title to all properties and assets which are material to
the business of the Company and the Association and to those
properties and assets described in the Registration Statement and
Prospectus, as owned by
32
them, free and clear of all liens, charges, encumbrances or restrictions,
except such as are described in the Registration Statement and
Prospectus, or are not material in relation to the business of the
Company and the Association considered as one enterprise; (ii) all of
the leases and subleases material to the business of the Company and
the Association under which the Company and the Association hold
properties, as described in the Registration Statement and Prospectus,
are in full force and effect; and (iii) the Association is duly
qualified as a foreign corporation to transact business and is in
good standing in each jurisdiction in which its ownership of property
or leasing of property or the conduct of its business requires such
qualification, unless the failure to be so qualified in one or more
of such jurisdictions would not have a material adverse effect on the
condition, financial or otherwise, or the business, operations or income
of the Association.
(d) At the Closing Date, the Agent shall have received the favorable
opinion, dated as of the Closing Date, of Silver, ▇▇▇▇▇▇▇▇ & Taff,
L.L.P., the Agent's counsel, with respect to such matters as the Agent
may reasonably require. Such opinion may rely upon the opinions of
counsel to the Company and the Association, and as to matters of fact,
upon certificates of offers and directors of the Company and the
Association delivered pursuant hereto or as such counsel shall
reasonably request.
(e) At the Closing Date, the Agent shall receive a certificate of the
Chief Executive Officer and the Principal Accounting Officer of the
Company and the Association in form and substance reasonably
satisfactory to the Agent's Counsel, dated as of such Closing Date, to
the effect that: (i) they have carefully examined the Prospectus and,
in their opinion, at the time the Prospectus became authorized for
final use, the Prospectus did not contain any untrue statement of a
material fact or omit to state a material fact necessary in order to
make the statements therein, in light of the circumstances under which
they were made, not misleading; (ii) since the date the Prospectus
became authorized for final use, no event has occurred which should
have been set forth in an amendment or supplement to the Prospectus
which has not been so set forth, including specifically, but without
limitation, any material adverse change in the condition, financial or
otherwise, or in the earnings, capital, properties or business of the
Company or the Association, and the conditions set
33
forth in this Section 7 have been satisfied; (iii) since the respective
dates as of which information is given in the Registration Statement and
the Prospectus, there has been no material adverse change in the
condition, financial or otherwise, or in the earnings, capital or
properties of the Company or the Association, independently, or of the
Company and the Association, considered as one enterprise, whether or
not arising in the ordinary course of business; (iv) the
representations and warranties in Section 4 are true and correct with
the same force and effect as though expressly made at and as of the
Closing Date; (v) the Company and the Association have complied in all
material respects with all agreements and satisfied all conditions on
their part to be performed or satisfied at or prior to the Closing
Date and will comply in all material respects with all obligations to
be satisfied by them after the Conversion; (vi) no stop order
suspending the effectiveness of the Registration Statement has been
initiated or, to the best knowledge of the Company or the Association,
threatened by the Commission or any state authority; (vii) no order
suspending the Offering, the Conversion, the acquisition of all of the
shares of the Association by the Company or the effectiveness of the
Prospectus has been issued and no proceedings for that purpose are
pending or, to the best knowledge of the Company or the Association,
threatened by the OTS, the OFI, the Commission, the FDIC, or any state
authority; and (viii) to the best knowledge of the Company or the
Association, no person has sought to obtain review of the final action
of the OTS approving the Plan.
