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P&B DRAFT - 9/25/98
COMMUNITY SAVINGS BANKSHARES, INC.
Up to 7,753,143 Shares
(Anticipated Maximum)
COMMON STOCK
($1.00 Par Value)
Subscription Price $10.00 Per Share
AGENCY AGREEMENT
October ___, 1998
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & Co., Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
The Primary Parties, e.g. Community Savings Bankshares, Inc. a Delaware
corporation (the "Company"), Community Savings Bankshares, Inc., a federal
corporation (the "Mid-Tier Holding Company"), ComFed, M.H.C. (the "MHC") and
Community Savings, F. A., North Palm Beach, Florida, a federally chartered
savings and loan association (the "Association"), 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 ▇▇▇▇▇▇▇▇, Billings, ▇▇▇▇▇▇ & Co., Inc. (the "Agent") as follows (defined
terms used herein shall have the same definition given in the Prospectus dated
October ___, 1998 unless otherwise defined herein):
SECTION 1. THE OFFERING. The Mid-Tier Holding Company will adopt an
interim federal stock charter and thereafter merge into the Association with the
Association as the surviving entity. The MHC, in accordance with the Plan of
Conversion of Agreement and Plan of Reorganization (the "Plan") will then
convert into an interim federal stock savings bank and merge with and into the
Association, pursuant to which the MHC will cease to exist (the "Conversion").
In connection with the Conversion, each stockholder of the Mid-Tier
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Holding Company immediately prior to the Conversion, except the MHC, ("Public
Stockholders") will receive Exchange Shares of the Company's common stock
("Common Stock," or "Shares") pursuant to a ratio that will result in Public
Stockholders owning in the aggregate immediately after the Conversion the same
percentage of the outstanding shares of Common Stock, before giving effect to
(a) the payment of cash in lieu of fractional shares; (b) the purchase by such
stockholders of additional shares of Common Stock in the Offering; and (c)
subject to an adjustment by the OTS to reflect the MHC's waiver of certain
dividends declared by the Association or the Mid-Tier Holding Company in the
total amount of $__ million.
Pursuant to the Plan and in connection with the Conversion, the Company
is offering up to 7,753,143 shares of its common stock (the "Conversion Stock")
in a subscription and community offering (the "Offerings"). Conversion Stock is
first being offered in a subscription offering with nontransferable subscription
rights being granted, in the following order of priority, to (i) depositors of
the Association with account balances of $50.00 or more as of the close of
business on June 30, 1997 ("Eligible Account Holders"); (ii) the Employee Stock
Ownership Plan (the ESOP"); (iii) depositors of the Association with account
balances of $50.00 or more as of the close of business on __________, 1998
(other than Eligible Account Holders) ("Supplemental Eligible Account Holders");
(iv) depositors of the Association as of the close of business on _________,
1998 (other than Eligible Account Holders and Supplemental Eligible Account
Holders) and certain borrowers ("Other Members") and (v) directors, officers and
employees of the Association. Subscription rights will expire if not exercised
by ▇▇▇▇, Eastern Time, on _________, 1998, unless extended.
Subject to the prior rights of holders of subscription rights,
Conversion Stock not subscribed for in the Subscription Offering is being
offered first to Eligible Public Shareholders and then in the Community Offering
to certain members of the general public to whom a copy of the Prospectus, stock
order form and certification is delivered, with preference given to natural
persons residing in the Community. The Primary Parties reserve the absolute
right to reject or accept any orders in the Community Offering in whole or in
part, either at the time of receipt of an order or as soon as practicable
following the Expiration Date.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-1 (File No. 333-_____) (the
"Registration Statement") containing a prospectus relating to the Offerings for
the registration of the Shares under the Securities Act of 1933 (the "1933
Act"), and has filed such amendments thereof, if any, and such amended
prospectuses as may have been required to the date hereof. The 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
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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 the regulations of the Office of Thrift Supervision
("OTS") governing the conversions of savings associations (the "Conversion
Regulations"), the MHC has filed with the OTS an Application for Conversion on
Form AC (the "Conversion Application"), including the prospectus, and has filed
such amendments thereto, if any, as may have been required by the OTS. The
Conversion Application has been approved by the OTS and the related Prospectus
has been authorized for use by the OTS.
SECTION 2. RETENTION OF THE AGENT; COMPENSATION; SALE AND DELIVERY OF
THE SHARES. Subject to the terms and conditions herein set forth, the Company,
the Mid-Tier Holding Company, the MHC and the Association hereby appoint the
Agent as their financial advisor and marketing agent to utilize its best efforts
to solicit subscriptions for Shares of the Company's Common Stock and to advise
and assist the Company and the Association with respect to the Company's sale of
the Shares in the Offerings and in the areas of market making, research coverage
and 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, the
Mid-Tier Holding Company, the MHC and the Association as to the matters set
forth in the letter agreement ("Letter Agreement"), dated August 19, 1998,
between the Association and the Agent (a copy of which is attached hereto as
Exhibit A). It is acknowledged by the Company, the MHC and the Association that
the Agent shall not be required to purchase any Shares and shall not be
obligated to take any action which is inconsistent with all applicable laws,
regulations, decisions or orders. In the event of a Community Offering, the
Agent will assemble and manage a selling group of broker-dealers which are
members of the National Association of Securities Dealers, Inc. (the "NASD") to
participate in the solicitation of purchase orders for shares under a selected
dealers' agreement ("Selected Dealers' Agreement"), the form of which is set
forth as Exhibit B to this Agreement.
The obligations of the Agent pursuant to this Agreement shall terminate
upon the completion or termination or abandonment of the Plan by the Company or
upon termination of the Offerings, but in no event later than 45 days after the
completion of the Subscription Offering (the "End Date"). All fees or expenses
due to the Agent but unpaid will be payable to the Agent in next day funds at
the earlier of the Closing Date (as hereinafter defined) or the End Date. In the
event the Offerings are extended beyond the End Date, the Company, the
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Mid-Tier Holding Company, the MHC, the Association and the Agent may agree to
renew this Agreement under mutually acceptable terms.
In the event the Company is unable to sell a minimum of 5,730,659
Shares within the period herein provided, this Agreement shall terminate and the
Company shall refund to any persons who have subscribed for any of the Shares,
the full amount which it may have received from them plus accrued interest as
set forth in the Prospectus; and none of the parties to this Agreement shall
have any obligation to the other parties hereunder, except as set forth in this
Section 2 and in Sections 6, 8 and 9 hereof.
In the event the Offerings are terminated for any reason not
attributable to the action or inaction of the Agent, the Agent shall be paid the
fees due to the date of such termination pursuant to subparagraphs (a) and (b)
below.
If all conditions precedent to the consummation of the Conversion,
including, without limitation, the sale of all Shares required by the Plan to be
sold, are satisfied, the Company agrees to issue, or have issued, the Shares
sold in the Offering and to release for delivery certificates for such Shares on
the Closing Date (as hereinafter defined) against payment to the Company by any
means authorized by the Plan, provided, however, that no funds shall be released
to the Company until the conditions specified in Section 7 hereof shall have
been complied with to the reasonable satisfaction of the Agent and its counsel.
The release of Shares against payment therefor shall be made on a date and at a
place acceptable to the Company, the Mid-Tier Holding Company, the MHC, the
Association and the Agent (it being understood that such date shall not be more
than ten business days after termination of the Offering) or such other time or
place as shall be agreed upon by the Company, the Mid-Tier Holding Company, the
MHC, the Association and the Agent. Certificates for shares shall be delivered
directly to the purchasers in accordance with their directions. The date upon
which the Company shall release or deliver the Shares sold in the Offering, in
accordance with the terms herein, is called the "Closing Date."
The Agent shall receive the following compensation for its services
hereunder:
(a) An advisory and management fee to the Agent in the amount of
$50,000, of which $25,000 has been paid and of which $25,000
will be paid upon OTS approval of the Plan application. Such
fees shall be deemed to be earned when due. Should the
Conversion be terminated for any reason not attributable to
the action or inaction of the Agent, the Agent shall have
earned and be entitled to be paid fees accruing through the
stage at which point the termination occurred, including any
accrued legal fees expanded by the Agent.
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(b) A marketing fee of 0.75% of the aggregate Purchase Price of
Common Stock sold in the Subscription Offering, Community
Offering, and to the Eligible Public Shareholders, excluding
those shares purchased by the Association's officers,
directors, or employees (or members of their immediate
families) or by any ESOP, charitable foundation, tax-qualified
or stock compensation plans (except IRA's) or similar plan
created by the Association for some or all of its directors or
employees. The management fee of $50,000 will be subtracted
from the marketing fee.
(c) The decision to utilize other selected Broker-Dealers will be
made jointly by the Agent and the Association. Selected
broker-dealers who assist in the subscription or purchase,
excluding those shares purchased by the Association's
officers, directors or employees or by any ESOP, charitable
foundation, tax-qualified or stock based compensation plans
(except IRA's) or similar plan created by the Association for
some or all of its directors or employees or by member
depositors in the original subscription phase of the offering,
will be paid a fee not to exceed 0.75% of the aggregate Actual
Purchase Price of the shares of common stock sold by them in
the Subscription and/or Community Offerings. The Agent's fee
for such shares shall equal 0.75% of the aggregate Actual
Purchase Price of the shares of common stock sold by selected
broker-dealers in the Subscription and/or Community Offering.
Fees with respect to subscriptions or purchases effected with
the assistance of Registered Representatives employed by a
Broker/Dealer other than the Agent shall be paid to the Agent
at Closing and then transmitted by the Agent to such
Broker/Dealer.
(d) The Association and the Company hereby agree to reimburse the
Agent, from time to time upon the Agent's request, for its
reasonable out-of-pocket expenses, including without
limitation, accounting, communication, travel expenses, and
legal fees and expenses, for amounts not to exceed $70,000.
The Association will bear the expenses of the Offerings
customarily borne by issuers including, without limitation,
OTS, SEC, "Blue Sky," and NASD filing and registration fees;
the fees of the Association's accountants, conversion agent,
data processor, attorneys, appraiser, transfer agent and
registrar, printing, mailing and marketing expenses associated
with the Conversion; and the fees set forth under this Section
2.
Full payment of the Agent's actual and accountable expenses, advisory
fees and compensation shall be made in next day funds on the earlier of the
Closing Date or a determination by the Association to terminate or abandon the
Plan.
