1,914,750 Shares
(subject to increase up to 2,201,962 shares
in the event of an oversubscription)
GOUVERNEUR BANCORP, INC.
(a federal corporation)
COMMON STOCK
($0.01 Par Value Per Share)
Subscription Price: $5.00 Per Share
AGENCY AGREEMENT
August __, 1998
First Albany Corporation
▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Gouverneur Bancorp, Inc., a federal corporation in formation (the "Holding
Company"), Cambray Mutual Holding Company, a federally-chartered mutual holding
company in formation (the "MHC" or the "Mutual Holding Company") and Gouverneur
Savings and Loan Association, a New York chartered mutual savings and loan
association ("Association") (collectively, the "Parties"), with its deposit
accounts insured by the Savings Association Insurance Fund ("SAIF") administered
by the Federal Deposit Insurance Corporation ("FDIC"), hereby confirm, jointly
and severally, their agreement with First Albany Corporation ("Agent") as
follows:
SECTION 1. THE OFFERING. The Holding Company is offering up to 1,914,750
shares of common stock, par value $.01 per share (the "Common Stock") (subject
to an increase up to 2,201,962 shares) in (i) a subscription offering
("Subscription Offering"), and if necessary, (ii) a direct community offering
("Direct Community Offering"), and (iii) a syndicated community offering (the
"Syndicated Community Offering") in connection with the conversion and
reorganization of the Association from a mutual savings association to a stock
savings association and wholly-owned subsidiary of the Holding Company (the
"Reorganization"), all pursuant to the Plan of Mutual Holding Company
Reorganization and Stock Issuance (the "Plan"). References to the Association
herein shall include the Association in its current mutual form or
post-reorganization stock form as a wholly-owned subsidiary of the Holding
Company.
Pursuant to the Plan, the Holding Company will offer and sell shares of its
Common Stock (the "Shares") in the Subscription Offering, Direct Community
Offering and Syndicated Community Offering (collectively, the "Offerings") such
that, upon completion of the Offerings, the purchasers of shares in the
Offerings will own 45% of the outstanding Common Stock and the Mutual Holding
Company will own 55% of the outstanding Common Stock. The Holding Company will
issue the Shares at a purchase price of $5.00 per share (the "Purchase Price").
If the number of Shares is increased or decreased in accordance with the Plan,
the term "Shares" shall mean such greater or lesser number, where applicable.
In the Subscription Offering, non-transferable rights to subscribe for
between 1,415,250
and 1,665,000 shares (subject to an increase up to 2,201,962 shares) of the
Common Stock ("Subscription Rights") will be granted, in the following priority:
(1) depositors of the Association with deposit balances of at least $50 as of
March 31, 1997 ("Eligible Account Holders"), (2) tax qualified employee benefit
plans of the Association or the Holding Company, (3) depositors of the
Association with balances of at least $50 as of June 30, 1998 ("Supplemental
Eligible Account Holders"), (4) certain other deposit account holders and
borrower members of the Association ("Other Members") and (5) to its employees,
officers and directors. Subject to the prior Subscription Rights of the
above-listed parties, the Association may offer for sale in a Direct Community
Offering conducted during or after the Subscription Offering, the Shares not so
subscribed for or ordered in the Subscription Offering to certain members of the
general public with a preference given to natural persons residing in the New
York counties of St. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇. In the event a Direct
Community Offering is held, it may be held at any time during or immediately
after the Subscription Offering. Depending on market conditions, shares not
subscribed for in the Subscription Offering or purchased in the Direct Community
Offering may be offered in the Syndicated Community Offering to eligible members
of the general public on a best efforts basis by approved broker-dealer firms
("Assisting Brokers") which are members of the National Association of
Securities Dealers, Inc. ("NASD") the general (all such offerees being referred
to in the aggregate as "Eligible Offerees"). It is acknowledged that the
purchase of Shares in the Subscription Offering and in the Direct Community
Offering and the Syndicated Community Offering (the Direct Community and
Syndicated Community Offerings, the "Public CommunityOfferings") is subject to
maximum and minimum purchase limitations as described in the Plan and that the
Holding Company may reject in whole or in part any subscriptions received from
subscribers in the PublicCommunity Offerings.
The Parties desire to retain Agent to assist the Parties with the sale of
the Shares in the Offerings. By and through this Agreement, the Parties confirm
the retention of Agent to assist the Parties during the Offerings.
The Holding Company has filed with the U.S. Securities and Exchange
Commission (the "Commission") a Registration Statement on Form S-1 (File No.
333-57845) in order to register the Shares under the Securities Act of 1933, as
amended (the "1933 Act"), and has filed such amendments thereto as have been
required to the date hereof (the "Registration Statement"). The prospectus, as
amended, included in the Registration Statement at the time it initially became
effective is hereinafter called the "Prospectus", except that if any Prospectus
is filed by the Holding Company pursuant to Rule 424(b) or (c) of the
regulations of the Commission under the 1933 Act differing from the Prospectus
included in the Registration Statement at the time it 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 and shall include any supplements and amendments thereto from and
after their dates of effectiveness or use, respectively.
In accordance with Title 12, Part 575 and 563b of the Code of Federal
Regulations (the "Reorganization Regulations"), the Association has filed with
the Office of Thrift Supervision (the "OTS") a Notice of Mutual Holding Company
Reorganization on Form MHC-1 and an Application for Approval of a Minority Stock
Issuance by a Savings Association Subsidiary of a Mutual Holding Company on Form
MHC-2, including exhibits and the Prospectus, and has filed amendments thereto
as required by the OTS (as so amended, collectively, the "MHC Notice and
Application"). The Holding Company has filed with the OTS its application on
Form H-(e)1 (the "Holding Company Application") to acquire the Association under
the Homeowners Loan Act, as amended, and the regulations promulgated thereunder
("HOLA"). The Association's application
with the OTS for approval of the conversion of the Association from a state
chartered mutual savings and loan association to a federally chartered mutual
savings and loan association, the formation of an interim stock savings
association and the merger of the interim stock savings association with an into
the Association (the "Merger Application") was filed as an exhibit to the
Holding Company Application. The MHC Notice and Application and the Holding
Company Application (including the Merger Application) shall collectively be
hereinafter referred to as the "OTS Applications."
SECTION 2. APPOINTMENT OF AGENT; COMPENSATION; SALE AND DELIVERY OF THE
SHARES. Subject to the terms and conditions herein set forth, the Parties hereby
appoint Agent as their financial advisor and marketing agent to advise and
assist the Parties with respect to the sale of the Shares in the Offerings on a
best efforts basis.
On the basis of the representations and warranties of the Parties contained
in, and subject to the terms and conditions of, this Agreement, the Agent
accepts such appointment and agrees to consult with and advise the MHC, the
Holding Company and the Association as to the matters relating to the
Reorganization and the Offerings and as set forth in the letter agreements
("Letter Agreements"), dated April 6, 1998, between the Association and Agent
(copies of each of which are attached hereto as Exhibit A). It is acknowledged
by the Parties that the Agent shall not be obligated to purchase any Shares and
shall not be obligated to take any action which is inconsistent with any
applicable law, regulation, decision or order. Subscriptions for Shares will be
offered by means of order forms as described in the Prospectus.
If selected broker-dealers are used to assist in the sale of Shares in the
Syndicated Community Offering, the Parties hereby appoint, subject to the terms
and conditions of this Agreement, Agent to manage such broker-dealers in the
Syndicated Community Offering. On the basis of the representations and
warranties of the Parties contained in, and subject to the terms and conditions
of, this Agreement, Agent accepts such appointment and agrees to manage the
selling group of broker-dealers in the Syndicated Community Offering.
The obligations of Agent pursuant to this Agreement shall terminate upon
the completion or termination or abandonment of the Plan by the Association or
upon termination of the Offerings, or if the terms of the Reorganization are
substantially amended so as to materially and adversely change the role of
Agent, but in no event later than 45 days after the completion of the Offerings
(the "End Date"). All fees due to Agent but unpaid will be payable to 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
Parties and Agent may mutually agree to renew this Agreement under mutually
acceptable terms.
In the event the Reorganization is not consummated for any reason,
including but not limited to the inability to sell a minimum of 1,415,250 Shares
in the Offerings within the period herein provided (including any permitted
extension thereof), this Agreement shall terminate, and the Association 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 7, 9 and 10 hereof.
In the event the closing does not occur, the Reorganization is terminated
or otherwise abandoned, or the terms of the Reorganization are substantially
amended so as to materially and adversely change the role of Agent, Agent shall
be reimbursed for all reasonable
legal fees and out-of-pocket expenses for rendering financial advice to the
Association concerning the structure of the Reorganization, preparing a market
and financial analysis, performing due diligence and assisting in the
preparation of the Registration Statement and the OTS Applications, which shall
be paid upon such termination, abandonment or amendment or within five days of
such event. Any payment made pursuant to this paragraph is subject to a limit of
$25,000 for Agent's legal expenses and $15,000 for its other expenses.
If all conditions precedent to the consummation of the Reorganization,
including, without limitation, the sale of all Shares required by the Plan to be
sold, are satisfied, the Holding Company agrees to issue or have issued the
Shares sold in the Offerings and to release for delivery certificates for such
Shares on the Closing Date (as hereinafter defined) against payment to the
Holding Company by any means authorized by the Plan, provided, however, that
except as otherwise required by law, no certificates shall be released for such
shares until the conditions specified in Sections 2(a) and 7 hereof shall have
been complied with. The release of Shares against payment therefor shall be made
on a date and at a time and place acceptable to the Holding Company and Agent.
The date upon which the Holding Company shall release or deliver the Shares sold
in the Offerings, in accordance with the terms hereof, is herein called the
"Closing Date." At the closing, the Parties shall deliver to the Agent in
same-day funds the commissions, fees and expenses owing to the Agent as set
forth herein and the opinions 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.
Agent has received or shall receive the following compensation for its
services hereunder:
(a) An advisory and administrative services fee in the amount of
$15,000. Such fee has been earned and paid in full.
(b) A marketing and advisory fee of $105,000.
(c) A fee not to exceed 4.5% of the aggregate Purchase Price of the
Shares sold by Assisting Brokers in any Syndicated Community Offering. The
Agent will pay the Assisting Brokers that assist in the purchase of Shares
in the Syndicated Community Offering a fee competitive with gross
underwriting discounts charged at such time for comparable amounts of stock
sold at a comparable price per share in a similar market environment.
Assisting Brokers will not be utilized without the prior approval of the
Parties, and it is agreed that Agent will manage the Assisting Brokers in
the Syndicated Offering.
(d) Reimbursement for all reasonable out-of-pocket expenses,
including, but not limited to, legal fees, travel, communications and
postage, incurred by it whether or not the Reorganization is successfully
completed as set forth in Section 7 hereof. Reimbursement for Agent's legal
and other expense hereunder shall not exceed $25,000 and $15,000
respectively, unless the Association has approved such expense prior to its
incurrence. Agent shall be reimbursed promptly for all out-of-pocket
expenses upon receipt by the Association of a monthly itemized ▇▇▇▇
summarizing such expenses since the date of the last ▇▇▇▇, if any, to the
date of the current ▇▇▇▇.