(f) Prior to and at the Closing Date: (i) in the reasonable opinion of the
Agent, there shall have been no material adverse change in the
condition, financial or otherwise, or in the earnings or business of
the Company or the Association independently, or of the Company and
the Association, considered as one enterprise, from that as of the
latest dates as of which such condition is set forth in the Prospectus
other than transactions referred to or contemplated therein; (iii) the
Company or the Association shall not have received from the OTS, the
OFI or the FDIC any direction (oral or written) to make any material
change in the method of conducting their business with which it has
not complied (which direction, if any, shall have been disclosed to
the Agent) or which materially and adversely would affect the
business, operations or financial condition or income of the Company
and the Association taken as
34
a whole; (iv) the Company and the Association shall not have been in
default (nor shall an event have occurred which, with notice or lapse
of time or both, would constitute a default) under any provision of
any agreement or instrument relating to any outstanding indebtedness;
(v) no action, suit or proceeding, at law or in equity or before or by
any federal or state commission, board or other administrative agency,
shall be pending or, to the knowledge of the Company or the Association,
threatened against the Company or the Association or affecting any of
their properties wherein an unfavorable decision, ruling or finding
would materially and adversely affect the business, operations,
financial condition or income of the Company and the Association taken
as a whole; and (vi) the Shares have been qualified or registered for
offering and sale or exempted therefrom under the securities or blue sky
laws of the jurisdictions as the Agent shall have reasonably requested
and as agreed to by the Company and the Association.
(g) Concurrently with the execution of this Agreement, the Agent shall
receive a letter from LaPorte, Sehrt, ▇▇▇▇▇ & Hand dated as of the
date of the Prospectus and addressed to the Agent: (i) confirming that
LaPorte, Sehrt, ▇▇▇▇▇ & Hand is a firm of independent public accounts
within the meaning of Rule 101 of the Code of Professional Ethics of
the American Institute of Certified Public Accountants and applicable
regulations of the OTS and stating in effect that in its opinion the
consolidated financial statements, schedules and related notes of the
Association as of December 31, 1995 and 1994 and for each of the two
years in the period ended December 31, 1995, as are included in the
Prospectus and covered by their opinion included therein, comply as to
form in all material respects with the applicable accounting
requirements and related published rules and regulations of the OTS
and the 1933 Act; (ii) stating in effect that, on the basis of certain
agreed upon procedures (but not an audit in accordance with generally
accepted auditing standards) consisting of a reading of the latest
available unaudited interim consolidated financial statements of the
Association prepared by the Association, a reading of the minutes of
the meetings of the Board of Directors and members of the Association
and consultations with officers of the Association responsible for
financial and accounting matters, nothing came to their attention
which caused them to believe that: (A) the unaudited financial
statements included in the
35
Prospectus are not in conformity with the 1933 Act, applicable
accounting requirements of the OTS and generally accepted accounting
principles applied on a basis substantially consistent with that of
the audited financial statements included in the Prospectus; or (B)
during the period from the date of the latest unaudited consolidated
financial statements included in the Prospectus to a specified date
not more than three business days prior to the date of the Prospectus,
except as has been described in the Prospectus, there was any increase
in borrowings, other than normal deposit fluctuations, by the
Association; or (c) there was any decrease in the consolidated net
assets of the Association at the date of such letter as compared
with amounts shown in the latest unaudited consolidated statement
of condition included in the Prospectus; and (iii) stating that,
in addition to the audit referred to in their opinion included in
the Prospectus and the performance of the procedures referred to
in clause (ii) of this subsection (f), they have compared with the
general accounting records of the Association, which are subject
to the internal controls of the Association, the accounting system
and other data prepared by the Association, directly from such
accounting records, to the extent specified in such letter, such
amounts and/or percentages set forth in the Prospectus as the
Agent may reasonably request; and they have reported on the results of
such comparisons.
(h) At the Closing Date, the Agent shall receive a letter dated the
Closing Date, addressed to the Agent, confirming the statements made
by LaPorte, Sehrt, ▇▇▇▇▇ & Hand in the letter delivered by it pursuant
to subsection (f) of this Section 7, the "specified date" referred to
in clause (ii) of subsection (f) thereof to be a date specified in
such letter, which shall not be more than three business days prior to
the Closing Date.
