Exhibit 1.2
BRIDGE STREET FINANCIAL, INC.
Up to 1,917,625 Shares for sale
Up to 1,497,718 Exchange shares
(Anticipated Maximum)
COMMON STOCK
($.01 par value)
Subscription Price $10.00 Per Share
AGENCY AGREEMENT
November ________, 2002
Friedman, Billings, ▇▇▇▇▇▇ & Co., Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
The Primary Parties, e.g. Bridge Street Financial, Inc., a Delaware
corporation (the "Company"), Oswego County MHC, a federally-chartered mutual
holding company (the "MHC"), Oswego County Bancorp, Inc. a federally-chartered
corporation (the "Mid-Tier Company"), owning all of the common stock of Oswego
County Savings Bank and Oswego County Savings Bank, Oswego, New York, a New
York-chartered savings bank (the "Bank"), with its deposit accounts insured by
the Bank Insurance Fund ("BIF") administered by the Federal Deposit Insurance
Corporation ("FDIC"), hereby confirm their agreement with Friedman, Billings,
▇▇▇▇▇▇ & Co., Inc. (the "Agent") as follows (defined terms used herein shall
have the same definition given in the prospectus dated November ______, 2002,
unless otherwise defined herein):
Section 1. The Offering. Pursuant to an Amended Plan of Conversion and
Plan of Reorganization ("Plan" or "Plan of Conversion") adopted by the Boards of
Directors of the MHC, the Mid-Tier Holding Company and the Bank, the Bank
intends to reorganize into a fully converted stock holding Company
("Conversion"). In connection with the Conversion, each stockholder of the
Mid-Tier Company immediately prior to the Conversion ("Public Stockholders")
will receive shares ("Exchange Shares", and together with
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Exhibit 1.2
the Conversion Stock, defined below, the "Shares") of the Company's common
stock, par value $0.01 per share ("Common Stock") pursuant to an exchange ratio
as defined in the Plan that will result in Public Stockholders owning in the
aggregate immediately after the Conversion approximately the same percentage of
the outstanding shares of Common Stock, before giving effect to (a) the payment
of cash in lieu of any fractional shares; (b) any adjustment necessary to
reflect dividends waived by the MHC; and (c) the purchase by such stockholders
of additional shares of Common Stock in the Offering (as defined below).
Following the Conversion, the Bank will convert from a New York-chartered
savings bank to a national bank ("Bank Conversion").
Pursuant to the Plan of Conversion, the Company is offering up to
1,917,625 shares of its common stock (the "Conversion Stock") in a subscription
offering (the "Subscription Offering") and community offering (the "Direct
Community Offering", and together with the Subscription Offering, the
"Offerings"). Conversion Stock is first being offered in the Subscription
Offering with nontransferable subscription rights being granted, in the
following order of priority, to (i) current of former depositors with accounts
at (1) the Bank with aggregate balances of at least $50 on March 31, 2001 and
(2) the Oswego County Savings Bank P&C Food Market branch (acquired from BSB
Bank & Trust Co.) with aggregate balances of at least $50 on May 10, 2001
("Eligible Account Holders"); (ii) depositors of the Bank with account balances
of $50.00 or more as of the close of business on September 30, 2002
("Supplemental Eligible Account Holders") and (iii) depositors of the Bank as of
the close of business on _______________, 2002 (other than Eligible Account
Holders and Supplemental Eligible Account Holders). Subscription rights will
expire if not exercised by 12:00 noon, New York time, on December ___________,
2002, unless extended (the "Expiration Date").
Subject to the prior rights of holders of subscription rights,
Conversion Stock not subscribed for in the Subscription Offering is being
offered in the Direct Community Offering to certain members of the general
public to whom a copy of the Prospectus is delivered, with preference given to
natural persons residing in the New York Counties of Oswego and Onondaga (the
"Community"). The Primary Parties reserve the absolute right to reject or accept
any orders in the Community Offering in whole or in part, either at the time of
receipt of an order or as soon as practicable following the Expiration Date.
The Company has filed with the Securities and Exchange Commission (the
"SEC") a registration statement on Form S-1 (File No. 333-99347) (the
"Registration Statement") containing a prospectus relating to the Offerings for
the registration of the Shares under the Securities Act of 1933, as amended (the
"1933 Act"), and has filed such amendments thereof, if any, and such amended
prospectuses as may have been required to the date hereof. The
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Exhibit 1.2
prospectus, as amended, on file with the SEC 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 SEC 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 SEC.
In accordance with title 12, Parts 575 and 563b of the regulations of
the Office of Thrift Supervision ("OTS") governing the conversions of savings
associations (the "Conversion Regulations"), the MHC has filed with the OTS an
Application for Conversion on Form AC (the "Conversion Application"), including
the Prospectus, and has filed such amendments thereto, if any, as may have been
required to the date hereof by the OTS. The Company has also filed an
application to acquire the Bank on Form H-(e) 1-S, and thereby become a savings
and loan holding company (the "Holding Company"). In connection with the H-(e)
1-S, the Company has also filed applications to form three interim federal
savings banks. The Conversion Application has been approved by the OTS and the
related Prospectus has been authorized for use by the OTS.
The Bank has filed an Interagency Bank Merger Act Application (the
"Bank Merger Application") with the Federal Deposit Insurance Corporation
("FDIC") and it has been approved by the FDIC; The Company has filed with the
Board of Governors of the Federal Reserve System ("Board") the Company's
application to acquire ownership of the Bank on Form FRY-3 ("Holding Company
Application") and has received approval of its acquisition of the Bank from the
Board. The Bank has filed an Application for Conversion to a National Bank (the
"Bank Conversion Application") with the Office of the Comptroller of the
Currency ("OCC") and it has been approved by the OCC. The Bank has filed an
application to merge (the "New York Application") with the New York State
Banking Department (the "NYSBD") and it has been approved by the NYSBD.
Section 2. Retention of the Agent; Compensation; Sale and Delivery of
the Shares. Subject to the terms and conditions herein set forth, the Primary
Parties hereby appoint the Agent as their financial advisor and marketing agent
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 Bank with respect to
the Company's sale of the Shares in the Offerings.
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 Primary
Parties as to the matters set forth in the letter agreement ("Letter
Agreement"), dated June 6, 2002, between the Bank and the Agent (a copy of
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Exhibit 1.2
which is attached hereto as Exhibit A). It is acknowledged by the Primary
Parties that the Agent shall not be required to purchase any Shares and shall
not be obligated to take any action that is inconsistent with all applicable
laws, regulations, decisions or orders. In the event of a Community Offering,
the Agent will assemble and manage a selling group of broker-dealers which are
members of the National Association of Securities Dealers, Inc. (the "NASD") to
participate in the solicitation of purchase orders for shares under a selected
dealers' agreement ("Selected Dealers' Agreement"), the form of which is set
forth as Exhibit B to this Agreement.
The obligations of the Agent pursuant to this Agreement shall terminate
upon the completion or termination or abandonment of the Plan by the Company or
upon termination of the Offerings, 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 Offerings are extended beyond the End Date, the Primary Parties 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 1,232,500
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 Offerings are 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 (b)
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
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 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 Primary Parties and the Agent (it being understood that
such date shall not be more than ten business days after termination of the
Offering) or such other time or place as shall be agreed upon by the Primary
Parties and the Agent. Certificates for shares shall be delivered directly to
the purchasers in accordance with
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Exhibit 1.2
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 to the Agent in the amount of $25,000, of
which $12,500 has been paid and of which $12,500 will be paid
upon OTS approval of the Conversion Application. Such fees
shall be deemed to be 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
point the termination occurred, including any accrued legal
fees expended by the Agent.
(b) A fixed marketing fee of $175,000 (excluding expenses) which
shall be paid provided that the Conversion is consummated. The
management fee of $25,000 will be subtracted from the
marketing fee.
(c) The foregoing fixed marketing fee shall be paid to Agent at
closing in addition to the allocable expenses described below.
(d) The decision to utilize other selected Broker-Dealers will be
made jointly by the Agent and the Bank. Selected
broker-dealers who assist in the subscription or purchase,
excluding those shares purchased by the Bank's officers,
directors or employees, tax-qualified or stock based
compensation plans (except IRA's) or similar plan created by
the Bank for some or all of its directors or employees or by
member depositors in the original subscription phase of the
offering, will be paid a fee not to exceed 4% of the aggregate
purchase price of the shares of common stock sold by them in
the Subscription and/or Community Offerings. The Agent's fee
for such shares shall equal 1.5% of the aggregate purchase
price of the shares of common stock sold by selected
broker-dealers in the Subscription and/or Community Offering.