All subscription funds received by Agent shall be transmitted (either by
U.S. Mail or similar type of transmittal) to the Association by noon of the
following business day.
SECTION 3. PROSPECTUS; SUBSCRIPTION AND PUBLICCOMMUNITY OFFERINGS. The
Shares are to be initially offered in the Subscription and PublicCommunity
Offerings at the Purchase Price as set forth on the cover page of the
Prospectus.
SECTION 4. REPRESENTATIONS AND WARRANTIES. The Parties jointly and
severally represent and warrant to the Agent as follows:
(a) The Holding Company and the Association have, and as of the
Closing Date, the MHC will 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 as provided herein and as described in the Prospectus. The
consummation of the Reorganization, 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 Holding Company and the Association
and, as of the Closing Date, will have been duly and validly authorized by
all necessary action of the part of MHC. This Agreement has been validly
executed and delivered by the Holding Company and the Association and, as
of the Closing Date, this Agreement will be the valid, legal and binding
agreement of the MHC, in each case enforceable in accordance with its
terms, except to the extent, if any, that the provisions of Section 10 and
11 hereof may be unenforceable as against public policy, and except to the
extent that such enforceability may be limited by bankruptcy laws,
insolvency laws, or other laws affecting the enforcement of creditors'
rights generally, or the rights of creditors of savings institutions
insured by the FDIC (including the laws relating to the rights of the
contracting parties to equitable remedies).
(b) The Plan has been approved by the OTS.
(c) The Registration Statement was declared effective by the
Commission on ___________, 1998; and no stop order has been issued with
respect thereto and no proceedings therefor have been initiated or to the
best knowledge of the Parties threatened by the Commission. At the time the
Registration Statement, including the Prospectus contained therein
(including any amendment or supplement thereto), became effective, the
Registration Statement complied as to form in all material respects with
the 1933 Act and the regulations promulgated thereunder and the
Registration Statement, including the Prospectus contained therein
(including any amendment or supplement thereto), any Blue Sky Application
or any Sales Information (as such terms are defined in Section 10 hereof)
authorized by the Parties 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 3, the
Registration Statement, including the Prospectus contained therein
(including any amendment or supplement thereto), and any Blue Sky
Application or any Sales Information authorized by the Parties 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(c) shall not apply to statements or omissions
made in reliance upon and in conformity with written information furnished
to the Parties by the Agent expressly regarding the Agent for use under the
captions ("Market for the Common Stock" and "The Reorganization - Community
Offering, - Public Offering, and - Marketing Arrangements") or written
statements or omissions from any sales information or information
filed pursuant to state securities or blue sky laws or regulations
regarding the Agent.
(d) The MHC Notice and Application, including the Prospectus, was
approved by the OTS on ________ ___, 1998; and the Proxy Statement of the
Association relating to the special meeting of the members of the
Association at which the Plan shall be considered for approval by the
Association's eligible voting members (the "Proxy Statement"), was
authorized for use by the MHC Notice and Application, including the
Prospectus, by the OTS (including any amendment or supplement thereto) and
at all times subsequent thereto until the Closing Date, the MHC Notice and
Application, including the Prospectus, did and will comply as to form in
all material respects with the MHC Regulations and any other applicable
rules and regulations of the OTS (except as modified or waived in writing
by the OTS). At the time of such approval, the MHC Notice and Application,
including the Prospectus (including any amendment or supplement thereto),
did not and does not include any untrue statement of a material fact or
omit to state any 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
or warranties in this subsection (d) shall not apply to statements or
omissions made in reliance upon and in conformity with written information
furnished to the Parties by the Agent expressly regarding the Agent for use
in the Prospectus contained in the MHC Notice and Application under the
captions ("Market for the Common Stock" and "The Reorganization - Community
Offering, - Public Offering, and - Marketing Arrangements") or written
statements or omissions from any sales information or information filed
pursuant to state securities or blue sky laws or regulations regarding the
Agent.
(e) No order has been issued by the OTS, the Commission or any State
regulatory or Blue Sky authority, 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
Reorganization is, to the best knowledge of the Parties, pending or
threatened.
(f) At the Closing Date referred to in Section 2, the Plan will have
been adopted by the Board of Directors of both the Holding Company and the
Association, the Holding Company and the Association will have completed
all material conditions precedent to the Reorganization and the offer and
sale of the Shares will have been conducted in accordance with the Plan,
the Reorganization Regulations and all other applicable laws, regulations,
and all written terms, conditions, requirements and provisions precedent to
the Reorganization imposed upon the Holding Company or the Association by
the OTS (including the OTS approval order described in paragraph (b) of
this Section 4) or any other regulatory authority and in the manner
described in the Prospectus. To the knowledge of the Holding Company or the
Association, no person has, and at the Closing Date, no person will have
sought to obtain review of the final action of the OTS in approving the
Plan or in approving the Reorganization or the Holding Company's
acquisition of more than 50% of the capital stock and control of the
Association pursuant to the HOLA or any other statute or regulation.
(g) As of the Closing Date, the Mutual Holding Company will have been
duly incorporated and shall be validly existing as a federal mutual holding
company in good standing under the laws of the United States with corporate
power and authority to own, lease and operate its properties and to conduct
its business as described in the Registration Statement, the OTS
Applications and the Prospectus, and the Mutual Holding Company shall be
qualified to do business as a foreign corporation in any 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 financial condition, earnings, capital properties, or the business
operations or income of the Parties. As of the Closing Date, the Mutual
Holding Company will have obtained all licenses, permits and other
governmental authorizations required for the conduct of its business,
except those that individually or in the aggregate would not materially
adversely affect the financial condition, earnings, capital, assets or
properties of the Parties taken as a whole; and as of the Closing Date, all
such licenses, permits and governmental authorizations will be in full
force and effect, and the Mutual Holding Company will be in compliance
therewith in all material aspects.
(h) The MHC does not own any equity securities or any equity interest
in any business enterprise except as described in the Prospectus.
(i) The MHC is not authorized to issue any shares of capital stock.
(j) As of the Closing Date, the Holding Company will be a corporation
duly organized and in good standing under the federal laws of the United
States, with corporate power and authority to own its properties and to
conduct its business as described in the Registration Statement, the OTS
Applications and the Prospectus, and will be qualified to transact business
and in good standing in each jurisdiction in which the conduct of business
requires such qualification unless the failure to qualify in one or more of
such jurisdictions would not have a material adverse effect on the
financial condition, earnings, capital, properties or business affairs of
the Parties. As of the Closing Date, the Holding Company will have obtained
all licenses, permits and other governmental authorizations required for
the conduct of its business, except those that individually or in the
aggregate would not materially adversely affect the financial condition,
earnings, capital, assets or properties of the Parties taken as a whole;
and as of the Closing Date, all such licenses, permits and governmental
authorizations will be in full force and effect, and the Holding Company
will be in compliance therewith in all material aspects.
(k) The Association is now an organized and validly existing
federally-chartered savings and loan association in mutual form of
organization and upon the Reorganization will become a duly organized and
validly existing federally-chartered savings association in capital stock
form of organization, in both instances duly authorized to conduct its
business and own its property as described in the OTS Applications and the
Prospectus; the Association has obtained all material licenses, permits and
other governmental authorizations currently required for the conduct of its
business; all such licenses, permits and governmental authorizations are in
full force and effect, and the Association is in all material respects
complying with all material laws, rules, regulations and orders applicable
to the operation of its businesses; and the Association is duly qualified
as a foreign corporation to transact business in each jurisdiction in which
its ownership of property or leasing of properties 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. Upon the completion of the
Reorganization of the Association pursuant to the Plan to a
federally-chartered stock savings Association, (i) not less than 35% and
not more than 45% of the authorized and outstanding capital stock of the
Association will be owned by the Holding Company, and (ii) the Holding
Company will have no direct subsidiaries other than the Association. The
Reorganization will have been effected in all material respects in
accordance with all applicable statutes, regulations, decisions and orders
except to the extent compliance therewith shall have been waived by OTS;
and except with respect to the filing of certain
post-sale, post-Reorganization reports and documents in compliance with the
OTS's resolutions or letters of approval. All terms, conditions,
requirements and provisions with respect to the Reorganization imposed by
the OTS and the FDIC, if any, will have been complied with by the Holding
Company and the Association in all material respects or appropriate waivers
will have been obtained and all material notice and waiting periods will
have been satisfied, waived or elapsed. All of the issued and outstanding
capital stock of the Association after the Reorganization will be duly and
validly issued and fully paid and non-assessable; and the Holding Company
will directly own all of such capital stock free and clear of any mortgage,
pledge, lien, encumbrance, claim or restriction. The Association does not
own equity securities or any equity interest in any other business
enterprise except as otherwise described in the Prospectus.
(l) The Association is a member of the Federal Home Loan Association
of New York ("FHLB"); and the deposit accounts of the Association are
insured by the FDIC up to the applicable limits. Upon consummation of the
Reorganization, the rights of the members of the Association in its mutual
form shall be transferred to the Mutual Holding Company in accordance with
the Plan and the requirements of the Reorganization Regulations.
(m) The Association has, and at the Closing Date the Parties shall
have, good and marketable title to all assets owned by them which are
material to the business of the Parties and to those assets described in
the OTS Applications and in the Prospectus as owned by them, free and clear
of all material liens, charges, encumbrances or restrictions, except such
as are described in the OTS Applications and in the Prospectus or are not
materially significant or important in relation to the business of the
Parties taken as a whole; and all of the leases and subleases material to
the business of the Parties under which the Parties holds properties,
including those described in the OTS Applications and Prospectus, are in
full force and effect.
(n) The Association has received an opinion of its counsel, ▇▇▇▇▇▇▇ &
Zelermeyer, LLP, with respect to the federal income tax consequences of,
and other matters relating to the Reorganization of the Association from
mutual to stock form as described in the Registration Statement, the OTS
Applications and the Prospectus and with respect to the New York income tax
consequences of the proposed transaction; all material aspects of the
opinion of ▇▇▇▇▇▇▇ & Zelermeyer, LLP are accurately summarized in the
Prospectus; and the facts and representations upon which such opinions are
based are truthful, accurate, and complete, and none of the Parties will
take any action inconsistent therewith.
(o) The Association has 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 its
capital stock to the Holding Company as provided herein and as described in
the Prospectus. The consummation of the Reorganization, 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 Association and this
Agreement has been validly executed and delivered by the Association and is
the valid, legal and binding agreement of the Association enforceable in
accordance with its terms (except as the enforceability thereof may be
limited by bankruptcy, insolvency, moratorium, reorganization or similar
laws relating to or affecting the enforcement of creditors' rights
generally or the rights of creditors of savings and loan holding companies,
the accounts of whose subsidiaries are insured by the FDIC or by general
equity principles regardless of whether such enforceability is considered
in a proceeding in equity or at law, and except to the extent, if any, that
the provisions of Sections 9 and 10 hereof may be unenforceable as against
public policy).