(i) At the Closing Date, the Agent shall receive a letter from RP
Financial, dated the date thereof and addressed to counsel for the
Agent (i) confirming that said firm is independent of the Company and
the Association and is experienced and expert in the area of corporate
appraisals within the meaning of Title 12 of the Code of Federal
Regulations, Section 563b.7(f)(1)(i), (ii) stating in effect that the
Appraisal prepared by such firm complies in all material respects with
the applicable requirements of Title 12 of the Code of Federal
Regulations, and (iii) further stating that their opinion of the
aggregate pro forma market
36
value of the Company and the Association expressed in their
Appraisal dated as of December __, 1996, and most recently updated,
remains in effect.
(j) The Company and the Association shall not have sustained since the
date of the latest financial statements included in the Prospectus
any material loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental
action, order or decree, otherwise than as set forth or contemplated
in the Registration Statement and Prospectus and since the
respective dates as of which information is given in the
Registration Statement and Prospectus, there shall not have been any
change in the long-term debt of the Company or the Association other
than debt incurred in relation to the purchase of Shares by the
Association's Eligible Plans, or any change, or any development
involving a prospective change, in or affecting the general affairs,
management, financial position, stockholders' equity or results of
operations of the Company or the Association, otherwise than as set
forth or contemplated in the Registration Statement and Prospectus,
the effect of which, in any such case described above, is in ▇▇▇▇'▇
reasonable judgment sufficiently material and adverse as to make it
impracticable or inadvisable to proceed with the Subscription
Offering or the delivery of the Shares on the terms and in the
manner contemplated in the Prospectus.
(k) At or prior to the Closing Date, the Agent shall receive: (i) a copy
of the letters from the OTS and the OFI approving the Conversion
Application and authorizing the use of the Prospectus; (ii) a copy of
the order from the Commission declaring the Registration Statement
effective; (iii) a certificate from the OFI evidencing the existence
of the Association; (iv) certificate of good standing from the State
of Louisiana evidencing the good standing of the Company; (v) a
certificate from the FDIC evidencing the Association's insurance of
accounts; (vi) a certificate of the FHLB-Dallas evidencing the
Association's membership thereof; (vii) a copy of the letter from the
OTS approving the Company's Holding Company Application; and (viii) a
copy of the Association's Louisiana stock charter.
(l) Subsequent to the date hereof, there shall not have occurred any of
the following: (i) a suspension or limitation in trading in
securities generally on the New York Stock Exchange or in the
over-the-counter market, or quotations halted
37
generally on the Nasdaq Stock Market, or minimum or maximum
prices for trading have been fixed, or maximum ranges for prices
for securities have been required by either of such exchanges or
the NASD or by order of the Commission or any other governmental
authority; (ii) a general moratorium on the operations of
commercial banks, Louisiana savings institutions or federal
savings institutions or a general moratorium on the withdrawal
of deposits from commercial banks, Louisiana savings
institutions or federal savings institutions declared by federal
or state authorities; (iii) the engagement by the United States
in hostilities which have resulted in the declaration, on or
after the date hereof, of a national emergency or war; or (iv) a
material decline in the price of equity or debt securities if
the effect of such a declaration or decline, in the Agent's
reasonable judgement, makes it impracticable or inadvisable to
proceed with the Offering or the delivery of the shares on the
terms and in the manner contemplated in the Registration Statement
and the Prospectus.
(m) At or prior to the Closing Date, counsel to the Agent shall have
been furnished with such documents and opinions as they may
reasonably require for the purpose of enabling them to pass upon
the sale of the Shares as herein contemplated and related
proceedings or in order to evidence the occurrence or completeness
of any of the representations or warranties, or the fulfillment of
any of the conditions, herein contained; and all proceedings taken
by the Company or the Association in connection with the
Conversion and the sale of the Shares as herein contemplated shall
be satisfactory in form and substance to ▇▇▇▇ and its counsel.
Section 8. Indemnification.
