Exhibit 1.1
JADE FINANCIAL CORP.
[__________] Shares
COMMON SHARES
($.01 par value)
Subscription Price $10.00 Per Share
AGENCY AGREEMENT
[_________], 1999
▇▇▇▇▇▇▇ ▇▇▇▇ & Company, a Division of
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Ladies and Gentlemen:
Jade Financial Corp., a Pennsylvania corporation (the "Company"),
and IGA Federal Savings, Feasterville, Pennsylvania, a federally
chartered mutual savings bank (the "Bank") (references to the
"Bank" include the Bank in the mutual or stock form, as indicated
by the context), with its deposit accounts insured by the Savings
Association Insurance Fund ("SAIF") administered by the Federal
Deposit Insurance Corporation ("FDIC"), hereby confirm their
agreement with ▇▇▇▇▇▇▇ ▇▇▇▇ & Company, a Division of ▇▇▇▇▇,
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, Inc. ("▇▇▇▇", "KBW" or "the Agent"), as
follows:
Section 1. The Offering. The Bank, in accordance with its
plan of conversion adopted by its Board of Directors (the
"Plan"), intends to convert from a federally chartered mutual
savings bank to a federally chartered stock savings bank, and
will issue all of its issued and outstanding capital stock to the
Company. In addition, the Company in accordance with the Plan
expects to contribute cash and shares of its common stock in an
amount equal to 8% of the shares of common stock sold in the
Offering (as hereinafter defined) to the IGA Charitable
Foundation (the "Foundation"), such shares are hereinafter
referred to as the "Foundation Shares." Pursuant to the Plan,
the Company will also offer and sell up to 2,149,062 of its
common shares, $.01 par value per share (the "Shares" or "Common
Shares"), in a subscription offering (the "Subscription
Offering") to (1) depositors of the Bank as of March 31, 1998
("Eligible Account Holders"), (2) the IGA Employee Stock
Ownership Plan (the "ESOP"), (3) depositors of the Bank
as of June 30, 1999 ("Supplemental Eligible Account Holders")
and (4) the Bank's Other Members on [_________], 1999. Subject
to the prior subscription rights of the above-listed parties, the
Company is offering for sale in a community offering (the
"Community Offering" and when referred to together with the
Subscription Offering, the "Subscription and Community Offering")
conducted concurrently with, at any time during, or as soon as
practicable after the Subscription Offering, the Shares not
subscribed for or ordered in the Subscription Offering to members
of the general public to whom a copy of the Prospectus (as
hereinafter defined) is delivered with a preference given to
natural persons residing in counties in Pennsylvania in which the
Bank has a branch office. It is anticipated that shares not
subscribed for in the Subscription and Community Offering will be
offered to members of the general public on a best efforts basis
through a selected dealers agreement (the "Syndicated Community
Offering") or through a public offering (the "Public Offering")
(the Subscription Offering, Community Offering, Syndicated
Community Offering and Public Offering are collectively referred
to as the "Offering"). It is acknowledged that the purchase of
Shares in the Offering is subject to the maximum and minimum
purchase limitations as described in the Plan and that the
Company and the Bank may reject, in whole or in part, any orders
received in the Community Offering or Syndicated Community
Offering. Collectively, these transactions are referred to
herein as the "Conversion."
In connection with the Conversion and pursuant to the terms
of the Plan as described in the Prospectus (as defined herein),
the Company has established the Foundation. Immediately
following the consummation of the Conversion, subject to the
approval of the establishment of the Foundation by the depositors
of the Bank and compliance with certain conditions as may be
imposed by regulatory authorities, the Company will contribute
cash and newly issued shares of Common Shares in an amount equal
to 8% of the Shares sold in the Offering. If the maximum amount
of Shares are offered, the Company will issue an additional
[________] shares of Common Shares to the Foundation and make a
cash contribution of $[_______].
The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement on
Form SB-2 (File No. 333-[_______]) (the "Registration Statement")
containing a prospectus relating to the Offering for the
registration of the Shares and the Foundation Shares under the
Securities Act of 1933 (the "1933 Act"), and has filed such
amendments thereof and such amended prospectuses as may have been
required to the date hereof. The term "Registration Statement"
shall include any documents incorporated by reference therein and
all financial schedules and exhibits thereto, as amended,
including post-effective amendments. The prospectus, as amended,
on file with the Commission at the time the Registration
Statement initially became effective is hereinafter called the
"Prospectus," except that if any Prospectus is filed by the
Company pursuant to Rule 424(b) or (c) of the rules and
regulations of the Commission under the 1933 Act (the "1933 Act
Regulations") differing from the prospectus on file at the time
the Registration Statement initially becomes effective, the term
"Prospectus" shall refer to the prospectus filed pursuant to
Rule 424(b) or (c) from and after the time said prospectus is
filed with the Commission.
In accordance with Title 12, Part 563b of the Code of
Federal Regulations (the "Conversion Regulations") and the laws
and regulations of the State of Pennsylvania, the Bank has filed
with the Office of Thrift Supervision (the "OTS") an Application
for Conversion (the "Conversion Application"), including the
Prospectus and the Conversion Valuation Appraisal Report prepared
by RP Financial, L.C. (the "Appraisal") and has filed such
amendments thereto as may have been required by the OTS. The
Conversion Application has been approved by the OTS and the
related Prospectus has been authorized for use by the OTS. In
addition, the Company has filed with the OTS its application on
Form H-(e)1 (the "Holding Company Application") to become a
registered savings and loan holding company under the Home
Owners' Loan Act, as amended ("HOLA"); and it has been approved.
Section 2. Retention of Agent; Compensation; Sale and
Delivery of the Shares. Subject to the terms and conditions
herein set forth, the Company and the Bank hereby appoint the
Agent as their exclusive financial advisor and marketing agent
(i) to utilize its best efforts to solicit subscriptions for
Common Shares and to advise and assist the Company and the Bank
with respect to the Company's sale of the Shares in the Offering
and (ii) to participate in the Offering in the areas of market
making, establishing and managing the stock information center
and in syndicate formation (if necessary).
On the basis of the representations, warranties, and
agreements herein contained, but subject to the terms and
conditions herein set forth, the Agent accepts such appointment
and agrees to consult with and advise the Company and the Bank as
to the matters set forth in the letter agreement, dated July 20,
1998, between the Bank and ▇▇▇▇ (a copy of which is attached
hereto as Exhibit A). It is acknowledged by the Company and the
Bank that the Agent shall not be required to purchase any Shares
or be obligated to take any action which is inconsistent with all
applicable laws, regulations, decisions or orders.
The obligations of the Agent pursuant to this Agreement
(other than those set forth in Section 2(a) and (d) hereof) shall
terminate upon the completion or termination or abandonment of
the Plan by the Company or upon termination of the Offering, but
in no event later than 45 days after the completion of the
Subscription Offering (the "End Date"). All fees or expenses due
to the Agent but unpaid will be payable to the Agent in next day
funds at the earlier of the Closing Date (as hereinafter defined)
or the End Date. In the event the Offering is extended beyond
the End Date, the Company, the Bank 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
1,381,250 Shares within the period herein provided, this
Agreement shall terminate and the Company shall refund to any
persons who have subscribed for any of the Shares the full amount
which it may have received from them plus accrued interest, as
set forth in the Prospectus; and none of the parties to this
Agreement shall have any obligation to the other parties
hereunder, except as set forth in this Section 2 and in
Sections 6, 8 and 9 hereof.
In the event the Offering is terminated for any reason not
attributable to the action or inaction of the Agent, the Agent
shall be paid the fees due to the date of such termination
pursuant to subparagraphs (a) and (d) below.
If all conditions precedent to the consummation of the
Conversion, including, without limitation, the sale of all Shares
required by the Plan to be sold, are satisfied, the Company
agrees to issue, or have issued, the Shares sold in the Offering
and to release for delivery certificates for such Shares on the
Closing Date (as hereinafter defined) against payment to the
Company by any means authorized by the Plan; provided, however,
that no funds shall be released to the Company until the
conditions specified in Section 7 hereof shall have been complied
with to the reasonable satisfaction of the Agent and their
counsel. The release of Shares against payment therefor shall be
made on a date and at a place acceptable to the Company, the Bank
and the Agent. Certificates for shares shall be delivered
directly to the purchasers in accordance with their directions.
The date upon which the Company shall release or deliver the
Shares sold in the Offering, in accordance with the terms herein,
is called the "Closing Date."
The Agent shall receive the following compensation for its
services hereunder:
(a) A management fee of $25,000; payable in four
consecutive monthly installments of $6,250. Such fees
shall be deemed to have been earned when due. Should
the Conversion be terminated for any reason not
attributable to the action or inaction of the Agent,
the Agent shall have earned and be entitled to be paid
fees accruing through the stage at which the
termination occurred, including any accrued legal fees
expended by the Agent.
(b) A Success Fee of 1.40% shall be charged based on the
aggregate Purchase Price of Common Shares sold in the
Subscription Offering and Community Offering, excluding
shares purchased by the Bank's officers, directors, or
employees (or members of their immediate families) plus
any ESOP, tax-qualified or stock-based compensation
plans (except IRA's) or similar plan created
by the Bank or the Company for some or all of its
directors or employees. The management fee described
in subparagraph 2(a) shall be applied against the
Success Fee described in this subparagraph 2(b).