(p) The Association is not, and as of the Closing Date neither the
Holding Company nor the MHC shall be, in violation of any written directive
which has been delivered to the Holding Company, the MHC or the Association
or of which management of the Holding Company, the MHC or the Association
has actual knowledge, from the Commission, 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 Commission, the OTS and the FDIC)
and except as set forth in the OTS Applications and the Prospectus there is
no suit or proceeding or, to the knowledge of the Holding Company, the MHC
or the Association, charge, investigation or action before or by any court,
regulatory authority or governmental agency or body, pending or, to the
knowledge of the Holding Company, the MHC or the Association, threatened,
which might materially and adversely affect the Reorganization, the
performance of this Agreement or the consummation of the transactions
contemplated in the Plan and as described in the Registration Statement or
the OTS Applications or which might result in any material adverse change
in the condition (financial or otherwise), earnings, capital, properties,
business affairs or business prospects of the Holding Company, the MHC or
the Association or which would materially affect their properties and
assets.
(q) The financial statements and the notes thereto which are included
in the Registration Statement and which are part of the Prospectus fairly
present the financial condition, results of operations, retained earnings
and cash flows of the Association 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 Title 12
of the Code of Federal Regulations, Regulation S-X of the Commission and
generally accepted accounting principles ("GAAP") (including those
requiring the recording of certain assets at their current market value).
To the knowledge of the Holding Company and the Association, 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 filings conform to
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, if any, 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.
(r) Since the date as of which the Application was approved by the
OTS:From the respective dates as of which information is given in the
Registration Statement, including the Prospectus, and the OTS Applications
were approved by the OTS through and including the Closing Date, (i) there
has not been any material adverse change, financial or otherwise, in the
condition of the MHC, the Holding Company or the Association, or of the
MHC, the Holding Company and the Association considered as one enterprise,
or in the earnings, capital or properties of the MHC, the Holding Company
or the Association, whether or not arising in the ordinary course of
business, (ii) there has not been any other material change which would
require an amendment to the Prospectus; (iii) the Association has not
issued any securities or incurred any liability or obligation for borrowing
other than in the ordinary course of business; (iv) there have not been any
material transactions entered into by the Holding Company or the
Association, except with respect to those transactions entered into in the
ordinary course of business; and (v) the capitalization, liabilities,
assets, properties and business
of the MHC, the Holding Company and the Association conform in all material
respects to the descriptions thereof contained in the Prospectus, and
neither the MHC, the Holding Company nor the Association have any material
liabilities of any kind, contingent or otherwise, except as set forth in
the Prospectus.
(s) As of the date hereof, as to the Association, and as of the
Closing Date, as to the Holding Company, the MHC and the Association,
neither the Holding Company, the MHC nor the Association is in violation of
its certificate of incorporation, charter or bylaws (and the Association
will not be in violation of its charter or bylaws in capital stock form as
of the Closing Date) 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
which would result in a material adverse change in the condition (financial
or otherwise), earnings, capital, properties, business affairs or business
prospects of the Holding Company, the MHC or Association or which would
materially affect their properties or assets. The consummation of the
transactions herein contemplated will not (i) conflict with or constitute a
breach of, or default under, the certificate of incorporation charter and
bylaws of the Holding Company, the charter and bylaws of the MHC, the
charter and bylaws of the Association (in either mutual or capital stock
form), or any material contract, lease or other instrument to which the
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 Holding Company, the MHC or the Association;
or (iii) with the exception of the lLiquidation aAccount established in the
Reorganization, result in the creation of any material lien, charge or
encumbrance upon any property of the Holding Company, the MHC or the
Association.
(t) No material default exists, and no event has occurred which with
notice or lapse of time, or both, would constitute a material default on
the part of any of the Parties, in the due performance and observance of
any term, covenant or condition of any indenture, mortgage, deed of trust,
note, loan or credit agreement or any other material instrument or
agreement to which any of the Parties is a party or by which any of them or
any of their property is bound or affected in any respect which, in any
such case, is material to any of the Parties individually or 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 Parties, threatened any action or proceeding wherein any of the
Parties would or might be alleged to be in default thereunder under
circumstances where such action or proceeding, if determined adversely to
any of the Parties, would have a material adverse effect upon the Parties
individually or considered as one enterprise.
(u) Upon consummation of the Reorganization, the authorized, issued
and outstanding equity capital of the Holding Company will be within the
range set forth in the Registration Statement, the Prospectus and the OTS
Applications under the caption "Capitalization," and, except for the shares
of Common Stock held by the MHC, no shares of Common Stock have been or
will be issued and outstanding prior to the Closing Date referred to in
Section 2; the Shares will have been duly and validly authorized for
issuance and, when issued and delivered by the Holding 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 and fully
paid and non-assessable; the issuance of the Shares will not violate any
preemptive rights; and the terms and provisions of the Shares will conform
in all material respects to the description thereof contained in the OTS
Applications and the Prospectus. To the knowledge of the Parties, upon the
issuance of the Shares, good title to the Shares will be transferred from
the Holding Company
to the purchasers thereof against payment therefor as set forth in the Plan
and the Prospectus, subject to such claims as may be asserted against the
purchasers thereof by third party claimants.
(v) No approval, authorization, consent or other order of any
regulatory or supervisory or other public authority is required in
connection with the execution and delivery of this Agreement or the
issuance of the Shares, except for the approval of the OTS and the
Commission (which have been received) and any necessary qualification,
notification, or registration or exemption under the securities or blue sky
laws of the various states in which the Shares are to be offered and as may
be required under the regulations of the National Association of Securities
Dealers, Inc. ("NASD") and the National Association of Securities Dealers
Automated Quotation ("NASDAQ") Stock Market.
(w) KPMG Peat Marwick, LLP has certified the financial statements
filed as part of the Registration Statement and the MHC Notice and
Application, and is with respect to the Holding Company and the Association
and the MHC, an independent public accountant within the meaning of the
Code of Professional Ethics of the American Institute of Certified Public
Accountants and Title 12 of the Code of Federal Regulations, Sections
563c.3 and 571.2(c)(3) and the 1933 Act and the 1933 Act Regulations.
(x) The Association has (subject to all properly obtained extensions)
timely filed all required federal and state tax returns, has paid all taxes
that have become due and payable in respect of such returns, has made
adequate reserves for similar future tax liabilities and no deficiency has
been asserted with respect thereto by any taxing authority.
(y) Appropriate arrangements have been made for placing the funds
received from subscriptions for Shares in special interest-bearing accounts
with the Association until all Shares are sold and paid for as described in
the Prospectus, with provision for refund to the purchasers in the event
that the Reorganization is not completed for whatever reason or for
delivery to the Association if all Shares are sold.
(z) The Association is in compliance in all material respects with the
applicable financial record keeping and reporting requirements of the
Currency and Foreign Transactions Reporting Act of 1970, as amended, and
the regulations and rules thereunder.
(aa) To the knowledge of the Parties, neither the Parties nor any
director or employee of the Parties has made any payment of funds of the
Parties as a loan to any person, other than to the Employee Stock Ownership
Plan Trust for the purchase of the Shares.
(bb) Prior to the Reorganization, the Association was not authorized
to issue shares of capital stock and neither the MHC, the Holding Company
nor the Association has: (i) issued any securities within the last 18
months (except for (A) notes to evidence other Association loans and
reverse repurchase agreements or other liabilities and (B) shares of Common
Stock issued to the MHC with respect to the initial capitalization of the
Holding Company); (ii) had any material dealings within the twelve 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 Subscription and PublicCommunity Offerings and
routine purchases and sales of U.S. government and agency securities and
other investment securities; (iii) entered into a financial or management
consulting agreement except as contemplated hereunder; and (iv) engaged any
intermediary between Agent and the Parties in connection with the offering
of Common Stock, and no person is being compensated in any manner for such
service.
(cc) All pending legal proceedings to which the Holding Company or the
Association is a party or of which any of their property is the subject
which are not described in the Application and the Prospectus, including
ordinary routine litigation incidental to the business are, considered in
the aggregate, not material.
(dd) To the knowledge of the MHC, the Holding Company and the
Association, the MHC, the Holding Company and the Association comply in all
material respects with all laws, rules and regulations relating to
environmental protection, and neither the MHC, the Holding Company nor the
Association has been notified or is otherwise aware that any of them is
potentially liable, or is considered potentially liable in any material
respect, under the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, or any similar federal, state or local
environmental laws and regulations. There are no actions, suits, regulatory
investigations or other proceedings pending or, to the knowledge of the
MHC, the Holding Company or the Association, threatened against the MHC,
the Holding Company or the Association relating to any environmental
condition or contamination, nor does the MHC, the Holding Company or the
Association have any reason to believe any such proceedings may be brought
against any of them; and no disposal, release or discharge of hazardous or
toxic substances, pollutants or contaminants, including petroleum and gas
products, as any of such terms may be defined under federal, state or local
law, as occurred on, in, at or about any facilities or properties owned or
leased by any of the Parties or, to the best knowledge of the Association,
in which the Association has a security interest.
(ee) The Parties have not relied upon Agent or its counsel for any
legal, tax or accounting advice in connection with the Reorganization.
(ff) The records of Eligible Account Holders, Supplemental Eligible
Account Holders and Other Members are accurate and complete and in all
material respects.
(gg) All of the loans represented as assets on the most recent
financial statements or selected financial information of the Association
included in the Prospectus meet or are exempt from all requirements of all
federal, state and local law pertaining to lending, including, without
limitation, truth in lending (including the requirements of Regulations Z
and 12 CFR Part 226), real estate settlement procedures, consumer credit
protection, equal credit opportunity and all disclosure laws applicable to
such loans, except for violations which, if asserted, would not result in a
material adverse effect on the financial condition, results of operations
or business of the Parties taken as a whole.
(hh) None of the Parties are required to be registered as an
investment company under the Investment Company Act of 1940.
(ii) ▇▇▇▇▇▇ & Company, Inc., which prepared the appraisal of the
aggregate pro forma market value of the Holding Company and the Association
on which the Offerings were based (the "Appraisal"), has advised the
Parties within the meeting of the Reorganization Regulations.
(jj) As of the date hereof the charters of the Holding Company and the
MHC have been filed with the OTS, but neither charter is effective or
otherwise enforced.
Any certificates signed by an officer of the Parties and delivered to Agent
or its
counsel that refer to this Agreement shall be deemed to be a representation and
warranty by the Parties to the Agent as to the matters covered thereby with the
same effect as if such representation and warranty were set forth herein.
SECTION 5. AGENT REPRESENTS AND WARRANTS TO THE PARTIES THAT:
(a) Agent is a corporation and is validly existing in good standing under
the laws of the State of ______________ with full power and authority to provide
the services to be furnished to the Parties 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 Agent, and this Agreement has been duly and
validly executed and delivered by Agent and is the legal, valid and binding
agreement of Agent, enforceable in accordance with its terms, except as the
legality, validity, binding nature and enforceability thereof may be limited by
(i) bankruptcy, insolvency, moratorium, reorganization, conservatorship,
receivership or other similar laws relating to or affecting the enforcement of
creditors' rights generally, (ii) general equity principles regardless of
whether such enforceability is considered in a proceeding in equity or at law,
and (iii) the extent, if any, that the provisions of Sections 10 or 11 hereof
may be unenforceable as against public policy.