(a) The Company and the Association jointly and severally agree to
indemnify and hold harmless the Agent, its respective officers and
directors, employees and agents, and each person, if any, who
controls the Agent within the meaning of Section 15 of the 1933
Act or Section 20(a) of the 1934 Act, against any and all loss,
liability, claim, damage or expense whatsoever (including but not
limited to settlement expenses), joint or several, that the Agent
or any of them may suffer or to which the Agent and any such
persons may become subject under all applicable federal or state
laws or otherwise, and to promptly reimburse the Agent and any
such persons upon
38
written demand for any expense (including reasonable fees and
disbursements of counsel) incurred by the Agent or any of them in
connection with investigating, preparing or defending any actions,
proceedings or claims (whether commenced or threatened) to the
extent such losses, claims, damages, liabilities or actions: (i)
arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact contained in the Registration
Statement (or any amendment or supplement thereto), preliminary or
final Prospectus (or any amendment or supplement thereto), the
Conversion Application (or any amendment or supplement thereto),
the Holding Company Application or any instrument or document
executed by the Company or the Association or based upon written
information supplied by the Company or the Association filed in
any state or jurisdiction to register or qualify any or all of the
Shares or to claim an exemption therefrom, or provided to any
state or jurisdiction to exempt the Company as a broker-dealer or
its officers, directors and employees as broker-dealers or agent,
under the securities laws thereof (collectively, the "Blue Sky
Application"), or any document, advertisement, oral statement or
communication ("Sales Information") prepared, made or executed by
or on behalf of the Company or the Association with their consent
or based upon written or oral information furnished by or on
behalf of the Company or the Association, whether or not filed in
any jurisdiction, in order to qualify or register the Shares or to
claim an exemption therefrom under the securities laws thereof;
(ii) arise out of or are based upon the omission or alleged
omission to state in any of the foregoing documents or
information, a material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; or (iii)
arise from any theory of liability whatsoever relating to or
arising from or based upon the Registration Statement (or any
amendment or supplement thereto), preliminary or final Prospectus
(or any amendment or supplement thereto), the Conversion
Application (or any amendment or supplement thereto), any Blue Sky
Application or Sales Information or other documentation
distributed in connection with the Conversion; provided, however,
that no indemnification is
39
required under this paragraph (a) to the extent such losses, claims,
damages, liabilities or actions arise out of or are based upon any
untrue material statement or alleged untrue material statement in,
or material omission or alleged material omission from, the
Registration Statement (or any amendment or supplement thereto),
preliminary or final Prospectus (or any amendment or supplement
thereto), the Conversion Application, any Blue Sky Application or
Sales Information made in reliance upon and in conformity with
information furnished in writing to the Company or the Association
by the Agent or its counsel regarding the Agent provided, that it
is agreed and understood that the only information furnished in
writing to the Company or the Association by the Agent regarding
the Agent is set forth in the Prospectus under the caption "The
Conversion--Marketing Arrangements"; and, provided further, that
such indemnification shall be to the extent permitted by the
Commissioner, the OTS, the OFI, the FDIC and the Board of
Governors of the Federal Reserve.
(b) The Agent agrees to indemnify and hold harmless the Company and
the Association, their directors and officers and each person, if
any, who controls the Company or the Association within the
meaning of Section 15 of the 1933 Act or Section 20(a) of the 1934
Act against any and all loss, liability, claim, damage or expense
whatsoever (including but not limited to settlement expenses),
joint or several, which they, or any of them, may suffer or to
which they, or any of them may become subject under all applicable
federal and state laws or otherwise, and to promptly reimburse the
Company, the Association, and any such persons upon written demand
for any expenses (including reasonable fees and disbursements of
counsel) incurred by them, or any of them, in connection with
investigating, preparing or defending any actions, proceedings or
claims (whether commenced or threatened) to the extent such
losses, claims, damages, liabilities or actions: (i) arise out of
or are based upon any untrue statement or alleged untrue statement
of a material fact contained in the Registration Statement (or any
amendment or supplement thereto), the Conversion Application (or
any amendment or supplement thereto), the preliminary or final
Prospectus (or any amendment or supplement
40
thereto), any Blue Sky Application or Sales Information, (ii) are
based upon the omission or alleged omission to state in any of the
foregoing documents a material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or (iii)
arise from any theory of liability whatsoever relating to or
arising from or based upon the Registration Statement (or any
amendment or supplement thereto), preliminary or final Prospectus
(or any amendment or supplement thereto), the Conversion
Application (or any amendment or supplement thereto), or any Blue
Sky Application or Sales Information or other documentation
distributed in connection with the Conversion; provided, however,
that the Agent's obligations under this Section 8(b) shall exist
only if and only to the extent (i) that such untrue statement or
alleged untrue statement was made in, or such material fact or
alleged material fact was omitted from, the Registration Statement
(or any amendment or supplement thereto), the preliminary or final
Prospectus (or any amendment or supplement thereto), the
Conversion Application (or any amendment or supplement thereto),
any Blue Sky Application or Sales Information in reliance upon and
in conformity with information furnished in writing to the Company
or the Association by the Agent or its counsel regarding the
Agent. Provided, that it is agreed and understood that the only
information furnished in writing to the Company or the Association
by the Agent regarding the Agent is set forth in the Prospectus
under the caption "The Conversion--Marketing Arrangements".