(c) If any of the Common Shares remain available after the
Subscription Offering, at the request of the Bank, ▇▇▇▇
will seek to form a syndicate of registered broker-
dealers ("Selected Dealers") to assist in the sale of
such Common Shares on a best efforts basis, subject to
the terms and conditions set forth in the selected
dealers agreement. ▇▇▇▇ will endeavor to distribute
the Common Shares among the Selected Dealers in a
fashion which best meets the distribution objectives of
the Bank and the Plan. ▇▇▇▇ will be paid a fee not to
exceed 5.5% of the aggregate Purchase Price of the
Shares sold by the Selected Dealers. ▇▇▇▇ will pass
onto the Selected Dealers who assist in the Syndicated
Community Offering or the Public Offering an amount
competitive with gross underwriting discounts charged
at such time for comparable amounts of stock sold at a
comparable price per share in a similar market
environment. Fees with respect to purchases affected
with the assistance of Selected Dealers other than ▇▇▇▇
shall be transmitted by ▇▇▇▇ to such Selected Dealers.
The decision to utilize Selected Dealers will be made
by the Bank upon consultation with ▇▇▇▇. In any event,
with respect to any purchases of Shares, fees paid
pursuant to this subparagraph 2(c) such fees shall be
in lieu of, and not in addition to, payment pursuant to
subparagraph 2(a) and 2(b).
(d) The Agent will not request reimbursement for any out-
of-pocket expenses relating to travel, lodging,
photocopying and meal expenses. The Bank and Company
shall reimburse the Agent for fees and expenses of
counsel and the legal fees will not exceed $30,000.
The Bank will bear the expenses of the Offering
customarily borne by issuers including, without
limitation, regulatory filing fees, SEC, "Blue Sky,"
and NASD filing and registration fees; the fees of the
Bank's accountants, attorneys, appraiser, transfer
agent and registrar, printing, mailing and marketing
expenses associated with the conversion; and the fees
set forth under this Section 2; and fees for "Blue sky"
legal work. The Company or the Bank will reimburse
▇▇▇▇ for expenses incurred by ▇▇▇▇ on their behalf as
set forth under Section 6 hereof.
Full payment of Agent's actual and accountable expenses,
advisory fees and compensation shall be made in next day funds on
the earlier of the Closing Date or a determination by the Bank to
terminate or abandon the Plan.
Section 3. Prospectus; Offering. The Shares are to be
initially offered in the Offering at $10.00 per share.
Section 4. Representations and Warranties. The Company and
the Bank jointly and severally represent and warrant to and agree
with the Agent as follows:
(a) The Registration Statement which was prepared by
the Company and the Bank and filed with the
Commission was declared effective by the
Commission on [_________], 1999. At the time the
Registration Statement, including the Prospectus
contained therein (including any amendment or
supplement), became effective, the Registration
Statement contained all statements that were
required to be stated therein in accordance with
the 1933 Act and the 1933 Act Regulations,
complied in all material respects with the
requirements of the 1933 Act and the 1933 Act
Regulations and the Registration Statement,
including the Prospectus contained therein
(including any amendment or supplement thereto),
and any information regarding the Company or the
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
Offering, did not contain an untrue statement of a
material fact or omit to state a material fact
required to be stated therein or necessary to make
the statements therein, in light of the
circumstances under which they were made, not
misleading, and at the time any Rule 424(b) or (c)
Prospectus was filed with the Commission and at
the Closing Date referred to in Section 2, 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 Offering will contain
all statements that are required to be stated
therein in accordance with the 1933 Act and the
1933 Act Regulations and will not contain an
untrue statement of a material fact or omit to
state a material fact necessary in order to make
the statements therein, in light of the
circumstances under which they were made, not
misleading; provided, however, that the
representations and warranties in this
Section 4(a) shall not apply to statements or
omissions made in reliance upon and in conformity
with written information furnished to the Company
or the Bank by the Agent or its counsel 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 which was prepared by
the Company and the Bank and filed with the OTS
was approved on [_________], 1999 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 Company
or the Bank by the Agent or its counsel expressly
regarding the Agent for use in the Prospectus
contained in the Conversion Application under the
caption "The Conversion-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. The Holding Company
Application for approval pursuant to the HOLA and
the regulations promulgated thereunder (the
"Control Act Regulations") has been prepared by
the Bank and the Company in material conformity
with the requirements of the Control Act
Regulations and has been filed with and approved
by the OTS. A conformed copy of the Holding
Company Application has been delivered to the
Agent.
(c) The Company has filed with the OTS the Holding
Company Application, and such Application was
deemed complete by the OTS. As of the Closing
Date, approval of the Company's acquisition of the
Bank will have been obtained from the OTS.
(d) No order has been issued by the OTS or the FDIC
(hereinafter any reference to the FDIC shall
include the SAIF) preventing or suspending the use
of the Prospectus, and no action by or before any
such government entity to revoke any approval,
authorization or order of effectiveness related to
the Conversion is, to the best knowledge of the
Company or the Bank, pending or threatened.
(e) At the Closing Date, the Plan will have been
adopted by the Boards of Directors of both the
Company and the Bank and approved by the members
of the Bank, and the offer and sale of the Shares
and the establishment and funding of the
Foundation will have been conducted in all
material respects in accordance with the Plan, the
Conversion Regulations, and all other applicable
laws, regulations, decisions and orders, including
all terms, conditions, requirements and provisions
precedent to the Conversion imposed upon the
Company or the Bank by the OTS, the Commission, or
any other regulatory authority and in the manner
described in the Prospectus. No person has sought
to obtain review of the final action of the OTS in
approving the Plan or in approving the Conversion
or the Holding Company Application pursuant to the
HOLA or any other statute or regulation.
(f) The Bank has been organized and is a validly
existing federally chartered savings bank in
mutual form of organization and upon the
Conversion will become a duly organized and
validly existing federally chartered savings bank
in permanent capital stock form of organization,
in both instances duly authorized to conduct its
business and own its property as described in the
Registration Statement and the Prospectus; the
Bank has obtained all licenses, permits and other
governmental authorizations currently required for
the conduct of its business, except those that
individually or in the aggregate would not
materially adversely affect the financial
condition, earnings, capital, assets, properties
or business of the Company and the Bank, 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 federal law 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 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. 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's resolutions or letters
of approval, all terms, conditions, requirements
and provisions with respect to the Conversion
imposed by the Commission, the OTS and the FDIC,
if any, will have been complied with by the
Company and the 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.
(g) The Company has been duly incorporated and is
validly existing as a corporation under the laws
of the State of Pennsylvania with corporate power
and authority to own, lease and operate its
properties and to conduct its business as
described in the Registration Statement and the
Prospectus, and at the Closing Date the Company
will be qualified to do business as a foreign
corporation in each jurisdiction in which the
conduct of its business requires such
qualification, except where the failure to so
qualify would not have a material adverse effect
on the condition, financial or otherwise, or the
business, operations or income of the Company.
The Company has obtained all 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, properties
or business of the Company and the Bank, taken as
a whole; all such licenses, permits and
governmental authorizations are in full force and
effect, and the Company is in all material
respects complying with all laws, rules,
regulations and orders applicable to the operation
of its business.
(h) The Bank is a member of the Federal Home Loan Bank
of Pittsburgh ("FHLB-Pittsburgh"). 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 Company
or the Bank, 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.
(I) The Foundation has been duly authorized,
incorporated and is validly existing as a non
stock 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
Prospectus; the Foundation will not be a savings
and loan holding company within the meaning of 12
C.F.R. Section 574.2(q) as a result of the
issuance of shares of Common Shares to it in
accordance with the terms of the Plan and in the
amounts as described in the Prospectus; no
approvals are required to establish the Foundation
and to contribute the Shares thereto as described
in the Prospectus other than those imposed by the
OTS; except as specifically disclosed in the
Prospectus, there are no agreements and/or
understandings, written or oral, between the
Company and/or the Bank and the Foundation with
respect to the control, directly or indirectly,
over the voting and the acquisition or disposition
of the Foundation Shares; at the time of the
Conversion, the Foundation Shares will have been
duly authorized for issuance and, when issued and
contributed by the Company pursuant to the Plan,
will be duly and validly issued and fully paid and
non-assessable; and the issuance of the Foundation
Shares is not subject to preemptive or similar
rights.
(j) The Company and the Bank have good and marketable
title to all real property and good title to all
other assets material to the business of the
Company and the Bank, taken as a whole, and to
those properties and assets described in the
Registration Statement and Prospectus as owned by
them, free and clear of all liens, charges,
encumbrances or restrictions, except such as are
described in the Registration Statement and
Prospectus, or are not material to the
business of the Company and the Bank, taken as a
whole; and all of the leases and subleases
material to the business of the Company and the
Bank, taken as a whole, under which the Company or
the Bank hold properties, including those
described in the Registration Statement and
Prospectus, are in full force and effect.
(k) The Company and the Bank have received an opinion
of their special counsel, ▇▇▇▇▇▇▇ & ▇▇▇, P.C.,
with respect to the federal and Pennsylvania
income tax consequences of the Conversion, the
deductibility of a contribution of Shares to the
Foundation and the applicability of the self-
dealing rules to such contribution; all material
aspects of the opinion of ▇▇▇▇▇▇▇ & ▇▇▇, P.C. are
accurately summarized in the Registration
Statement and will be accurately summarized in the
Prospectus; and further represent and warrant that
the facts upon which such opinion is based are
truthful, accurate and complete.
(l) The Company and the Bank 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 the Shares and the Foundation Shares and
sell the Shares to be sold by the Company as
provided herein and as described in the
Prospectus, subject to approval or confirmation by
the OTS of the final appraisal of the Bank. The
consummation of the Conversion, the execution,
delivery and performance of this Agreement and the
consummation of the transactions herein
contemplated have been duly and validly authorized
by all necessary corporate action on the part of
the Company and the Bank and this Agreement has
been validly executed and delivered by the Company
and the Bank and is the valid, legal and binding
agreement of the Company and the Bank enforceable
in accordance with its terms (except as the
enforceability thereof may be limited by
bankruptcy, insolvency, moratorium, reorganization
or similar laws relating to or affecting the
enforcement of creditors' rights generally or the
rights of creditors of savings and loan holding
companies, the accounts of whose subsidiaries are
insured by the FDIC, or by general equity
principles, regardless of whether such
enforceability is considered in a proceeding in
equity or at law, and except to the extent, if
any, that the provisions of Sections 8 and 9
hereof may be unenforceable as against public
policy).