Fees with respect to subscriptions or purchases effected with
the assistance of Registered Representatives employed by a
Broker/Dealer other than the Agent shall be paid to the Agent
at Closing and then transmitted by the Agent to such
Broker/Dealer.
(e) The Bank and the Company hereby agree to reimburse the Agent,
from time to time upon the Agent's request, for its reasonable
allocable expenses, including without limitation, accounting,
communication, travel expenses, and legal fees
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Exhibit 1.2
and expenses,whether or not the Conversion is consummated.
Agent agrees to notify the Company if allocable expenses
requiring reimbursement exceed $15,000 (excluding fees of
Agent's counsel of $40,000). The Company will bear the expenses
of the Offerings customarily borne by issuers including,
without limitation, OTS, SEC, NYSBD, the OCC, "Blue Sky," and
NASD filing and registration fees; the fees of the Mid-Tier
Company's accountants, conversion agent, data processor,
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 the Agent's actual fees described as above compensation
shall be made in next day funds on the earlier of the Closing Date or a
determination by the Bank to terminate or abandon the Plan.
In the event of an oversubscription or other event, which causes the
Offerings to continue beyond the original expiration date or a resolicitation of
subscribers, the parties agree to renegotiate the expense cap on legal fees
applicable to the Agent.
Section 3. Prospectus; Offering. The Shares are to be initially offered
in the Offerings at the purchase price as defined and set forth on the cover
page of the Prospectus.
Section 4. Representations and Warranties. The Primary Parties jointly
and severally represent and warrant to the Agent on the date hereof as follows:
(a) The Registration Statement was declared effective by the
SEC on November ___, 2002. At the time the Registration Statement,
including the Prospectus contained therein (including any amendment or
supplement thereto), became effective, the Registration Statement
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 Bank
contained in Sales Information (as such term is defined in Section 8
hereof) authorized by the Company or the Bank for use in connection
with the Offerings, did not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading, and at the time any Rule
424(b) or (c) Prospectus was filed with the SEC and at the Closing Date
referred to in Section 2, the Registration Statement, including the
Prospectus contained therein (including any amendment or supplement
thereto), any
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Exhibit 1.2
information regarding the Company or the Bank contained in Sales
Information (as such term is defined in Section 8 hereof) authorized by
the Company or the Bank for use in connection with the Offerings will
not contain an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading;
provided, however, that the representations and warranties in this
Section 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 Bank by the Agent expressly regarding the Agent for
use in the Prospectus under the caption "The Conversion-Marketing
Arrangements" 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 was approved by the OTS on
November __, 2002, and the related Prospectus has been authorized for
use by the OTS. At the time of the approval of the Conversion
Application, including the Prospectus (including any amendment or
supplement thereto), by the OTS 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. 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; 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 Primary Parties by the Agent
expressly regarding the Agent for use in the Prospectus contained in
the Conversion Application under the caption "The Conversion and Stock
Offering-Marketing Arrangements" 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.
(c) the Holding Company Application has been prepared by the
Company in material conformity with the requirements of the OTS and has
been approved by the OTS. A conformed copy of the Holding Company
Application has been delivered to the Agent and its counsel, receipt of
which is hereby acknowledged by the Agent.
(d) The Bank Merger Application was approved by the FDIC on
November ____, 2002. At the time of the approval of the Bank Merger
Application (including any amendment or supplement thereto) by the FDIC
and at all times subsequent thereto until the Closing Date, the Bank
Merger Application (including any amendment or supplement thereto) will
comply in all material respects with applicable FDIC regulations except
to the extent waived in writing by the FDIC. The Bank Merger
Application (including any amendment or supplement thereto) does not
include any untrue statement of a material fact or omit to
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Exhibit 1.2
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; provided, however, that the
representations and warranties in this Section 4(c) shall not apply to
statements or omissions made in reliance upon and in conformity with
written information furnished to the Primary Parties by the Agent
expressly regarding the Agent for use in the Prospectus contained in
the Bank Merger Application under the caption "The Conversion and Stock
Offering-Marketing Arrangements" 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.
(e) The Bank Holding Company Application on Form FRY-3 was
approved by the Board on _____________, 2002. At the time of the
approval of the Bank Holding Company Application (including any
amendment or supplement thereto) by the Board and at all times
subsequent thereto until the Closing Date, the Bank Holding Company
Application will comply in all material respects with applicable Board
regulations except to the extent waived by the Board.
(f) The Bank Conversion Application was approved by the OCC on
November __, 2002. At the time of the approval of the Bank Conversion
Application (including any amendment or supplement thereto) by the OCC
and at all times subsequent thereto until the Closing Date, the Bank
Conversion Application (including any amendment or supplement thereto)
will comply in all material respects with applicable OCC regulations
except to the extent waived by the OCC. The Bank Conversion Application
(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; provided, however, that the representations and warranties
in this Section 4(e) shall not apply to statements or omissions made in
reliance upon and in conformity with written information furnished to
the Primary Parties by the Agent 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.
(g) The New York Application was approved by the NYSBD on
November ____, 2002. At the time of the approval of the New York
Application (including any amendment or supplement thereto) by the
NYSBD and at all times subsequent thereto until the Closing Date, the
New York Application (including any amendment or supplement thereto)
will comply in all material respects with applicable NYSBD regulations
except to the extent waived by the NYSBD. The New York Application
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Exhibit 1.2
(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.
(h) No order has been issued by the SEC or the OTS 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 pending or to the best
knowledge of the Primary Parties, threatened.
(i) The Plan has been adopted by the Boards of Directors of
the Primary Parties and at the Closing Date referred to in Section 2
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 Primary Parties by the
OTS, the SEC, the FDIC 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, the FDIC, the Board and the OCC
in approving or taking no objection to the Plan or in approving or
taking no objection to the Conversion or the Holding Company
Application, the Bank Merger Application, the Bank Conversion
Application or the New York Application pursuant to the Conversion
Regulations or any other statute or regulation.
(j) The Bank has been organized and is a validly existing New
York chartered savings bank in stock form of organization and upon the
Conversion will be organized and will be validly existing as a national
bank, is duly authorized to conduct its business and own its property
as described in the Registration Statement and the Prospectus; the Bank
has obtained all material licenses, permits and other governmental
authorizations currently required for the conduct of its business;
except those that individually or in the aggregate would not materially
adversely affect the financial condition, earnings, capital, assets,
prospects or business of the Primary Parties, taken as a whole, all
such licenses, permits and governmental authorizations are in full
force and effect, and the Bank is in compliance with all material
laws, rules, regulations and orders applicable to the operation of its
business; the Bank is existing under the laws of the State of New York
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 Bank. The Bank does not own
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Exhibit 1.2
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 Bank. Upon completion of the sale by
the Company of the Shares contemplated by the Prospectus, (i) all of
the authorized and outstanding capital stock of the Bank will be owned
by the Company, and (ii) the Company will have no direct subsidiaries
other than the Bank. At the Closing Date, 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'
letters of approval or no objection taken, the FDIC's letters of
approval or no objection taken, and the NYSBD's letters of approval or
no objections taken all terms, conditions, requirements and provisions
with respect to the Conversion (except those that are conditions
subsequent) imposed by the SEC, the OTS, the FDIC, or the NYSBD if
any, will have been complied with by the Company, the MHC and the Bank
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.
(k) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware 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 the Company is 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.
(l) The MHC has been duly organized and is a validly existing
federally chartered mutual holding company, 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 the MHC is 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 MHC. The MHC has obtained all
material licenses, permits and other governmental
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Exhibit 1.2
authorizations currently required for the conduct of its business; all
such licenses, permits and governmental authorizations are in full
force and effect, and the MHC is in all material respects complying
with all laws, rules, regulations and orders applicable to the
operation of its business.
(m) The Mid-Tier Company has been duly organized and is a
validly existing federally chartered mutual holding company subsidiary,
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 the Mid-Tier Company is 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 Mid-Tier Company. The Mid-Tier 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 Mid-Tier Company is in all material respects complying with all
laws, rules, regulations and orders applicable to the operation of its
business.
(n) The Bank is a member of the Federal Home Loan Bank of New
York ("FHLB-New York"). The deposit accounts of the Bank 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 Primary Parties, threatened. Upon consummation of the
Conversion, the liquidation account for the benefit of Eligible Account
Holders and Supplemental Eligible Account Holders will be duly
established in accordance with the requirements of the Conversion
Regulations.