(c) Each indemnified party shall give prompt written notice to each
indemnifying party of any action, proceeding, claim (whether
commenced or threatened), or suit instituted against it in
respect of which indemnity may be sought hereunder, but failure
to so notify an indemnifying party shall not relieve it from any
liability which it may have on account of this Section 8 or
otherwise. An indemnifying party may participate at its own
expense in the defense of such action. In addition, if it so
elects within a reasonable time after receipt of such notice, an
indemnifying party, jointly with any other indemnifying parties
receiving such notice,
41
may assume defense of such action with counsel chosen by it and
approved by the indemnified parties that are defendants in such
action, unless such indemnified parties reasonably object to such
assumption on the ground that there may be legal defenses available
to them that are different from or in addition to those available to
such indemnifying party. If an indemnifying party assumes the
defense of such action, the indemnifying parties shall not be liable
for any fees and expenses of counsel for the indemnified parties
incurred thereafter in connection with such action, proceeding or
claim, other than reasonable costs of investigation. In no event
shall the indemnifying parties be liable for the fees and expenses
of more than one separate firm of attorneys (and any special
counsel that said firm may retain) for each indemnified party in
connection with any one action, proceeding or claim or separate
but similar or related actions, proceedings or claims in the same
jurisdiction arising out of the same general allegations or
circumstances.
(d) The agreements contained in this Section 8 and in Section 9
hereof and the representations and warranties of the Company and
the Association set forth in this Agreement shall remain
operative and in full force and effect regardless of: (i) any
investigation made by or on behalf of agent or their officers,
directors or controlling persons, agent or employees or by or on
behalf of the Company or the Association or any officers,
directors or controlling persons, agent or employees of the
Company or the Association; (ii) delivery of and payment
hereunder for the Shares; or (iii) any termination of this
Agreement.
Section 9. Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnification provided for in
Section 8 is due in accordance with its terms but is for any reason held by a
court to be unavailable from the Company, the Association or the Agent, the
Company, the Association and the Agent shall contribute to the aggregate
losses, claims, damages and liabilities (including any investigation, legal
and other expenses incurred in connection with, and any amount paid in
settlement of, any action, suit or proceeding of any claims asserted, but
after deducting any contribution received by the Company, the Association or
the Agent from persons other than the other party thereto, who may also be
liable for contribution) in such proportion so that the Agent is responsible
for that portion represented by the percentage that the fees paid to the
Agent pursuant to Section 2 of this Agreement (not including expenses)
42
bears to the gross proceeds received by the Company from the sale of the
Shares in the Offering, and the Company and the Association shall be
responsible for the balance. If, however, the allocation provided above is
not permitted by applicable law or if the indemnified party failed to give
the notice required under Section 8 above, then each indemnifying party shall
contribute to such amount paid or payable by such indemnified party in such
proportion as is appropriate to reflect not only such relative fault of the
Company and the Association on the one hand and the Agent on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities (or actions, proceedings or claims in respect
thereto), but also the relative benefits received by the Company and the
Association on the one hand and the Agent on the other from the Offering
(before deducting expenses). The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company and/or the
Association on the one hand or the Agent on the other and the parties'
relative intent, good faith, knowledge, access to information and opportunity
to correct or prevent such statement or omission. The Company, the
Association and the Agent agree that it would not be just and equitable if
contribution pursuant to this Section 9 were determined by pro-rata
allocation or by any other method of allocation which does not take into
account the equitable considerations referred to above in this Section 9.