(c) Each of Agent and its employees, agents and representatives who shall
perform any of the services hereunder shall be duly authorized and empowered,
and shall have all licenses, approvals and permits necessary, to perform such
services and Agent is a registered selling agent in the jurisdictions listed in
Exhibit A hereto and will remain registered in such jurisdictions in which the
Association is relying on such registration for the sale of the Shares, until
the Reorganization is consummated or terminated.
(d) No action, suit, charge or proceeding before the Commission, the NASD,
any state securities commission or any court is pending, or to the knowledge of
Agent threatened, against Agent which, if determined adversely to Agent, would
have a material adverse effect upon the ability of Agent to perform its
obligations under this Agreement.
(e) Agent is registered as a broker/dealer pursuant to Section 15(b) of the
1934 Act and is a member of the National Association of Securities Dealers, Inc.
(f) The execution and delivery of this Agreement by 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
certificate of incorporation of Agent or any agreement, indenture or other
instrument to which Agent is a party or by which its property is bound, or law
or regulation by which Agent is bound.
(g) Funds received by Agent to purchase Common Stock in the Offerings will
be handled in accordance with Rule 15c2-4 under the Securities Exchange Act of
1934, as amended.
(h) Agent will comply with all applicable laws and regulations in the
performance of its obligations hereunder.
SECTION 6. COVENANTS OF THE PARTIES. The Parties hereby jointly and
severally covenant with Agent as follows:
(a) The Holding 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 file any amendment
or supplement to which amendment the Agent or its counsel shall reasonably
object.
(b) The Parties will not, at any time after the date any OTS
Application is approved, file any amendment or supplement to such OTS
Application without providing the Agent and its counsel an opportunity to
review such amendment or supplement or file any amendment or supplement to
which amendment or supplement the Agent or its counsel shall reasonably
object.
(c) The Parties will use their best efforts to cause the OTS to
approve the Holding Company's acquisition of the Association, and 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 OTS Applications to be approved by the OTS,
and will immediately upon receipt of any information concerning the events
listed below notify Agent and promptly confirm the notice in writing: (i)
when the Registration Statement, as amended, has become effective; (ii)
when the MHC Notice and Application, as amended, has been approved by the
OTS; (iii) when the Holding Company Application, as amended, has been
approved by the OTS; (iv) when the Merger Application has been approved by
the OTS; (v) of the receipt of any comments from the Commission, the OTS or
any other governmental entity with respect to the Reorganization or the
transactions contemplated by this Agreement; (vi) of any request by the
Commission, the OTS or any other governmental entity for any amendment or
supplement to the Registration Statement or the OTS Applications or for
additional information; (vii) of the issuance by the Commission, the OTS,
the FDIC or any other governmental entity of any order or other action
suspending the Subscription or PublicCommunity Offerings, or the use of the
Registration Statement or the Prospectus or any other filing of the Parties
under the Reorganization Regulations or withdrawing the approval of the OTS
Applications or any other filing of the Association under the
Reorganization Regulations or other applicable law, or the threat of any
such action; (viii) of the issuance by the Commission, the OTS or the FDIC,
or any state authority, of any order withdrawing the authorization to use
the Prospectus or of any stop order suspending the effectiveness of any
Blue Sky filings or of the initiation or threat of initiation or threat of
any proceedings for those purposes; or (vi) of the occurrence of any event
mentioned in paragraph (g) below. The Parties will make every reasonable
effort to prevent the issuance by the Commission, the OTS or the FDIC, or
any other state authority of any such order and, if any such order shall at
any time be issued, to obtain the lifting thereof at the earliest possible
time.
(d) The Parties will deliver to Agent and to its counsel two conformed
copies of each of the following documents, with all exhibits: each of the
OTS Applications and the Holding Company Application, and the Registration
Statement, as originally filed and of each amendment or supplement thereto.
Further, the Parties will deliver such additional copies of the foregoing
documents to counsel for Agent as may be required for any NASD filings. In
addition, the Association will also deliver to Capital Resources such
number of copies of the Offering Circular, as amended or supplemented, as
Capital Resources or its counsel may reasonably request.
(e) The Parties will furnish to Agent, from time to time, during the
period when the Offering Circular (or any later prospectus related to this
Offering) is required to be delivered under the 1933 Act or the 1934 Act,
such number of copies of such prospectus (as amended or supplemented) as
the Prospectus as Agent or its counsel may reasonably request. for the
purposes contemplated by the 1933 Act or the 1934 Act or the respective
applicable rules and regulations thereunder. The Parties authorize
Agent to use the Prospectus (as amended or supplemented, if amended or
supplemented) for any lawful manner in connection with the sale of the
Shares by Agent.
(f) The Association will comply in all material respects at its own
expense with any and all terms, conditions, requirements and provisions
with respect to the Reorganization and the transactions contemplated
thereby imposed by the Commission, by applicable state laws and
regulations, and by the 1933 Act, the Securities Exchange Act of 1934, as
amended, the ("1934 Act"), and the rules and regulations of the Commission
promulgated under such statutes, to be complied with prior to or subsequent
to the Closing Date; and when the Prospectus is required to be delivered,
the Parties will comply in all material respects, at their own expense,
with all material requirements imposed upon them by the OTS, the
Reorganization Regulations, the Commission, and all other applicable laws
and regulations, 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 MHC, the Holding Company or the Association shall occur, as a result of
which it is necessary or appropriate, in the reasonable opinion of counsel
for the Parties to amend or supplement the Registration Statement, the OTS
Applications or Prospectus in order to make the Registration Statement, the
OTS Applications or Prospectus not misleading in light of the circumstances
existing at the time it is delivered to a purchaser, the Parties will, at
their sole expense, forthwith prepare, file with the Commission and the OTS
and furnish to Agent a reasonable number of copies of any amendment or
amendments of, or a supplement or supplements to, the OTS Applications, the
Registration Statement and/or Prospectus (in form and substance reasonably
satisfactory to Agent and its counsel after a reasonable time for review)
which will amend or supplement the OTS Applications, 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 reasonably is delivered
to a purchaser, not misleading. For the purpose of this Agreement, the MHC,
the Holding Company and the Association each will timely furnish to Agent
such information with respect to itself as Agent may from time to time
request.
(h) The Holding Company will take all necessary actions, in
cooperation with Agent, and furnish to whomever Agent may direct, such
information as may be required to qualify or register the Shares for
offering and sale by the Holding Company under the applicable securities or
blue sky laws of such jurisdictions in which the Shares are required under
the Reorganization Regulations to be sold or as Agent may reasonably
designate and as reasonably agreed to by the Holding Company and to exempt
the Holding Company and its officers, directors and employees from
registration as broker-dealers, under the applicable securities laws of the
jurisdictions in which the Offerings will be conducted; provided, however,
that the Holding 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 Holding
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 with account balances of $50 or more as of the applicable record
dates will be duly established and maintained in accordance with the
requirements of the OTS.
(j) The Holding Company will not sell or issue, contract to sell or
otherwise dispose of, for a period of 180 days after the date hereof,
without Agent's prior written consent, any shares of Common Stock other
than in connection with any plan or arrangement described in the
Prospectus.
(k) The Holding Company shall register its Common Stock under Section
12(g) of the 1934 Act concurrent with the Offerings pursuant to the Plan
and shall request that such registration be effective upon completion of
the Reorganization. The Holding Company shall maintain the effectiveness of
such registration for not less than three years or such shorter period as
permitted by the OTS.
(l) During the period during which the Holding Company's Common Stock
is registered under the 1934 Act or for three years from the date hereof,
whichever period is greater, the Holding Company will furnish to its
stockholders as soon as practicable after the end of each fiscal year an
annual report (including a balance sheet and statements of income,
stockholders' equity and changes in financial position or cash flow
statement of the Holding Company as at the end of and for such year,
certified by independent public accountants and prepared in accordance with
Regulation S-X or S-B under the 1934 Act or applicable regulations of the
OTS).
(m) During the period of three years from the date hereof, the Holding
Company will furnish to Agent: (i) a copy of each public report of the
Holding 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 Holding Company is listed or quoted (including but not
limited to, reports on Form 10-KSB, 10-QSB and 8-K and all proxy statements
and annual reports to stockholders), a copy of each public report of the
Holding Company mailed to its stockholders or filed with the OTS or any
other supervisory or regulatory authority or any national securities
exchange or system on which any class of securities of the Holding Company
is listed or quoted, each press release and material news items and
additional public documents and information with respect to the Holding
Company as Agent may reasonably request, and (ii) from time to time, such
other publicly available information concerning the Holding Company and the
Association as Agent may reasonably request.
(n) The Parties 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 HOLA, the Reorganization
Regulations, the 1933 Act and the 1934 Act and the rules and regulations
promulgated under such statutes, and the laws of any state in which the
Shares are qualified for sale, neither the Holding Company nor the
Association will distribute any prospectus, Prospectus or other offering
material in connection with the offer and sale of the Shares.
(p) The Parties shall advise Agent in writing of all material
relationships or material facts known to the Parties to render any persons
subscribing for or ordering shares in the Subscription and Community
Offerings an Associate of, or a person acting in concert with, any other
person within the meaning of the Reorganization Regulations, and shall
further cooperate with Agent in calculating appropriate limitations on the
purchase of shares by such person pursuant to the Reorganization
Regulations and the Plan. The Association will make generally available to
its security holders as soon as practicable, but not later than 90 days
after the close of the period an earnings statement (in form complying with
the provisions of Rule 158 under the ▇▇▇▇ ▇▇▇) covering a twelve-month
period beginning not later than the first day of the Association's fiscal
quarter next following the effective date (as defined in said Rule 158) of
the Application.
(q) The Holding Company will use its best efforts obtain approval for
and
maintain quotation of the shares on the NASDAQ Stock Market/Small Cap
Market effective on or prior to the Closing Date.
(r) The Parties will maintain appropriate arrangements for depositing
all funds received from persons mailing subscriptions for or orders to
purchase Shares in the Subscription and PublicCommunity 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 Holding Company's obligation to refund payments received from persons
subscribing for or ordering Shares in the Subscription and PublicCommunity
Offerings in accordance with the Plan as described in the Prospectus or
until refunds of such funds have been made to the persons entitled thereto
or withdrawal authorizations canceled in accordance with the Plan and as
described in the Prospectus. The Parties 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
Parties to make the appropriate refunds of such funds in the event that
such refunds are required to be made in accordance with the Plan and as
described in the Prospectus.
(s) Prior to the Closing Date, the Mutual Holding Company and the
Holding Company will each register as a savings and loan holding company
under the HOLA within the period required by applicable law.
(t) The Parties will take such actions and furnish such information as
are reasonably requested by Agent in order for Agent to ensure compliance
with the "Interpretation of the Board of Governors of the NASD on Free
Riding and Withholding."
(u) The Parties have conducted and will conduct their businesses in
compliance in all material respects with all applicable federal and state
laws, rules, regulations, decisions, directives and orders, including all
decisions, directives and orders of the Commission, the OTS and the FDIC.