(o) The Primary Parties have good and marketable title to all
real property and other assets material to the business of the Primary
Parties 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 Primary Parties taken as a whole; and
all of the leases and subleases material to the business of the Primary
Parties under which the Primary Parties hold properties, including
those described in the Registration Statement and Prospectus, are in
full force and effect.
(p) The Primary Parties have received an opinion of their
special counsel, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇ ("▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇"), with
respect to the federal income tax consequences of the Conversion of the
MHC from mutual to stock form, and the sale of
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Exhibit 1.2
the Shares as described in the Registration Statement and the
Prospectus, and an opinion from KPMG LLP ("KPMG LLP") with respect to
the New York state income tax consequences of the proposed transaction;
all material aspects of the opinions of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and KPMG LLP
are accurately summarized in the Prospectus; and the facts and
representations upon which such opinions are based are truthful,
accurate and complete.
(q) The Primary Parties 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 Bank.
(r) The Primary Parties are not in violation of any directive
received from the OTS, the NYSBD, 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, the NYSBD and the FDIC) and, except
as 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
nowledge of the Primary Parties, 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 Primary Parties,
or which would materially affect their properties and assets.
(s) The financial statements which are included in the
Prospectus fairly present the financial condition, results of
operations, equity and cash flows of the Mid-Tier Company at the
respective dates thereof and for the respective periods covered thereby
and comply as to form in all material respects with the applicable
accounting requirements of Titles 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 have been prepared in accordance with accounting
principles generally accepted in the United States of America
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 Bank and the Mid-Tier Company with the OTS and the
SEC, except that accounting principles employed in such regulatory
filings conform to the requirements of such authorities and not
necessarily to generally accepted accounting principles. The
12
Exhibit 1.2
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 Mid-Tier Company included in the Prospectus, and as
to the pro forma adjustments, the adjustments made therein have been
properly applied on the basis described therein.
(t) 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 Primary Parties or in the earnings, capital or
properties of the Primary Parties, whether or not arising in the
ordinary course of business; (ii) there has not been any material
increase in the long-term debt of the Bank 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 surplus and reserves or total assets of the Primary Parties nor have
the Primary Parties issued any securities 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
Primary Parties, except with respect to those transactions entered into
in the ordinary course of business; (iv) the capitalization,
liabilities, assets, properties and business of the Primary Parties
conform in all material respects to the descriptions thereof contained
in the Prospectus; and (v) none of the Primary Parties has any material
contingent liabilities, except as set forth in the Prospectus.
(u) As of the date hereof and as of the Closing Date, none of
the Primary Parties is in violation of its certificate of incorporation
or bylaws, charter or bylaws or organizational certificate or bylaws,
as applicable, or 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 and the Bank 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
Primary Parties and this Agreement has been validly executed and
delivered by the Primary Parties and is the valid, legal and binding
Agreement of the Primary Parties 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 New York savings institutions and their holding
companies, (ii) general equitable principles, (iii) laws relating to
the safety and soundness
13
Exhibit 1.2
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, the
certificate of incorporation and bylaws of the Company, the charters
and bylaws of the Mid-Tier Company or the MHC (in either mutual or
capital stock form) or the organizational certificate and bylaws of the
Bank, or any material contract, lease or other instrument to which the
Primary Parties has a beneficial interest, or any applicable law, rule,
regulation or order; (ii) violate any authorization, approval,
judgment, decree, order, statute, rule or regulation applicable to the
Primary Parties, except for such violations which would not have a
material adverse effect on the financial condition and results of
operations of the Primary Parties, 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 Primary Parties.
(v) 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 Primary Parties, in the due performance and observance of
any term, covenant or condition of any indenture, mortgage, deed of
trust, note, bank loan or credit agreement or any other instrument or
agreement to which the Primary Parties 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 effect on the financial
condition or results of operations of the Primary Parties 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 Primary Parties, threatened any action or proceeding
wherein the Primary Parties would or might be alleged to be in default
thereunder under circumstances where such action or proceeding, if
determined adversely to the Primary Parties, would have a material
adverse effect on the Primary Parties, on a consolidated basis.
(w) 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";
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, or exchanged as calculated as set forth
in the Plan and in the Prospectus, will be duly and validly issued,
fully paid and non-assessable; no preemptive rights exist with respect
to the Shares; and the terms and provisions of the
14
Exhibit 1.2
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 Primary Parties, 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.
(x) 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 or non-objection, as applicable, of the SEC, the OTS, the
FDIC, the NYSBD, the Board 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 SmallCap Market.
(y) KPMG LLP, which has certified the financial statements of
the Mid-Tier Company included in the Prospectus as of December 31, 2001
and 2000 and for each of the years in the three year period ended
December 31, 2001, has advised the Primary Parties in writing that they
are, with respect to the Primary Parties, independent public
accountants within the meaning of the Code of Professional Ethics of
the American Institute of Certified Public Accountants and the
applicable regulations of the SEC and the OTS.
(z) RP Financial, LC., which has prepared the MHC's
Independent Appraisal Report as of August 23, 2002 (as amended or
supplemented, if so amended or supplemented) (the "Appraisal"), has
advised the Company in writing that it is independent of the Primary
Parties within the meaning of the Conversion Regulations.
(aa) The Primary Parties have timely filed all required
federal, state and local tax returns; the Primary Parties 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.
(bb) The Bank is in compliance in all material respects with
the applicable financial recordkeeping and reporting requirements of
the Currency and Foreign Transactions Reporting Act of 1970, as
amended, and the regulations and rules thereunder.
15
Exhibit 1.2
(cc) To the knowledge of the Primary Parties, neither the
Primary Parties nor employees of the Primary Parties have made any
payment of funds of the Primary Parties 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.
(dd) None of the Primary Parties has: (i) issued any
securities within the last 18 months (except for (a) 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,
(b) shares issued in connection with the incorporation of the Mid-Tier
Company, and (c) shares issued in connection with the exercise of stock
options under the Mid-Tier Company's existing stock option plan); (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
except for the Letter Agreement set forth in Exhibit A; and (iv)
engaged any intermediary between the Agent and the Company, the MHC and
the Bank in connection with the offering of the Shares, and no person
is being compensated in any manner for such service.
(ee) The Primary Parties have not relied upon the Agent or the
Agent's counsel for any legal, tax or accounting advice in connection
with the Conversion.
(ff) The Company is not required to be registered under the
Investment Company Act of 1940, as amended.
(gg) The Mid-Tier Company and the Bank maintain a system of
internal accounting controls sufficient to provide reasonable assurance
that (a) transactions are executed in accordance with management's
general or specific authorizations; (b) transactions are recorded as
necessary to permit preparation of financial statements in conformity
with generally accepted accounting principles and to maintain asset
accountability; (c) access to assets is permitted only on accordance
with management's general or specific authorization; and (d) the
recorded accountability for assets is
16
Exhibit 1.2
compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
(hh) The Mid-Tier Company and the Bank are in compliance in
all material respects with all presently applicable provisions of the
Employee Retirement Income Security Act of 1974, as amended, including
the regulations and published interpretations thereunder ("ERISA"); no
"reportable event" (as defined in ERISA) has occurred with respect to
any "pension plan" (as defined in ERISA) for which the Company or the
Bank, respectively, would have any liability; both the Company and the
Bank have not incurred and do not expect to incur liability under (i)
Title IV of ERISA with respect to termination of, or withdrawal from,
any "pension plan" or (ii) Sections 412 or 4971 of the Internal Revenue
Code of 1986, as amended, including the regulations and published
interpretations thereunder (the "Code"); and each "pension plan" for
which the Company and the Bank would have any liability that is
intended to be qualified has occurred, whether by action or by failure
to act, which would cause the loss of such qualification.
(ii) The Company and the Bank will take all actions necessary
to comply with the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 and the rules and
regulations promulgated thereunder as well as the corporate governance
rules that are in effect and may be adopted by any securities exchange
or market on which the Common Stock may from time to time be traded.
Any certificates signed by an officer of the Primary Parties pursuant
to the conditions of this Agreement and delivered to the Agent or its counsel
that refers to this Agreement shall be deemed to be a representation and
warranty by the Primary Parties to the Agent as to the matters covered thereby
with the same effect as if such representation and warranty were set forth
herein.
Section 5. Representations and Warranties of the Agent. The Agent
represents and warrants to the Primary Parties that:
(a) The Agent is a corporation and is validly existing in
good standing under the laws of the State of Delaware with
full power and authority to provide the services to be
furnished to the Bank, the MHC and the Company hereunder.