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions, proceedings or claims in respect
thereof) referred to above in this Section 9 shall be deemed to include any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action, proceeding or
claim. It is expressly agreed that the Agent shall not be liable for any
loss, liability, claim, damage or expense or be required to contribute any
amount which in the aggregate exceeds the amount paid (excluding reimbursable
expenses) to the Agent under this Agreement. It is understood that the above
stated limitation on the Agent's liability is essential to the Agent and that
the Agent would not have entered into this Agreement if such limitation had
not been agreed to by the parties to this Agreement. No person found guilty
of any fraudulent misrepresentation (within the meaning of Section 11(f) of
the ▇▇▇▇ ▇▇▇) shall be entitled to contribution from any person who was not
found guilty of such fraudulent misrepresentation. The obligations of the
Company and the Association under this Section 9 and under Section 8 shall be
in addition to any liability which the Company and the Association may
otherwise have. For purposes of this Section 9, each of the Agent's, the
Company's or the Association's officers and directors and each person, if
any, who controls the Agent or the Company or the Association within the
meaning of the 1933 Act and the 1934 Act shall have the same rights to
contribution as the Agent, the Company or the Association. Any party
entitled to contribution, promptly after receipt of notice of commencement of
any action, suit, claim or proceeding against such party in respect of which
a claim for contribution may be made against another party under this
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Section 9, will notify such party from whom contribution may be sought, but
the omission to so notify such party shall not relieve the party from whom
contribution may be sought from any other obligation it may have hereunder or
otherwise than under this Section 9.
Section 10. Survival of Agreements, Representations and Indemnities.
The respective indemnities of the Company, the Association and the Agent and
the representations and warranties and other statements of the Company, the
Association and the Agent set forth in or made pursuant to this Agreement
shall remain in full force and effect, regardless of any termination or
cancellation of this Agreement or any investigation made by or on behalf of
the Agent, the Company, the Association or any controlling person referred to
in Section 8 hereof, and shall survive the issuance of the Shares, and any
successor or assign of the Agent, the Company, the Association, and any such
controlling person shall be entitled to the benefit of the respective
agreements, indemnities, warranties and representations.
Section 11. Termination. The Agent may terminate this Agreement by
giving the notice indicated below in this Section 11 at any time after this
Agreement becomes effective as follows:
(a) In the event the Company fails to sell the required minimum
number of the Shares by December 31, 1997, and in accordance with
the provisions of the Plan or as required by the Conversion
Regulations, and applicable law, this Agreement shall terminate
upon refund by the Company to each person who has subscribed for
or ordered any of the Shares the full amount which it may have
received from such person, together with interest as provided in
the Prospectus, and no party to this Agreement shall have any
obligation to the other hereunder, except for payment by the
Company and/or the Association as set forth in Sections 2(a), 6,
8 and 9 hereof.
(b) If any of the conditions specified in Section 7 shall not have
been fulfilled when and as required by this Agreement unless
waived in writing, or by the Closing Date, this Agreement and all
of the Agent's obligations hereunder may be cancelled by the
Agent by notifying the Company and the Association of such
cancellation in writing or by telegram at any time at or prior to
the Closing Date, and any such cancellation shall be without
liability of any party to any other party except as otherwise
provided in Sections 2(a), 6, 8 and 9 hereof.
44
(c) If the Agent elects to terminate this Agreement as provided in
this Section, the Company and the Association shall be notified
promptly by telephone or telegram, confirmed by letter.