(v) The Parties will not amend the Plan without Agent's prior written
consent in any manner that, in the reasonable opinion of Agent, would
materially and adversely affect the sale of the Shares or the terms of this
Agreement except to comply with any regulatory requirement.
(w) The Holding Company will file with the Commission within the
required time period, such reports on Form SR as may be required pursuant
to Rule 463 under the 1933 Act.
(x) The Holding Company shall provide the Agent with any information
necessary to carry out the allocation of the Shares in the event of an
oversubscription, and such information shall be accurate and reliable in
all material respects.
(y) The Holding Company will not deliver the Shares until the parties
have satisfied or caused to be satisfied each condition set forth in
Section 8 hereof, unless such condition is waived in writing by the Agent.
(z) Upon completion of the sale by the Holding Company of the Shares
contemplated by the Plan and the Prospectus, (i) the MHC shall have been
formed pursuant to the Plan and shall own at all times more than 50% of the
issued and outstanding shares of Common Stock, (ii) all of the issued and
outstanding shares of capital stock of the Association shall be
owned by the Holding Company, (iii) the Holding Company shall have no
direct subsidiaries other than the Association, and (iv) the Reorganization
shall have been effected in accordance with all applicable statutes,
regulations, decisions and orders; and (v) all terms, conditions,
requirements and provisions with respect to the Reorganization (except
those that are conditions subsequent) imposed by the Commission, the OTS or
any other governmental agency, if any, shall have been complied with by the
Parties in all material respects or appropriate waivers shall have been
obtained and all notice and waiting periods shall have been satisfied,
waived or elapsed.
(aa) Prior to the Closing Date, the Plan shall have been approved by
the eligible voting members of the Association in accordance with the
Reorganization Regulations and the provisions of the Association's charter
and bylaws.
(bb) On or before the Closing Date, the Parties will have completed
all conditions precedent to the Reorganization specified in the Plan and
the offer and sale of the Shares will have been conducted in all material
respects in accordance with the Plan, the Reorganization Regulations
(except as modified or waived in writing by the OTS) and with all other
applicable laws, regulations, decisions and orders, including all terms,
conditions, requirements and provisions precedent to the Reorganization
imposed upon any of the Parties by the OTS, the Commission or any other
regulatory authority and in the manner described in the Prospectus.
SECTION 7. PAYMENT OF EXPENSES. Whether or not the Reorganization is
completed or the sale of the Shares by the Holding Company is consummated, the
Parties agree to pay directly for or to reimburse Agent for (to the extent that
such expenses have been reasonably incurred by Agent) (a) all filing fees and
expenses incurred in connection with the qualification or registration of the
Shares for offer and sale by the Holding Company under the securities or blue
sky laws of any jurisdictions that Agent and the Association may agree upon
pursuant to subsection (h) of Section 6 above, including counsel fees paid or
incurred by the Parties or Agent in connection with such qualification or
registration or exemption from qualification or registration; (b) all filing
fees in connection with all filings with the NASD; (c) any stock issue or
transfer taxes which may be payable with respect to the sale of the Shares to
purchasers in the Reorganization; (d) reasonable and necessary expenses of the
Reorganization, including but not limited to, 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 Reorganization; and (e) out-of-pocket expenses incurred by Agent in
connection with the Reorganization or any of the transactions contemplated
hereby, including, without limitation, the fees of its attorneys, and reasonable
communication and travel expenses, as limited by Section 2 hereof. Not later
than three days prior to the Closing Date, the Agent will provide the Parties
with a detailed accounting of all reimbursable expenses to be paid at the
Closing.
SECTION 8. CONDITIONS TO AGENT'S OBLIGATIONS. The Agent's obligations
hereunder, as to the Shares to be delivered at the Closing Date and the
occurrence of the Closing and the Reorganization, are subject to the condition
that all representations and warranties and other statements of the Parties
herein are, at and as of the commencement of the Subscription and
PublicCommunity Offerings and at and as of the Closing Date, true and correct in
all material respects, the condition that the Parties shall have performed in
all material respects all of their obligations hereunder to be performed on or
before such dates, and to the following further conditions:
(a) The Registration Statement shall have been declared effective by
the Commission and the MHC Notice and Application approved by the OTS prior
to the commencement of the Offering, the Holding Company Application shall
have been approved, and no stop order or other action suspending the
effectiveness of the Registration Statement shall have been issued under
the 1933 Act or proceedings therefor initiated or, to any of the Parties'
best knowledge, threatened by the Commission or any state authority and no
order or other action suspending the authorization for use of the
Prospectus or the consummation of the Reorganization shall have been issued
or proceedings therefore initiated or, to any of the Parties' best
knowledge, threatened by the OTS, the Commission, or any other governmental
body.
(b) At the Closing Date, the MHC, the Holding Company and the
Association will have completed the conditions precedent to, and shall have
conducted the Reorganization in all material respects in accordance with,
the Plan, the Reorganization Regulations and all other applicable laws,
regulations, decisions and orders, including all terms, conditions,
requirements and provisions precedent to the Reorganization imposed upon
them by the OTS.
(c) At the Closing Date, Agent shall have received:
(1) The favorable opinion, dated as of the Closing Date addressed
to Agent and for its benefit, of ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, LLP ("S&P")
counsel for the Parties, in form and substance acceptable to Agent .
S&P shall also provide a letter dated as of the Closing Date addressed
to Agent which states that, with respect to the opinion of such
counsel nothing has come to the attention of S&P that would lead S&P
to believe that Agent and its counsel are not justified in relying
upon such opinion. The opinions of S&P shall in form and substance be
to the effect that:
(i) The Holding Company is a corporation duly organized and
validly existing and in good standing under the federal laws of
the United States of America, with corporate power and authority
to own its properties and to conduct its business as described in
the Prospectus, and is duly qualified to transact business and is
in good standing in each jurisdiction in which the conduct of its
business requires such qualification and in which the failure to
qualify would have a material adverse effect on the financial
condition, earnings, capital, properties or business affairs of
the Parties.
(ii) The Mutual Holding Company has been incorporated and is
validly existing as a mutual holding company in good standing
under the laws of the United States.
(iii) The Mutual Holding Company has corporate power and
authority to own, lease and operate its properties and to conduct
its business as described in the OTS Applications and the
Prospectus.
(iv) The Association was organized and is a validly existing
federally-chartered savings and loan association in mutual form
of organization and upon the Reorganization will become an
organized and validly existing federally-chartered savings bank
in capital stock form of organization, in both instances duly
authorized to conduct its business and own its property as
described in the OTS Applications and the Association has
corporate existence under the laws of the United States. The
activities of the Association as described in the Prospectus,
insofar as they are material to the operations and financial
condition of the Association, are permitted by the rules and
regulations of the OTS; the issuance and sale of the capital
stock of the Association to the Holding Company in the
Reorganization has been duly and validly authorized by all
necessary
corporate action on the part of the Holding Company and the
Association and, upon payment therefore in accordance with the
terms of the Plan, will be validly issued, fully paid and
non-assessable; and will be owned of record and beneficially by
the Holding Company, free and clear of any mortgage, pledge,
lien, encumbrance, claim or restriction.
(v) The Association is a member of the FHLB of New York, the
deposit accounts of the Association are insured by the FDIC up to
the maximum amount allowed under law, and to such counsel's
knowledge no proceedings for the termination or revocation of
such insurance are pending or threatened; and the description of
the liquidation account as set forth in the Application and the
Prospectus under the caption "The Reorganization - Effects of
Reorganization on Depositors and Borrowers - Liquidation Rights"
to the extent that it constitutes matters of law, summaries of
legal matters, documents, proceedings or legal conclusions has
been reviewed by such counsel and is accurate in all material
respects.
(vi) On the Closing Date, the authorized, issued and
outstanding capital stock of the Holding Company will be within
the range set forth in as set forth in the Application and the
Prospectus under the caption "Capitalization," and to such
counsel's knowledge no shares of Common Stock have been issued
prior to the Closing Date (except for shares issued to the MHC
upon incorporation of the Holding Company); the shares of Common
Stock of the Holding Company issued to the MHC have been duly and
validly authorized for issuance and will be fully paid and
nonassessable; at the time of the Reorganization, the Shares
subscribed for pursuant to the Subscription and PublicCommunity
Offerings and the Shares issued to the Mutual Holding Company
will have been duly and validly authorized for issuance, and when
issued and delivered by the Association pursuant to the Plan
against payment of the consideration calculated as set forth in
the Plan, will be duly and validly issued and fully paid and
non-assessable, provided, however, that Shares issued to the
Mutual Holding Company may be subject to restrictions on resale
and possible subscription rights of the Association's depositors
in accordance with the Reorganization Regulations, and provided
further that no opinion need be rendered as to security interests
or pledges granted by the purchasers of such Shares; and the
issuance of the Shares is not subject to preemptive rights.
(vii) The execution and delivery of this Agreement, and the
performance by the Parties of their obligations hereunder, have
been validly authorized by all necessary corporate action on the
part of the Parties; and this Agreement is a valid and binding
obligation of the Parties, enforceable in accordance with its
terms (except as the enforceability thereof may be limited by
bankruptcy, insolvency, moratorium, reorganization or similar
laws relating to or affecting the enforcement of creditors'
rights generally or the rights of creditors of savings
institutions or savings and loan holding companies, or by general
equity principles, regardless of whether such enforceability is
considered in a proceeding in equity or at law, and except as the
obligations of the Parties under the indemnification provisions
of Sections 9 and 10 hereof may be limited by law or
unenforceable as against public policy, as to which, no opinion
need be expressed).
(viii) The Plan has been duly adopted by the required vote
of the Directors and members of the Association in the manner
required by the Reorganization Regulations and the Association's
respective charter and bylaws, provided, however, that as to the
tally of votes, such counsel may rely upon the certificate of the
inspectors of election.
(ix) Subject to the satisfaction of the conditions to the
OTS's approval of the Reorganization and the Holding Company
Application, no further approval, registration, authorization,
consent or other order of any regulatory agency, public board or
body is required
in connection with the execution and delivery of this Agreement,
the issuance of the Shares and the consummation of the
Reorganization, except as may be required under Blue Sky laws,
(as to which no opinion need be rendered) or the regulations of
the NASD and the NASDAQ Stock Market (as to which no opinion need
be rendered). The Reorganization has been consummated in all
material respects in accordance with all applicable provisions of
the HOLA and the Reorganization Regulations.
(x) The OTS Applications including the Prospectus as filed
with the OTS were complete as to form in all material respects
and have been approved by the OTS. The OTS has approved the
Application and the Holding Company Application under the HOLA,
and the issuance of all of the issued and outstanding capital
stock of the Association and the purchase thereof by the Holding
Company as described in the Prospectus has been authorized by the
OTS and to such counsel's knowledge, no action has been taken, or
to counsel's knowledge is pending or threatened, to revoke any
such authorization or approval.