(b) The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been
duly and validly authorized by all necessary action on the
part of the Agent, and this Agreement has been duly and
17
Exhibit 1.2
validly executed and delivered by the Agent and is the legal,
valid and binding agreement of the Agent, enforceable in
accordance with its terms.
(c) Each of the Agent and its employees, agents 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, including appropriate licenses and the
Company's approvals in the various states in which securities
shall be offered.
(d) 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.
(e) 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.
(f) 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.
Section 5.1 Covenants of the Primary Parties. The Primary Parties
hereby jointly and severally covenant with the Agent as follows:
(a) The Company has filed the Registration Statement with the
SEC. 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 MHC has filed the Conversion Application with the OTS.
The MHC will not, at any time after the Conversion Application is
approved by the OTS, file any
18
Exhibit 1.2
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 Bank has filed the Bank Merger Application with the
FDIC. The Bank will not, at any time after the Bank Merger Application
is approved by the FDIC, file any amendment or supplement to such Bank
Merger 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.
(d) The Company has filed the Holding Company Application with
the Board. The Company will not, at any time after the Holding Company
Application is approved by the Board, file any amendment or supplement
to such Holding Company 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.
(e) The Bank has filed the Bank Conversion Application with
the OCC. The Bank will not, at any time after the Bank Conversion
Application is approved by the OCC, file any amendment or supplement to
such Bank 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.
(f) The Bank has filed the New York Application with the
NYSBD. The Bank will not, at any time after the New York Application is
approved by the NYSBD, file any amendment or supplement to such New
York 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.
(g) The Company, the MHC and the Bank will use their best
efforts to cause any post-effective amendment to the Registration
Statement to be declared effective by the SEC, any post-effective
amendment to the Conversion Application to be approved by the OTS, any
post-effective amendment to the Holding Company Application to be
approved by the Board, any post-effective amendment to the Bank Merger
Application to
19
Exhibit 1.2
be approved by the FDIC, any post-effective amendment to the Bank
Conversion Application to be approved by the OCC, and any
post-effective amendment to the New York Application to be approved by
the NYSBD 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; (iii)
when the Bank Merger Application, as amended, has been approved by the
FDIC; (iv) when the Holding Company Application, as amended, has been
approved by the Board; (v) when the Bank Conversion Application, as
amended, has been approved by the OCC; (vi) when the New York
Application has been approved by the NYSBD; (vii) of any comments from
the SEC, the OTS, the FDIC, the Board, the OCC or any other
governmental entity with respect to the Conversion or the transactions
contemplated by this Agreement; (viii) of the request by the SEC, the
OTS, the FDIC, the Board, the NYSBD, the OCC or any other governmental
entity for any amendment or supplement to the Registration Statement,
the Conversion Application, the Bank Merger Application, the Holding
Company Application, the Bank Conversion Application, the New York
Application, or for additional information; (ix) of the issuance by the
SEC, the OTS, the FDIC, the Board, the OCC, the NYSBD 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 other filing of the MHC, the Company or the Bank under the
Conversion Regulations, or other applicable law, or the threat of any
such action; (x) the issuance by the SEC, the OTS, the FDIC, the Board,
the OCC, the NYSBD or any state authority of any stop order suspending
the effectiveness of the Registration Statement or the approval of the
Conversion Application, the Bank Merger Application, the Holding
Company Application, the Bank Conversion Application, the New York
Application or of the initiation or threat of initiation or threat of
any proceedings for any such purpose; or (xi) of the occurrence of any
event mentioned in paragraph (i) below. The Company, the MHC and the
Bank will make every reasonable effort (i) to prevent the issuance by
the SEC, the OTS, the FDIC, the Board, the OCC, the NYSBD 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.
(h) The Primary Parties will deliver to the Agent and to its
counsel two conformed copies of the Registration Statement, Holding
Company Application, Bank Merger Application, Bank Conversion
Application, New York Application and the Conversion Application, as
originally filed and of each amendment or supplement thereto, including
all exhibits. Further, the Company, the MHC and the Bank will deliver
20
Exhibit 1.2
such additional copies of the foregoing documents to counsel to the
Agent as may be required for any NASD and blue sky filings.
(i) The Primary Parties 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, as amended (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.
(j) The Primary Parties 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
SEC, the OTS, the FDIC, the Board, the OCC, the NYSBD, the Conversion
Regulations, applicable FDIC, Board, OCC and NYSBD statutes and
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, the Company, the MHC and the Bank will comply, at their
own expense, with all material requirements imposed upon them by the
SEC, the OTS, the FDIC, the Board, the OCC, the NYSBD, the Conversion
Regulations, applicable FDIC, Board, OCC and NYSBD statutes and
regulations, 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 shares of Common Stock during such period in
accordance with the provisions hereof and the Prospectus.
(k) 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 Primary Parties shall occur, as a result of which
it is necessary or appropriate, in the opinion of counsel for the
Primary Parties 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 Bank will at their
expense, prepare and file with the SEC and the OTS and furnish to the
Agent a reasonable number of copies of an amendment or amendments of,
or a supplement or
21
Exhibit 1.2
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 Primary Parties each will timely furnish to the
Agent such information with respect to itself as the Agent may from
time to time reasonably request.
(l) The Primary Parties 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 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 Primary Parties may reasonably agree upon;
provided, however, that the Company shall not be obligated to file any
general consent to service of process or to qualify to do business in
any jurisdiction in which it is not so qualified. In each jurisdiction
where any of the Shares shall have been 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.
(m) The liquidation account for the benefit of Eligible
Account Holders and Supplemental Eligible Account Holders will be duly
established and maintained by the Bank in accordance with the
requirements of the OTS, and such Eligible Account Holders and
Supplemental Eligible Account Holders who continue to maintain their
savings accounts in the Bank 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 shares of Common Stock in the event
of a complete liquidation of the Bank.
(n) The Company and the Bank 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 shares of
Common Stock other than the Shares or other than in connection with any
plan or arrangement described in the Prospectus or upon the exercise of
any option issued pursuant to the Mid-Tier Company's existing stck
option plan.
22
Exhibit 1.2
(o) The Company shall register its Common Stock under Section
12(g) of the 1934 Act and shall request that such registration be
effective prior to the completion of the Conversion. The Company shall
maintain the effectiveness of such registration for not less than
three (3) years or such shorter period as may be required by the OTS.
(p) During the period during which the Company's Common Stock
is registered under the 1934 Act or for three years from the date
hereof, whichever period is greater, the Company will furnish to its
stockholders as soon as practicable after the end of each fiscal year
an annual report of the Company (including a consolidated balance sheet
and statements of consolidated income, stockholders' 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).
(q) 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 SEC 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 SEC,
the OTS, the Board 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 Bank as the Agent may reasonably request;
and (iii) from time to time, such other nonconfidential information
concerning the Company or the Bank as the Agent may reasonably request.
(r) The Company and the Bank will use the net proceeds from
the sale of the Shares in the manner set forth in the Prospectus under
the caption "How We Intend to Use the Proceeds From the Offering."
(s) Other than as permitted by the Conversion Regulations, the
Home Owners' Loan Act of 1933 (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, none of
the Primary Parties will distribute any prospectus, offering circular
or other offering material in connection with the offer and sale of the
Shares.
23
Exhibit 1.2
(t) The Company will use its best efforts to list and maintain
its listing of the shares on the Nasdaq SmallCap Market effective on or
prior to the Closing Date.
(u) The Bank will maintain appropriate arrangements for
depositing all funds received from persons mailing subscriptions for or
orders to purchase Shares in the Offerings 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 Bank's
obligation to refund payments received from persons subscribing for or
ordering Shares in the Offerings 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 Bank 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 Bank 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.
(v) The Company and the Bank will take such actions and
furnish such information as are reasonably requested by the Agent in
order for the Agent to ensure compliance with the NASD's
"Interpretation Relating to Free Riding and Withholding."
(w) Neither the Bank, the Mid-Tier Company nor the MHC will
amend the Plan without notifying the Agent prior thereto.
(x) 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 in all material
respects.
(y) Prior to the Closing Date, the Primary Parties will inform
the Agent of any event or circumstances of which it is aware as a
result of which the Registration Statement, the Conversion Application,
the Holding Company Application, the Bank Merger Application, the Bank
Conversion Application the New York Application 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.
24
Exhibit 1.2
Section 5.2 Covenants of the Agent. The Agent hereby covenants
with the Primary Parties as follows:
(a) During the period when the Prospectus is used, the Agent
will comply, in all material respects and at its own expense, with all
requirements imposed upon it by the OTS and, to the extent applicable,
by the 1933 Act and the 1934 Act and the rules and regulations
promulgated thereunder.
(b) The Agent shall return unused prospectuses, if any, to the
Company promptly upon the completion of the Conversion.
(c) The Agent will distribute the Prospectuses or offering
materials in connection with the sales of the common stock only in
accordance with OTS regulations, the 1933 Act and the rules and
regulations promulgated thereunder.
(d) The Agent shall assist the Bank in maintaining
arrangements for the deposit of funds and the making of refunds, as
appropriate (as described in Section 5.1(r)), and shall perform the
allocation of shares in the event of an oversubscription, in
conformance with the Plan and applicable regulations and based upon
information furnished to the Agent by the Bank (as described in Section
5.1(v)).
Section 6. Payment of Expenses. Whether or not the Conversion is
completed or the sale of the Shares by the Company is consummated, the Primary
Parties jointly and severally agree to pay or reimburse the Agent for any
expenses incurred by Agent in connection with the Conversion, including but not
limited to: (a) all filing fees in connection with all filings 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 Agent, attorneys' fees (incurred in connection with the
Conversion), 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 other reasonable
out-of-pocket expenses incurred by Agent (including legal fees of $40,000 and
related expenses). Such out-of-pocket expenses include, but are not limited to,
travel, communications and postage. In the event the Company is unable to sell a
minimum of 1,232,500 shares of Conversion Stock or the Conversion is terminated
or otherwise abandoned, the Primary Parties shall reimburse the Agent in
accordance with Section 2 hereof but such reimbursement shall not exceed Agent's
actual, accountable out-of-pocket expenses.
25
Exhibit 1.2
Section 7. Conditions to the Agent's Obligations. The Agent's
obligations hereunder, as to the Shares to be delivered at the Closing Date, are
subject, to the extent not waived by the Agent, to the condition that all
representations and warranties of the Primary Parties herein are, at and as of
the commencement of the Offerings and at and as of the Closing Date, true and
correct in all material respects, the condition that the Primary Parties shall
have performed all of their obligations hereunder to be performed on or before
such dates, and to the following further conditions:
(a) At the Closing Date, the Primary Parties 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 and the Bank
Conversion (if OCC approval has been obtained) imposed upon them by the
OTS, the FDIC, the NYSBD, the Board and the OCC.
(b) The Registration Statement shall have been declared
effective by the SEC, the Conversion Application approved by the OTS,
the Bank Merger Application approved by the FDIC, and the New York
Application approved by the NYSBD 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 SEC, 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, the MHC's, the Mid-Tier Company's or the Bank's
knowledge, threatened by the SEC, the OTS, the FDIC, the NYSBD, 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 ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, special counsel for the Primary Parties, 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 Delaware and 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
26
Exhibit 1.2
Prospectus. All of the outstanding capital stock of the
Company is duly authorized and validly issued, and upon
payment therefor, will be fully paid and non-assessable.
(ii) The Mid-Tier Company has been
organized and is a validly existing federal mutual holding
company subsidiary authorized to conduct its business and own
its property as described in the Registration Statement and
Prospectus.
(iii) The MHC has been organized and is a
validly existing federal mutual holding company authorized to
conduct its business and own its property as described in the
Registration Statement and Prospectus.
(iv) The Bank is a member of the FHLB-New
York. The deposit accounts of the Bank 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 caption "The Conversion and Stock
Offering--Liquidation Rights" to the extent that such
information constitutes matters of law and legal conclusions
has been reviewed by such counsel and is accurate in all
material respects.
(v) 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 "Holding Company Capitalization," and except
for shares issued upon incorporation of the Company 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 Offerings 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 the Prospectus, will
be duly and validly issued and fully paid and non-assessable;
the issuance of the Shares is not subject to preemptive rights
and the terms and provisions of the Shares conform in all
material respects to the description thereof contained in the
Prospectus. 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.
27
Exhibit 1.2
(vi) The execution and delivery of this
Agreement and the consummation of the transactions
contemplated hereby have been validly authorized by all
necessary action on the part of the Primary Parties; and this
Agreement is a valid and binding obligation of the Primary
Parties, enforceable in accordance with its terms, except as
the enforceability thereof may be limited by (i) bankruptcy,
insolvency, moratorium, reorganization, 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 savings institutions
and their holding companies, (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 Section 23A and 23B of the
Federal Reserve Act, and except that no opinion need to 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).
(vii) The Conversion Application has been
approved by the OTS and the Prospectus and proxy statement
have been authorized for use by the OTS. The Bank Merger
Application has been approved by the FDIC. The Bank Mergers
have been approved by the NYSBD. The Holding Company
Application has been approved by the Board. The Bank
Conversion Application has been approved by the OCC. No action
has been taken or is pending, and to such counsel's Actual
Knowledge, none is threatened, to revoke any such
authorization or approval.
(viii) The Plan has been adopted by the
required vote of the directors of the Mid-Tier Company, the
MHC and the Bank and, based upon the certificate of the
inspector of election, by the members of the MHC, the
stockholders of the Mid-Tier Company and the sole stockholder
of the Bank.
(ix) Subject to the satisfaction of the
conditions to the OTS' approval of the Conversion and any
condition that may be imposed by the NYSBD, the FDIC, (and if
regulatory approval has been obtained, the Board and the OCC)
no further approval, registration, authorization, consent or
other order of or notice to any federal or Delaware 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
28
Exhibit 1.2
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 SmallCap Market (as to which no
opinion need be rendered).
(x) 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 counsel's Actual
Knowledge, threatened by the SEC.
(xi) At the time the Conversion
Application, including the Prospectus contained therein, was
approved by the OTS, the Conversion Application, including the
Prospectus contained therein, complied as to form in all
material respects with the requirements of the Conversion
Regulations, the HOLA 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). At the time the Bank Merger Application,
including the Prospectus contained therein, was approved by
the FDIC, the Bank Merger Application, including the
Prospectus contained therein, complied as to form in all
material respects with the requirements of applicable FDIC
regulations (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). If the Bank Conversion has been approved prior
to the Closing Date, at the time the Holding Company
Application, including the Prospectus contained therein, was
approved by the Board, the Holding Company Application,
including the Prospectus contained therein, complied as to
form in all material respects with the requirements of
applicable Board regulations (other than the financial
statements, the notes thereto, and other tabular, financial,
statistical and appraisal data and accounting information
included therein, as to which no opinion need be rendered). At
the time the Bank Conversion Application was approved by the
OCC, the Bank Conversion Application complied as to form in
all material respects with the requirements of applicable OCC
regulations (other than the financial statements, the notes
thereto, and other tabular, financial, statistical and
appraisal data and accounting information included therein, as
to which no opinion need be rendered). At the time the New
York Application was approved by the NYSBD, the New York
Application complied as to form in all material respects with
the requirements of applicable NYSBD regulations (other than
the financial statements, the notes
29
Exhibit 1.2
thereto, and other tabular, financial, statistical and
appraisal data included therein, as to which no opinion need
be rendered).
(xii) 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.
(xiii) 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 proper form.
(xiv) To such counsel's Actual knowledge,
there are no legal or governmental proceedings pending or
threatened which are required to be disclosed in the
Registration Statement and Prospectus, other than those
disclosed therein.
(xv) 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
30
Exhibit 1.2
Prospectus of such documents and exhibits is accurate in all
material respects and fairly presents the information required
to be shown.
(xvi) To such counsel's Actual Knowledge,
the Primary Parties have conducted the Conversion, in all
material respects, in accordance with all applicable
requirements of the Plan, the HOLA and regulations thereunder.
The Plan complies in all material respects with all applicable
laws, rules, regulations, decisions and orders including, but
not limited to, the Conversion Regulations; no order has been
issued by the OTS, the SEC, or any governmental authority to
suspend the Offerings 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 SEC,
the FDIC or the Board or any state authority and, to such
counsel's Actual Knowledge, no person has sought to obtain
regulatory or judicial review of the final actions of the OTS
approving the Plan, the Conversion Application or the
Prospectus, of the FDIC approving the Bank Merger Application,
of the FRB approving the Holding Company Application, or of
the NYSBD approving the New York Application.
(xvii) To such counsel's Actual Knowledge,
the Primary Parties have obtained all material licenses,
permits and other governmental authorizations currently
required for the conduct of their businesses and all such
licenses, permits and other governmental authorizations are in
full force and effect, and the Primary Parties 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 affect on the business or
operations of the Primary Parties, taken as a whole.
(xviii) To such counsel's Actual Knowledge,
none of the Primary Parties is in violation of its certificate
of incorporation or bylaws, charter or bylaws, or
organizational certificate or bylaws, as applicable, 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
31
Exhibit 1.2
adverse impact on the financial condition or results of
operations of the Primary Parties, taken as a whole; 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
Primary Parties pursuant to any material contract, indenture,
mortgage, loan agreement, note, lease or other instrument to
which any of the Primary Parties is a party or by which any of
them may be bound, or to which any of the property or assets
of the Primary Parties is subject (other than the
establishment of a liquidation account), and such action will
not result in any violation of the provisions of the
certificate of incorporation or bylaws, charter or bylaws, or
organizational certificate or bylaws, as applicable, of the
certificate of incorporation or bylaws, charter or bylaws, or
organizational certificate or bylaws, or any applicable
federal, New York or Delaware law, act, regulation (except
that no opinion need be rendered with respect to the
securities and blue sky laws of various jurisdictions or the
rules and regulations of the NASD and/or the Nasdaq SmallCap
Market) or order or court order, writ, injunction or decree.
(xix) The Company's certificate of
incorporation and bylaws comply in all material respects with
the General Corporation Law ("GCL") of the State of Delaware.
The Mid-Tier Company's and the MHC's charter and bylaws comply
in all material respects with the HOLA and the rules and
regulations of the OTS. The Bank's organizational certificate
complies in all material respects with the laws and
regulations of the State of New York. The Bank's federal
articles of association comply in all material respects with
the OCC statutes and regulations.
(xx) To such counsel's Actual Knowledge,
none of the Primary Parties is in violation of any directive
from the OTS, OCC, the NYSBD or the FDIC to make any material
change in the method of conducting its respective business.
(xxi) The information in the Prospectus
under the captions "Regulation of Oswego County Savings Bank,
Oswego County Bancorp, Bridge Street Financial, Oswego County
MHC and Oswego County National Bank," "The Conversion and the
Stock Offering," "Anti-Takeover Effects of Bridge Street
Financial's Certificate of Incorporation, Bylaws and Benefit
Plans Adopted
32
Exhibit 1.2
in the Conversion," "Regulatory Restrictions on Acquisition of
Bridge Street Financial and Oswego National Bank" and
"Description of Capital Stock of Bridge Street Financial" 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 and Stock Offering"
in the Prospectus has been reviewed by such counsel and is in
all material respects correct. 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 "Taxation" has
been reviewed by such counsel and constitutes a correct
summary of the opinions rendered by ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and KPMG
LLP to the Primary Parties with respect to such matters.
In giving such opinion, such counsel may rely as to
all matters of fact on certificates of officers or directors
of the Primary Parties and certificates of public officials.
Such counsel's opinion shall be limited to matters governed by
federal laws and regulation, banking laws and regulations of
the State of New York and by the State of Delaware General
Corporation Law. 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 any of the Primary Parties
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
33
Exhibit 1.2
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 Primary Parties.
In addition, such counsel shall provide a letter stating
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 Primary Parties, at which conferences the contents of
the Conversion Application, the Registration Statement and the
Prospectus and related matters were discussed and, while such
counsel has not confirmed the accuracy or completeness of or
otherwise verified the information contained in the Conversion
Application, the Registration Statement or the Prospectus, and
does not assume any responsibility for such information, based
upon such conferences and a review of documents deemed
relevant for the purpose of rendering their opinion (relying
as to materiality as to factual matters on certificates of
officers and other factual representations by the Primary
Parties), 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, accounting information and other tabular,
financial, statistical and appraisal data included therein as
to which no opinion 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 of the circumstances under which
they were made, not misleading.
(2) The favorable opinion, dated as of the Closing
Date, of ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, P.C., the Agent's
counsel, with respect to such matters as the Agent may
reasonably require. Such opinion may rely and as to matters of
fact, upon certificates of officers and directors of the
Company, the MHC and the Bank delivered pursuant hereto or as
such counsel shall reasonably request.
(d) At the Closing Date, the Agents shall receive a
certificate of the Chief Executive Officer and the Chief Financial
Officer of the Primary Parties, to the effect that: (i) they have
reviewed 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
34
Exhibit 1.2
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 material adverse change in the condition,
financial or otherwise, or in the earnings, capital, properties or
business of the Primary Parties has occurred and, to their knowledge,
no other event has occurred, which should have been set forth in an
amendment or supplement to the Prospectus which has not been so set
forth, and the conditions set forth in this Section 7 have been
satisfied; (iii) since the respective dates as of which information is
given in the Registration Statement and Prospectus, there has been no
material adverse change in the condition, financial or otherwise, or in
the earnings, capital or properties of the Primary Parties,
independently, or of the Primary Parties 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 although expressly made at and as of the
Closing Date; (v) the Primary Parties 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; (vi) no
stop order suspending the effectiveness of the Registration Statement
has been initiated or, to the best knowledge the Primary Parties,
threatened by the SEC or any state authority; (vii) no order suspending
the Offerings, the Conversion or the effectiveness of the Prospectus
has been issued and no proceedings for that purpose are pending or, to
the best knowledge of any of the Primary Parties, threatened by the
OTS, the SEC, or any state authority; and (viii) to the best knowledge
of the Primary Parties, no person has sought to obtain review of the
final action of the OTS approving the Plan.
(e) 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 (other than as a result of a
change in law or regulation and affecting the savings association
industry as a whole), or in the earnings or business of the Primary
Parties independently, or of the Primary Parties 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) none of the Primary Parties shall have
received from the OTS, the NYSBD 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 Agents) or which materially and adversely
would affect the business, operations or financial condition or income
of the Primary Parties considered as one enterprise; (iv) the Primary
Parties shall not have been in default (nor shall any event have
occurred which, with notice or lapse of time or both, would constitute
a default) under any provision of
35
Exhibit 1.2
any agreement or instrument relating to any outstanding indebtedness;
(v) no action, suit or proceedings, 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 any the Primary Parties,
threatened against any of the Primary Parties 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 Primary Parties considered as one
enterprise; 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 requested and as
agreed to by the Company and the Bank.
(f) Concurrently with the execution of this Agreement, the
Agent shall receive a letter from KPMG LLP dated as of the date of the
Prospectus and addressed to the Agent: (i) confirming that KPMG LLP is
a firm of independent public accountants 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
FDIC and stating in effect that in KPMG LLP's opinion the financial
statements of the Company and/or the Bank (as applicable) as of
December 31, 2001 and 2000, and for each of the three years in the
period ended December 31, 2001, 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, the FDIC, the
NYSBD, the SEC and the 1933 Act; (ii) a statement from KPMG LLP 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 Mid-Tier Company prepared by
the Mid-Tier Company, a reading of the minutes of the meetings of the
Board of Directors of the Mid-Tier Company and the Bank and
consultations with officers of the Mid-Tier Company and the Bank
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 Prospectus, are not in conformity
with the 1933 Act, applicable accounting requirements of the OTS and
the SEC 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 material increase in borrowings, other than
normal deposit fluctuations, by the Mid-Tier Company or the Bank; or
(C) there was any decrease in consolidated net assets of the Mid-Tier
Company or the Bank at the date of such letter as compared with amounts
shown in the latest
36
Exhibit 1.2
unaudited consolidated statement of condition included in the
Prospectus; and (iii) a statement from KPMG LLP 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 Mid-Tier Company and the Bank, which are subject to the
internal controls of the Mid-Tier Company and the Bank, the accounting
system and other data prepared by the Mid-Tier Company and the Bank,
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.
(g) At the Closing Date, the Agent shall receive a letter from
KPMG LLP dated the Closing Date, addressed to the Agent, confirming
the statements made by them in the letter delivered by them 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.
(h) At the Closing Date, the Agent shall receive a letter from
FinPro, Inc., dated the date thereof and addressed to counsel for the
Agent (i) confirming that said firm is independent of the Primary
Parties and is experienced and expert in the area of corporate
appraisals within the meaning of Title 12 of the Code of Federal
Regulations, Part 303, (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
estimated aggregate pro forma market value of the Company, expressed
in their Appraisal dated as of _________________, 2002, and most
recently updated, remains in effect.
(i) The Primary Parties shall not have sustained since the date
of the latest audited financial statements included in the Prospectus
any material loss or interference with their businesses 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.
(j) At or prior to the Closing Date, the Agent shall receive:
(i) a copy of the letter from the OTS approving the Conversion
Application and authorizing the use of the Prospectus; (ii) a copy of
the order from the SEC declaring the Registration Statement effective;
(iii) certificates from the OTS evidencing the existence of the
Mid-Tier Company and the MHC; (iv) certificates of good standing from
the State of Delaware evidencing the good standing of the Company; (v)
a certificate from the FDIC evidencing
37
Exhibit 1.2
the Bank's insurance of accounts, (vi) a certificate of the FHLB-New
York evidencing the Bank's membership thereof, and (vii) a certificate
of the NYSBD evidencing the good standing of the Bank.
(k) Subsequent to the date hereof, there shall not have
occurred any of the following: (i) a suspension or limitation in
trading in securities generally on the New York Stock Exchange or in
the over-the-counter market, or quotations halted generally on the
Nasdaq National 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
SEC or any other governmental authority; (ii) a general moratorium on
the operations of commercial banks or federal savings associations or
a general moratorium on the withdrawal of deposits from commercial
banks or federal savings associations 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 judgment, makes it impracticable
or inadvisable to proceed with the Offerings or the delivery of the
shares on the terms and in the manner contemplated in the Registration
Statement and Prospectus.
Section 8. Indemnification.
(a) The Primary Parties jointly and severally agree to
indemnify and hold harmless the Agent, its officers, directors,
agents, servants and employees and each person, if any, who controls
the Agent within the meaning of Section 15 of the 1933 Act or Section
20(a) of the 1934 Act, against any and all loss, liability, claim,
damage or expense whatsoever (including but not limited to settlement
expenses), 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 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 to defend 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), or any
38
Exhibit 1.2
blue sky application or other instrument or document executed by any of
the Primary Parties based upon written information supplied by the
Primary Parties 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 agents, under the securities laws thereof
(collectively, the "Blue Sky Application"), or any application or other
document, advertisement, oral statement or communication ("Sales
Information") prepared, made or executed by or on behalf of any of the
Primary Parties with their consent or based upon written or oral
information furnished by or on behalf of any of the Primary Parties,
whether or not filed in any jurisdiction, in order to qualify or
register the Shares or to claim an exemption therefrom under the
securities laws thereof; (ii) arise out of or 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 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 statements 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 Primary Parties
regarding the Agent and provided further that such indemnification
shall be to the extent permitted by the OTS and the FDIC. The Primary
Parties will not be liable to any indemnified party under the foregoing
indemnification and reimbursement provisions, (i) for any settlement by
an indemnified party effected without prior written consent of the
Primary Parties; or (ii) to the extent that any loss, claim, damage or
liability is found in a final judgment by a court to have resulted
primarily from the Agent's gross negligence or willful misconduct. The
Agent shall repay to the Company any amounts paid by the Company for
reimbursement of the Agent's and any indemnified party's expenses in
the event that such expenses were incurred in relation to an act or
omission with respect to which it is finally determined that the Agent
has acted in gross negligence or with willful misconduct. The Parties
also agree that no indemnified party shall have any liability (whether
direct or indirect, in
39
Exhibit 1.2
contract or tort or otherwise) to the Company or the Bank or their
security holders or creditors related to or arising out of the
engagement of the Agent pursuant to, or the performance by the Agent
of the services contemplated by, this Agreement except to the extent
that any loss, claim, damage or liability is found in a final judgment
by a court to have resulted primarily from the Agent's gross
negligence or willful misconduct.
(b) The Agent agrees to indemnify and hold harmless the Primary
Parties, their directors and officers and each person, if any, who
controls any of the Primary Parties within the meaning of Section 15
of the 1933 Act or Section 20(a) of the 1934 Act against any and all
loss, liability, claim, damage or expense whatsoever (including but
not limited to settlement expenses), joint or several, which they, or
any of them, may suffer or to which they, or any of them may become
subject under all applicable federal and state laws or otherwise, and
to promptly reimburse the Primary Parties, and any such persons upon
written demand for any 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 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) or the preliminary or final
Prospectus (or any amendment or supplement thereto), or are based upon
the omission or alleged omission to state in any of the foregoing
documents a material fact required to be stated therein or necessary
to make the statements therein, in the light of the circumstances
under which they were made, not misleading; 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) or 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 Bank by the Agent regarding
the Agent. In no case shall the Agent be liable or responsible for any
amount in excess of the fees received by the Agent pursuant to Section
2 of this Agreement. The Agent will not be liable to any indemnified
party under the foregoing indemnification and reimbursement
provisions, (i) for any settlement by an indemnified party effected
without its prior written consent; or (ii) to the extent that any
loss, claim, damage or liability is found in a final judgment by a
court to have resulted primarily from the Bank or Company's gross
negligence or willful misconduct. The Bank shall repay to
40
Exhibit 1.2
the Agent any amounts paid by the Agent for reimbursement of the
Bank's and any indemnified party's expenses in the event that such
expenses were incurred in relation to an act or omission with respect
to which it is finally determined that the Bank or Company have acted
in gross negligence or with willful misconduct. The Agent also agrees
that no indemnified party shall have any liability (whether direct or
indirect, in contract or tort or otherwise) to the Agent or its
security holders or creditors related to or arising out of the
engagement of the Agent except to the extent that any loss, claim,
damage or liability is found in a final judgment by a court to have
resulted primarily from the Company's or the Bank's gross negligence
or willful misconduct.
(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, 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 Primary Parties
set forth in this Agreement shall remain operative and in full force
and effect regardless of: (i) any investigation made by or on behalf
of the Agent or its officers, directors or controlling persons, agents
or employees or by or on behalf of any of the Primary Parties or any
officers, directors or controlling persons, agents or employees of any
of the Primary Parties; (ii) deliver of and payment hereunder for the
Shares; or (iii) any termination of this Agreement.
41
Exhibit 1.2
(e) To the extent required by law, this Section 8 is subject to
the provisions of Sections 23A and 23B of the Federal Reserve Act, 12
U.S.C. Sections 371c and 371c-1 ("Sections 23A and 23B").
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 Bank or the Agent, the Company,
the Bank 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 Bank 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 shall be 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) bears to the gross proceeds received by the Company from the
sale of the Shares in the Offerings and the Company and the Bank 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 Bank 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 Bank on the one hand and
the Agent on the other from the Offerings (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 Bank 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
Bank 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
42
Exhibit 1.2
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 Bank under
this Section 9 and under Section 8 shall be in addition to any liability which
the Company and the Bank may otherwise have. For purposes of this Section 9,
each of the Agent's, the Company's or the Bank's officers and directors and each
person, if any, who controls the Agent or the Company or the Bank 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 Bank. Any party entitled to
contribution, promptly after receipt of notice of commencement of any action,
suit, claim or proceeding against such party in respect of which a claim for
contribution may be made against another party under this Section 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. To the extent required by law, this Section 9 is subject to and limited by
the provisions of Sections 23A and 23B.
Section 10. Survival of Agreements, Representations and Indemnities.
The respective indemnities of the Company, the Bank and the Agent and the
representations and warranties and other statements of the Company and the Bank
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 Bank or any
controlling person referred to in Section 8 hereof, and shall survive the
issuance of the Shares, and any legal representative, successor or assign of the
Agent, the Company, the Bank, 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 its obligations under
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 all of the Shares by
_______________, 2002, 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 Bank 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
43
Exhibit 1.2
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 Bank as set forth in Sections 2(a) and (d), 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 canceled by the Agent by
notifying the Primary Parties 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, 6, 8 and 9 hereof.
(c) If the Agent elects to terminate this Agreement as provided
in this Section, the Primary Parties shall be notified promptly by the
Agent by telephone or telegram, confirmed by letter.
The Primary Parties 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 Bank have provided the Agent 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 Friedman,
Billings, ▇▇▇▇▇▇ & Co., Inc., ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇, Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ (with a copy to ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ &
▇▇▇▇▇▇, P.C., ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇, ▇.▇., ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇,
Attention: ▇▇▇▇ ▇▇▇▇▇▇, Esq.) and, if sent to the Primary Parties, shall be
mailed, delivered or telegraphed and confirmed to Oswego County Savings Bank at
▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇,
President and Chief Executive Officer (with a copy to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇, ▇▇▇▇▇ ▇▇▇,▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Attention: ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, Esq.)
Section 13. Parties. The Primary Parties 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 any of the Primary
44
Parties, when the same shall have been given by the undersigned or any other
officer of any of the Primary Parties. This Agreement shall inure solely to the
benefit of, and shall be binding upon, the Agent, the Primary Parties, and their
respective successors, legal representatives 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 Primary Parties. At the closing, the Primary Parties 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 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.
Section 18. Waiver of Trial by Jury. The parties waive their right to
a trial by jury in any action, proceeding, claim, or counterclaim (whether based
on contract, tort or otherwise) related to or arising out of this Agreement.
45
Exhibit 1.2
If the foregoing correctly sets forth the arrangement among the Primary
Parties, 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.
Very truly yours,
BRIDGE STREET FINANCIAL, INC. OSWEGO COUNTY SAVINGS BANK
By:________________________________ By:________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
President and Chief Executive President and Chief Executive
Officer Officer
OSWEGO COUNTY, MHC OSWEGO COUNTY BANCORP, INC.
By:________________________________ By:________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
President and Chief Executive President and Chief Executive
Officer Officer
Accepted as of the date first above written
FRIEDMAN, BILLINGS, ▇▇▇▇▇▇ & CO., INC.
By:________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Managing Director
46
EXHIBIT B
BRIDGE STREET FINANCIAL, INC.
Up to 1,917,625 Shares (Anticipated Maximum)
(Par Value $.01 Per Share)
Selected Dealers' Agreement
____________________, 2002
Gentlemen:
We have agreed to assist Oswego County Savings Bank (the "Bank"), a New
York-chartered stock savings bank, and the Bank's federal mutual holding
company, Oswego County MHC (the "MHC"), in connection with the offer and sale of
up to 1,917,625 shares of the conversion common stock, par value $.01 per share
(the "Common Stock") of Bridge Street Financial, Inc. (the "Company"), a
Delaware corporation, to be issued in connection with the conversion of the MHC.
The total number of shares of Common Stock to be offered may be decreased to a
minimum of 25 shares. The price per share has been fixed at $10.00. The Common
Stock, the number of shares to be issued, and certain of the terms on which they
are being offered, are more fully described in the enclosed Prospectus dated
_______________, 2002 (the "Prospectus"). In connection with the Conversion, the
Company, on a best-efforts basis is offering for sale between 1,232,500 and
1,667,500 shares (the "Shares") of the Common Stock, in a Subscription Offering,
as defined, as contemplated by Office of Thrift Supervision (the "OTS")
Regulation. Any Shares not sold in the Subscription Offering will be offered to
the general public in a community offering (the "Community Offering") giving
preference to residents of the Bank's Local Community, as defined in the
Prospectus.
The Subscription and Community Offerings are being conducted under a Plan
of Conversion (the "Plan") adopted by the Bank, the Mid-Tier Company and the MHC
pursuant to which the MHC intends to convert from a federal mutual holding
company to an interim federal stock savings bank and simultaneously merge with
and into the Company (the "Conversion"). As part of the Conversion, the Company
will sell the Common Stock to the public as provided for in the Plan. The
Subscription and Community Offerings are further being conducted in accordance
with the regulations of the OTS subject to the restrictions contained in the
Plan.
B-1
Exhibit 1.2
The Common Stock is also being offered in accordance with the Plan by
broker/dealers licensed by the National Association of Securities Dealers, Inc.
("NASD"), which have been approved by the Bank ("Approved Brokers").
We are offering the selected dealers (of which you are one) the opportunity
to participate in the solicitation of offers to buy the Common Stock and we will
pay you a fee in the amount of four percent (4%) of the dollar amount of the
Common Stock sold on behalf of the Company by you, as evidenced by the
authorized designation of your firm on the order form or forms for payment
therefor to the special account established by the Bank for the purpose of
holding such funds. It is understood, of course, that payment of your fee will
be made only out of compensation received by us for the Common Stock sold on
behalf of the Company by you, as evidenced in accordance with the preceding
sentence. As soon as practicable after the closing date of the offering, we will
remit to you, only out of our compensation as provided above, the fees to which
you are entitled hereunder.
Each order form for the purchase of Common Stock must set forth the
identity and address of each person to whom the certificates for such Common
Stock should be issued and delivered. Such order form also must clearly identify
your firm in order for you to receive compensation. You shall instruct any
subscriber who elects to send his order form to you to make any accompanying
check payable to "Bridge Street Financial, Inc."
This offer is made subject to the terms and conditions herein set forth and
is made only to selected dealers who are members in good standing of the NASD
who are to comply with all applicable rules of the NASD, including, without
limitation, the NASD's Interpretation With Respect to Free-Riding and
Withholding and Section 24 of Article III of the NASD's Rules of Fair Practice.
Orders for Common Stock will be subject to confirmation and we, acting on
behalf of the Primary Parties, reserve the right in our unfettered discretion to
reject any order in whole or in part, to accept or reject orders in the order of
their receipt or otherwise, and to allot. Neither you nor any other person is
authorized by the Company, the MHC and the Bank, or by us to give any
information or make any representations other than those contained in the
Prospectus in connection with the sale of any of the Common Stock. No selected
dealer is authorized to act as agent for us when soliciting offers to buy the
Common Stock from the public or otherwise. No selected dealer shall engage in
any stabilizing (as defined in Rule 10b-7 promulgated under the Securities
Exchange Act of 1934) with respect to the Company's Common Stock during the
offering.
B-2
Exhibit 1.2
We and each selected dealer assisting in selling Common Stock pursuant
hereto agree to comply with the applicable requirements of the Securities
Exchange Act of 1934 and applicable state rules and regulations. Each
customer-carrying selected dealer that is not a $250,000 net capital reporting
broker/dealer agrees that it will not use a sweep arrangement and that it will
transmit all customer checks by noon of the next business day after receipt
thereof. In addition, we and each selected dealer confirm that the Securities
and Exchange Commission interprets Rule 15c2-8 promulgated under the Securities
Exchange Act of 1934 as requiring that a Prospectus be supplied to each person
who is expected to receive a confirmation of sale 48 hours prior to delivery of
such person's order form.
We and each selected dealer further agree that to the extent that your
customers desire to pay for shares with funds held by or to be deposited with
us, in accordance with the interpretations of the Securities and Exchange
Commission of Rule 15c2-4 promulgated under the Securities and Exchange Act of
1934, either (a) upon receipt of an executed order form or direction to execute
an order form on behalf of a customer to forward the offering price of the
Common Stock ordered on or before twelve noon Delaware time of the next business
day following receipt or execution of an order form by us to the Company for
deposit in a segregated account or (b) to solicit indications of interest in
which event (i) we will subsequently contact any customer indicating interest to
confirm the interest and give instructions to execute and return an order form
or to receive authorization to execute the order form on the customer's behalf,
(ii) we will mail acknowledgments of receipt of orders to each customer
confirming interest on the business day following such confirmation, (iii) we
will debit accounts of such customers on the third business day (the "Debit
Date") following receipt of the confirmation referred to in (i), and (iv) we
will forward complete order forms together with such funds to the Company on or
before twelve noon on the next business day and each selected dealer
acknowledges that if the procedure in (b) is adopted, our customers' funds are
not required to be in their accounts until the Debit Date.
Unless earlier terminated by us, this Agreement shall terminate upon the
closing date of the Conversion. We may terminate this Agreement or any
provisions hereof any time by written or telegraphic notice to you. Of course,
our obligations hereunder are subject to the successful completion of the
Conversion.
You agree that at any time or times prior to the termination of this
Agreement you will, upon our request, report to us the number of shares of
Common Stock sold on behalf of the Company by you under this Agreement.
B-3
Exhibit 1.2
We shall have full authority to take such actions as we may deem advisable
in respect of all matters pertaining to the offering. We shall be under no
liability to you except for lack of good faith and for obligations expressly
assumed by us in this Agreement.
Upon application to us, we will inform you as to the states in which we
believe the Common Stock has been qualified for sale under, or are exempt from
the requirements of, the respective blue sky laws of such states, but we assume
no responsibility or obligation as to your rights to sell Common Stock in any
state.
Additional copies of the Prospectus and any supplements thereto will be
supplied in reasonable quantities upon request.
Any notice from us to you shall be deemed to have been duly given if
mailed, telephoned, or telegraphed to you at the address to which this Agreement
is mailed.
This Agreement shall be construed in accordance with the laws of the State
of Delaware.
Please confirm your agreement hereto by signing and returning the
confirmations accompanying this letter at once to us at Friedman, Billings,
▇▇▇▇▇▇ & Co., Inc., Potomac Tower, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇. The enclosed duplicate copy will evidence the agreement between
us.
FRIEDMAN, BILLINGS, ▇▇▇▇▇▇ & CO., INC.
By:____________________________________
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Managing Director
CONFIRMED AS OF:
, 2002
B-4
Exhibit 1.2
(Name of Dealer)
By:________________________________
Its:_______________________________
B-5