(m) Neither the Company nor the Bank are in violation
of any directive received from the OTS, the FDIC,
or any other agency to make any material change in
the method of conducting their businesses so as to
comply in all material respects with all
applicable statutes and regulations (including,
without limitation, regulations, decisions,
directives and orders of the OTS and the FDIC)
and, except as may be set forth in the
Registration Statement and the Prospectus, there
is no suit or proceeding or charge or action
before or by any court, regulatory authority or
governmental agency or body, pending or, to the
knowledge of the Company or the Bank, threatened,
which might materially and adversely affect the
Conversion, the performance of this Agreement or
the consummation of the transactions contemplated
in the Plan and as described in the Registration
Statement and the Prospectus or which might result
in any material adverse change in the condition
(financial or otherwise), earnings, capital or
properties of the Company or the Bank, or which
would materially affect their properties and
assets.
(n) The financial statements, schedules and notes
related thereto which are included in the
Prospectus fairly present the balance sheet,
income statement, statement of changes in equity
capital and statement of cash flows of the Bank at
the respective dates indicated and for the
respective periods covered thereby and comply as
to form in all material respects with the
applicable accounting requirements of Title 12 of
the Code of Federal Regulations and generally
accepted accounting principles (including those
requiring the recording of certain assets at their
current market value). Such financial statements,
schedules and notes related thereto have been
prepared in accordance with generally accepted
accounting principles consistently applied through
the periods involved, present fairly in all
material respects the information required to be
stated therein and are consistent with the most
recent financial statements and other reports
filed by the Bank with the OTS, except that
accounting principles employed in such regulatory
filings conform to the requirements of the OTS and
not necessarily to GAAP. The other financial,
statistical and pro forma information and related
notes included in the Prospectus present fairly
the information shown therein on a basis
consistent with the audited and unaudited
financial statements of the Bank included in the
Prospectus, and as to the pro forma adjustments,
the adjustments made therein have been
properly applied on the basis described therein.
(o) Since the respective dates as of which information
is given in the Registration Statement including
the Prospectus: (i) there has not been any
material adverse change, financial or otherwise,
in the condition of the Company or the Bank and
its subsidiaries, considered as one enterprise, or
in the earnings, capital or properties of the
Company or the Bank, 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 the principal amount of the
Bank's assets which are classified by the Bank as
substandard, doubtful or loss or in loans past due
90 days or more or real estate acquired by
foreclosure, by deed-in-lieu of foreclosure or
deemed in-substance foreclosure or any material
decrease in equity capital or total assets of the
Bank, nor has the Company or the Bank issued any
securities (other than in connection with the
incorporation of the Company) or incurred any
liability or obligation for borrowing other than
in the ordinary course of business; (iii) there
have not been any material transactions entered
into by the Company or the Bank; (iv) there has
not been any material adverse change in the
aggregate dollar amount of the Bank's deposits or
its consolidated net worth or spread; (v) there
has been no material adverse change in the
Company's or the Bank's relationship with its
insurance carriers, including, without limitation,
cancellation or other termination of the Company's
or the Bank's fidelity bond or any other type of
insurance coverage; (vi) except as disclosed in
the Prospectus, there has been no material change
in management of the Company or the Bank, neither
of which has any material undisclosed liability of
any kind, contingent or otherwise; (vii) neither
the Company nor the Bank has sustained any
material loss or interference with its respective
business or properties from fire, flood,
windstorm, earthquake, accident or other calamity,
whether or not covered by insurance;
(viii) neither the Company nor the Bank is in
default in the payment of principal or interest on
any outstanding debt obligations; (ix) the
capitalization, liabilities, assets, properties
and business of the Company and the Bank conform
in all material respects to the descriptions
thereof contained in the Prospectus; and
(x) neither the Company nor the Bank has any
material contingent liabilities, except as set
forth in the Prospectus. All documents made
available to or delivered or to be made
available to or delivered by the Bank or the
Company or their representatives in connection
with the issuance and sale of the Shares,
including records of account holders, depositors,
borrowers and other members of the Bank, or in
connection with the Agent's exercise of due
diligence, except for those documents which were
prepared by parties other than the Bank, the
Company or their representatives, to the best
knowledge of the Bank and the Company, were on the
dates on which they were delivered, or will be on
the dates on which they are to be delivered, true,
complete and correct in all material respects.
(p) As of the date hereof and as of the Closing Date,
neither the Company nor the Bank is (i) in
violation of its articles of incorporation or code
of regulations or charter or bylaws, respectively
(and the Bank will not be in violation of its
charter or bylaws in capital stock form upon
consummation of the Conversion), or (ii) in
default in the performance or observance of any
material obligation, agreement, covenant, or
condition contained in any material contract,
lease, loan agreement, indenture or other
instrument to which it is a party or by which it
or any of its property may be bound. The
consummation of the transactions herein
contemplated will not: (i) conflict with or
constitute a breach of, or default under, or
result in the creation of any material lien,
charge or encumbrance (with the exception of the
liquidation account established in the Conversion)
upon any of the assets of the Company or the Bank
pursuant to the Articles of Incorporation and
Bylaws of the Company or the Charter and Bylaws of
the Bank (in either mutual or capital stock form)
or any material contract, lease or other
instrument in which the Company or the Bank has a
beneficial interest, or any applicable law, rule,
regulation or order; (ii) violate any
authorization, approval, judgement, decree, order,
statute, rule or regulation applicable to the
Company or the Bank, except for such violations
which would not have a material adverse effect on
the financial condition and results of operations
of the Company and the Bank on a consolidated
basis; or (iii) with the exception of the
liquidation account established in the Conversion,
result in the creation of any material lien,
charge or encumbrance upon any property of the
Company or the Bank.
(q) No default exists, and no event has occurred which
with notice or lapse of time, or both, would
constitute a default on the part of the Company or
the Bank in the due performance and observance of
any term, covenant or condition of any indenture,
mortgage, deed of trust, note, bank loan or credit
agreement or any other instrument or agreement to
which the Company or the Bank is a party or by
which any of them or any of their property is
bound or affected, except such defaults which
would not have a material adverse affect on the
financial condition or results of operations of
the Company and the Bank on a consolidated basis;
such agreements are in full force and effect; and
no other party to any such agreements has
instituted or, to the best knowledge of the
Company and the Bank, threatened any action or
proceeding wherein the Company or the Bank would
or might be alleged to be in default thereunder,
where such action or proceeding, if determined
adversely to the Company or the Bank, would have a
material adverse effect on the Company or the Bank
considered as one enterprise.
(r) Upon consummation of the Conversion and the
contribution of the Foundation Shares, the
authorized, issued and outstanding equity capital
of the Company will be within the range set forth
in the Prospectus under the caption
"Capitalization," and no Shares have been or will
be issued and outstanding prior to the Closing
Date; the Shares will have been duly and validly
authorized for issuance and, when issued and
delivered by the Company pursuant to the Plan
against payment of the consideration calculated as
set forth in the Plan and in the Prospectus, will
be duly and validly issued, fully paid and
non-assessable, except for shares purchased by the
ESOP with funds borrowed from the Company to the
extent payment therefor in cash has not been
received by the Company; except to the extent that
subscription rights and priorities pursuant
thereto exist pursuant to the Plan, no preemptive
rights exist with respect to the Shares; and the
terms and provisions of the Shares will conform in
all material respects to the description thereof
contained in the Registration Statement and the
Prospectus. To the best knowledge of the Company
and the Bank, upon the issuance of the Shares,
good title to the Shares will be transferred from
the Company to the purchasers thereof against
payment therefor, subject to such claims as may be
asserted against the purchasers thereof by
third-party claimants.
(s) No approval of any regulatory or supervisory or
other public authority is required in connection
with the execution and delivery of this Agreement
or the issuance of the Shares, except for the
approval of the Commission and the OTS, 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
National Association of Securities Dealers, Inc.
("NASD") and/or The Nasdaq Stock Market.
(t) Stockton ▇▇▇▇▇, LLP, which has certified the
audited financial statements and schedules of the
Bank included in the Prospectus, has advised the
Company and the Bank in writing that they are,
with respect to the Company and the Bank,
independent public accountants within the meaning
of the Code of Professional Ethics of the American
Institute of Certified Public Accountants and
applicable regulations of the OTS.
(u) RP Financial, L.C., which has prepared the Bank's
Conversion Valuation Appraisal Report as of
[__________], 1999 (as amended or supplemented, if
so amended or supplemented) (the "Appraisal"), has
advised the Company in writing that it is
independent of the Company and the Bank within the
meaning of the Conversion Regulations.
(v) The Company and the Bank have timely filed all
required federal, state and local tax returns; the
Company and the Bank have paid all taxes that have
become due and payable in respect of such returns,
except where permitted to be extended, have made
adequate reserves for similar future tax
liabilities and no deficiency has been asserted
with respect thereto by any taxing authority.
(w) The Bank is in compliance in all material respects
with the applicable financial record-keeping and
reporting requirements of the Currency and Foreign
Transactions Reporting Act of 1970, as amended,
and the regulations and rules thereunder.
(x) To the knowledge of the Company and the Bank,
neither the Company, the Bank nor employees of the
Company or the Bank has made any payment of funds
of the Company or the Bank as a loan for the
purchase of the Shares or made any other payment
of funds prohibited by law, and no funds have been
set aside to be used for any payment prohibited by
law.