(xi) At the time the OTS Applications, including the
Prospectus contained therein, was approved, the OTS Applications
including the Prospectus contained therein (as amended or
supplemented, if so amended or supplemented) complied as to form
in all material respects with the requirements of all applicable
federal laws and the rules and regulations of the OTS (except as
to the financial statements, other financial and statistical data
and stock valuation and pro forma information included therein as
to which such counsel need express no opinion); to such counsel's
knowledge, all material documents and exhibits required to be
filed with the OTS Applications (as amended or supplemented, if
so amended or supplemented) have been so filed. The description
in the OTS Applications and the Prospectus contained therein of
such documents and exhibits is accurate in all material respects.
(xii) To such counsel's knowledge, no person has sought to
obtain regulatory or judicial review of the final action of the
OTS approving the Application or the Holding Company Application.
(xiii) The Registration Statement has become effective under
the 1933 Act, no stop order suspending the effectiveness of the
Registration Statement has been issued, and, to the best of such
counsel's knowledge, no proceedings for that purpose have been
instituted or threatened.
(xiv) The terms and provisions of the Common Stock of the
Holding Company conform to the description thereof contained in
the Registration Statement, the OTS Applications and the
Prospectus, and such description describes in all material
respects the rights of the holders thereof; the information in
the Prospectus under the captions "Restrictions on Acquisition of
the Company and the Bank - Absence of Cumulative Voting" and " -
Authorization of Preferred Stock" and " - Restrictions on
Acquisition of Securities" and "Description of Capital Stock of
the Company," to the extent that they constitute matters of law
or legal conclusions has been prepared by such counsel and is
accurate in all material respects; and the form of certificate
used to evidence the Shares is in due and proper form.
(xv) To such counsel's knowledge, there are no legal or
governmental proceedings pending or threatened asserting the
invalidity of this Agreement, seeking to prevent the
Reorganization or the offer, sale or issuance of the Shares, or
which are required to be disclosed in the OTS Applications and
the Prospectus, other than those disclosed therein; provided,
that for this purpose, any litigation or governmental proceeding
is not considered to be
"threatened" unless the potential litigant or governmental
authority has manifested to the management of the Association, or
to such counsel, a present intention to initiate such litigation
or proceeding.
(xvi) At the time that the Registration Statement became
effective the Registration Statement, including the Prospectus
contained therein (as amended or supplemented) (other than the
financial statements, notes to financial statements, financial
tables or other financial and statistical data included therein
and the appraisal valuation as to which counsel need express no
opinion), complied as to form in all material respects with the
requirements of the 1933 Act and the rules and regulations
promulgated thereunder.
(xvii) The information in the OTS Applications and
Prospectus under the captions "Regulation," "The
Reorganization-Tax Effects," "Taxation," and "Description of
Capital Stock of the Company" to the extent that it 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 (except as to the
financial statements and other financial and statistical data and
stock valuation and pro forma data included therein as to which
such counsel need express no opinion).
(xviii) To such counsel's knowledge, the MHC, the Holding
Company the Association have obtained all licenses, permits and
other governmental authorizations required for the conduct of
their respective businesses, except where the failure to have
such licenses, permits or authorizations would not have a
material adverse effect on the business, financial condition,
operations or income of the MHC, the Holding Company and the
Association on a consolidated basis, and to such counsel's
knowledge all such licenses, permits and other governmental
authorizations are in full force and effect.
(xix) To such counsel's knowledge neither the MHC, the
Holding Company nor the Association is in contravention of its
charter or its bylaws (and the Association will not be in
contravention of its charter or bylaws in stock form upon
consummation of the Reorganization) or, to such counsel's
knowledge, in default or violation of any material obligation,
agreement, covenant or condition contained in any material
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 which default or violation would be
material to the business of the MHC, the Holding Company and the
Association considered as one enterprise; to such counsel's
knowledge, the execution and delivery of this Agreement by the
Parties, the incurring of the obligations herein set forth and
the consummation of the transactions contemplated herein have
been duly authorized by all necessary corporate action of the
MHC, the Holding Company and the Association, as applicable, and,
to such counsel's knowledge, will not constitute a material
breach of, or default under, or result in the creation or
imposition of any material lien, charge or encumbrance upon any
property or assets of the MHC, the Holding Company or the
Association which are material to their business considered as
one enterprise, pursuant to any material contract, indenture,
mortgage, loan agreement, note, lease or other instrument to
which the MHC, the Holding Company or the Association is a party
or by which any of them may be bound, or to which any of the
property or assets of the MHC, the Holding Company or the
Association is subject. In addition to such counsel's knowledge,
such action will not result in any material violation of the
provisions of the ccertificate of incorporation ▇▇▇▇▇▇ or bylaws
of the MHC, the Holding Company or the charter and bylaws of the
Association.
(xx) To such Counsel's knowledge, the MHC, the Holding
Company and the
Association are not in violation of any directive from the
Commission, the OTS or the FDIC requiring them to make any
material change in the method of conducting their business.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the United
States, to the extent such counsel deems proper and specified in such opinion
satisfactory to Agent, upon the opinion of other counsel of good standing
(providing that such counsel states that nothing has come to its attention that
would lead it to believe that Agent is not justified in relying upon such
specified opinion or opinions), and (B) as to matters of fact, to the extent
such counsel deems proper, on certificates of responsible officers of the
Parties and public officials (but not on conclusions of law which may be set
forth in said certificates); provided copies of any such opinion(s) or
certificates are delivered pursuant hereto or to Agent together with the opinion
to be rendered hereunder by special counsel to the Parties. Such counsel may
assume that any agreement is the valid and binding obligation of any parties to
such agreement other than the MHC, the Holding Company or the Association.
(2) The letter of ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, LLP, counsel for the Parties
addressed to Agent, dated the Closing Date, in form and substance to the effect
that:
During the preparation of the Registration Statement, the OTS Applications
and the Prospectus, such counsel participated in conferences with officers,
directors and representatives of the MHC, the Association and the Holding
Company, representatives of the independent public accountants for the Parties
and representatives of Agent, at which the contents of the Registration
Statement, the OTS Applications and Prospectus were discussed. Based upon such
conferences and a review of corporate records of the OTS as such counsel
conducted in connection with the preparation of the Registration Statement and
of the OTS Applications, and on the basis of the foregoing (relying as to
factual matters on officers' certificates and other statements of fact made by
the Parties), nothing has come to such counsel's attention that would lead them
to believe that the Registration Statement at the time it was declared effective
by the Commission and as of the date of such letter, and the OTS Applications at
the time it was approved or, the Prospectus as of its date, 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 (it being understood
that such counsel need express no opinion with respect to the financial
statements schedules and other financial, statistical, valuation and pro forma
data included or statistical methodology employed in the Registration Statement,
the OTS Applications or Prospectus).
(3) The favorable opinion, dated as of the Closing Date, of ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, P.A., Agent's counsel, with respect to such matters as
Agent may reasonably require. Such opinion may rely upon the opinions of counsel
to the Parties, and as to matters of fact, upon certificates of officers and
directors of the Parties delivered pursuant hereto or as such counsel shall
reasonably request.
(d) At the Closing Date, counsel to Agent shall have been furnished with
such documents and opinions as they may reasonably require for the purpose of
enabling them to render the opinion as herein contemplated and related
proceedings or in order to evidence the occurrence or completeness of any of the
representations or warranties, or the fulfillment of any of the conditions,
herein contained.
(e) At the Closing Date, Agent shall receive a certificate of the Chief
Executive Officer and the Chief Financial Officer of each of the Parties, dated
as of such Closing Date, to the effect that: (i) they have carefully examined
the Prospectus and, in their opinion, at the time the Prospectus became
authorized for final use, the Prospectus did not contain 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; (ii) since the date the Prospectus became authorized for final
use, in their opinion no event has occurred which should have been set forth in
an amendment or supplement to the Prospectus which has not been so set forth,
including specifically, but without limitation, any material adverse change in
the condition, financial or otherwise, or in the earnings, financial condition,
capital, properties, business prospects or business affairs of the Association,
and the conditions set forth in this Section 8 have been satisfied; (iii) to
their knowledge since the respective dates as of which information is given in
the OTS Applications and the Prospectus, there has been no material adverse
change in the condition, financial or otherwise, or in the earnings, capital,
properties, business affairs or business prospects of the Association whether or
not arising in the ordinary course of business; (iv) to the knowledge of such
officers the representations and warranties in Section 4 are true and correct
with the same force and effect as though expressly made at and as of the Closing
Date; (v) to their knowledge, the Parties have complied with all material
agreements and satisfied, in all material respects at or prior to the Closing
Date, all obligations required to be met by such date and will in all material
respects comply with all obligations to be satisfied by them after
Reorganization; (vi) to their knowledge, no order suspending or withdrawing the
approval of the OTS Applications has been initiated or, to their knowledge,
threatened by the OTS or any state authority; (vii) no order suspending the
Subscription or PublicCommunity Offerings, the Reorganization, the acquisition
of all of the shares of the Association by the Holding Company or the
authorization for use of the Prospectus has been issued and to the best
knowledge of the Parties, no proceedings for that purpose have been initiated or
threatened by the OTS, the Commission, the FDIC, or any state authority; and
(viii) to their knowledge, no person has sought to obtain review of the final
action of the OTS approving the Plan or to enjoin the Reorganization.
(f) Prior to and at the Closing Date: (i) in the reasonable opinion of
Agent, there shall have been no material adverse change in the condition,
financial or otherwise, or in the earnings, or the business affairs or business
prospects of the Association, since the latest date as of which such condition
is set forth in the Prospectus, except as referred to therein; (ii) there shall
have been no material transaction entered into by the Parties, considered as one
enterprise, from the latest date as of which the financial condition of the
Parties is set forth in the Prospectus other than transactions referred to or
contemplated therein; (iii) the MHC, the Holding Company 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
Agent) and which would reasonably be expected to have a material and adverse
effect on the business, operations or financial condition or income of the
Parties taken as a whole; (iv) the Parties shall not be in default (nor shall an
event have occurred which, with notice or lapse of time or both, would
constitute a default) under any provision of any agreement or instrument
relating to any material 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 Parties, threatened against any of the Parties or affecting any
of their properties wherein an unfavorable decision, ruling or finding would
reasonably be expected to have a material and adverse effect on the business,
operations, financial condition or income of the Parties, taken as a whole; and
(vi) the Shares have been qualified or registered for offering and sale under
the securities or blue sky laws of the jurisdictions as Agent shall have
requested
and as agreed to by the Parties.