The Company and the Association may terminate this Agreement in the event
the Agent is in material breach of the representations and warranties or
covenants contained in Section 5 and such breach has not been cured after the
Company and the Association have provided ▇▇▇▇ with notice of such breach.
This Agreement may also be terminated by mutual written consent of the
parties hereto.
Section 12. Notices. All communications hereunder, except as herein
otherwise specifically provided, shall be mailed in writing and if sent to
the Agent shall be mailed, delivered or telegraphed and confirmed to ▇▇▇▇▇▇▇
▇▇▇▇ & Company, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: ▇▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇ (with a copy to Silver, ▇▇▇▇▇▇▇▇ & Taff, L.L.P., Attention:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, P.C. and, if sent to the Company and the Association,
shall be mailed, delivered or telegraphed and confirmed to the Company and
the Association at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇, President (with a copy to Elias, Matz, ▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇, L.L.P., Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.).
Section 13. Parties. The Company and the Association shall be entitled
to act and rely on any request, notice, consent, waiver or agreement
purportedly given on behalf of the Agent when the same shall have been given
by the undersigned. The Agent shall be entitled to act and rely on any
request, notice, consent, waiver or agreement purportedly given on behalf of
the Company or the Association, when the same shall have been given by the
undersigned or any other officer of the Company or the Association. This
Agreement shall inure solely to the benefit of, and shall be binding upon,
the Agent, the Company, the Association, and their respective successors and
assigns, and no other person shall have or be construed to have any legal or
equitable right, remedy or claim under or in respect of or by virtue of this
Agreement or any provision herein contained. It is understood and agreed
that this Agreement is the exclusive agreement among the parties hereto, and
supersedes any prior agreement among the parties and may not be varied except
in writing signed by all the parties.
Section 14. Closing. The closing for the sale of the Shares shall take
place on the Closing Date at such location as mutually agreed upon by the
Agent and the Company and the Association. At the closing, the Company and
the Association shall deliver to the Agent in next day funds the commissions,
fees and expenses due and owing to the Agent as set forth in Sections 2 and 6
hereof and the opinions and certificates required hereby and other documents
deemed reasonably necessary by the Agent shall be executed and
45
delivered to effect the sale of the Shares as contemplated hereby and
pursuant to the terms of the Prospectus.
Section 15. Partial Invalidity. In the event that any term, provision
or covenant herein or the application thereof to any circumstance or
situation shall be invalid or unenforceable, in whole or in part, the
remainder hereof and the application of said term, provision or covenant to
any other circumstances or situation shall not be affected thereby, and each
term, provision or covenant herein shall be valid and enforceable to the full
extent permitted by law.
Section 16. Construction. This Agreement shall be construed in accordance
with the laws of the State of New York.
Section 17. Counterparts. This Agreement may be executed in separate
counterparts, each of which so executed and delivered shall be an original,
but all of which together shall constitute but one and the same instrument.
If the foregoing correctly sets forth the arrangement among the Company,
the Association and the Agent, please indicate acceptance thereof in the
space provided below for that purpose, whereupon this letter and the Agent's
acceptance shall constitute a binding agreement.
Section 18. Entire Agreement. This Agreement, including schedules and
exhibits hereto, which are integral parts hereof and incorporated as though
set forth in full, constitutes the entire agreement between the parties
pertaining to the subject matter hereof superseding any and all prior or
contemporaneous oral or prior written agreements, proposals, letters of
intent and understandings, and cannot be modified, changed, waived or
terminated except by a writing which expressly states that it is an
46
amendment, modification or waiver, refers to this Agreement and is signed by
the party to be charged. No course of conduct or dealing shall be construed
to modify, amend or otherwise affect any of the provisions hereof.
Very truly yours,
GS FINANCIAL CORP. GUARANTY SAVINGS AND HOMESTEAD
ASSOCIATION
By Its Authorized By Its Authorized
Representative: Representative:
---------------- ----------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
President President
Accepted as of the date first above written
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, Inc.
By Its Authorized
Representative:
--------------------
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Executive Vice President
47