(y) Prior to the Conversion, neither the Company nor
the Bank has: (i) issued any securities within the
last 18 months (except for notes to evidence bank
loans and reverse repurchase agreements or other
liabilities in the ordinary course of business or
as described in the Prospectus); (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 and other securities in the ordinary
course of business; (iii) entered into a financial
or management consulting agreement except as
contemplated hereunder; and (iv) engaged any
intermediary between the Agent and the Company and
the Bank in connection with the offering of the
Shares, and no person is being compensated in any
manner for such service. Appropriate arrangements
have been made for placing the funds received from
subscriptions for Shares in a special interest-
bearing account with the Bank until all Shares are
sold and paid for, with provision for refund to
the purchasers in the event that the Conversion is
not completed for whatever reason or for delivery
to the Company if all Shares are sold.
(z) The Company and the Bank have not relied upon the
Agent or its legal counsel or other advisors for
any legal, tax or accounting advice in connection
with the Conversion.
(aa) The Company is not required to be registered under
the Investment Company Act of 1940, as amended.
(bb) Any certificates signed by an officer of the
Company or the Bank pursuant to the conditions of
this Agreement and delivered to the Agent or their
counsel that refers to this Agreement shall be
deemed to be a representation and warranty by the
Company or the Bank 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.
KBW represents and warrants to the Company and the Bank
that:
(i) it is a corporation and is validly existing
in good standing under the laws of the State of New
York and licensed to conduct business in the State of
Pennsylvania and that ▇▇▇▇ is an unincorporated
division thereof with full power and authority to
provide the services to be furnished to the
Bank and the Company hereunder.
(ii) The execution and delivery of this Agreement
and the consummation of the transactions contemplated
hereby have been duly and validly authorized by all
necessary action on the part of the Agent, and this
Agreement has been duly and validly executed and
delivered by the Agent and is a legal, valid and
binding agreement of the Agent, enforceable in
accordance with its terms.
(iii) Each of the Agent and its employees, 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; and the
Agent is a registered selling agent in each of the
jurisdictions in which the Shares are to be offered by
the Company in reliance upon the Agent as a registered
selling agent as set forth in the blue sky memorandum
prepared with respect to the Offering.
(iv) The execution and delivery of this Agreement
by the Agent, the consummation of the transactions
contemplated hereby and compliance with the terms and
provisions hereof will not conflict with, or result in
a breach of, any of the terms, provisions or conditions
of, or constitute a default (or an event which with
notice or lapse of time or both would constitute a
default) under, the Articles of Incorporation or Bylaws
of the Agent or any agreement, indenture or other
instrument to which the Agent is a party or by which it
or its property is bound.
(v) No approval of any regulatory or supervisory
or other public authority is required in connection
with the Agent's execution and delivery of this
Agreement, except as may have been received.
(vi) There is no suit or proceeding or charge or
action before or by any court, regulatory authority or
government agency or body or, to the knowledge of the
Agent, pending or threatened, which might materially
adversely affect the Agent's performance of this
Agreement.
Section 5.1 Covenants of the Company and the Bank. The
Company and the Bank hereby jointly and severally covenant with
KBW as follows:
(a) The Company will not, at any time after the date
the Registration Statement is declared effective,
file any amendment or supplement to the
Registration Statement without providing the Agent
and its counsel an opportunity to review
such amendment or supplement or file any amendment
or supplement to which amendment or supplement the
Agent or its counsel shall reasonably object.
(b) The Bank will not, at any time after the
Conversion Application is approved by the OTS,
file any amendment or supplement to such
Conversion Application without providing the Agent
and its counsel an opportunity to review such
amendment or supplement or file any amendment or
supplement to which amendment or supplement the
Agent or its counsel shall reasonably object.
(c) The Company will not, at any time before the
Holding Company Application is approved by the
OTS, file any amendment or supplement to such
Holding Company Application without providing the
Agent and its counsel an opportunity to review the
nonconfidential portions of such amendment or
supplement or file any amendment or supplement to
which amendment or supplement the Agent or its
counsel shall reasonably object.
(d) The Company and the Bank will use their best
efforts to cause any post-effective amendment to
the Registration Statement to be declared
effective by the Commission and any post-effective
amendment to the Conversion Application to be
approved by the OTS and will immediately upon
receipt of any information concerning the events
listed below notify the Agent: (i) when the
Registration Statement, as amended, has become
effective; (ii) when the Conversion Application,
as amended, has been approved by the OTS;
(iii) any comments from the Commission, the OTS,
or any other governmental entity with respect to
the Conversion or the transactions contemplated by
this Agreement; (iv) of the request by the
Commission, the OTS, or any other governmental
entity for any amendment or supplement to the
Registration Statement, the Conversion Application
or for additional information; (v) of the issuance
by the Commission, the OTS, 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 Company or the Bank under the
Conversion Regulations, or other applicable law,
or the threat of any such action; (vi) the
issuance by the Commission, the OTS, or any
authority of any stop order suspending the
effectiveness of the Registration Statement or of
the initiation or threat of initiation or threat
of any proceedings for that purpose; or (vii) of
the occurrence of any event mentioned in
paragraph (h) below. The Company and the Bank
will make every reasonable effort (i) to prevent
the issuance by the Commission, the OTS, or any
other state authority of any such order and, if
any such order shall at any time be issued,
(ii) to obtain the lifting thereof at the earliest
possible time.
(e) The Company and the Bank will deliver to the Agent
and to its counsel two conformed copies of the
Registration Statement, the Conversion Application
and the Holding Company Application, as originally
filed and of each amendment or supplement thereto,
including all exhibits. Further, the Company and
the Bank will deliver such additional copies of
the foregoing documents to counsel to the Agent as
may be required for any NASD filings.
(f) The Company and the Bank will furnish to the
Agent, from time to time during the period when
the Prospectus (or any later prospectus related to
this offering) is required to be delivered under
the 1933 Act or the Securities Exchange Act of
1934 (the "1934 Act"), such number of copies of
such Prospectus (as amended or supplemented) as
the Agent may reasonably request for the purposes
contemplated by the 1933 Act, the 1933 Act
Regulations, the 1934 Act or the rules and
regulations promulgated under the 1934 Act (the
"1934 Act Regulations"). The Company authorizes
the Agent to use the Prospectus (as amended or
supplemented, if amended or supplemented) in any
lawful manner contemplated by the Plan in
connection with the sale of the Shares by the
Agent.
(g) The Company and the Bank will comply with any and
all material terms, conditions, requirements and
provisions with respect to the Conversion
including the formation and operation of the
Foundation and the transactions contemplated
thereby imposed by the Commission, the OTS or the
Conversion Regulations, and by the 1933 Act, the
1933 Act Regulations, the 1934 Act and the 1934
Act Regulations to be complied with prior to or
subsequent to the Closing Date and when the
Prospectus is required to be delivered, and during
such time period the Company and the Bank will
comply, at their own expense, with all material
requirements imposed upon them by the Commission,
the OTS or the Conversion Regulations, and by the
1933 Act, the 1933 Act Regulations, the 1934 Act
and the 1934 Act Regulations, including, without
limitation, Rule 10b-5 under the 1934 Act, in each
case as from time to time in force, so
far as necessary to permit the continuance of
sales or dealing in the Common Shares during such
period in accordance with the provisions hereof
and the Prospectus.
(h) If, at any time during the period when the
Prospectus relating to the Shares is required to
be delivered, any event relating to or affecting
the Company or the Bank shall occur, as a result
of which it is necessary or appropriate, in the
opinion of counsel for the Company and the Bank 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 immediately so inform
the Agent and prepare and file, at their own
expense, with the Commission, and the OTS and
furnish to the Agent a reasonable number of copies
of an amendment or amendments of, or a supplement
or supplements to, the Registration Statement or
Prospectus (in form and substance reasonably
satisfactory to the Agent and its counsel after a
reasonable time for review) which will amend or
supplement the Registration Statement or
Prospectus so that as amended or supplemented it
will not contain an untrue statement of a material
fact or omit to state a material fact necessary in
order to make the statements therein, in light of
the circumstances existing at the time the
Prospectus is delivered to a purchaser, not
misleading. For the purpose of this Agreement,
the Company and the Bank each will timely furnish
to the Agent such information with respect to
itself as the Agent may from time to time
reasonably request.
(i) The Company and the Bank 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 Company and the Bank
may reasonably agree upon; provided, however, that
the Company shall not be obligated to file any
general consent to service of process, to qualify
to do business in any jurisdiction in
which it is not so qualified, or to register its
directors or officers as brokers, dealers,
salesmen or agents in any jurisdiction. In each
jurisdiction where any of the Shares shall have
been qualified or registered as above provided,
the Company will make and file such statements and
reports in each fiscal period as are or may be
required by the laws of such jurisdiction.
(j) The liquidation account for the benefit of
Eligible Account Holders and Supplemental Eligible
Account Holders will be duly established and
maintained in accordance with the requirements of
the OTS, and 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
the Common Shares in the event of a complete
liquidation of the Bank.
(k) 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 of their
common shares, other than the Shares and
Foundation Shares or other than in connection with
any plan or arrangement described in the
Prospectus, including existing stock benefit
plans.
(l) The Company shall register its Common Shares under
Section 12(g) of the 1934 Act concurrently with
the Offering and shall request that such
registration be effective prior to or upon
completion of the Conversion. The Company shall
maintain the effectiveness of such registration
for not less than three years or such shorter
period as may be required by the OTS.
(m) During the period during which the Common Shares
are registered under the 1934 Act or for three (3)
years from the date hereof, whichever period is
greater, the Company will furnish to its
shareholders as soon as practicable after the end
of each fiscal year an annual report of the
Company (including a consolidated balance sheet
and statements of consolidated income,
shareholders' equity and cash flows of the Company
and its subsidiaries as at the end of and for such
year, certified by independent public accountants
in accordance with Regulation S-X under the 1933
Act and the 1934 Act).