(g) Concurrently with the execution of this Agreement, Agent shall receive
a letter from KPMG Peat Marwick LLP, dated the date hereof and addressed to
Agent: (i) confirming that KPMG Peat Marwick LLP is a firm of independent public
accountants within the meaning of 12 C.F.R. ss. 571.2(c)(3) and no information
concerning its relationship with or interests in the Parties is required to be
disclosed in the Prospectus by the Reorganization Regulations, and stating in
effect that in KPMG Peat Marwick LLP's opinion the financial statements of the
Association as are included in the Prospectus comply as to form in all material
respects with the applicable accounting requirements of the 1933 Act, the 1934
Act and the related published rules and regulations of the Commission
thereunder, the Reorganization Regulations and generally accepted accounting
principles; (ii) stating in effect that, on the basis of certain agreed upon
procedures (but not an audit examination in accordance with generally accepted
auditing standards) consisting of a reading of the latest available unaudited
interim financial statements of the Association prepared by the Association, a
reading of the minutes of the meetings of the Board of Directors and members of
the Association, a review of interim financial information in accordance with
Statement of Auditing Standards no. 71, and consultations with officers of the
Association responsible for financial and accounting matters, nothing came to
their attention which caused them to believe that: (A) such unaudited financial
statements including recent developments, if any, are not in conformity with
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 audited
financial statements included in the Prospectus to a specified date not more
than ten business days prior to the date hereof, there has been (1) any increase
in the long term borrowings of the Association of more than $250,000 or in short
term borrowings of more than $2,000,000 or (2) an increase of greater than
$200,000 in non performing assets (consisting of accruing loans past due 90 days
or more, non-accruing loans and foreclosed assets) or (3) any decrease in the
allowance for loan losses or (4) any decrease in total equity or (5) a decrease
in net income when compared to the like period in 1995 or (6) any change in
total assets of the Association in an amount greater than $10,000,000 any
material change in certain financial statement categories as reasonably
identified by Agent; or (C) during the period from the date of the latest
unaudited consolidated financial statements included in the Prospectus to a
specified date not more than ten business days prior to the date hereof, there
was any increase in borrowing (defined as advances from the FHLB of New York,
securities sold under agreements to repurchase and any other form of debt other
than deposits) of any of the Parties or in non-performing loans of the
Association; or (D) there was any decrease in retained earnings of the
Association at the date of such letter as compared with amounts shown in the
latest unaudited statement of condition included in the Prospectus or there was
any decrease in net income or net interest income of the Association for the
number of full months commencing immediately after the period covered by the
latest unaudited income statement included in the Prospectus and ended on the
latest month end prior to the date of the Prospectus or in such letter as
compared to the corresponding period in the preceding year; and (iii) stating
that, in addition to the audit examination referred to in its opinion included
in the Prospectus and the performance of the procedures referred to in clause
(ii) of this subsection (g), they have compared with the general accounting
records of the Association which are subject to the internal controls of the
Association's accounting system and other data prepared by the Association, as
applicable, directly from such accounting records, to the extent specified in
such letter, such amounts and/or percentages set forth in the Prospectus as
Agent may reasonably request, and they have found such amounts and percentages
to be in agreement therewith (subject to rounding).
(h) At the Closing Date, Agent shall receive a letter from KPMG Peat
Marwick LLP, dated the Closing Date, addressed to Agent, confirming the
statements made by its letter delivered by it pursuant to subsection (g) of this
Section 8, except that the "specified date" referred to in clause (ii)(B)
thereof to be a date specified in such letter, which shall not be more than
three business days prior to the Closing Date.
(i) The Association shall not have sustained since the date of the latest
audited financial statements included in the Registration Statement, the OTS
Applications and Prospectus, any material loss or interference with its business
from fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action, order or
decree, otherwise than as set forth or contemplated in the Registration
Statement, the OTS Application and Prospectus, and since the respective dates as
of which information is given in the Registration Statement, the OTS Application
and Prospectus, there shall not have been any material change in the long term
debt of the Association other than debt incurred in relation to the purchase of
Shares by the Association's Tax-Qualified Employee Plans, or any change, or any
development involving a prospective change, in or affecting the general affairs,
management, financial position, stockholders' equity or results of operations of
the Association, otherwise than as set forth or contemplated in the Registration
Statement,, the OTS Application and Prospectus, the effect of which, in any such
case described above, is in Agent's reasonable judgment sufficiently material
and adverse as to make it impracticable or inadvisable to proceed with the
Subscription or PublicCommunity Offerings or the delivery of the Shares on the
terms and in the manner contemplated in the Prospectus.
(j) At or prior to the Closing Date, Agent shall receive (i) a copy of the
letter from the OTS authorizing the use of the Prospectus and approving the MHC
Notice and Application, (ii) a copy of a certificate from the OTS evidencing the
corporate existence of the Association, (iii) the copy of the order from the
Commission declaring the Registration Statement effective, (iv) a certificate
and/or other writing, in form and substance reasonably satisfactory to Agent,
evidencing the valid existence, from the appropriate federal authority, of the
Holding Company as of the Closing Date, (v) a copy of the letter from the OTS
approving the Holding Company application, (vi) a certificate from the FDIC
evidencing the Association's insurance of accounts, (vii) a certificate of FHLB
of New York evidencing the Association's membership therein, (viii) a
certificate or other writing from OTS, in form and substance reasonably
satisfactory to Agent, evidencing the valid existence of the MHC as of the
Closing Date, (ix) a copy of the letters from the OTS approving the Merger
Application, and (x) any other documents that the Agent shall reasonably
request.
(k) As soon as available after the Closing Date, Agent shall receive a
certified copy of the Association's stock charter, the Holding Company's
charter, and the MHC's charter.
(1) 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 American Stock Exchange or in the
over-the-counter market, or quotations halted generally on the NASDAQ Stock
Market, or minimum or maximum prices for trading being fixed, or maximum ranges
for prices for securities being required by either of such exchanges or the NASD
or by order of the Commission or any other governmental authority other than
temporary trading halts (A) imposed as a result of intraday changes in the Dow
▇▇▇▇▇ Industrial Average, (B) lasting no longer than until the regularly
scheduled commencement of trading on the next succeeding business-day, and (C)
which, when combined with all other such halts occurring during the previous
five business days, total less than three; (ii) a general moratorium on the
operations of commercial banks or federal - insured financial institutions or
general moratorium on the withdrawal of deposits from commercial banks or
federal - insured financial institutions declared by either 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, as to clauses (iii) or (iv), the effect of such hostilities or
decline, in Agent' reasonable judgment,
makes it impracticable or inadvisable to proceed with the Subscription or
PublicCommunity Offerings or the delivery of the Shares on the terms and in the
manner contemplated in the Registration Statement, the OTS Applications and the
Prospectus.
(m) At the Closing Date, the Agent shall receive a letter from ▇▇▇▇▇▇ &
Company, Inc. dated as of the Closing Date, (i) confirming that said firm is
independent of the Parties and is experienced and expert in the area of
corporate appraisals within the meaning of the Reorganization Regulations, (ii)
stating in effect that the Appraisal complies in all material respects with the
applicable requirements of the Reorganization Regulations, and (iii) further
stating that its opinion of the aggregate pro forma market value of the Parties,
as reorganized, expressed in the Appraisal as most recently updated, remains in
effect.
All such opinions, certifications, letters and documents shall be in
compliance with the provisions hereof only if they are, in the reasonable
opinion of Agent and its counsel, satisfactory to Agent and its counsel. Any
certificates signed by an officer or director of the MHC, the Holding Company or
the Association and delivered to Agent or its counsel shall be deemed a
representation and warranty by the MHC, the Holding Company or the Association
to Agent as to the statements made therein.
If any of the conditions specified in this Section shall not have been
fulfilled when and as required by this Agreement, this Agreement and all of
Agent' obligations hereunder may be canceled by Agent by notifying 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, 7, 9
and 10 hereof. Notwithstanding the above, if this Agreement is canceled pursuant
to this paragraph, the Association agrees to reimburse Agent for all
out-of-pocket expenses, (including without limitation the fees and expenses of
Agent' counsel) reasonably incurred by Agent and Agent's counsel at its normal
rates, in connection with the preparation of the Registration Statement, the OTS
Applications and the Prospectus, and in contemplation of the proposed
Subscription or PublicCommunity Offerings to the extent provided for in Sections
2 and 7 hereof.
SECTION 9. INDEMNIFICATION.
(a) The Parties jointly and severally agree to indemnify and hold harmless
Agent, its officers, directors, agents, attorneys and employees and each person,
if any, who controls or is under common control with 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 Agent or any of them may suffer
or to which Agent and any such persons may become subject under all applicable
federal and state laws or otherwise, and to promptly reimburse Agent and any
such persons upon written demand for any expenses (including fees and
disbursements of counsel) incurred by 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), the OTS Applications (or any
amendment or supplement thereto), the preliminary or final Prospectus (or any
amendment or supplement thereto), or any Blue Sky application or other
instrument or document of the Parties or based upon written information supplied
by any of the Parties filed in any state or jurisdiction to register or qualify
any or all of the Shares or the subscription rights applicable thereto under the
securities laws
thereof (collectively, the "Blue Sky Application"), or any application or other
document, advertisement, oral statement, or communication ("Sales Information")
prepared, made or executed by or on behalf of any of the Parties with its
consent or based upon written or oral information furnished by or on behalf of
any of the Parties, whether or not filed in any jurisdiction in order to qualify
or register the Shares under the securities laws thereof; (ii) arise out of or
are based upon the omission or alleged omission to state in any of the foregoing
documents or information, a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading; or, (iii) arise from any theory of
liability whatsoever relating to or arising from or based upon the Registration
Statement (or any amendment or supplement thereto), the OTS Applications (or any
amendment or supplement thereto), the preliminary or final Prospectus (or any
amendment or supplement thereto), any Blue Sky Application or Sales Information
or other documentation distributed in connection with the Reorganization; or
(iv) result from any claims made with respect to the accuracy, reliability and
completeness of the records of Eligible Account Holders, Supplemental Eligible
Account Holders and Other Members, or for any denial or reduction of a
subscription or order to purchase Common Stock, whether as a result of a
properly calculated allocation pursuant to the Plan or otherwise, based upon
such records; 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 statements or alleged untrue
material statements in, or material omission or alleged material omission from,
the Registration Statement (or any amendment or supplement thereto) the OTS
Applications (or any amendment or supplement thereto), any Blue Sky Application,
the Prospectus (or any amendment or supplement thereto), or Sales Information
made in reliance upon and in conformity with written information furnished to
the Parties by Agent regarding Agent expressly for use in the Registration
Statement or the Prospectus under the captions "Market for Common Stock," "The
Reorganization - Community Offering," "- Public Offering," or "- Marketing
Arrangements," nor is indemnification required for material oral misstatements
made by Agent to a purchaser of Shares, which are not based upon information
provided by the Parties orally or in writing or based on information contained
in the Registration Statement (or any amendment or supplement thereto), the OTS
Applications (or any amendment or supplement thereto), preliminary or final
Prospectus (or any amendment or supplement thereto), any Blue Sky Application or
Sales Information distributed in connection with the Reorganization. In
addition, the Parties will not be liable under the foregoing provisions to the
extent that the loss, claim, damage, liability or action is expressly found in a
final judgment by a court of competent jurisdiction to have resulted from
Agent's bad faith or gross negligence.