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In the event of an oversubscription or other event, which causes the
Offerings to continue beyond the original expiration date or a resolicitation of
subscribers, the parties agree to renegotiate the expense cap on legal fees
applicable to the Agent.
SECTION 3. PROSPECTUS; OFFERING. The Shares are to be initially offered
in the Offerings at the Purchase Price as defined and set forth on the cover
page of the Prospectus.
SECTION 4. REPRESENTATIONS AND WARRANTIES. The Company, the Mid-Tier
Holding Company, the MHC and the Association jointly and severally represent and
warrant to the Agent on the date hereof as follows:
(a) The Registration Statement was declared effective by the
Commission on October ___, 1998. At the time the Registration
Statement, including the Prospectus contained therein (including any
amendment or supplement thereto), became effective, the Registration
Statement complied in all material respects with the requirements of
the 1933 Act and the 1933 Act Regulations and the Registration
Statement, including the Prospectus contained therein (including any
amendment or supplement thereto), and any information regarding the
Company or the Association contained in Sales Information (as such term
is defined in Section 8 hereof) authorized by the Company or the
Association for use in connection with the Offerings, did not contain
an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, and at the time any Rule 424(b) or (c) Prospectus was filed
with the 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), any information
regarding the Company or the Association contained in Sales Information
(as such term is defined in Section 8 hereof) authorized by the Company
or the Association for use in connection with the Offerings will not
contain an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading;
provided, however, that the representations and warranties in this
Section 4(a) shall not apply to statements or omissions made in
reliance upon and in conformity with written information furnished to
the Company or the Association by the Agent expressly regarding the
Agent for use in the Prospectus under the caption "The
Conversion-Marketing Arrangements" or statements in or omissions from
any Sales Information or information filed pursuant to state securities
or blue sky laws or regulations regarding the Agent.
(b) The Conversion Application was approved by the OTS on
_______, 1998 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
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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 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, the
Mid-Tier Holding Company, the MHC or the Association by the Agent
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.
(c) No order has been issued by the SEC or the OTS preventing
or suspending the use of the Prospectus and no action by or before any
such government entity to revoke any approval, authorization or order
of effectiveness related to the Conversion is, to the best knowledge of
the Company, the Mid-Tier Holding Company, the MHC or the Association,
pending or threatened.
(d) At the Closing Date referred to in Section 2, the Plan
will have been adopted by the Boards of Directors of the Company, the
Mid-Tier Holding Company, the MHC and the Association and the offer and
sale of the Shares will have been conducted in all material respects in
accordance with the Plan, the Conversion Regulations, and all other
applicable laws, regulations, decisions and orders, including all
terms, conditions, requirements and provisions precedent to the
Conversion imposed upon the Company, the Mid-Tier Holding Company, the
MHC or the Association by the OTS, the Commission or any other
regulatory authority and in the manner described in the Prospectus. To
the best knowledge of the Company, no person has sought to obtain
review of the final action of the OTS in approving or taking no
objection to the Plan or in approving or taking no objection to the
Conversion or the Holding Company Application pursuant to the
Conversion Regulations or any other statute or regulation.
(e) The Association has been organized and is a validly
existing federally chartered savings and loan association in stock form
of organization and upon the Conversion will continue as such, is duly
authorized to conduct its business and own its property as described in
the Registration Statement and the Prospectus; the Association has
obtained all material licenses, permits and other governmental
authorizations
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currently required for the conduct of its business; all such licenses,
permits and governmental authorizations are in full force and effect,
and the Association is in all material respects complying with all
laws, rules, regulations and orders applicable to the operation of its
business; the Association is existing under the laws of the United
States 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 or property or the conduct of its
business requires such qualification, unless the failure to be so
qualified in one or more of such jurisdictions would not have a
material adverse effect on the condition, financial or otherwise, or
the business, operations or income of the Association. The Association
does not own equity securities or any equity interest in any other
business enterprise except as described in the Prospectus or as would
not be material to the operations of the Association. Upon completion
of the sale by the Company of the Shares contemplated by the
Prospectus, (i) all of the authorized and outstanding capital stock of
the Association will be owned by the Company, and (ii) the Company will
have no direct subsidiaries other than the Association. The Conversion
will have been effected in all material respects in accordance with all
applicable statutes, regulations, decisions and orders; and, except
with respect to the filing of certain post-sale, post-Conversion
reports, and documents in compliance with the 1933 Act Regulations or
the OTS' letters of approval or no objection taken, all terms,
conditions, requirements and provisions with respect to the Conversion
(except those that are conditions subsequent) imposed by the Commission
or the OTS, if any, will have been complied with by the Company, the
Mid-Tier Holding Company, the MHC and the Association in all material
respects or appropriate waivers will have been obtained and all
material notice and waiting periods will have been satisfied, waived or
elapsed.
(f) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware with corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Registration Statement and the Prospectus, and the Company is qualified
to do business as a foreign corporation in each jurisdiction in which
the conduct of its business requires such qualification, except where
the failure to so qualify would not have a material adverse effect on
the condition, financial or otherwise, or the business, operations or
income of the Company. The Company has obtained all material licenses,
permits and other governmental authorizations currently required for
the conduct of its business; all such licenses, permits and
governmental authorizations are in full force and effect, and the
Company is in all material respects complying with all laws, rules,
regulations and orders applicable to the operation of its business.
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(g) The Mid-Tier Holding Company has been duly organized and
is a validly existing federally chartered corporation, with corporate
power and the authority to own, lease and operate its properties and
conduct its business as described in the Registration Statement and the
Prospectus. The Mid-Tier Holding Company is qualified to do business as
a foreign corporation in each jurisdiction in which the conduct of its
business requires such qualification, except where the failure to so
qualify will not have a material adverse effect on the condition,
financial or otherwise, or the business, operations or income of the
Mid-Tier Holding Company. The Mid-Tier Holding Company has obtained all
material licenses, permits and other governmental authorizations
currently required for the conduct of its business; all such licenses,
permits and governmental authorizations are in full force and effect,
and the Mid-Tier Holding Company is in all material respects complying
with all laws, rules, regulations and orders applicable to the
operation of its business.
(h) The MHC has been duly organized and is a validly existing
federally chartered mutual holding company, with corporate power and
authority to own, lease and operate its properties and to conduct its
business as described in the Registration Statement and the Prospectus,
and the MHC is qualified to do business as a foreign corporation in
each jurisdiction in which the conduct of its business requires such
qualification, except where the failure to so qualify would not have a
material adverse effect on the condition, financial or otherwise, or
the business, operations or income of the MHC. The MHC has obtained all
material licenses, permits and other governmental authorizations
currently required for the conduct of its business; all such licenses,
permits and governmental authorizations are in full force and effect,
and the MHC is in all material respects complying with all laws, rules,
regulations and orders applicable to the operation of its business.
(i) The Association is a member of the Federal Home Loan Bank
of Atlanta ("FHLB-Atlanta"). The deposit accounts of the Association
are insured by the FDIC up to the applicable limits; and no proceedings
for the termination or revocation of such insurance are pending or, to
the best knowledge of the Company, the Mid-Tier Holding Company, the
MHC or the Association, 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.
(j) The Company, the Mid-Tier Holding Company, the MHC and the
Association have good and marketable title to all real property and
other assets material to the business of the Company, the Mid-Tier
Holding Company, the MHC and the Association 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
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restrictions, except such as are described in the Registration
Statement and Prospectus or are not material to the business of the
Company, the Mid-Tier Holding Company, the MHC and the Association
taken as a whole; and all of the leases and subleases material to the
business of the Company, the Mid-Tier Holding Company, the MHC and the
Association under which the Company, the Mid-Tier Holding Company, the
MHC or the Association hold properties, including those described in
the Registration Statement and Prospectus, are in full force and
effect.
(k) The Company, the Mid-Tier Holding Company, the MHC and the
Association have received an opinion of their special counsel, ▇▇▇▇▇,
▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, LLP ("▇▇▇▇▇ ▇▇▇▇"), with respect to the
federal income tax consequences of the conversion of the MHC from
mutual to stock form, and the sale of the Shares as described in the
Registration Statement and the Prospectus, and an opinion from ▇▇▇▇▇,
▇▇▇▇▇▇ & Company, LLP ("▇▇▇▇▇ ▇▇▇▇▇▇") with respect to the Florida
state income tax consequences of the proposed transaction; all material
aspects of the opinions of ▇▇▇▇▇, ▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇ are accurately
summarized in the Prospectus; and the facts and representations upon
which such opinions are based are truthful, accurate and complete.
(l) The Company, the Mid-Tier Holding Company, the MHC and the
Association have all such power, authority, authorizations, approvals
and orders as may be required to enter into this Agreement, to carry
out the provisions and conditions hereof and to issue and sell the
Shares to be sold by the Company as provided herein and as described in
the Prospectus.
(m) The Company, the Mid-Tier Holding Company, the MHC and the
Association are not in violation of any directive received from the
OTS, the FDIC, or any other agency to make any material change in the
method of conducting their businesses so as to comply in all material
respects with all applicable statutes and regulations (including,
without limitation, regulations, decisions, directives and orders of
the OTS and the FDIC) and, except as set forth in the Registration
Statement and the Prospectus, there is no suit or proceeding, charge or
action before or by any court, regulatory authority or governmental
agency or body, pending or, to the knowledge of the Company, the
Mid-Tier Holding Company, the MHC and the Association, threatened,
which might materially and adversely affect the Conversion, the
performance of this Agreement or the consummation of the transactions
contemplated in the Plan and as described in the Registration Statement
and the Prospectus or which might result in any material adverse change
in the condition (financial or otherwise), earnings, capital or
properties of the Company, the Mid-Tier Holding Company, or the
Association, or which would materially affect their properties and
assets.
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(n) The financial statements which are included in the
Prospectus fairly present the financial condition, results of
operations, retained earnings and cash flows of the Company, the
Mid-Tier Holding Company, and/or the Association (as applicable) at the
respective dates thereof and for the respective periods covered thereby
and comply as to form in all material respects with the applicable
accounting requirements of Titles 12 of the Code of Federal Regulations
and generally accepted accounting principles (including those requiring
the recording of certain assets at their current market value). Such
financial statements have been prepared in accordance with generally
accepted accounting principles consistently applied through the periods
involved, present fairly in all material respects the information
required to be stated therein and are consistent with the most recent
financial statements and other reports filed by the Association with
the OTS and the FDIC, except that accounting principles employed in
such regulatory filings conform to the requirements of such authorities
and not necessarily to generally accepted accounting principles. The
other financial, statistical and pro forma information and related
notes included in the Prospectus present fairly the information shown
therein on a basis consistent with the audited and unaudited financial
statements of the Association included in the Prospectus, and as to the
pro forma adjustments, the adjustments made therein have been properly
applied on the basis described therein.
(o) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus; (i) there has
not been any material adverse change, financial or otherwise, in the
condition of the Company, the Mid-Tier Holding Company, the MHC, the
Association or in the earnings, capital or properties of the Company,
the Mid-Tier Holding Company, the MHC or the Association, 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 Association or in
loans past due 90 days or more or real estate acquired by foreclosure,
by deed-in-lieu of foreclosure or deemed in-substance foreclosure or
any material decrease in surplus and reserves or total assets of the
Association nor has the Company, the Mid-Tier Holding Company or the
Association issued any securities or incurred any liability or
obligation for borrowing other than in the ordinary course of business;
(iii) there have not been any material transactions entered into by the
Company, the Mid-Tier Holding Company, the MHC or the Association,
except with respect to those transactions entered into in the ordinary
course of business; (iv) the capitalization, liabilities, assets,
properties and business of the Company, the Mid-Tier Holding Company,
the MHC and the Association conform in all material respects to the
descriptions thereof contained in the Prospectus; and (v) neither the
Company, the Mid-Tier Holding Company, the MHC nor the Association has
any material contingent liabilities, except as set forth in the
Prospectus.
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(p) As of the date hereof and as of the Closing Date, neither
the Company, the Mid-Tier Holding Company, the MHC nor the Association
is in violation of its certificate of incorporation or bylaws or
charter or bylaws, as applicable, or in default in the performance or
observance of any material obligation, agreement, covenant, or
condition contained in any material contract, lease, loan agreement,
indenture or other instrument to which it is a party or by which it or
any of its property may be bound; the consummation of the Conversion,
the execution, delivery and performance of this Agreement and the
consummation of the transactions herein contemplated have been duly and
validly authorized by all necessary corporate action on the part of the
Company and the Association and this Agreement has been validly
executed and delivered by the Company, the Mid-Tier Holding Company,
the MHC and the Association and is the valid, legal and binding
Agreement of the Company, the Mid-Tier Holding Company, the MHC and the
Association enforceable in accordance with its terms, except as the
enforceability thereof may be limited by (i) bankruptcy, insolvency,
reorganization, moratorium, conservatorship, receivership or other
similar laws now or hereafter in effect relating to or affecting the
enforcement of creditors' rights generally or the rights of creditors
of Federal savings institutions and their holding companies, (ii)
general equitable principles, (iii) laws relating to the safety and
soundness of insured depository institutions, and (iv) applicable law
or public policy with respect to the indemnification and/or
contribution provisions contained herein, and except that no
representation or warranty need be made as to the effect or
availability of equitable remedies or injunctive relief (regardless of
whether such enforceability is considered in a proceeding in equity or
at law). The consummation of the transactions herein contemplated will
not: (i) conflict with or constitute a breach of, or default under, the
certificate of incorporation and bylaws of the Company or the charters
and bylaws of the Association, the Mid-Tier Holding Company or the MHC
(in either mutual or capital stock form), or any material contract,
lease or other instrument to which the Company, the Mid-Tier Holding
Company, the MHC or the Association has a beneficial interest, or any
applicable law, rule, regulation or order; (ii) violate any
authorization, approval, judgment, decree, order, statute, rule or
regulation applicable to the Company, the Mid-Tier Holding Company, the
MHC or the Association, except for such violations which would not have
a material adverse effect on the financial condition and results of
operations of the Company, the Mid-Tier Holding Company, the MHC and
the Association on a consolidated basis; or (iii) with the exception of
the liquidation account established in the Conversion, result in the
creation of any material lien, charge or encumbrance upon any property
of the Company, the Mid-Tier Holding Company, the MHC or the
Association.
(q) No default exists, and no event has occurred which with
notice or lapse of time, or both, would constitute a default on the
part of the Company, the Mid-Tier Holding Company, the MHC or the
Association, in the due performance and
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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, the Mid-Tier
Holding Company, the MHC or the Association is a party or by which any
of them or any of their property is bound or affected except such
defaults which would not have a material adverse effect on the
financial condition or results of operations of the Company, the
Mid-Tier Holding Company, the MHC and the Association on a consolidated
basis; such agreements are in full force and effect; and no other party
to any such agreements has instituted or, to the best knowledge of the
Company, the Mid-Tier Holding Company, the MHC or the Association,
threatened any action or proceeding wherein the Company, the Mid-Tier
Holding Company, the Association or the MHC would or might be alleged
to be in default thereunder under circumstances where such action or
proceeding, if determined adversely to the Company, the Mid-Tier
Holding Company, the MHC or the Association, would have a material
adverse effect on the Company, the Mid-Tier Holding Company, the MHC
and the Association, taken as a whole.
(r) Upon consummation of the Conversion, the authorized,
issued and outstanding equity capital of the Company will be within the
range set forth in the Prospectus under the caption "Capitalization";
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; 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, the
Mid-Tier Holding Company, the MHC and the Association, upon the
issuance of the Shares, good title to the Shares will be transferred
from the Company to the purchasers thereof against payment therefor,
subject to such claims as may be asserted against the purchasers
thereof by third-party claimants.
(s) No approval of any regulatory or supervisory or other
public authority is required in connection with the execution and
delivery of this Agreement or the issuance of the Shares, except for
the approval or non-objection, as applicable, of the Commission, 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 NASD and/or the Nasdaq National
Market.
(t) Deloitte & Touche ("D&T"), which has certified the
financial statements of the Mid-Tier Holding Company and the
Association included in the Prospectus as of December 31, 1997,
December 31, 1996 and September 30, 1996, and for the year
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ended December 31, 1997, for the three months ended December 31, 1996,
and for each of the two years in the period ended September 30, 1996,
and has advised the Company, the Mid-Tier Holding Company, the MHC and
the Association in writing that they are, with respect to the Company,
the Mid-Tier Holding Company, the MHC and the Association, independent
public accountants within the meaning of Rule 101 of the Code of
Professional Ethics of the American Institute of Certified Public
Accountants and Title 121 of the Code of Federal Regulations and
Section 571.2(c)(3).
(u) FinPro, Inc. which has prepared the Association's
Conversion Valuation Appraisal Report as of August 13, 1998 (as amended
or supplemented, if so amended or supplemented) (the "Appraisal"), has
advised the Company in writing that it is independent of the Company,
the Mid-Tier Holding Company, the MHC and the Association within the
meaning of the Conversion Regulations.
(v) The Company, the Mid-Tier Holding Company, the MHC and the
Association have timely filed all required federal, state and local tax
returns; the Company, the Mid-Tier Holding Company, the MHC and the
Association have paid all taxes that have become due and payable in
respect of such returns, except where permitted to be extended, have
made adequate reserves for similar future tax liabilities and no
deficiency has been asserted with respect thereto by any taxing
authority.
(w) The Company, the Mid-Tier Holding Company, the MHC and the
Association are in compliance in all material respects with the
applicable financial recordkeeping and reporting requirements of the
Currency and Foreign Transactions Reporting Act of 1970, as amended,
and the regulations and rules thereunder.
(x) To the knowledge of the Company, the Mid-Tier Holding
Company, the MHC and the Association, neither the Company, the Mid-Tier
Holding Company, the MHC, the Association nor employees of the Company,
the Mid-Tier Holding Company, the MHC or the Association have made any
payment of funds of the Company, the Mid-Tier Holding Company, the MHC
or the Association as a loan for the purchase of the Shares (other than
a loan by the Company to the ESOP) 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, the Association had _________
shares of authorized capital stock, of which __________ shares were
issued and outstanding, the Mid-Tier Holding Company had __________
shares of authorized capital stock, of which ___ shares were issued and
outstanding, the Company had ______ shares of authorized capital stock,
of which ______ shares were issued and outstanding, and the MHC was not
authorized to issue shares. Neither the Association, the Company, the
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Mid-Tier Holding Company nor the MHC has: (i) other than as described
in the Prospectus issued any securities within the last 18 months
(except for notes to evidence other bank loans and reverse repurchase
agreements or other liabilities in the ordinary course of business or
as described in the Prospectus); (ii) had any material dealings within
the 12 months prior to the date hereof with any member of the NASD, or
any person related to or associated with such member, other than
discussions and meetings relating to the proposed offering and routine
purchases and sales of United States government and agency securities;
(iii) entered into a financial or management consulting agreement
except as contemplated hereunder and except for the Letter Agreement
set forth in Exhibit A; and (iv) engaged any intermediary between the
Agent and the Company, the MHC and the Association in connection with
the offering of the Shares, and no person is being compensated in any
manner for such service.
(z) The Company, the Mid-Tier Holding Company, the MHC and
the Association have not relied upon the Agent or the Agent's counsel
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.
Any certificates signed by an officer of the Company, the Mid-Tier
Holding Company, the MHC or the Association pursuant to the conditions of this
Agreement and delivered to the Agent or its counsel that refers to this
Agreement shall be deemed to be a representation and warranty by the Company,
the Mid-Tier Holding Company, the MHC or the Association to the Agent as to the
matters covered thereby with the same effect as if such representation and
warranty were set forth herein.
SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE AGENT. The Agent
represents and warrants to the Company, the Mid-Tier Holding Company, the MHC
and the Association that:
(a) The Agent is a corporation and is validly existing in
good standing under the laws of the State of Delaware with
full power and authority to provide the services to be
furnished to the Association, the MHC and the Company
hereunder.
(b) The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been
duly and validly authorized by all necessary action on the
part of the Agent, and this Agreement has been duly and
validly executed and delivered by the Agent and is the legal,
valid and binding agreement of the Agent, enforceable in
accordance with its terms.
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(c) Each of the Agent and its employees, agents and
representatives who shall perform any of the services
hereunder shall be duly authorized and empowered, and shall
have all licenses, approvals and permits necessary to perform
such services, including appropriate licenses and the
Company's approvals in the various states in which securities
shall be offered.
(d) The execution and delivery of this Agreement by the Agent,
the consummation of the transactions contemplated hereby and
compliance with the terms and provisions hereof will not
conflict with, or result in a breach of, any of the terms,
provisions or conditions of, or constitute a default (or event
which with notice or lapse of time or both would constitute a
default) under, the articles of incorporation of the Agent or
any agreement, indenture or other instrument to which the
Agent is a party or by which it or its property is bound.
(e) No approval of any regulatory or supervisory or other
public authority is required in connection with the Agent's
execution and delivery of this Agreement, except as may have
been received.
(f) There is no suit or proceeding, 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, THE MID-TIER HOLDING COMPANY,
THE MHC, AND THE ASSOCIATION. The Company, the Mid-Tier Holding Company, the MHC
and the Association hereby jointly and severally covenant with the Agent as
follows:
(a) The Company has filed the Registration Statement with the
Commission. The Company will not, at any time after the date the
Registration Statement is declared effective, file any amendment or
supplement to the Registration Statement without providing the Agent
and its counsel an opportunity to review such amendment or supplement
or file any amendment or supplement to which amendment or supplement
the Agent or its counsel shall reasonably object.
(b) The MHC has filed the Conversion Application with the OTS.
The Association 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.
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(c) The Company and the Association will use their best
efforts to cause any post-effective amendment to the Registration
Statement to be declared effective by the Commission and any
post-effective amendment to the Conversion Application to be approved
by the OTS and will immediately upon receipt of any information
concerning the events listed below notify the Agent: (i) when the
Registration Statement, as amended, has become effective; (ii) when the
Conversion Application, as amended, has been approved by the OTS; (iii)
of 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 or 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 Association 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 state authority of
any stop order suspending the effectiveness of the Registration
Statement or the approval of the Conversion Application, or of the
initiation or threat of initiation or threat of any proceedings for any
such purpose; or (vii) of the occurrence of any event mentioned in
paragraph (h) below. The Company, the Mid-Tier Holding Company, the MHC
and the Association will make every reasonable effort (i) to prevent
the issuance by the Commission, the OTS or any state authority of any
such order and, if any such order shall at any time be issued, (ii) to
obtain the lifting thereof at the earliest possible time.
(d) The Company, the Mid-Tier Holding Company, the MHC and the
Association will deliver to the Agent and to its counsel two conformed
copies of the Registration Statement and the Conversion Application, as
originally filed and of each amendment or supplement thereto, including
all exhibits. Further, the Company, the Mid-Tier Holding Company, the
MHC and the Association will deliver such additional copies of the
foregoing documents to counsel to the Agent as may be required for any
NASD and blue sky filings.
(e) The Company, the Mid-Tier Holding Company, the MHC and the
Association will furnish to the Agent, from time to time during the
period when the Prospectus (or any later prospectus related to this
offering) is required to be delivered under the 1933 Act or the
Securities Exchange Act of 1934 (the "1934 Act"), such number of copies
of such Prospectus (as amended or supplemented) as the Agent may
reasonably request for the purposes contemplated by the 1933 Act, the
1933 Act Regulations, the 1934 Act or the rules and regulations
promulgated under the 1934 Act (the "1934 Act Regulations"). The
Company authorizes the Agent to use the
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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.
(f) The Company, the Mid-Tier Holding Company, the MHC and the
Association will comply with any and all material terms, conditions,
requirements and provisions with respect to the Conversion and the
transactions contemplated thereby imposed by the Commission, the OTS,
the Conversion Regulations or the OTS, and by the 1933 Act, the 1933
Act Regulations, the 1934 Act and the 1934 Act Regulations to be
complied with prior to or subsequent to the Closing Date and when the
Prospectus is required to be delivered, the Company, the Mid-Tier
Holding Company, the MHC and the Association will comply, at their own
expense, with all material requirements imposed upon them by the
Commission, the OTS, the Conversion Regulations or the OTS, and by the
1933 Act, the 1933 Act Regulations, the 1934 Act and the 1934 Act
Regulations, including, without limitation, Rule 10b-5 under the 1934
Act, in each case as from time to time in force, so far as necessary to
permit the continuance of sales or dealing in shares of Common Stock
during such period in accordance with the provisions hereof and the
Prospectus.
(g) 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, the Mid-Tier Holding Company, the MHC or
the Association shall occur, as a result of which it is necessary or
appropriate, in the opinion of counsel for the Company, the Mid-Tier
Holding Company, the MHC and the Association or in the reasonable
opinion of the Agent's counsel, to amend or supplement the Registration
Statement or Prospectus in order to make the Registration Statement or
Prospectus not misleading in light of the circumstances existing at the
time the Prospectus is delivered to a purchaser, the Company and the
Association will at their expense, prepare and file 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
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, the Mid-Tier Holding Company, the MHC and the Association each
will timely furnish to the Agent such information with respect to
itself as the Agent may from time to time reasonably request.
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(h) The Company, the Mid-Tier Holding Company, the MHC and the
Association will take all necessary actions, in cooperating with the
Agent, and furnish to whomever the Agent may direct, such information
as may be required to qualify or register the Shares for offering and
sale by the Company or to exempt such Shares from registration, or to
exempt the Company as a broker-dealer and its officers, directors and
employees as broker-dealers 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, the Mid-Tier Holding Company, the MHC and the Association may
reasonably agree upon; provided, however, that the Company shall not be
obligated to file any general consent to service of process or to
qualify to do business in any jurisdiction in which it is not so
qualified. In each jurisdiction where any of the Shares shall have been
qualified or registered as above provided, the Company will make and
file such statements and reports in each fiscal period as are or may be
required by the laws of such jurisdiction.
(i) The liquidation account for the benefit of Eligible
Account Holders and Supplemental Eligible Account Holders will be duly
established and maintained by the Association 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 Association will have an inchoate interest in
their pro rata portion of the liquidation account which shall have a
priority superior to that of the holders of shares of Common Stock in
the event of a complete liquidation of the Association.
(j) The Company, the MHC, the Mid-Tier Holding Company and the
Association will not sell or issue, contract to sell or otherwise
dispose of, for a period of 90 days after the Closing Date, without the
Agent's prior written consent, any shares of Common Stock other than
the Shares or other than in connection with any plan or arrangement
described in the Prospectus.
(k) The Company shall maintain the effectiveness of the
registration of its Common Stock under Section 12 (g) of the 1934 Act
for not less than three (3) years or such shorter period as may be
required by the OTS.
(l) During the period during which the Company's Common Stock
is registered under the 1934 Act or for three years from the date
hereof, whichever period is greater, the Company will furnish to its
stockholders as soon as practicable after the end of each fiscal year
an annual report of the Company (including a consolidated balance sheet
and statements of consolidated income, stockholders' equity and cash
flows of the Company and its subsidiaries as at the end of and for such
year, certified
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by independent public accountants in accordance with Regulation S-X
under the 1933 Act and the 1934 Act).
(m) During the period of three years from the date hereof, the
Company will furnish to the Agent: (i) as soon as practicable after
such information is publicly available, a copy of each report of the
Company furnished to or filed with the Commission under the 1934 Act or
any national securities exchange or system on which any class of
securities of the Company is listed or quoted (including, but not
limited to, reports on Forms 10-K, 10-Q and 8-K and all proxy
statements and annual reports to stockholders), (ii) a copy of each
other non-confidential report of the Company mailed to its stockholders
or filed with the Commission, the OTS or any other supervisory or
regulatory authority or any national securities exchange or system on
which any class of securities of the Company is listed or quoted, each
press release and material news items and additional documents and
information with respect to the Company or the Association as the Agent
may reasonably request; and (iii) from time to time, such other
nonconfidential information concerning the Company or the Association
as the Agent may reasonably request.
(n) The Company and the Association will use the net proceeds
from the sale of the Shares in the manner set forth in the Prospectus
under the caption "Use of Proceeds."
(o) Other than as permitted by the Conversion Regulations, the
Home Owners Loan Act of 1933 (the "HOLA"), the 1933 Act, the 1933 Act
Regulations, and the laws of any state in which the Shares are
registered or qualified for sale or exempt from registration, neither
the Company, the MHC, the Mid-Tier Holding Company nor the Association
will distribute any prospectus, offering circular or other offering
material in connection with the offer and sale of the Shares.
(p) The Company will use its best efforts to (i) encourage and
assist two market makers to maintain a market for the Shares and (ii)
continue to list the Shares on the Nasdaq National Market.
(q) The Association will maintain appropriate arrangements for
depositing all funds received from persons mailing subscriptions for or
orders to purchase Shares in the Offerings on an interest bearing basis
at the rate described in the Prospectus until the Closing Date and
satisfaction of all conditions precedent to the release of the
Association's obligation to refund payments received from persons
subscribing for or ordering Shares in the Offerings in accordance with
the Plan and as described in the Prospectus or until refunds of such
funds have been made to the persons entitled thereto or withdrawal
authorizations canceled in accordance with the Plan and as
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described in the Prospectus. The Association will maintain such records
of all funds received to permit the funds of each subscriber to be
separately insured by the FDIC (to the maximum extent allowable) and to
enable the Association to make the appropriate refunds of such funds in
the event that such refunds are required to be made in accordance with
the Plan and as described in the Prospectus.
(r) The Company and the Association will take such actions and
furnish such information as are reasonably requested by the Agent in
order for the Agent to ensure compliance with the NASD's
"Interpretation Relating to Free Riding and Withholding."
(s) Neither the Association nor the MHC will amend the Plan of
Conversion without notifying the Agent prior thereto.
(t) 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.
(u) Prior to the Closing Date, the Company, the Mid-Tier
Holding Company, the MHC and the Association will inform the Agent of
any event or circumstances of which it is aware as a result of which
the Registration Statement, the Conversion Application and/or
Prospectus, as then amended or supplemented, would contain an untrue
statement of a material fact or omit to state a material fact necessary
in order to make the statements therein not misleading.
SECTION 5.2 COVENANTS OF THE AGENT. The Agent hereby covenants
with the Company, the MHC, the Mid-Tier Holding Company and the
Association as follows:
(a) During the period when the Prospectus is used, the Agent
will comply, in all material respects and at its own expense, with all
requirements imposed upon it by the OTS and, to the extent applicable,
by the 1933 Act and the 1934 Act and the rules and regulations
promulgated thereunder.
(b) The Agent shall return unused prospectuses, if any, to the
Company promptly upon the completion of the Conversion.
(c) The Agent will distribute the Prospectuses or offering
materials in connection with the sales of the common stock only in
accordance with OTS regulations, the 1933 Act and the rules and
regulations promulgated thereunder.
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(d) The Agent shall assist the Association in maintaining
arrangements for the deposit of funds and the making of refunds, as
appropriate (as described in Section 5.1(r)), and shall perform the
allocation of shares in the event of an oversubscription, in
conformance with the Plan and applicable regulations and based upon
information furnished to the Agent by the Association (as described in
Section 5.1(v)).
SECTION 6. PAYMENT OF EXPENSES. Whether or not the Conversion is
completed or the sale of the Shares by the Company is consummated, the Company,
the MHC, the Mid-Tier Holding Company and the Association jointly and severally
agree to pay or reimburse the Agent for: (a) all filing fees in connection with
all filings with the NASD; (b) any stock issue or transfer taxes which may be
payable with respect to the sale of the Shares; (c) all reasonable expenses of
the Conversion including but not limited to the Company, the Mid-Tier Holding
Company, the MHC and the Association's attorneys' fees, transfer agent,
registrar and other agent charges, fees relating to auditing and accounting or
other advisors and costs of printing all documents necessary in connection with
the Conversion; and (d) all reasonable out-of-pocket expenses incurred by the
Agent not to exceed $70,000 (including legal fees and expenses). Such
out-of-pocket expenses include, but are not limited to, travel, communications
and postage. However, such out-of-pocket expenses do not include expenses
incurred with respect to the matters set forth in (a) or (b) above. In the event
the Company is unable to sell a minimum of 5,730,659 Shares or the Conversion is
terminated or otherwise abandoned, the Company, the Mid-Tier Holding Company,
the MHC and the Association shall reimburse the Agent in accordance with Section
2 hereof but such reimbursement shall not exceed Agent's actual, accountable
out-of-pocket expenses.
SECTION 7. CONDITIONS TO THE AGENT'S OBLIGATIONS. The Agent's
obligations hereunder, as to the Shares to be delivered at the Closing Date, are
subject, to the extent not waived by the Agent, to the condition that all
representations and warranties of the Company, the MHC, the Mid-Tier Holding
Company and the Association herein are, at and as of the commencement of the
Offerings and at and as of the Closing Date, true and correct in all material
respects, the condition that the Company, the MHC, the Mid-Tier Holding Company
and the Association shall have performed all of their obligations hereunder to
be performed on or before such dates, and to the following further conditions:
(a) At the Closing Date, the Company, the MHC, the Mid-Tier
Holding Company and the Association shall have conducted the Conversion
in all material respects in accordance with the Plan, the Conversion
Regulations, and all other applicable laws, regulations, decisions and
orders, including all terms, conditions, requirements and provisions
precedent to the Conversion imposed upon them by the OTS.
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(b) The Registration Statement shall have been declared
effective by the Commission, 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, the
MHC's or the Association's knowledge, threatened by the Commission, the
OTS or any state authority.
(c) At the Closing Date, the Agent shall have received:
(1) The favorable opinion, dated as of the Closing
Date and addressed to the Agent and for its benefit, of ▇▇▇▇▇
▇▇▇▇, special counsel for the Company, the MHC, the Mid-Tier
Holding Company and the Association, in form and substance to
the effect that:
(i) The Company has been duly incorporated
and is validly existing as a corporation under the laws of the
State of Delaware and has corporate power and authority to
own, lease and operate its properties and to conduct its
business as described in the Registration Statement and the
Prospectus. All of the outstanding capital stock of the
Company is duly authorized and validly issued, and upon
payment therefor, will be fully paid and non-assessable.
(ii) The Association has been organized and
is a validly existing federal savings association in capital
stock form of organization, authorized to conduct its business
and own its property as described in the Registration
Statement and Prospectus. All of the outstanding capital stock
of the Association will be authorized and upon payment
therefor, will be validly issued, fully paid and
non-assessable and will be owned by the Company, free and
clear of any liens, encumbrances, claims or other
restrictions.
(iii) The Mid-Tier Holding Company has been
organized as a, and is a validly existing, federal
corporation, authorized to conduct its business and own its
property as described in the Registration Statement and
Prospectus.
(iv) The MHC has been organized and is a
validly existing federal mutual holding company authorized to
conduct its business and own its property as described in the
Registration Statement and Prospectus.
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(v) The Association is a member of the
FHLB-Atlanta. The deposit accounts of the Association are
insured by the FDIC up to the maximum amount allowed under law
and no proceedings for the termination or revocation of such
insurance are pending or, to such counsel's Actual Knowledge,
threatened; the description of the liquidation account as set
forth in the Prospectus under the caption "The
Conversion--Liquidation Rights" to the extent that such
information constitutes matters of law and legal conclusions
has been reviewed by such counsel and is accurate in all
material respects.
(vi) Upon consummation of the Conversion,
the authorized, issued and outstanding capital stock of the
Company will be within the range set forth in the Prospectus
under the caption "Capitalization," and except for shares
issued upon incorporation of the Company no shares of Common
Stock have been issued prior to the Closing Date; at the time
of the Conversion, the Shares subscribed for pursuant to the
Offerings will have been duly and validly authorized for
issuance, and when issued and delivered by the Company
pursuant to the Plan against payment of the consideration
calculated as set forth in the Plan and the Prospectus, will
be duly and validly issued and fully paid and non-assessable;
the issuance of the Shares is not subject to preemptive rights
and the terms and provisions of the Shares conform in all
material respects to the description thereof contained in the
Prospectus. 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.
(vii) The execution and delivery of this
Agreement and the consummation of the transactions
contemplated hereby have been validly authorized by all
necessary action on the part of the Company, the Mid-Tier
Holding Company, the MHC, and the Association; and this
Agreement is a valid and binding obligation of the Company,
the Mid-Tier Holding Company, the MHC and the Association,
enforceable in accordance with its terms, except as the
enforceability thereof may be limited by (i) bankruptcy,
insolvency, moratorium, reorganization, conservatorship,
receivership or other similar laws now or hereafter in effect
relating to or affecting the enforcement of creditors' rights
generally or the rights of creditors of savings institutions
and their holding companies, (ii) general equitable
principles, (iii) laws relating to the safety and soundness of
insured depository institutions, and (iv) applicable law or
public policy with respect to the indemnification and/or
contribution provisions contained herein, including, without
limitation, the provisions of
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Section 23A and 23B of the Federal Reserve Act, and except
that no opinion need to be expressed as to the effect or
availability of equitable remedies or injunctive relief
(regardless of whether such enforceability is considered in a
proceeding in equity or at law).
(viii) The Conversion Application has been
approved by the OTS and the Prospectus has been authorized for
use by the OTS and no action has been taken, and to such
counsel's Actual Knowledge, none is pending or threatened, to
revoke any such authorization or approval.
(ix) The Plan has been adopted by the
required vote of the directors of the Company, the Mid-Tier
Holding Company, the MHC and the Association and, based upon
the certificate of the inspector of election, by the members
of the MHC, the stockholders of the Mid-Tier Holding Company
and the stockholders of the Association.
(x) Subject to the satisfaction of the
conditions to the OTS' approval of the Conversion, no further
approval, registration, authorization, consent or other order
of or notice to any federal or Delaware regulatory agency is
required in connection with the execution and delivery of this
Agreement, the issuance of the Shares and the consummation of
the Conversion, except as may be required under the securities
or blue sky laws of various jurisdictions (as to which no
opinion need be rendered) and except as may be required under
the rules and regulations of the NASD and/or the Nasdaq
National Market (as to which no opinion need be rendered).
(xi) 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.
(xii) At the time the Conversion
Application, including the Prospectus contained therein, was
approved by the OTS, the Conversion Application, including the
Prospectus contained therein, complied as to form in all
material respects with the requirements of the Conversion
Regulations, the HOLA and all applicable rules and regulations
promulgated thereunder (other than the financial statements,
the notes thereto, and other tabular, financial, statistical
and appraisal data and accounting information included
therein, as to which no opinion need be rendered).
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(xiii) 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.
(xiv) The terms and provisions of the
Shares of the Company conform, in all material respects, to
the description thereof contained in the Registration
Statement and Prospectus, and the form of certificate used to
evidence the Shares is in proper form.
(xv) There are no legal or governmental
proceedings pending or to such counsel's Actual Knowledge,
threatened which are required to be disclosed in the
Registration Statement and Prospectus, other than those
disclosed therein, and to such counsel's Actual Knowledge, all
pending legal and governmental proceedings to which the
Company, the MHC, the Mid-Tier Holding Company or the
Association is a party or of which any of their property is
the subject, which are not described in the Registration
Statement and the Prospectus, including ordinary routine
litigation incidental to the Company's, the MHC's, the
Mid-Tier Holding Company's or the Association's business, are,
considered in the aggregate, not material.
(xvi) 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.
(xvii) To such counsel's Actual Knowledge,
the Company, the Mid-Tier Holding Company, the MHC and the
Association have conducted the Conversion, in all material
respects, in accordance with all applicable
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requirements of the Plan and the HOLA and regulations
thereunder, and the Plan complies in all material respects
with all applicable Delaware and federal laws, rules and
regulations including, but not limited to, the Conversion
Regulations (except where a written waiver has been received);
no order has been issued by the OTS, the Commission or any
state authority to suspend the Offerings or the use of the
Prospectus, and no action for such purposes has been
instituted or, to such counsel's Actual Knowledge, threatened
by the OTS or the Commission or any state authority and, to
such counsel's Actual Knowledge, no person has sought to
obtain regulatory or judicial review of the final action of
the OTS approving the Plan, the Conversion Application or the
Prospectus.
(xviii) To such counsel's Actual Knowledge,
the Company, the MHC the Mid-Tier Holding Company and the
Association have obtained all material federal and Delaware
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, the MHC, the
Mid-Tier Holding Company and the Association are in all
material respects complying therewith, except where the
failure to have such licenses, permits and other governmental
authorizations or the failure to be in compliance therewith
would not have a material adverse affect on the business or
operations of the Association, the MHC, the Mid-Tier Holding
Company and the Company, taken as a whole.
(xix) To such counsel's Actual Knowledge,
neither the Company, the Mid-Tier Holding Company, the MHC nor
the Association is in violation of its certificate of
incorporation, bylaws, or charter, as applicable, or, to such
counsel's Actual Knowledge, in default or violation of any
obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, loan agreement, note, lease or
other instrument to which it is a party or by which it or its
property may be bound except for such defaults or violations
which would not have a material adverse impact on the
financial condition or results of operations of the Company,
the Mid-Tier Holding Company, the MHC nor the Association on a
consolidated basis; to such counsel's Actual Knowledge, the
execution and delivery of this Agreement, the occurrence of
the obligations herein set forth and the consummation of the
transactions contemplated herein will not conflict with or
constitute a breach of, or default under, or result in the
creation or imposition of any lien, charge or encumbrance upon
any property or assets of the Company, the Mid-Tier Holding
Company, the MHC or the Association pursuant to any material
contract, indenture, mortgage, loan agreement, note, lease or
other instrument to which the Company, the MHC, the Mid-Tier
Holding Company or the
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Association is a party or by which any of them may be bound, or
to which any of the property or assets of the Company, the
Mid-Tier Holding Company, the MHC or the Association is subject
(other than the establishment of a liquidation account), and
such action will not result in any violation of the provisions
of the certificate of incorporation, bylaws or charter, as
applicable, of the Company, the Mid-Tier Holding Company, the
MHC or the Association, or any applicable federal or Delaware
law, act, regulation (except that no opinion need be rendered
with respect to the securities or blue sky laws of various
jurisdictions or the rules and regulations of the NASD and/or
the Nasdaq National Market) or order or court order, writ,
injunction or decree.
(xx) The Company's certificate of
incorporation and bylaws comply in all material respects with
the General Corporation Law ("GCL") of the State of Delaware.
The Association's, the Mid-Tier Holding Company's and the
MHC's charter and bylaws comply in all material respects with
the HOLA and the rules and regulations of the OTS.
(xxi) To such counsel's Actual Knowledge,
neither the Company, the Mid-Tier Holding Company, the MHC nor
the Association is in violation of any directive from the OTS
or the FDIC to make any material change in the method of
conducting its respective business.
(xxii) The information in the Prospectus
under the captions "Regulation," "The Conversion,"
"Restrictions on Acquisition of the Company" to the extent
that such information constitutes matters of law, summaries of
legal matters, documents or proceedings, or legal conclusions,
has been reviewed by such counsel and is correct in all
material respects. The description of the Conversion process
under the caption "The Conversion" in the Prospectus has been
reviewed by such counsel and is in all material respects
correct. The discussion of statutes or regulations described
or referred to in the Prospectus are accurate summaries and
fairly present the information required to be shown. The
information under the caption "The Conversion-Tax Aspects" has
been reviewed by such counsel and constitutes a correct
summary of the opinions rendered by ▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇▇
▇▇▇▇▇▇ to the Company, the Mid-Tier Holding Company, the MHC
and the Association with respect to such matters.
In giving such opinion, such counsel may rely as to
all matters of fact on certificates of officers or directors
of the Company, the Mid-Tier Holding Company, the MHC and the
Association and certificates of public officials. Such
counsel's opinion shall be limited to matters governed by
federal laws and
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29
by the State of Delaware GCL. With respect to matters
involving the application of Delaware law, such counsel may
rely, to the extent it deems proper and as specified in its
opinion, upon the opinion of local counsel (providing that
such counsel states that it believes the Agent is justified in
relying upon such specified opinion or opinions). The opinion
of ▇▇▇▇▇ ▇▇▇▇ shall be governed by the Legal Opinion Accord
("Accord") of the American Bar Association Section of Business
Law (1991). The term "Actual Knowledge" as used herein shall
have the meaning set forth in the Accord. For purposes of such
opinion, no proceedings shall be deemed to be pending, no
order or stop order shall be deemed to be issued, and no
action shall be deemed to be instituted unless, in each case,
a director or executive officer of the Company, the Mid-Tier
Holding Company, the MHC or the Association shall have
received a copy of such proceedings, order, stop order or
action. In addition, such opinion may be limited to present
statutes, regulations and judicial interpretations and to
facts as they presently exist; in rendering such opinion, such
counsel need assume no obligation to revise or supplement it
should the present laws be changed by legislative or
regulatory action, judicial decision or otherwise; and such
counsel need express no view, opinion or belief with respect
to whether any proposed or pending legislation, if enacted, or
any proposed or pending regulations or policy statements
issued by any regulatory agency, whether or not promulgated
pursuant to any such legislation, would affect the validity of
the Conversion or any aspect thereof. Such counsel may assume
that any agreement is the valid and binding obligation of any
parties to such agreement other than the Company, the Mid-Tier
Holding Company, the MHC or the Association.
In addition, such counsel shall provide a letter
stating that during the preparation of the Conversion
Application, the Registration Statement and the Prospectus,
they participated in conferences with certain officers of, the
independent public and internal accountants for, and other
representatives of the Company, the Mid-Tier Holding Company,
the MHC and the Association, at which conferences the contents
of the Conversion Application, the Registration Statement and
the Prospectus and related matters were discussed and, while
such counsel has not confirmed the accuracy or completeness of
or otherwise verified the information contained in the
Conversion Application, the Registration Statement or the
Prospectus, and does not assume any responsibility for such
information, based upon such conferences and a review of
documents deemed relevant for the purpose of rendering their
opinion (relying as to materiality as to factual matters on
certificates of officers and other factual representations by
the Company, the Mid-Tier Holding Company, the MHC and the
Association), nothing has come to their attention that would
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30
lead them to believe that the Conversion Application, the
Registration Statement, the Prospectus, or any amendment or
supplement thereto (other than the financial statements, the
notes thereto, accounting information and other tabular,
financial, statistical and appraisal data included therein as
to which no opinion need be rendered) contained an untrue
statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which
they were made, not misleading.
(2) The favorable opinion, dated as of the Closing
Date and addressed to the Agent and for its benefit, of the
Association's local counsel, in form and substance to the
effect that, to the best of such counsel's knowledge, (i) the
Company, the Mid-Tier Holding Company, the MHC and the
Association have good and marketable title to all properties
and assets which are material to the business of the Company,
the Mid-Tier Holding Company, the MHC and the Association 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 in relation to the business of the
Company, the MHC, the Mid-Tier Holding Company and the
Association considered as one enterprise; (ii) all of the
leases and subleases material to the business of the Company,
the MHC, the Mid-Tier Holding Company and the Association
under which the Company, the MHC, the Mid-Tier Holding Company
and the Association hold properties, as described in the
Registration Statement and Prospectus, are in full force and
effect; (iii) to counsel's actual knowledge based on
certificates of officers, the Association is qualified as a
foreign corporation to transact business and is in good
standing in each jurisdiction in which its ownership of
property or leasing of property or the conduct of its business
requires such qualification, unless the failure to be so
qualified in one or more of such jurisdictions would not have
a material adverse effect on the condition, financial or
otherwise, or the business, operations or income of the
Association; (iv) the MHC 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 MHC; and (v) the
Mid-Tier Holding Company 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 conduct of its business requires such
qualification unless the failure to be so qualified in one or
more of
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31
such jurisdictions would not have a material adverse effect on
the condition, financial or otherwise, or the business,
operations or income of the Mid-Tier Holding Company.
(3) The favorable opinion, dated as of the Closing
Date, of ▇▇▇▇▇▇▇ & ▇▇▇▇▇, the Agent's counsel, with respect to
such matters as the Agent may reasonably require. Such opinion
may rely upon the opinions of counsel of the Company, the
Mid-Tier Holding Company, the MHC and the Association, and as
to matters of fact, upon certificates of officers and
directors of the Company, the Mid-Tier Holding Company, the
MHC and the Association delivered pursuant hereto or as such
counsel shall reasonably request.
(d) At the Closing Date, the Agents shall receive a
certificate of the Chief Executive Officer and the Chief Financial
Officer of the Company and a certificate of the Chief Executive Officer
and the Chief Financial Officer of the Mid-Tier Holding Company, the
MHC and the Association, both dated as of such Closing Date, to the
effect that: (i) they have reviewed the Prospectus and, in their
opinion, at the time the Prospectus became authorized for final use,
the Prospectus did not contain any untrue statement of a material fact
or omit to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were
made, not misleading; (ii) since the date the Prospectus became
authorized for final use, no material adverse change in the condition,
financial or otherwise, or in the earnings, capital, properties or
business of the Company, the Mid-Tier Holding Company, the MHC and the
Association has occurred and, to their knowledge, no other event has
occurred, which should have been set forth in an amendment or
supplement to the Prospectus which has not been so set forth, and the
conditions set forth in this Section 7 have been satisfied; (iii) since
the respective dates as of which information is given in the
Registration Statement and Prospectus, there has been no material
adverse change in the condition, financial or otherwise, or in the
earnings, capital or properties of the Company, the Mid-Tier Holding
Company, the MHC or the Association, independently, or of the Company,
the MHC and the Association considered as one enterprise, whether or
not arising in the ordinary course of business; (iv) the
representations and warranties in Section 4 are true and correct with
the same force and effect although expressly made at and as of the
Closing Date; (v) the Company, the Mid-Tier Holding Company, the MHC
and the Association have complied in all material respects with all
agreements and satisfied all conditions on their part to be performed
or satisfied at or prior to the Closing Date; (vi) no stop order
suspending the effectiveness of the Registration Statement has been
initiated or, to the best knowledge of the Company, the Mid-Tier
Holding Company, the MHC or the Association, threatened by the
Commission or any state authority; (vii) no order suspending the
Offerings, the Conversion or the effectiveness of the Prospectus has
been issued and no
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proceedings for that purpose are pending or, to the best knowledge of
the Company, the Mid-Tier Holding Company, the MHC or the Association,
threatened by the OTS, the Commission or any state authority; and
(viii) to the best knowledge or the Company or the Association, no
person has sought to obtain review of the final action of the OTS
approving the Plan.
(e) Prior to and at the Closing Date: (i) in the reasonable
opinion of the Agent, there shall have been no material adverse change
in the condition, financial or otherwise (other than as a result of a
change in law or regulation and affecting the savings association
industry as a whole), or in the earnings or business of the Company,
the Mid-Tier Holding Company, the MHC or the Association independently,
or of the Company, the Mid-Tier Holding Company, the MHC and the
Association considered as one enterprise, from that as of the latest
dates as of which such condition is set forth in the Prospectus other
than transactions referred to or contemplated therein; (iii) the
Company, the Mid-Tier Holding Company, the MHC or the Association 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 Agents) or which materially and adversely
would affect the business, operations or financial condition or income
of the Company, the Mid-Tier Holding Company, the MHC and the
Association considered as one enterprise; (iv) the Company, the
Mid-Tier Holding Company, the MHC and the Association shall not have
been in default (nor shall any event have occurred which, with notice
or lapse of time or both, would constitute a default) under any
provision of any agreement or instrument relating to any outstanding
indebtedness; (v) no action, suit or proceedings, at law or in equity
or before or by any federal or state commission, board or other
administrative agency, shall be pending or, to the knowledge of the
Company, the Mid-Tier Holding Company, the MHC or the Association,
threatened against the Company, the Mid-Tier Holding Company, the MHC
or the Association or affecting any of their properties wherein an
unfavorable decision, ruling or finding would materially and adversely
affect the business operations, financial condition or income of the
Company, the Mid-Tier Holding Company, the MHC and the Association
considered as one enterprise; and (vi) the Shares have been qualified
or registered for offering and sale or exempted therefrom under the
securities or blue sky laws of the jurisdictions as the Agent shall
have requested and as agreed to by the Company and the Association.
(f) Concurrently with the execution of this Agreement, the
Agent shall receive separate letters from each of ▇▇▇▇▇ ▇▇▇▇▇▇ and D&T
dated as of the date of the Prospectus and addressed to the Agent: (i)
confirming that ▇▇▇▇▇ ▇▇▇▇▇▇ and D&T are firms 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
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33
applicable regulations of the OTS and FDIC and stating in effect in the
letter of D&T that in D&T's opinion the financial statements of the
Company, the Mid-Tier Holding Company, and/or the Association (as
applicable) as of December 31, 1997 and December 31, 1996 and September
30, 1996 and for the year ended December 31, 1997 or the three months
ended December 31, 1996 and for each of the two years in the period
ended September 30, 1996 as are included in the Prospectus and covered
by their opinion included therein, comply as to form in all material
respects with the applicable accounting requirements and related
published rules and regulations of the OTS, the FDIC, the SEC and the
1933 Act; (ii) a statement from ▇▇▇▇▇ ▇▇▇▇▇▇ in effect that, on the
basis of certain agreed upon procedures (but not an audit in accordance
with generally accepted auditing standards) consisting of a reading of
the latest available unaudited interim consolidated financial
statements of the Company prepared by the Company, a reading of the
minutes of the meetings of the Board of Directors of the Company, the
Mid-Tier Holding Company, and the Association and consultations with
officers of the Company, the Mid-Tier Holding Company, and the
Association responsible for financial and accounting matters, nothing
came to their attention which caused them to believe that: (A) the
unaudited financial statements included in the Prospectus, are not in
conformity with the 1933 Act, applicable accounting requirements of the
OTS, the FDIC, and the SEC and generally accepted accounting principles
applied on a basis substantially consistent with that of the audited
financial statements included in the Prospectus; or (B) during the
period from the date of the latest unaudited consolidated financial
statements included in the Prospectus to a specified date not more than
three business days prior to the date of the Prospectus, except as has
been described in the Prospectus, there was any material increase in
borrowings, other than normal deposit fluctuations, by the Company, the
Mid-Tier Holding Company, or the Association; or (C) there was any
decrease in consolidated net assets of the Company, the Mid-Tier
Holding Company, or the Association at the date of such letter as
compared with amounts shown in the latest unaudited consolidated
statement of condition included in the Prospectus; and (iii) a
statement from ▇▇▇▇▇ ▇▇▇▇▇▇ that in addition to the performance of the
procedures referred to in clause (ii) of this subsection (f), they have
compared with the general accounting records of the Company, the
Mid-Tier Holding Company and the Association, which are subject to the
internal controls of the Company, the Mid-Tier Holding Company and the
Association, the accounting system and other data prepared by the
Company, the Mid-Tier Holding Company and the Association, directly
from such accounting records, to the extent specified in such letter,
such amounts and/or percentages set forth in the Prospectus as the
Agent may reasonably request; and they have reported on the results of
such comparisons.
(g) At the Closing Date, the Agent shall receive letters from
D&T and ▇▇▇▇▇ ▇▇▇▇▇▇ dated the Closing Date, addressed to the Agent,
confirming the
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34
statements made by each of them in letters delivered by each of them
pursuant to subsection (f) of this Section 7, the "specified date"
referred to in clause (ii) of subsection (f) thereof to be a date
specified in such letter, which shall not be more than three business
days prior to the Closing Date.
(h) At the Closing Date, the Agent shall receive a letter from
FinPro, Inc., dated the date thereof and addressed to counsel for the
Agent (i) confirming that said firm is independent of the Company, the
Mid-Tier Holding Company, the MHC and the Association and is
experienced and expert in the area of corporate appraisals within the
meaning of Title 12 of the Code of Federal Regulations, Part 303, (ii)
stating in effect that the Appraisal prepared by such firm complies in
all material respects with the applicable requirements of Title 12 of
the Code of Federal Regulations, and (iii) further stating that their
opinion of the estimated aggregate pro forma market value of the
Company, the Mid-Tier Holding, the MHC and the Association expressed in
their Appraisal dated as of August 13, 1998, and most recently updated,
remains in effect.
(i) The Company, the Mid-Tier Holding Company, the MHC and the
Association shall not have sustained since the date of the latest
audited financial statements included in the Prospectus any material
loss or interference with their businesses from fire, explosion, flood
or other calamity, whether or not covered by insurance, or from any
labor dispute or court or governmental action, order or decree,
otherwise than as set forth or contemplated in the Registration
Statement and Prospectus.
(j) At or prior to the Closing Date, the Agent shall receive:
(i) a copy of the letter from the OTS approving the Conversion
Application and authorizing the use of the Prospectus; (ii) a copy of
the order from the Commission declaring the Registration Statement
effective; (iii) certificates from the OTS evidencing the existence of
the Association, the Mid-Tier Holding Company and the MHC; (iv)
certificates of good standing from the State of Delaware evidencing the
good standing of the Company; (v) a certificate from the FDIC
evidencing the Association's insurance of accounts, and (vi) a
certificate of the FHLB-Atlanta evidencing the Association's membership
thereof.
(k) Subsequent to the date hereof, there shall not have
occurred any of the following: (i) a suspension or limitation in
trading in securities generally on the New York Stock Exchange or in
the over-the-counter market, or quotations halted generally on the
Nasdaq National Market, or minimum or maximum prices for trading have
been fixed, or maximum ranges for prices for securities have been
required by either of such exchanges or the NASD or by order of the
Commission or any other governmental authority; (ii) a general
moratorium on the operations of commercial banks or federal savings
associations or a general moratorium on the withdrawal of deposits from
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35
commercial banks or federal savings associations declared by federal or
state authorities; (iii) the engagement by the United States in
hostilities which have resulted in the declaration, on or after the
date hereof, of a national emergency or war; or (iv) a material decline
in the price of equity or debt securities if the effect of such a
declaration or decline, in the Agent's reasonable judgment, makes it
impracticable or inadvisable to proceed with the Offerings or the
delivery of the shares on the terms and in the manner contemplated in
the Registration Statement and Prospectus.
SECTION 8. INDEMNIFICATION.
(a) The Primary Parties jointly and severally agree to
indemnify and hold harmless the Agent, its officers, directors, agents,
servants and employees and each person, if any, who controls the Agent
within the meaning of Section 15 of the 1933 Act or Section 20(a) of
the 1934 Act, against any and all loss, liability, claim, damage or
expense whatsoever (including but not limited to settlement expenses),
joint or several, that the Agent or any of them may suffer or to which
the Agent and any such persons may become subject under all applicable
federal or state laws or otherwise, and to promptly reimburse the Agent
and any such persons upon written demand for any expense (including
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), or any blue sky application or other
instrument or document executed by the Company, the Mid-Tier Holding
Company, the MHC or the Association based upon written information
supplied by the Company, the Mid-Tier Holding Company, the MHC or the
Association filed in any state or jurisdiction to register or qualify
any or all of the Shares or to claim an exemption therefrom, or
provided to any state or jurisdiction to exempt the Company as a
broker-dealer or its officers, directors and employees as
broker-dealers or agents, under the securities laws thereof
(collectively, the "Blue Sky Application"), or any application or other
document, advertisement, oral statement or communication ("Sales
Information") prepared, made or executed by or on behalf of the
Company, the Mid-Tier Holding Company, the MHC or the Association with
their consent or based upon written or oral information furnished by or
on behalf of the Company, the Mid-Tier Holding Company, the MHC or the
Association, whether or not filed in any jurisdiction, in order to
qualify or register the Shares or to claim an exemption therefrom under
the securities laws thereof; (ii) arise out of or based upon the
omission or alleged omission to state in any of the foregoing documents
or information, a material fact required to be
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36
stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading; or (iii)
arise from any theory of liability whatsoever relating to or arising
from or based upon the Registration Statement (or any amendment or
supplement thereto), preliminary or final Prospectus (or any amendment
or supplement thereto), the Conversion Application (or any amendment or
supplement thereto), any Blue Sky Application or Sales Information or
other documentation distributed in connection with the Conversion;
provided, however, that no indemnification is required under this
paragraph (a) to the extent such losses, claims, damages, liabilities
or actions arise out of or are based upon any untrue material statement
or alleged untrue material statements in, or material omission or
alleged material omission from, the Registration Statement (or any
amendment or supplement thereto), preliminary or final Prospectus (or
any amendment or supplement thereto), the Conversion Application, any
Blue Sky Application or Sales Information made in reliance upon and in
conformity with information furnished in writing to the Company or the
Association by the Agent regarding the Agent and provided further that
such indemnification shall be to the extent permitted by the OTS and
the FDIC.
(b) The Agent agrees to indemnify and hold harmless the
Company, the Mid-Tier Holding Company, the MHC and the Association,
their directors and officers and each person, if any, who controls the
Company, the Mid-Tier Holding Company, the MHC or the Association
within the meaning of Section 15 of the 1933 Act or Section 20(a) of
the 1934 Act against any and all loss, liability, claim, damage or
expense whatsoever (including but not limited to settlement expenses),
joint or several, which they, or any of them, may suffer or to which
they, or any of them may become subject under all applicable federal
and state laws or otherwise, and to promptly reimburse the Company, the
Mid-Tier Holding Company, the MHC, the Association, and any such
persons upon written demand for any expenses (including reasonable fees
and disbursements of counsel) incurred by them, or any of them, in
connection with investigating, preparing or defending any actions,
proceedings or claims (whether commenced or threatened) to the extent
such losses, claims, damages, liabilities or actions arise out of or
are based upon any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement (or any amendment
or supplement thereto), the Conversion Application (or any amendment or
supplement thereto) or the preliminary or final Prospectus (or any
amendment or supplement thereto), or are based upon the omission or
alleged omission to state in any of the foregoing documents a material
fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading; provided, however, that the Agent's obligations under
this Section 8(b) shall exist only if and only to the extent (i) that
such untrue statement or alleged untrue statement was made in, or such
material fact or alleged material fact was omitted from, the
Registration Statement (or any amendment or supplement thereto), the
preliminary
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or final Prospectus (or any amendment or supplement thereto) or the
Conversion Application (or any amendment or supplement thereto), any
Blue Sky Application or Sales Information in reliance upon and in
conformity with information furnished in writing to the Company or the
Association by the Agent regarding the Agent. In no case shall the
Agent be liable or responsible for any amount in excess of the fees
received by the Agent pursuant to Section 2 of this Agreement.
(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, the
Mid-Tier Holding Company, the MHC and the Association set forth in this
Agreement shall remain operative and in full force and effect
regardless of: (i) any investigation made by or on behalf of the Agent
or its officers, directors or controlling persons, agents or employees
or by or on behalf of the Company, the Mid-Tier Holding Company, the
MHC or the Association or any officers, directors or controlling
persons, agents or employees of the Company, the Mid-Tier Holding
Company, the MHC or the Association; (ii) deliver 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
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Association or the Agent, the Company, the Association and the Agent shall
contribute to the aggregate losses, claims, damages and liabilities (including
any investigation, legal and other expenses incurred in connection with, and any
amount paid in settlement of, any action, suit or proceeding of any claims
asserted, but after deducting any contribution received by the Company, the
Association or the Agent from persons other than the other party thereto, who
may also be liable for contribution) in such proportion so that the Agent shall
be responsible for that portion represented by the percentage that the fees paid
to the Agent pursuant to Section 2 of this Agreement (not including expenses)
bears to the gross proceeds received by the Company from the sale of the Shares
in the Offerings and the Company and the Association shall be responsible for
the balance. If, however, the allocation provided above is not permitted by
applicable law or if the indemnified party failed to give the notice required
under Section 8 above, then each indemnifying party shall contribute to such
amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative fault of the Company and the
Association on the one hand and the Agent on the other in connection with the
statements or omissions which resulted in such losses, claims, damages or
liabilities (or actions, proceedings or claims in respect thereto), but also the
relative benefits received by the Company and the Association on the one hand
and the Agent on the other from the Offerings (before deducting expenses). The
relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Company and/or the Association on the one hand or the Agent on the other and the
parties' relative intent, good faith, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company, the
Association and the Agent agree that it would not be just and equitable if
contribution pursuant to this Section 9 were determined by pro-rata allocation
or by any other method of allocation which does not take into account the
equitable considerations referred to above in this Section 9. The amount paid or
payable by an indemnified party as a result of the losses, claims, damages or
liabilities (or actions, proceedings or claims in respect thereof) referred to
above in this Section 9 shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action, proceeding or claim. It is expressly agreed that
the Agent shall not be liable for any loss, liability, claim, damage or expense
or be required to contribute any amount which in the aggregate exceeds the
amount paid (excluding reimbursable expenses) to the Agent under this Agreement.
It is understood that the above stated limitation on the Agent's liability is
essential to the Agent and that the Agent would not have entered into this
Agreement if such limitation had not been agreed to by the parties to this
Agreement. No person found guilty of any fraudulent misrepresentation (within
the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution
from any person who was not found guilty of such fraudulent misrepresentation.
The obligations of the Company and the Association under this Section 9 and
under Section 8 shall be in addition to any liability which the Company and the
Association may otherwise have. For purposes of this Section 9, each of the
Agent's, the Company's or the Association's officers and directors
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and each person, if any, who controls the Agent or the Company or the
Association within the meaning of the 1933 Act and the 1934 Act shall have the
same rights to contribution as the Agent, the Company or the Association. Any
party entitled to contribution, promptly after receipt of notice of commencement
of any action, suit, claim or proceeding against such party in respect of which
a claim for contribution may be made against another party under this Section 9,
will notify such party from whom contribution may be sought, but the omission to
so notify such party shall not relieve the party from whom contribution may be
sought from any other obligation it may have hereunder or otherwise than under
this Section 9.
SECTION 10. SURVIVAL OF AGREEMENTS, REPRESENTATIONS AND INDEMNITIES.
The respective indemnities of the Company, the Association and the Agent and the
representations and warranties and other statements of the Company and the
Association set forth in or made pursuant to this Agreement shall remain in full
force and effect, regardless of any termination or cancellation of this
Agreement or any investigation made by or on behalf of the Agent, the Company,
the Association or any controlling person referred to in Section 8 hereof, and
shall survive the issuance of the Shares, and any legal representative,
successor or assign of the Agent, the Company, the Association, and any such
controlling person shall be entitled to the benefit of the respective
agreements, indemnities, warranties and representations.
SECTION 11. TERMINATION. The Agent may terminate its obligations under
this Agreement by giving the notice indicated below in this Section 11 at any
time after this Agreement becomes effective as follows:
(a) In the event the Company fails to sell all of the Shares
by _______, 1998, 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 Association to each person
who has subscribed for or ordered any of the Shares the full amount
which it may have received from such person, together with interest as
provided in the Prospectus, and no party to this Agreement shall have
any obligation to the other hereunder, except for payment by the
Company and/or the Association as set forth in Sections 2(a) and (d),
6, 8 and 9 hereof.
(b) If any of the conditions specified in Section 7 shall not
have been fulfilled when and as required by this Agreement unless
waived in writing, or by the Closing Date, this Agreement and all of
the Agent's obligations hereunder may be canceled by the Agent by
notifying the Company, the Mid-Tier Holding Company, the MHC and the
Association of such cancellation in writing or by telegram at any time
at or prior to the Closing Date, and any such cancellation shall be
without liability of any party to any other party except as otherwise
provided in Sections 2, 6, 8 and 9 hereof.
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(c) If the Agent elects to terminate this Agreement as
provided in this Section, the Company, the Mid-Tier Holding Company,
the MHC and the Association shall be notified promptly by the Agent by
telephone or telegram, confirmed by letter.
The Company, the Mid-Tier Holding Company, the MHC and the Association
may terminate this Agreement in the event the Agent is in material breach of the
representations and warranties or covenants contained in Section 5 and such
breach has not been cured after the Company and the Association have provided
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 ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & Co., Inc., ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ (with a copy to Peabody & Brown, ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, Esq.) and, if sent to the Company, the Mid-Tier Holding Company, the
MHC and the Association, shall be mailed, delivered or telegraphed and confirmed
to the Company, the Mid-Tier Holding Company, the MHC and the Association at ▇▇▇
▇.▇. ▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.,
President (with a copy to ▇▇▇▇▇, ▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, LLP, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇.▇., ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.)
SECTION 13. PARTIES. The Company, the Mid-Tier Holding Company, the MHC
and the Association shall be entitled to act and rely on any request, notice,
consent, waiver or agreement purportedly given on behalf of the Agent, when the
same shall have been given by the undersigned. The Agent shall be entitled to
act and rely on any request, notice, consent, waiver or agreement purportedly
given on behalf of the Company, the Mid-Tier Holding Company, the MHC or the
Association, when the same shall have been given by the undersigned or any other
officer of the Company, the Mid-Tier Holding Company, the MHC or the
Association. This Agreement shall inure solely to the benefit of, and shall be
binding upon, the Agent, the Company, the Mid-Tier Holding Company, the MHC, the
Association, and their respective successors, legal representatives and assigns,
and no other person shall have or be construed to have any legal or equitable
right, remedy or claim under or in respect of or by virtue of this Agreement or
any provision herein contained. It is understood and agreed that this Agreement
is the exclusive agreement among the parties hereto, and supersedes any prior
agreement among the parties and may not be varied except in writing signed by
all the parties.
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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, the MHC and the Association. At the closing, the Company, the
MHC and the Association shall deliver to the Agent in next day funds the
commissions, fees and expenses due and owing to the Agent as set forth in
Sections 2 and 6 hereof and the opinions and certificates required hereby and
other documents deemed reasonably necessary by the Agent shall be executed and
delivered to effect the sale of the Shares as contemplated hereby and pursuant
to the terms of the Prospectus.
SECTION 15. PARTIAL INVALIDITY. In the event that any term, provision
or covenant herein or the application thereof to any circumstance or situation
shall be invalid or unenforceable, in whole or in part, the remainder hereof and
the application of said term, provision or covenant to any other circumstances
or situation shall not be affected thereby, and each term, provision or covenant
herein shall be valid and enforceable to the full extent permitted by law.
SECTION 16. CONSTRUCTION. This Agreement shall be construed in
accordance with the laws of the State of Delaware.
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.
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If the foregoing correctly sets forth the arrangement among the
Company, the Mid-Tier Holding Company, the MHC, the Association, and the Agent,
please indicate acceptance thereof in the space provided below for that purpose,
whereupon this letter and the Agent's acceptance shall constitute a binding
agreement.
Very truly yours,
COMMUNITY SAVINGS, COMMUNITY SAVINGS
BANKSHARES, INC., A DELAWARE BANKSHARES, INC., A FEDERAL
CORPORATION CORPORATION
By: By:
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
President and Chief Executive President and Chief Executive
Officer Officer
▇▇▇▇▇▇, M.H.C. COMMUNITY SAVINGS, F. A.
By: By:
----------------------------------- --------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
President and Chief Executive President and Chief Executive
Officer Officer
Accepted as of the date first above written
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & CO., INC.
By:
----------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Managing Director
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