(n) During the period of three years from the date
hereof, the Company will furnish to the Agent: (i)
as soon as practicable after such information is
publicly available, a copy of each report of the
Company furnished to or filed with the Commission
under the 1934 Act or any national securities
exchange or system on which any class of
securities of the Company is listed or quoted
(including, but not limited to, reports on Forms
10-KSB, 10-QSB 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 shareholders or filed with
the Commission, the OTS or any other supervisory
or regulatory authority or any national securities
exchange or system on which any class of
securities of the Company is listed or quoted,
each press release and material news items and
additional documents and information with respect
to the Company or the 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.
(o) 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 "Use of
Proceeds."
(p) Other than as permitted by the Conversion
Regulations, the HOLA, the 1933 Act, the 1933 Act
Regulations and its rules and regulations and the
laws of any state in which the Shares are
registered or qualified for sale or exempt from
registration, neither the Company nor the Bank
will distribute any prospectus, offering circular
or other offering material in connection with the
offer and sale of the Shares.
(q) The Company will use its best efforts to (i)
encourage and assist a market maker to establish
and maintain a market for the Shares and (ii) list
and maintain quotation of the Shares and the
Foundation Shares on a national or regional
securities exchange or on The Nasdaq Stock Market
effective on or prior to the Closing Date.
(r) The Bank will maintain appropriate arrangements
for depositing all funds received from persons
mailing subscriptions for or orders to purchase
Shares in the Offering on an interest-bearing
basis at the rate described in the Prospectus
until the Closing Date and satisfaction of all
conditions precedent to the release of the Bank's
obligation to refund payments received
from persons subscribing for or ordering Shares in
the Offering in accordance with the Plan and as
described in the Prospectus or until refunds of
such funds have been made to the persons entitled
thereto or withdrawal authorizations canceled in
accordance with the Plan and as described in the
Prospectus. The 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.
(s) The Company will promptly take all necessary
action to register as a savings and loan holding
company under the HOLA.
(t) 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."
(u) Neither the Company nor the Bank will amend the
Plan of Conversion without notifying the Agent
prior thereto.
(v) The Company shall assist the Agent, if necessary,
in connection with the allocation of the Shares in
the event of an oversubscription and shall provide
the Agent with any information necessary to assist
the Company in allocating the Shares in such event
and such information shall be accurate and
reliable in all material respects.
(w) Prior to the Closing Date, the Company and the
Bank will inform the Agent of any event or
circumstances of which it is aware as a result of
which the Registration Statement and/or
Prospectus, as then amended or supplemented, would
contain an untrue statement of a material fact or
omit to state a material fact necessary in order
to make the statements therein not misleading.
(x) Subsequent to the date the Registration Statement
is declared effective by the Commission and prior
to the Closing Date, except as otherwise may be
indicated or contemplated therein or set forth in
an amendment or supplement thereto, neither the
Company nor the Bank will have: (i) issued any
securities or incurred any liability or
obligation, direct or contingent, for borrowed
money, except borrowings from the same
or similar sources indicated in the Prospectus in
the ordinary course of its business, or (ii)
entered into any transaction which is material in
light of the business and properties of the
Company and the Bank, taken as a whole.
(y) The facts and representations provided to ▇▇▇▇▇▇▇
& ▇▇▇, P.C. by the Bank and the Company and upon
which ▇▇▇▇▇▇▇ & ▇▇▇, P.C. will base its opinion
under Section 7(c)(1) are and will be truthful,
accurate and complete.
Section 6. Payment of Expenses. Whether or not the
Conversion is completed or the sale of the Shares by the Company
is consummated, the Company and the Bank jointly and severally
agree to pay or reimburse the Agent for: (a) all filing fees in
connection with all filings related to the Offering with the
NASD; (b) any stock issue or transfer taxes which may be payable
with respect to the sale of the Shares; (c) all reasonable
expenses of the Conversion, including but not limited to the
Company's and the Bank's, and the Agent's attorneys' fees (not to
exceed $30,000) and expenses, blue sky fees, transfer agent,
registrar and other agent charges, fees relating to auditing and
accounting or other advisors and costs of printing all documents
necessary in connection with the Conversion; provided, however,
there will be no out-of-pocket expenses charged by the Agent for
expenses such as travel, photocopying, lodging and meals. In the
event the Company is unable to sell a minimum of 1,381,250 Shares
or the Conversion is terminated or otherwise abandoned, the
Company and the Bank shall promptly reimburse the Agent in
accordance with Section 2(d) hereof.
Section 7. Conditions to the Agent's Obligations. The
obligations of the Agent hereunder, as to the Shares to be
delivered at the Closing Date, are subject, to the extent not
waived in writing by the Agent, to the condition that all
representations and warranties of the Company and the Bank herein
are, at and as of the commencement of the Offering and at and as
of the Closing Date, true and correct in all material respects,
the condition that the Company and the Bank 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 Company and the Bank
shall have conducted the Conversion in all
material respects in accordance with the Plan, the
Conversion Regulations, all requirements of
Pennsylvania law, and all other applicable laws,
regulations, decisions and orders, including all
terms, conditions, requirements and provisions
precedent to the Conversion imposed upon them by
the OTS.
(b) The Registration Statement shall have been
declared effective by the Commission and the
Conversion Application approved by the OTS not
later than 5:30 p.m. on the date of this
Agreement, or with the Agent's consent at a later
time and date; and at the Closing Date, no stop
order suspending the effectiveness of the
Registration Statement shall have been issued
under the 1933 Act or proceedings therefore
initiated or threatened by the Commission or any
state authority, and no order or other action
suspending the authorization of the Prospectus or
the consummation of the Conversion shall have been
issued or proceedings therefore initiated or, to
the Company's or the Bank's knowledge, threatened
by the Commission, the OTS, the FDIC, or any
other 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 ▇▇▇▇▇▇▇ & ▇▇▇, P.C.,
special counsel for the Company and the Bank,
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
Commonwealth of Pennsylvania.
(ii) The Company has corporate power
and authority to own, lease and operate its
properties and to conduct its business as
described in the Registration Statement and
the Prospectus.
(iii) The Bank is a validly existing
federally chartered savings bank in mutual
form and immediately following the completion
of the Conversion will be a validly existing
federally chartered savings bank in permanent
capital stock form of organization, in both
instances duly authorized to conduct its
business and own its property as described in
the Registration Statement and the
Prospectus. All of the outstanding capital
stock of the Bank upon completion of the
Conversion will be duly authorized and, upon
payment therefor, will be validly issued,
fully paid and non-assessable and will be
owned by the Company, to such counsel's
Actual Knowledge, free and clear of any
liens, encumbrances, claims or
other restrictions.
(iv) The Bank is a member of the FHLB-
Pittsburgh. 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 captions "The
Conversion- Effects of Conversion-Depositors=
Rights if IGA Liquidates," to the extent that
such information constitutes matters of law
and legal conclusions, has been reviewed by
such counsel and is accurately described in
all material respects.
(v) Immediately following the
consummation of the Conversion and the
issuance of the Foundation Shares to the
Foundation, the authorized, issued and
outstanding Common Shares of the Company will
be within the range set forth in the
Prospectus under the caption
"Capitalization," and no Common Shares have
been issued prior to the Closing Date; at the
time of the Conversion, the Shares subscribed
for pursuant to the Offering will have been
duly and validly authorized for issuance, and
when issued and delivered by the Company
pursuant to the Plan against payment of the
consideration calculated as set forth in the
Plan and Prospectus, will be duly and validly
issued and fully paid and non-assessable,
except for shares purchased by the ESOP with
funds borrowed from the Company to the extent
payment therefor in cash has not been
received by the Company; except to the extent
that subscription rights and priorities
pursuant thereto exist pursuant to the Plan,
the issuance of the Shares is not subject to
preemptive rights and the terms and
provisions of the Shares conform in all
material respects to the description thereof
contained in the Prospectus. To such
counsel's Actual Knowledge, upon the issuance
of the Shares, good title to the Shares will
be transferred 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.
(vi) The Bank and the Company have full
corporate power and authority to enter into
the Agreement and to consummate the
transactions contemplated hereby including
the establishment of the Foundation and the
contribution thereto of the Foundation Shares
and by the Plan. The execution and delivery
of this Agreement and the consummation of the
transactions contemplated hereby have been
duly and validly authorized by all necessary
action on the part of the Company and the
Bank; and this Agreement is a valid and
binding obligation of the Company and the
Bank, enforceable against the Company and the
Bank 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 federally chartered savings
institutions, (ii) general equitable
principles, (iii) laws relating to the safety
and soundness of insured depository
institutions, and (iv) applicable law or
public policy with respect to the
indemnification and/or contribution
provisions contained herein, including
without limitation the provisions of
Sections 23A and 23B of the Federal Reserve
Act and except that no opinion need be
expressed as to the effect or availability of
equitable remedies or injunctive relief
(regardless of whether such enforceability is
considered in a proceeding in equity or at
law).
(vii) The Conversion Application has
been approved by the OTS and the Prospectus
has been authorized for use by the OTS. The
OTS has approved the Holding Company
Application and the purchase by the Company
of all of the issued and outstanding capital
stock of the Bank and no action has been
taken, and to such counsel's Actual
Knowledge, none is pending or threatened, to
revoke any such authorization or approval.
(viii) The Plan and the establishment
and funding of the Foundation has been duly
adopted by the required vote of the directors
of the Company and the Bank, and based upon
the certificate of the inspectors of
election, by the members of the Bank.
(ix) Subject to the satisfaction of the
conditions to the OTS's approval of the
Conversion, no further approval,
registration, authorization, consent or other
order of any federal regulatory agency is
required in connection with the execution and
delivery of this Agreement, the issuance of
the Shares and the consummation of the
Conversion, except as may be required under
the securities or blue sky laws of various
jurisdictions (as to which no opinion need be
rendered) and except as may be required under
the rules and regulations of the NASD and/or
The Nasdaq Stock Market (as to which no
opinion need by 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
Commission.
(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,
federal and state law and all applicable
rules and regulations promulgated thereunder
(other than the financial statements, the
notes thereto, and other tabular, financial,
statistical and appraisal data included
therein, as to which no opinion need be
rendered).
(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 due and 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 Prospectus of such
documents and exhibits is accurate in all
material respects and fairly presents the
information required to be shown.
(xvi) The Plan complies in all material
respects with all applicable federal and
Pennsylvania laws, rules, regulations,
decisions and orders including, but not
limited to, the Conversion Regulations; to
such counsel's Actual Knowledge, no order has
been issued by the OTS, the Commission, the
FDIC, or any state authority to suspend the
Offering or the use of the Prospectus, and no
action for such purposes has been instituted
or threatened by the OTS, the Commission,
the FDIC, or any other state authority and,
to such counsel's Actual Knowledge, no person
has sought to obtain regulatory or judicial
review of the final action of the
OTS approving the Plan, the Conversion
Application (which includes the Plan that
provides for the establishment of the
Foundation), the Holding Company Application
or the Prospectus.
(xvii) To such counsel's Actual
Knowledge, the Company and the Bank 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 Company and the Bank are
in all material respects complying therewith.
(xviii) To such counsel's Actual
Knowledge, neither the Company nor the Bank
is in violation of its Articles of
Incorporation and Bylaws or its Charter and
Bylaws, as appropriate or, to such counsel's
Actual Knowledge, in default or violation of
any obligation, agreement, covenant or
condition contained in any contract,
indenture, mortgage, loan agreement, note,
lease or other instrument to which it is a
party or by which it or its property may be
bound, except for such defaults or violations
which would not have a material adverse
impact on the financial condition or results
of operations of the Company and the Bank on
a consolidated basis; to such counsel's
Actual Knowledge, the execution and delivery
of this Agreement, the incurrence of the
obligations herein set forth and the
consummation of the transactions contemplated
herein will not conflict with or constitute a
breach of, or default under, or result in the
creation or imposition of any lien, charge or
encumbrance upon any property or assets of
the Company or the Bank pursuant to any
material contract, indenture, mortgage, loan
agreement, note, lease or other instrument to
which the Company or the Bank is a party or
by which any of them may be bound, or to
which any of the property or assets of the
Company or the Bank are subject (other than
the establishment of the liquidation
account); and such action will not result in
any violation of the provisions of the
Articles of Incorporation or Bylaws of the
Company or the Charter or the Bylaws of the
Bank or, to such counsel's Actual Knowledge,
result in any violation of any applicable
federal or state law, act,
regulation (except that no opinion with
respect to the securities and blue sky laws
of various jurisdictions or the rules or
regulations of the NASD and/or The Nasdaq
Stock Market need be rendered) or order or
court order, writ, injunction or decree.
(xix) The Foundation has been duly
incorporated and is validly existing as a
non-stock 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 Prospectus; the
Foundation is not a savings and loan holding
company within the meaning of 12 C.F.R.
Section 574.2(q) as a result of the issuance
of Common Shares to it in accordance with the
terms of the Plan and in the amounts as
described in the Prospectus; no approvals are
required to establish the Foundation and to
contribute the Common Shares thereto as
described in the Prospectus other than those
set forth in any written notice or order of
approval or non-objection of the Conversion,
the Conversion Application or the Holding
Company Application, copies of which were
provided to the Agent prior to the Closing
Time.
(xx) The Company's Articles of
Incorporation and Bylaws comply in all
material respects with the laws of the
Commonwealth of Pennsylvania. The Bank's
Charter and Bylaws comply in all material
respects with federal law.
(xxi) To such counsel's Actual
Knowledge, neither the Company nor the Bank
is in violation of any directive from the OTS
or the FDIC to make any material change in
the method of conducting its respective
business.
(xxii) The information in the
Prospectus under the captions "How We Are
Regulated," "The Conversion," "Restrictions
on Acquisitions of Jade and IGA" and
"Description of Capital Stock of Jade," 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 in the Prospectus under
the caption "The Conversion" 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 fairly describes
such process in all material respects. The
descriptions in the Prospectus of statutes or
regulations are accurate summaries and fairly
present the information required to be shown.
The information under the caption "The
Conversion-Effects of the Conversion--Tax
Effects of the Conversion and Jade's Stock
Offering" has been reviewed by such counsel
and fairly describes the opinions rendered by
them to the Company and the Bank with respect
to such matters.
In addition, such counsel shall state
that during the preparation of the Conversion
Application, the Registration Statement and
the Prospectus, they participated in
conferences with certain officers of, the
independent public and internal accountants
for, and other representatives of, the
Company and the Bank, at which conferences
the contents of the Conversion Application,
the Registration Statement and the Prospectus
and related matters were discussed and, while
such counsel have not confirmed the accuracy
or completeness of or otherwise verified the
information contained in the Conversion
Application, the Registration Statement or
the Prospectus and do not assume any
responsibility for such information, based
upon such conferences and a review of
documents deemed relevant for the purpose of
rendering their opinion (relying as to
materiality as to factual matters on
certificates of officers and other factual
representations by the Company and the Bank),
nothing has come to their attention that
would lead them to believe that the
Conversion Application, the Registration
Statement, the Prospectus, or any amendment
or supplement thereto (other than the
financial statements, the notes thereto, and
other tabular, financial, statistical and
appraisal data included therein as to which
no view need be rendered) contained an untrue
statement of a material fact or omitted to
state a material fact required to be stated
therein or necessary to make the statements
therein, in light of the
circumstances under which they were made, not
misleading.
In giving such opinion, such counsel may
rely as to all matters of fact on
certificates of officers or directors of the
Company and the Bank and certificates of
public officials. Such counsel's opinion
shall be limited to matters governed by
federal laws and by the laws of the
Commonwealth of Pennsylvania. The term
"Actual Knowledge" as used herein shall have
the meaning set forth in the Legal Opinion
Accord of the American Bar Association
Section of Business Law. For purposes of
such opinion, no proceedings shall be deemed
to be pending, no order or stop order shall
be deemed to be issued, and no action shall
be deemed to be instituted unless, in each
case, a director or executive officer of the
Company or the Bank shall have received a
copy of such proceedings, order, stop order
or action. In addition, such opinion may be
limited to present statutes, regulations and
judicial interpretations and to facts as they
presently exist; in rendering such opinion,
such counsel need assume no obligation to
revise or supplement it should the present
laws be changed by legislative or regulatory
action, judicial decision or otherwise; and
such counsel need express no view, opinion or
belief with respect to whether any proposed
or pending legislation, if enacted, or any
proposed or pending regulations or policy
statements issued by any regulatory agency,
whether or not promulgated pursuant to any
such legislation, would affect the validity
of the Conversion or any aspect thereof.
Such counsel may assume that any agreement is
the valid and binding obligation of any
parties to such agreement other than the
Company or the Bank.
(d) At the Closing Date, the Agent shall receive a
certificate of the Chief Executive Officer and the
Principal Accounting Officer of the Company and
the Bank in form and substance reasonably
satisfactory to the Agent's Counsel, dated as of
such Closing Date, to the effect that: (i) they
have carefully examined the Prospectus and, in
their opinion, at the time the Prospectus became
authorized for final use, the Prospectus did not
contain any untrue statement of a material fact or
omit to state a material fact necessary in order
to make the statements therein, in light
of the circumstances under which they were made,
not misleading; (ii) since the date the Prospectus
became authorized for final use, no event has
occurred which should have been set forth in an
amendment or supplement to the Prospectus which
has not been so set forth, including specifically,
but without limitation, any material adverse
change in the condition, financial or otherwise,
or in the earnings, capital, properties or
business of the Company or the Bank 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 the Prospectus, there has been no
material adverse change in the condition,
financial or otherwise, or in the earnings,
capital or properties of the Company or the Bank
independently, or of the Company and the Bank
considered as one enterprise, whether or not
arising in the ordinary course of business; (iv)
the representations and warranties in Section 4
are true and correct with the same force and
effect as though expressly made at and as of the
Closing Date; (v) the Company and the Bank have
complied in all material respects with all
agreements and satisfied all conditions on their
part to be performed or satisfied at or prior to
the Closing Date and will comply in all material
respects with all obligations to be satisfied by
them after the Conversion; (vi) no stop order
suspending the effectiveness of the Registration
Statement has been initiated or, to the best
knowledge of the Company or the Bank, threatened
by the Commission or any state authority; (vii) no
order suspending the Offering, the Conversion, the
acquisition of all of the shares of the Bank by
the Company or the effectiveness of the Prospectus
has been issued and no proceedings for that
purpose are pending or, to the best knowledge of
the Company or the Bank, threatened by the OTS,
the Commission, the FDIC, or any state authority;
and (viii) to the best knowledge of the Company or
the Bank, 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, or in the earnings or
business of the Company or the Bank independently,
or of the Company and the Bank 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; (ii) the Company
or the Bank shall not have received from the OTS
or the FDIC any direction (oral or written) to
make any material change in the method of
conducting their business with which it has not
complied (which direction, if any, shall have been
disclosed to the Agent) or which materially and
adversely would affect the business, operations or
financial condition or income of the Company and
the Bank taken as a whole; (iii) neither the
Company nor the Bank shall have been in default
(nor shall an event have occurred which, with
notice or lapse of time or both, would constitute
a default) under any provision of any agreement or
instrument relating to any outstanding
indebtedness; (iv) no action, suit or proceeding,
at law or in equity or before or by any federal or
state commission, board or other administrative
agency, shall be pending or, to the knowledge of
the Company or the Bank, threatened against the
Company or the Bank or affecting any of their
properties wherein an unfavorable decision, ruling
or finding would materially and adversely affect
the business, operations, financial condition or
income of the Company or the Bank taken as a
whole; and (v) the Shares shall have been
qualified or registered for offering and sale or
exempted therefrom under the securities or blue
sky laws of the jurisdictions as the Agent shall
have reasonably requested and as agreed to by the
Company and the Bank.
(f) Concurrently with the execution of this Agreement,
the Agent shall receive a letter from Stockton
▇▇▇▇▇, LLP dated as of the date of the Prospectus
and addressed to the Agent: (i) confirming that
Stockton ▇▇▇▇▇, 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 stating in
effect that in its opinion the financial
statements, schedules and related notes of the
Bank as of December 31, 1998 and for each of the
six month periods ended December 31, 1998 and 1997
and as of June 30, 1998, and for each of the three
years in the period ended June 30, 1998, included
in the Prospectus and covered by their opinion
included therein, comply as to form in all
material respects with the applicable accounting
requirements and related published rules and
regulations of the OTS and the 1933 Act; (ii)
stating in effect that, on the basis of certain
agreed upon procedures (but not an audit in
accordance with generally accepted auditing
standards) consisting of a reading of
the latest available unaudited interim financial
statements of the Bank prepared by the Bank, a
reading of the minutes of the meetings of the
Board of Directors and members of the Bank and
consultations with officers of the Bank
responsible for financial and accounting matters,
nothing came to their attention which caused them
to believe that: (A) the unaudited financial
statements included in the Prospectus are not in
conformity with the 1933 Act, applicable
accounting requirements of the OTS and generally
accepted accounting principles applied on a basis
substantially consistent with that of the audited
financial statements included in the Prospectus;
or (B) during the period from the date of the
latest unaudited financial statements included in
the Prospectus to a specified date not more than
three business days prior to the date of the
Prospectus, except as has been described in the
Prospectus, there was any increase in borrowings,
other than normal deposit fluctuations, by the
Bank; or (C) there was any decrease in the net
assets of the Bank at the date of such letter as
compared with amounts shown in the latest
unaudited balance sheets included in the
Prospectus; and (iii) stating that, in addition to
the audit referred to in their opinion included in
the Prospectus and the performance of the
procedures referred to in clause (ii) of this
subsection (g), they have compared with the
general accounting records of the Bank, which are
subject to the internal controls of the Bank, the
accounting system and other data prepared by 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 dated the Closing Date, addressed to the
Agent, confirming the statements made by Stockton
▇▇▇▇▇, LLP in the letter delivered by it pursuant
to subsection (g) of this Section 7, the
"specified date" referred to in clause (ii) of
subsection (g) to be a date specified in the
letter required by this subsection (h) which for
purposes of such letter 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 RP Financial, L.C., dated the Closing
Date thereof and addressed to counsel for the
Agent (i) confirming that said firm is independent
of the Company and the Bank and is
experienced and expert in the area of corporate
appraisals within the meaning of Title 12 of the
Code of Federal Regulations,
Section 563b.7(f)(1)(i), (ii) stating in effect
that the Appraisal prepared by such firm complies
in all material respects with the applicable
requirements of Title 12 of the Code of Federal
Regulations, and (iii) further stating that its
opinion of the aggregate pro forma market value of
the Company and the Bank expressed in its
Appraisal dated as of [__________], 1999, as most
recently updated, remains in effect.
(i) The Company and the Bank shall not have sustained
since the date of the latest financial statements
included in the Prospectus any material loss or
interference with its business from fire,
explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or
court or governmental action, order or decree,
otherwise than as set forth or contemplated in the
Registration Statement and Prospectus and since
the respective dates as of which information is
given in the Registration Statement and
Prospectus, there shall not have been any change
in the long-term debt of the Company or the Bank
other than debt incurred in relation to the
purchase of Shares by the Bank's eligible plans,
or any change, or any development involving a
prospective change, in or affecting the general
affairs, management, financial position,
shareholders' equity or results of operations of
the Company or the Bank, otherwise than as set
forth or contemplated in the Registration
Statement and Prospectus, the effect of which, in
any such case described above, is in ▇▇▇▇'▇
reasonable judgment sufficiently material and
adverse as to make it impracticable or inadvisable
to proceed with the Subscription Offering or the
delivery of the Shares on the terms and in the
manner contemplated in the Prospectus.
(j) At or prior to the Closing Date, the Agent shall
receive: (i) a copy of the letters from the OTS
approving the Conversion Application and
authorizing the use of the Prospectus; (ii) a copy
of the order from the Commission declaring the
Registration Statement effective; (iii) a
certificate from the OTS evidencing the good
standing of the Bank; (iv) a certificate of good
standing from the Commonwealth of Pennsylvania
evidencing the good standing of the Company; (v) a
certificate from the FDIC evidencing the Bank's
insurance of accounts; (vi) a certificate from the
FHLB-Pittsburgh evidencing the Bank's
membership thereof; (vii) a copy of the letter
from the OTS approving the Company's Holding
Company Application; and (viii) a certified copy
of the Bank's Charter and Bylaws.
(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 Stock Market, or minimum
or maximum prices for trading have been fixed, or
maximum ranges for prices for securities have been
required by either of such exchanges or the NASD
or by order of the Commission or any other
governmental authority; (ii) a general moratorium
on the operations of commercial banks, or federal
savings and loan associations or a general
moratorium on the withdrawal of deposits from
commercial banks or federal savings and loan
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 judgement, makes it
impracticable or inadvisable to proceed with the
Offering or the delivery of the Shares on the
terms and in the manner contemplated in the
Registration Statement and the Prospectus.
(l) At or prior to the Closing Date, counsel to the
Agent shall have been furnished with such
documents and opinions as they may reasonably
require for the purpose of enabling them to pass
upon the sale of the Shares as herein contemplated
and related proceedings or in order to evidence
the occurrence or completeness of any of the
representations or warranties, or the fulfillment
of any of the conditions, herein contained; and
all proceedings taken by the Company or the Bank
in connection with the Conversion and the sale of
the Shares as herein contemplated shall be
satisfactory in form and substance to ▇▇▇▇ and its
counsel.
Section 8. Indemnification.
(a) The Company and the Bank jointly and severally
agree to indemnify and hold harmless the Agent,
its respective officers and directors, employees
and agents, and each person, if any, who controls
the Agent within the meaning of Section 15 of the
1933 Act or Section 20(a) of the 1934 Act, against
any and all loss, liability, claim, damage or
expense whatsoever (including, but not limited to,
settlement expenses and the establishment of the
Foundation and the contribution of the Foundation
Shares thereto by the Company), 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 or defending any actions, proceedings or
claims (whether commenced or threatened) to the
extent such losses, claims, damages, liabilities
or actions: (i) arise out of or are based upon any
untrue statement or alleged untrue statement of a
material fact contained in the Registration
Statement (or any amendment or supplement
thereto), preliminary or final Prospectus (or any
amendment or supplement thereto), the Conversion
Application (or any amendment or supplement
thereto), the Holding Company Application or any
instrument or document executed by the Company or
the Bank or based upon written information
supplied by the Company or the Bank filed in any
state or jurisdiction to register or qualify any
or all of the Shares or to claim an exemption
therefrom or provided to any state or jurisdiction
to exempt the Company as a broker-dealer or its
officers, directors and employees as
broker-dealers or agent, under the securities laws
thereof (collectively, the "Blue Sky
Application"), or any document, advertisement,
oral statement or communication ("Sales
Information") prepared, made or executed by or on
behalf of the Company or the Bank with their
consent or based upon written or oral information
furnished by or on behalf of the Company or the
Bank, whether or not filed in any jurisdiction, in
order to qualify or register the Shares or to
claim an exemption therefrom under the securities
laws thereof; (ii) arise out of or are based upon
the omission or alleged omission to state in any
of the foregoing documents or information a
material fact required to be stated therein or
necessary to make the statements
therein, in light of the circumstances under which
they were made, not misleading; or (iii) arise
from any theory of liability whatsoever relating
to or arising from or based upon the Registration
Statement (or any amendment or supplement
thereto), preliminary or final Prospectus (or any
amendment or supplement thereto), the Conversion
Application (or any amendment or supplement
thereto), any Blue Sky Application or Sales
Information or other documentation distributed in
connection with the Conversion; provided, however,
that no indemnification is required under this
paragraph (a) to the extent such losses, claims,
damages, liabilities or actions arise out of or
are based upon any untrue material statement or
alleged untrue material statement in, or material
omission or alleged material omission from, the
Registration Statement (or any amendment or
supplement thereto), preliminary or final
Prospectus (or any amendment or supplement
thereto), the Conversion Application, any Blue Sky
Application or Sales Information made in reliance
upon and in conformity with information furnished
in writing to the Company or the Bank by the Agent
or its counsel regarding the Agent, provided, that
it is agreed and understood that the only
information furnished in writing to the Company or
the Bank by the Agent regarding the Agent is set
forth in the Prospectus under the caption "The
Conversion-Marketing Arrangements"; and, provided
further, that such indemnification shall be to the
extent not prohibited by the Commission, the OTS,
the FDIC and the Board of Governors of the Federal
Reserve.
(b) The Agent agrees to indemnify and hold harmless
the Company and the Bank, their directors and
officers and each person, if any, who controls the
Company or the Bank within the meaning of
Section 15 of the 1933 Act or Section 20(a) of the
1934 Act against any and all loss, liability,
claim, damage or expense whatsoever (including but
not limited to settlement expenses), joint or
several, which they, or any of them, may suffer or
to which they, or any of them may become subject
under all applicable federal and state laws or
otherwise, and to promptly reimburse the Company,
the Bank, and any such persons upon written demand
for any expenses (including reasonable fees and
disbursements of counsel) incurred by them, or any
of them, in connection with investigating,
preparing or defending any actions, proceedings or
claims (whether commenced or threatened) to the
extent such losses, claims, damages, liabilities
or actions: (i) arise out of or are
based upon any untrue statement or alleged untrue
statement of a material fact contained in the
Registration Statement (or any amendment or
supplement thereto), the Conversion Application
(or any amendment or supplement thereto), the
preliminary or final Prospectus (or any amendment
or supplement thereto), any Blue Sky Application
or Sales Information, (ii) are based upon the
omission or alleged omission to state in any of
the foregoing documents a material fact required
to be stated therein or necessary to make the
statements therein, in the light of the
circumstances under which they were made, not
misleading, or (iii) arise from any theory of
liability whatsoever relating to or arising from
or based upon the Registration Statement (or any
amendment or supplement thereto), preliminary or
final Prospectus (or any amendment or supplement
thereto), the Conversion Application (or any
amendment or supplement thereto), or any Blue Sky
Application or Sales Information or other
documentation distributed in connection with the
Conversion; provided, however, that the Agent's
obligations under this Section 8(b) shall exist
only if and only to the extent that such untrue
statement or alleged untrue statement was made in,
or such material fact or alleged material fact was
omitted from, the Registration Statement (or any
amendment or supplement thereto), the preliminary
or final Prospectus (or any amendment or
supplement thereto), the Conversion Application
(or any amendment or supplement thereto), any Blue
Sky Application or Sales Information in reliance
upon and in conformity with information furnished
in writing to the Company or the Bank by the Agent
or its counsel regarding the Agent, provided, that
it is agreed and understood that the only
information furnished in writing to the Company or
the Bank by the Agent regarding the Agent is set
forth in the Prospectus under the caption "The
Conversion Marketing Arrangements."
(c) Each indemnified party shall give prompt written
notice to each indemnifying party of any action,
proceeding, claim (whether commenced or
threatened), or suit instituted against it in
respect of which indemnity may be sought
hereunder, but failure to so notify an
indemnifying party shall not relieve it from any
liability which it may have on account of this
Section 8 or otherwise. An indemnifying party may
participate at its own expense in the defense of
such action. In addition, if it so elects within
a reasonable time after receipt of such notice, an
indemnifying party, jointly with any
other indemnifying parties receiving such notice,
may assume defense of such action with counsel
chosen by it and approved by the indemnified
parties that are defendants in such action, unless
such indemnified parties reasonably object to such
assumption on the ground that there may be legal
defenses available to them that are different from
or in addition to those available to such
indemnifying party. If an indemnifying party
assumes the defense of such action, the
indemnifying parties shall not be liable for any
fees and expenses of counsel for the indemnified
parties incurred thereafter in connection with
such action, proceeding or claim, other than
reasonable costs of investigation. In no event
shall the indemnifying parties be liable for the
fees and expenses of more than one separate firm
of attorneys (and any special counsel that said
firm may retain) for each indemnified party in
connection with any one action, proceeding or
claim or separate but similar or related actions,
proceedings or claims in the same jurisdiction
arising out of the same general allegations or
circumstances.
(d) The agreements contained in this Section 8 and in
Section 9 hereof and the representations and
warranties of the Company and the Bank 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,
agent or employees or by or on behalf of the
Company or the Bank or any officers, directors or
controlling persons, agent or employees of the
Company or the Bank; (ii) delivery of and payment
hereunder for the Shares; or (iii) any termination
of this Agreement.
Section 9. Contribution. In order to provide for just and
equitable contribution in circumstances in which the
indemnification provided for in Section 8 is due in accordance
with its terms but is for any reason held by a court to be
unavailable from the Company, the 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, but
after deducting any contribution received by the Company, the
Bank or the Agent from persons other than the other parties
thereto, who may also be liable for contribution) in such
proportion so that the Agent is responsible for that portion
represented by the percentage that the fees paid to the Agent
pursuant to Section 2 of this Agreement (not including expenses)
bears to the gross proceeds received by the Company
from the sale of the Shares in the Offering, and the Company and
the Bank shall be responsible for the balance. If, however, the
allocation provided above is not permitted by applicable law,
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 Offering (before deducting
expenses). The relative fault shall be determined by reference
to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the
Company and/or the 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 pursuant to Section 8(b)
or this Section 9 which in the aggregate exceeds the amount paid
(excluding reimbursable expenses) to the Agent under this
Agreement. It is understood that the above stated limitation on
the Agent's liability is essential to the Agent and that the
Agent would not have entered into this Agreement if such
limitation had not been agreed to by the parties to this
Agreement. No person found guilty of any fraudulent
misrepresentation (within the meaning of Section 11(f) of the
▇▇▇▇ ▇▇▇) shall be entitled to contribution from any person who
was not found guilty of such fraudulent misrepresentation. The
obligations of the Company, the Bank and the Agent under this
Section 9 and under Section 8 shall be in addition to any
liability which the Company, the Bank and the Agent 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.
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, the Bank and the Agent set forth in or
made pursuant to this Agreement shall remain in full force and
effect, regardless of any termination or cancellation of this
Agreement or any investigation made by or on behalf of the Agent,
the Company, the Bank or any controlling person referred to in
Section 8 hereof, and shall survive the issuance of the Shares,
and any successor or assign of the Agent, the Company, the 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 this
Agreement by giving the notice indicated below in this Section 11
at any time after this Agreement becomes effective as follows:
(a) In the event the Company fails to sell the
required minimum number of the Shares by [________
__, ____], and in accordance with the provisions
of the Plan or as required by the Conversion
Regulations, and applicable law, this Agreement
shall terminate upon refund by the Company to each
person who has subscribed for or ordered any of
the Shares the full amount which it may have
received from such person, together with interest
as provided in the Prospectus, and no party to
this Agreement shall have any obligation to the
other hereunder, except as set forth in
Sections 2(a), 6, 8 and 9 hereof.
(b) If any of the conditions specified in Section 7
shall not have been fulfilled when and as required
by this Agreement, unless waived in writing, or by
the Closing Date, this Agreement and all of the
Agent's obligations hereunder may be canceled by
the Agent by notifying the Company and the Bank of
such cancellation in writing or by telegram at any
time at or prior to the Closing Date, and any such
cancellation shall be without liability of any
party to any other party except as otherwise
provided in Sections 2(a), 6, 8 and 9 hereof.
(c) If the Agent elects to terminate this Agreement as
provided in this Section, the Company and the Bank
shall be notified promptly by telephone or
telegram, confirmed by letter.
The Company and the Bank 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 ▇▇▇▇▇▇▇ ▇▇▇▇ & Company, ▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: ▇▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇ (with a copy to Silver, ▇▇▇▇▇▇▇▇ & ▇▇▇▇, L.L.P.,
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, P.C. and, if sent to the Company
and the Bank, shall be mailed, delivered or telegraphed and
confirmed to the Company and the Bank at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇,
▇▇., President and Chief Executive Officer (with a copy to
▇▇▇▇▇▇▇ & ▇▇▇, P.C., Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.).
Section 13. Parties. The Company and the Bank shall be
entitled to act and rely on any request, notice, consent, waiver
or agreement purportedly given on behalf of the Agent when the
same shall have been given by the undersigned. The Agent shall
be entitled to act and rely on any request, notice, consent,
waiver or agreement purportedly given on behalf of the Company or
the Bank, when the same shall have been given by the undersigned
or any other officer of the Company or the Bank. This Agreement
shall inure solely to the benefit of, and shall be binding upon,
the Agent, the Company, the Bank, and their respective successors
and assigns, and no other person shall have or be construed to
have any legal or equitable right, remedy or claim under or in
respect of or by virtue of this Agreement or any provision herein
contained. It is understood and agreed that this Agreement is
the exclusive agreement among the parties hereto, and supersedes
any prior agreement among the parties and may not be varied
except in writing signed by all the parties.
Section 14. Closing. The closing for the sale of the
Shares shall take place on the Closing Date at such location as
mutually agreed upon by the Agent and the Company and the Bank.
At the closing, the Company and the Bank 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 Commonwealth of
Pennsylvania.
Section 17. Counterparts. This Agreement may be executed
in separate counterparts, each of which so executed and delivered
shall be an original, but all of which together shall constitute
but one and the same instrument.
If the foregoing correctly sets forth the arrangement among
the Company, the Bank and the Agent, please indicate acceptance
thereof in the space provided below for that purpose, whereupon
this letter and the Agent's acceptance shall constitute a binding
agreement.
Section 18. Entire Agreement. This Agreement, including
schedules and exhibits hereto, which are integral parts hereof
and incorporated as though set forth in full, constitutes the
entire agreement between the parties pertaining to the subject
matter hereof superseding any and all prior or contemporaneous
oral or prior written agreements, proposals, letters of intent
and understandings, and cannot be modified, changed, waived or
terminated except by a writing which expressly states that it is
an amendment, modification or waiver, refers to this Agreement
and is signed by the party to be charged. No course of conduct
or dealing shall be construed to modify, amend or otherwise
affect any of the provisions hereof.
Very truly yours,
JADE FINANCIAL CORP. IGA FEDERAL SAVINGS
By Its Authorized By Its Authorized
Representative: Representative:
___________________________ _____________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇.
President and Chief Executive President and Chief Executive
Officer Officer
Accepted as of the date first above written
▇▇▇▇▇▇▇ ▇▇▇▇ & Company, A Division of
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, Inc.
By Its Authorized
Representative:
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Executive Vice President
EXHIBIT A
Letter Agreement