(b) The Agent agrees to indemnify and hold harmless the Parties, their
directors and officers, agents, servants and employees and each person, if any,
who controls any of the Parties within the meaning of Section 15 of the 1933 Act
or Section 20(a) of the 1934 Act against any and all loss, liability, claim,
damage or expense whatsoever (including but not limited to settlement expenses),
joint or several which they, or any of them, may suffer or to which they, or any
of them, may become subject under all applicable federal and state laws or
otherwise, and to promptly reimburse the Parties and any such persons upon
written demand for any expenses (including 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 OTS Applications (or any amendment or supplement thereto), or the
preliminary or final Prospectus (or any amendment or supplement thereto), or any
Blue Sky Application or Sales Information 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 Agent' obligations under this
Section 9(b) shall exist only if and only to the extent that such untrue
statement or alleged untrue statement was made in, or such material fact or
alleged material fact was omitted from, the Registration Statement (or any
amendment or supplement thereto), the OTS Applications (or any amendment or
supplement thereto), the Prospectus (or any amendment or supplement thereto),
any Blue Sky Application or Sales Information in reliance upon and in conformity
with written information furnished to the Parties by Agent regarding Agent
expressly for use under the captions "Market for Common Stock," "The
Reorganization - Marketing Arrangements," "- Public Offering," or "- Plan of
Distribution" in the Prospectus or in the event of oral misstatements made by
Agent to a purchaser of Shares, which are not based upon information provided by
the Parties orally or in writing or based on information contained in the
Registration Statement (or any amendment or supplement thereto), the OTS
Applications (or any amendment or supplement thereto), the Prospectus (or any
amendment or supplement thereto), any Blue Sky Application or Sales Information
distributed in connection with the Reorganization. In addition, Agent will not
be liable under the foregoing provisions to the extent that the loss, claim,
damage, liability or action is expressly found in a final judgment by a court of
competent jurisdiction to have resulted from the Parties' bad faith or gross
negligence.
(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 9,
Section 10 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) (unless an indemnified party or parties shall have reasonably
concluded that there may be defenses available to it or them which are different
from or in addition to those of other indemnified parties) for all indemnified
parties 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. No indemnifying
party shall be liable for any settlement of any action, proceeding or suit which
settlement is effected without its prior written consent.
(d) This Section 9 and Section 10 hereof and the representations and
warranties of the Parties set forth in this Agreement shall survive, 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, controlling persons,
agents, attorneys or employees or by or on behalf of any of the Parties or any
officers, directors, controlling persons, agents or employees of any of the
Parties; (ii) delivery of and payment hereunder for the Shares; or (iii) any
termination of this Agreement.
(e) No indemnification by the Parties under Section 9(a) hereof nor
contribution under Section 10 hereof shall be effective if the same shall be
deemed to be in violation of any law, rule or regulation applicable to the
Parties including, without limitation, Section 23A of the Federal Reserve Act.
If the indemnification or contribution by the Parties is not effective pursuant
to the preceding sentence, then the indemnification by Agent pursuant to Section
9(b) shall likewise be ineffective and the Parties shall not be entitled to any
contribution from Agent pursuant to Section 10.
SECTION 10. CONTRIBUTION. In order to provide for just and equitable
contribution in circumstances in which the indemnification provided for in
Section 9 is due in accordance with its terms but is for any reason unavailable
as a result of Section 9(e) or held by a court to be unavailable from the
Parties or Agent, then in any such event the Parties and 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 Parties or Agent
from persons other than the other party thereto, who may also be liable for
contribution) in such proportion so that (i) Agent is responsible for that
portion represented by the percentage that the fees paid to Agent pursuant to
Section 2 of this Agreement (not including expenses) bears to the gross proceeds
received by the Parties from the sale of the Shares in the Subscription and
PublicCommunity Offerings, net of amounts paid to Agent and (ii) the Parties
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 9 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
Parties on the one hand and 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 thereof), but also the relative
benefits received by the Parties on the one hand and Agent on the other from the
Offerings as well as any other relevant equitable considerations. The relative
benefits received by the Parties on the one hand and Agent on the other shall be
deemed to be in the same proportion as the total gross proceeds from the
Subscription and PublicCommunity Offerings (before deducting expenses) received
by the Parties net of amounts paid to Agent bear to the total fees (not
including expenses) received by Agent. 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 Parties on the one hand or 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 Parties and Agent agree that it would not be just and equitable if
contribution pursuant to this Section 10 were determined by pro rata allocation
or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 10. The amount paid
or payable by an indemnified party as a result of the losses, claims, damages or
liabilities (or action, proceedings or claims in respect thereof) referred to
above in this Section 10 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
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 Agent under this Agreement. It is
understood that the above-stated limitation on Agent's liability is essential to
Agent and that Agent relied upon such limitation and would not have entered into
this Agreement if such limitation had not been agreed to by the
parties to this Agreement. No person found guilty of any fraudulent
misrepresentation (within the meaning of Section 11(f) of the ▇▇▇▇ ▇▇▇) shall be
entitled to contribution from any person who was not found guilty of such
fraudulent misrepresentation. The duties, obligations and liabilities of the
Parties under this Section 10 and under Section 9 shall be in addition to any
duties, obligations and liabilities which the Parties may otherwise have. For
purposes of this Section 10, each of Agent's or the Parties' officers and
directors and each person, if any, who controls Agent or the Parties within the
meaning of the 1933 Act and the 1934 Act shall have the same rights to
contribution as Agent and the Parties. 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 10, 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 10. This
Section 10 is subject to and limited by the provisions of Section 23A of the
Federal Reserve Act, as applicable.
SECTION 11. SURVIVAL OF AGREEMENTS, REPRESENTATIONS, WARRANTIES AND
INDEMNITIES. The respective indemnities of the Parties and Agent and the
representations and warranties and other statements of the Parties set forth in
or made pursuant to this Agreement, or contained in certificates of officers of
the Parties or the Agent submitted pursuant hereto, shall remain operative and
in full force and effect, regardless of any termination or cancellation of this
Agreement or any investigation made by or on behalf of Agent, the Parties or any
indemnified person referred to in Section 9 hereof, and shall survive the
issuance of the Shares, and any legal representative, successor or assign of
Agent, the Parties, and any such indemnified person shall be entitled to the
benefit of the respective agreements, indemnities, warranties and
representations. Neither this Section nor Section 9(d) shall be interpreted as
providing that the effective date of the making of any representation, warranty
or statement shall itself be extended to a date after any termination or
cancellation of this Agreement or any consummation of the Reorganization.
SECTION 12. TERMINATION. Agent may terminate this Agreement by giving the
notice indicated below in this Section at any time after this Agreement becomes
effective as follows:
(a) In the event the Holding Company fails to sell the minimum number
of the Shares within the period specified, and in accordance with the
provisions of the Plan or as required by the Reorganization Regulations and
applicable law, this Agreement shall terminate upon refund by the Parties
to each person who has subscribed for or ordered any of the Shares the full
amount which it may have received from such person, together with interest
as provided in the Prospectus, and no party to this Agreement shall have
any obligation to the other hereunder, except as set forth in ▇▇▇▇▇▇▇▇ ▇,
▇, ▇ ▇▇▇ ▇▇ ▇▇▇▇▇▇.
(▇) If any of the conditions specified in Section 8 shall not have
been fulfilled when and as required by this Agreement, or by the Closing
Date, or waived in writing by Agent, this Agreement and all of Agent's
obligations hereunder may be canceled by Agent by notifying the Association
of such cancellation in writing 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 set forth in Sections 2, 7, 9 and 10 hereof.
(c) If Agent elects to terminate this Agreement as provided in this
section, the
Association shall be notified as provided in Section 13 hereof, promptly by
Agent by telephone or telegram, confirmed by letter.
SECTION 13. NOTICES. All notices and other communications hereunder, except
as herein otherwise specifically provided, shall be in writing and shall be
deemed to have been duly given if mailed or transmitted by any standard form of
telecommunication; and if sent to Agent shall be mailed, delivered or
telegraphed and confirmed to Agent at First Albany Corporation, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ (with a copy to
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esquire, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, P.A., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇.▇. ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇ 03302-1415) and, if sent to the
Parties, shall be mailed, delivered or telegraphed and confirmed to the Parties
at Gouverneur Savings & Loan Association, ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President (with a copy to ▇▇▇ ▇. Hack,
Esquire, ▇▇▇▇▇▇▇ & Zelermyer, LLP, ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇ 10601).
SECTION 14. PARTIES. The Parties shall be entitled to act and rely on any
request, notice, consent, waiver or agreement purportedly given on behalf of
Agent when the same shall have been given by the undersigned. Agent shall be
entitled to act and rely on any request, notice, consent, waiver or agreement
purportedly given on behalf of the Parties, when the same shall have been given
by the undersigned or any other officer of the Parties. This Agreement shall
inure solely to the benefit of, and shall be binding upon, Agent and the Parties
and the controlling persons referred to in Section 9 hereof, 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.
SECTION 15. CLOSING. The closing for the sale of the Shares shall take
place on the Closing Date at the offices of ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, LLP or such
other location as mutually agreed upon by Agent and the Parties. At the closing,
the Parties shall deliver to Agent in next day funds the commissions, fees and
expenses due and owing to Agent as set forth in Sections 2 and 7 hereof and the
opinions and certificates required hereby and other documents deemed reasonably
necessary by 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 16. PARTIAL INVALIDITY. In the event that any term, provision or
covenant herein or the application thereof to any circumstances 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 circumstance 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 17. CONSTRUCTION. This Agreement shall be construed in accordance
with the laws of the State of New York.
SECTION 18. COUNTERPARTS. This Agreement may be executed in separate
counterparts, each of which so executed and delivered shall be an original, but
all of which together shall constitute but one and the same instrument.
SECTION 19. HEADINGS. Section headings are not to be considered part of
this Agreement, are for convenience and reference only and are not to be deemed
to be full or
accurate descriptions of the contents of any paragraph or subparagraph.
SECTION 20. ENTIRE AGREEMENT: AMENDMENT. This Agreement represents the
entire understanding of the parties hereto with reference to the transactions
contemplated hereby and supersedes any and all other oral or written agreements
heretofore made, except for (i) the engagement letter, dated April 6, 1998, by
and between Agent and the Association relating to the Agent providing marketing
services to the Holding Company and the Association in connection with the
Reorganization and (ii) the indemnification letter agreement, dated April 6,
1998, by and between Agent and the Association, relating to Agent's provision of
services to the Holding Company and the Association in connection with the
Reorganization. In the event of a conflict between any provision of this
Agreement and any provision of any of the other writings identified in the
preceding sentence, the provisions of this Agreement shall control. No waiver,
amendment or other modification of this Agreement shall be effective unless in
writing and signed by the parties hereto.
Time shall be of the essence of this Agreement.
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us a counterpart hereof, whereupon this instrument
along with all counterparts will become a binding agreement between you and us
in accordance with its terms.
Very truly yours,
GOUVERNEUR BANCORP, INC.
(In Formation)
By:__________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
President and Chief
Executive Officer
CAMBRAY MUTUAL HOLDING COMPANY
(In Formation)
By:_________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
President and Chief
Executive Officer
GOUVERNEUR SAVINGS & LOAN ASSOCIATION
By:_______________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
President and Chief
Executive Officer
The foregoing Agency Agreement is hereby confirmed and
accepted as of the date first set and above written.
FIRST ALBANY CORPORATION
By:______________________________
Name:
Title: