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EXHIBIT 1.1
EXECUTION COPY
931,500 Shares
(subject to increase up to 1,071,225 shares
in the event of an increase in the pro forma market
value of the Company's Common Stock)
Hometown Bancorp, Inc.
(a federal stock holding company)
Common Stock
(par value $.01 per share)
AGENCY AGREEMENT
May 14, 2007
SANDLER O'NEILL & PARTNERS, L.P.
919 Third Avenue, 6th Floor
New York, New York 10022
Ladies and Gentlemen:
Hometown Bancorp, Inc., a federally chartered mid-tier stock holding
company (the "Company"), Hometown Bancorp MHC, a federally chartered mutual
holding company (the "MHC"), and Walden Federal Savings and Loan Association, a
federally chartered savings and loan association (the "Association"), each
chartered under the laws of the United States of America, hereby confirm their
agreement with Sandler O'Neill & Partners, L.P. ("Sandler O'Neill" or the
"Agent") with respect to the offer and sale by the Company of up to 931,500
shares (subject to increase up to 1,071,225 shares in the event of an increase
in the pro forma market value of the Company's common stock) of the Company's
common stock, par value $.01 per share (the "Common Stock"). The shares of
Common Stock to be sold by the Company in the Offerings (as defined below) are
hereinafter called the "Securities."
On May 18, 2006, the Association reorganized pursuant to a Plan of
Reorganization from a federally chartered mutual savings and loan association to
a federally chartered stock savings and loan association in the federal mutual
holding company form of ownership and issued all of its stock to the Company
(the "Reorganization"). In connection therewith, the MHC was formed to serve as
the mutual holding company parent of the Company.
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The Securities are being offered for sale in accordance with the Plan
of Stock Issuance (the "Plan") adopted by the Board of Directors of the Company
pursuant to which the Association intends to offer, in compliance with
regulations of the Office of Thrift Supervision (the "OTS"), up to 49.9% of the
Common Stock of the Company. As a result of the sale of stock under the Plan,
the Company will be 55% owned by the MHC.
Pursuant to the Plan, the Company will offer to certain members of the
Association and to the Association's tax qualified employee benefit plans,
including the Association's employee stock ownership plan (the "ESOP")
(collectively, the "Employee Plans"), rights to subscribe for the Securities in
a subscription offering (the "Subscription Offering"). To the extent Securities
are not subscribed for in the Subscription Offering, such Securities may be
offered to certain members of the general public and to other persons in a
community offering (the "Community Offering"), with preference given first to
natural persons and trusts of natural persons residing in Orange County, New
York, and second to other persons to whom the Company delivers a Prospectus (as
hereinafter defined). The Community Offering, which together with the
Subscription Offering, as each may be extended or reopened from time to time,
are herein referred to as the "Subscription and Community Offering," may be
commenced concurrently with, during or after, the Subscription Offering. It is
currently anticipated by the Association and the Company that any Securities not
subscribed for in the Subscription and Community Offering will be offered,
subject to Section 2 hereof, in a syndicated community offering (the "Syndicated
Community Offering"). The Subscription and Community Offering and the Syndicated
Community Offering are hereinafter referred to collectively as the "Offerings."
The Securities may be offered to the general public in a public offering (the
"Public Offering") in lieu of or subsequent to the Syndicated Community
Offering. If there is a Public Offering, the Public Offering will be governed by
a separate definitive purchase agreement as described in Section 2 hereof. It is
acknowledged that the number of Securities to be sold in the Offerings may be
increased or decreased as described in the Prospectus. If the number of
Securities is increased or decreased in accordance with the Plan, the term
"Securities" shall mean such greater or lesser number, where applicable.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form SB-2 (No. 333-141351), including
a related prospectus, for the registration of the Securities under the
Securities Act of 1933, as amended (the "Securities Act"), has filed such
amendments thereto, if any, and such amended prospectus as may have been
required to the date hereof by the Commission in order to declare such
registration statement effective, and will file such additional amendments
thereto and such amended prospectuses and prospectus supplements as may
hereafter be required. Such registration statement (as amended to date, if
applicable, and as from time to time amended or supplemented hereafter) and the
prospectus constituting a part thereof (including in each case all documents
incorporated or deemed to be incorporated by reference therein and the
information, if any, deemed to be a part thereof pursuant to the rules and
regulations of the Commission under the Securities Act, as from time to time
amended or supplemented pursuant to the Securities Act or otherwise (the
"Securities Act Regulations")), are hereinafter referred to as the "Registration
Statement" and the "Prospectus," respectively, except that if any revised
prospectus shall be used by the Company in connection with the Subscription and
Community Offering or the Syndicated Community Offering which differs from the
Prospectus on file at the Commission at the time the Registration Statement
becomes effective (whether or not such revised prospectus is required to be
filed by the Company pursuant to Rule 424(b) of the Securities Act Regulations),
the
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term "Prospectus" shall refer to such revised prospectus from and after the time
it is first provided to the Agent for such use.
Concurrently with the execution of this Agreement, the Company is
delivering to the Agent copies of the Prospectus of the Company to be used in
the Offerings. Such Prospectus contains information with respect to the
Association, the Company, the MHC and the Common Stock.
SECTION 1. REPRESENTATIONS AND WARRANTIES.
(a) The Company, the Association and the MHC jointly and severally
represent and warrant to the Agent as of the date hereof as follows:
(i) The Registration Statement has been declared effective by the
Commission, no stop order has been issued with respect thereto and no
proceedings therefor have been initiated or, to the knowledge of the
Company, the MHC and the Association, threatened by the Commission. At
the time the Registration Statement became effective and at the Closing
Time referred to in Section 2 hereof, the Registration Statement
complied and will comply in all material respects with the requirements
of the Securities Act and the Securities Act Regulations and did not
and will 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 not misleading. The Prospectus at the date
hereof does not and at the Closing Time referred to in Section 2 hereof
will not include an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading; PROVIDED, HOWEVER, that the representations and
warranties in this subsection shall not apply to statements in or
omissions from the Registration Statement or Prospectus made in
reliance upon and in conformity with information with respect to the
Agent furnished to the Company in writing by the Agent expressly for
use in the Registration Statement or Prospectus (the "Agent
Information," which the Company, the MHC and the Association
acknowledge appears only in the second sentence under "Summary--Market
for Hometown Bancorp's Common Stock," the fourth sentence under "Market
for the Common Stock" and the sixth paragraph of the section "The Stock
Offering- Marketing Arrangements."
(ii) At the time of filing the Registration Statement relating to
the offering of the Securities and at the date hereof, the Company was
not, and is not, an ineligible issuer, as defined in Rule 405 of the
Securities Act Regulations. At the time of the filing of the
Registration Statement and at the time of the use of any issuer free
writing prospectus, as defined in Rule 433(h) of the Securities Act
Regulations, the Company met the conditions required by Rules 164 and
433 of the Securities Act Regulations for the use of a free writing
prospectus. If required to be filed, the Company has filed any issuer
free writing prospectus related to the offered Securities at the time
it is required to be filed under Rule 433 of the Securities Act
Regulations and, if not required to be filed, will retain such free
writing prospectus in the Company's records pursuant to Rule 433(g) of
the Securities Act Regulations and if any issuer free writing
prospectus is used after the date hereof in connection with the
offering of the Securities the Company will file or retain such free
writing prospectus as required by Rule 433 of the Securities Act
Regulations.
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(iii) As of the Applicable Time, neither (i) the Issuer-Represented
General Free Writing Prospectus(es) issued at or prior to the
Applicable Time and the Statutory Prospectus, all considered together
(collectively, the "General Disclosure Package"), nor (ii) any
individual Issuer-Represented Limited-Use Free Writing Prospectus, when
considered together with the General Disclosure Package, included any
untrue statement of a material fact or omitted to state any material
fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading. The
preceding sentence does not apply to statements in or omissions from
any Prospectus included in the Registration Statement relating to the
offered Securities or any Issuer-Represented Free Writing Prospectus
based upon and in conformity with written information furnished to the
Company by the Agent specifically for use therein. As used in this
paragraph and elsewhere in this Agreement:
1. "Applicable Time" means each and every date when a
potential purchaser submitted a subscription or otherwise committed to
purchase Securities.
2. "Statutory Prospectus", as of any time, means the
Prospectus relating to the offered Securities that is included in the
Registration Statement relating to the offered Securities immediately
prior to the Applicable Time time, including any document incorporated
by reference therein.
3. "Issuer-Represented Free Writing Prospectus" means any
"issuer free writing prospectus," as defined in Rule 433(h) of the
Securities Act Regulations, relating to the offered Securities in the
form filed or required or, if not required to be filed, in the form
retained in the Company's records pursuant to Rule 433(g) under the
Securities Act Regulations. The term does not include any writing
exempted from the definition of prospectus pursuant to clause (a) of
Section 2(a)(10) of the 1933 Act, without regard to Rule 172 or Rule
173 of the Securities Act Regulations.
4. "Issuer-Represented General Free Writing Prospectus" means
any Issuer-Represented Free Writing Prospectus that is intended for
general distribution to prospective investors.
5. "Issuer-Represented Limited-Use Free Writing Prospectus"
means any Issuer-Represented Free Writing Prospectus that is not an
Issuer-Represented General Free Writing Prospectus. The term
Issuer-Represented Limited-Use Free Writing Prospectus also includes
any "bona fide electronic road show," as defined in Rule 433 of the
Securities Act Regulations, that is made available without restriction
pursuant to Rule 433(d)(8)(ii) of the Securities Act Regulations or
otherwise, even though not required to be filed with the Commission.
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(iv) Each Issuer-Represented Free Writing Prospectus, as of its
date of first use and at all subsequent times through the completion of
the Offerings and sale of the offered Securities or until any earlier
date that the Company notified or notifies the Agent (as described in
the next sentence), did not, does not and will not include any
information that conflicted, conflicts or will conflict with the
information contained in the Registration Statement, including any
document incorporated by reference therein that has not been superseded
or modified. If at any time following the date of first use of an
Issuer-Represented Free Writing Prospectus there occurred or occurs an
event or development as a result of which such Issuer-Represented Free
Writing Prospectus conflicted or would conflict with the information
contained in the Registration Statement relating to the offered
Securities or included or would include an untrue statement of a
material fact or omitted or would omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances prevailing at that subsequent time, not misleading, the
Company has notified or will notify promptly the Agent so that any use
of such Issuer-Represented Free-Writing Prospectus may cease until it
is amended or supplemented and the Company has promptly amended or will
promptly amend or supplement such Issuer-Represented Free Writing
Prospectus to eliminate or correct such conflict, untrue statement or
omission. The foregoing two sentences do not apply to statements in or
omissions from any Issuer-Represented Free Writing Prospectus made in
reliance upon and in conformity with written information furnished to
the Company by the Agent specifically for use therein.
(v) Pursuant to the rules and regulations of the OTS, as from time
to time amended or supplemented (the "OTS Regulations"), the Company
filed with the OTS an Application for Approval of a Minority Stock
Issuance by a Savings Association Subsidiary of a Mutual Holding
Company (Form MHC-2), and has filed such amendments thereto and
supplementary materials as may have been required to the date hereof
(the "MHC Application"). The Offerings and the Plan have been duly
approved by the Boards of Directors of the Association, the Company and
the MHC and such adoption has not since been rescinded or revoked. The
MHC Application has been approved by the OTS. The Prospectus has been
approved for use by the OTS, such approval remains in full force and
effect and no order has been issued by the OTS suspending or revoking
such approval and no proceedings therefor have been initiated or, to
the knowledge of the Company, the MHC or the Association, threatened by
the OTS. At the date of such approval and at the Closing Time referred
to in Section 2, the MHC Application complied and will comply in all
material respects with the applicable provisions of the OTS
Regulations.
(vi) The Company has filed the Prospectus and any supplemental
sales literature with the Commission and the OTS. The Prospectus and
all supplemental sales literature, as of the date the Registration
Statement became effective and at the Closing Time referred to in
Section 2, complied and will comply in all material respects with the
applicable requirements of the OTS Regulations and the Securities Act
Regulations and, at or prior to the time of their first use, will have
received all required authorizations of the OTS and Commission for use
in final form.
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(vii) None of the Commission, the OTS or any "Blue Sky" authority
has, by order or otherwise, prevented or suspended the use of the
Prospectus or any supplemental sales literature authorized by the
Company, the MHC or the Association in connection with the Offerings,
and no proceedings for such purposes are pending or to the knowledge of
the Company, the MHC, or the Association, threatened.
(viii) The Offerings and other transactions contemplated hereby do
not and will not require any material consent, approval, authorization
or permit or filing with any other governmental agency or regulatory
authority, except as disclosed in the Prospectus.
(ix) At the Closing Time referred to in Section 2, the Company, the
Association and the MHC will have completed the conditions precedent to
the Offerings in accordance with the Plan, the applicable OTS
Regulations and all other applicable laws, regulations, decisions and
orders, including all material terms, conditions, requirements and
provisions precedent to the Offerings imposed upon the Company, the
Association or the MHC by the OTS or any other regulatory authority,
other than those which the regulatory authority permits to be completed
after the Offerings.
(x) FinPro, Inc. (the "Appraiser"), which prepared the valuation of
the Association as part of the Plan, has advised the Company, the MHC
and the Association in writing that it satisfies all requirements for
an appraiser set forth in the OTS Regulations and any interpretations
or guidelines issued by the OTS or its staff with respect thereto.
(xi) The only direct or indirect subsidiaries of the Company are
the Association and the Association's two wholly-owned subsidiaries,
Every-Green Financial Services, Inc. ("Ever-Green"), and Valley
Services Inc. ("Valley Services") (Ever-Green and Valley Services,
together, the "Subsidiaries"). Except for the Subsidiaries, none of the
Company or the MHC, directly or indirectly, controls any other
corporation, limited liability company, partnership, joint venture,
association, trust or other business organization.
(xii) Beard Miller Company LLP ("Beard Miller"), the accountants
who audited and reported on the consolidated financial statements and
supporting schedules of the Company and the Association (including the
Subsidiaries) included in the Registration Statement, have advised the
Company, the MHC and the Association in writing that they are
independent public accountants within the meaning of the Code of Ethics
of the American Institute of Certified Public Accountants (the
"AICPA"), that they are registered with the Public Company Accounting
Oversight Board ("PCAOB") and such accountants are, with respect to the
Company, the MHC and the Association, independent registered public
accountants as required by, and are not in violation of the auditor
independence requirements of, the Securities Act, the Securities Act
Regulations and OTS Regulations and such accountants are not in
violation of the auditors independence requirements of the Sarbanes
Oxley Act of 2002.
(xiii) The consolidated financial statements and the related notes
thereto included in the Registration Statement and the Prospectus
present fairly the financial position of the Company, the Association
and the Subsidiaries at the dates indicated and the results of
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operations, stockholder's equity and cash flows for the periods
specified, and comply as to form with the applicable accounting
requirements of the Securities Act Regulations and the OTS Regulations
except as otherwise stated in the Registration Statement and
Prospectus; the consolidated financial statements have been prepared in
conformity with generally accepted accounting principles applied on a
consistent basis. 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 consolidated financial statements included in the
Prospectus, and as to the pro forma adjustments, the adjustments made
therein have been consistently applied on the basis described therein.
(xiv) Since the respective dates as of which information is given
in the Registration Statement and the Prospectus, except as otherwise
stated therein (A) there has been no material adverse change in the
financial condition, results of operations, business affairs or
prospects of the Company, the MHC, the Association (including the
Subsidiaries), considered as one enterprise, whether or not arising in
the ordinary course of business, (B) except for transactions
specifically referred to or contemplated in the Registration Statement
and Prospectus, there have been no transactions entered into by the
Company, the MHC or the Association, other than those in the ordinary
course of business consistent with past practice, which are material
with respect to the Company, the MHC and the Association, considered as
one enterprise, (C) the capitalization, liabilities, assets, properties
and business of the Company, the MHC, the Association and the
Subsidiaries conform in all material respects to the descriptions
contained in the Prospectus and none of the Company, the MHC, the
Association, Ever-Green or Valley Services has any material liabilities
of any kind, contingent or otherwise, except as disclosed in the
Registration Statement or the Prospectus and (D) none of the Company,
the MHC, the Association, Ever-Green, or Valley Services have issued
any securities or incurred any liability or obligation, direct or
contingent, or borrowed money, except borrowings in the ordinary course
of business consistent with past practice from the same or similar
sources and in similar amounts as indicated in the Prospectus.
(xv) The Company has been duly organized and is validly existing as
a federal stock holding company chartered under the laws of the United
States of America with full corporate power and authority to own, lease
and operate its properties, to conduct its business as described in the
Registration Statement and the Prospectus, and to enter into and
perform its obligations under this Agreement and the transactions
contemplated hereby; and the Company is duly qualified to transact
business and is in good standing under the laws of the United States of
America and in each other jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or
the conduct of business, except where the failure to so qualify would
not have a material adverse effect on the financial condition, results
of operations or business affairs of the Company, the MHC, the
Association, Ever-Green and Valley Services considered as one
enterprise (a "Material Adverse Effect").
(xvi) Upon completion of the Offerings as described in the
Prospectus, the issued and outstanding capital stock of the Company
will be within the range as set forth in the Prospectus under
"Capitalization" (except for subsequent issuances, if any, pursuant to
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reservations, agreements or employee benefit plans referred to in the
Prospectus). The authorized capital stock of the Company consists of
7,000,000 shares of Common Stock and 3,000,000 shares of preferred
stock, par value $.01 per share of which 100 shares of the Common Stock
are issued and outstanding at the date hereof, which shares shall be
cancelled as of the Closing Time; at the date hereof and at the Closing
Time, the Securities will have been duly authorized for issuance and,
when issued and delivered by the Company pursuant to the Plan against
payment of the consideration calculated as set forth in the Plan and
stated on the cover page of the Prospectus, will be duly and validly
issued and fully paid and nonassessable; the terms and provisions of
the Common Stock and the other capital stock of the Company conform in
all material respects to all statements relating thereto contained in
the Prospectus; the certificates representing the shares of Common
Stock will conform to the requirements of applicable law and
regulations; and the issuance of the Securities is not subject to
preemptive or other similar rights, except for subscription rights
granted pursuant to the Plan in accordance with the OTS Regulations.
(xvii) The MHC has been duly organized and is validly existing as a
federal mutual savings and loan holding company chartered under the
laws of the United States of America with full corporate power and
authority to own, lease and operate its properties, to conduct its
business as described in the Registration Statement and the Prospectus,
and to enter into and perform its obligations under this Agreement and
consummate the transactions contemplated hereby; the MHC is duly
qualified to transact business and is in good standing under the laws
of the United States of America and in any other jurisdiction in which
such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the
failure to so qualify would not have a Material Adverse Effect. The MHC
conducts business exclusively in New York.
(xviii) The MHC has no capital stock. All holders of the savings,
demand or other authorized accounts of the Association are members of
the MHC. The MHC does not own any equity securities or any equity
interest in any business enterprise except as described in the
Prospectus.
(xix) The Association has been duly organized and is validly
existing as a federal savings association in stock form, with full
corporate power and authority to own, lease and operate its properties,
to conduct its business as described in the Registration Statement and
the Prospectus, and to enter into and perform its obligations under
this Agreement and the transactions contemplated hereby; and the
Association is duly qualified to transact business and is in good
standing under the laws of the United States of America and in each
other jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of
business, except where the failure to so qualify would not have a
Material Adverse Effect.
(xx) The authorized capital stock of the Association consists of
1,000 shares of common stock, par value $1.00 per share ("Association
Common Stock"), and the issued and outstanding capital stock of the
Association consists of 100 shares of common stock. The shares of
Association Common Stock issued to the Company have been duly and
validly issued and are fully paid and nonassessable, and all such
Association Common Stock is
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owned beneficially and of record by the Company free and clear of any
security interest, mortgage, pledge, lien, encumbrance or legal or
equitable claim; the terms and provisions of the Association Common
Stock conform in all material respects to all statements relating
thereto contained in the Prospectus, and the certificates representing
the shares of the Association Common Stock comply with the requirements
of applicable laws and regulations; and the issuance of the Association
Common Stock is not subject to preemptive or similar rights; and there
are no other warrants, options or rights of any kind to acquire
additional shares of Association Common Stock.
(xxi) The Company, the MHC, the Association and each subsidiary
have each obtained all licenses, permits and other governmental
authorizations currently required for the conduct of their respective
businesses, except where the failure to obtain such licenses, permits
or other governmental authorizations would not have a Material Adverse
Effect; all such licenses, permits and other governmental
authorizations are in full force and effect and the Company, the MHC,
the Association, Ever-Green and Valley Services are in all material
respects in compliance therewith; none of the Company, the MHC, the
Association, Ever-Green or Valley Services has received notice of any
proceeding or action relating to the revocation or modification of any
such license, permit or other governmental authorization which, singly
or in the aggregate, if the subject of an unfavorable decision, ruling
or finding, might have a Material Adverse Effect.
(xxii) The Association is a member in good standing of the Federal
Home Loan Bank of New York; the deposit accounts of the Association are
insured by the Federal Deposit Insurance Corporation ("FDIC") up to the
applicable limits. The Association is a "qualified thrift lender"
within the meaning of 12 U.S.C. Section 1467a(m).
(xxiii) Ever-Green and Valley Services have been duly organized and
are validly existing as corporations in good standing under the laws of
the jurisdiction of their incorporation, have full corporate power and
authority to own, lease and operate their properties and to conduct
their business as described in the Registration Statement and
Prospectus, and are duly qualified as foreign corporations to transact
business and are in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the
failure to so qualify would not have a Material Adverse Effect; the
activities of Ever-Green and Valley Services are permitted for
subsidiaries of a federally chartered savings association and a
federally chartered mutual holding company by the rules, regulations,
resolutions and practices of the OTS; all of the issued and outstanding
capital stock of Ever-Green and Valley Services have been duly
authorized and validly issued, are fully paid and nonassessable and are
owned by the Association directly, free and clear of any security
interest, mortgage, pledge, lien, encumbrance or legal or equitable
claim; and there are no warrants, options or rights of any kind to
acquire shares of capital stock of Ever-Green and Valley Services.
(xxiv) The Company, the MHC, and the Association have taken all
corporate action necessary for them to execute, deliver and perform
this Agreement and the transactions contemplated hereby, and this
Agreement has been duly executed and delivered by, and is the
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valid and binding agreement of, the Company, the MHC and the
Association, enforceable against each of them in accordance with its
terms, except as may be limited by bankruptcy, insolvency or similar
laws and the availability of equitable remedies.
(xxv) No approval of any regulatory or supervisory or other public
authority is required in connection with the execution and delivery of
this Agreement or the issuance of the Securities that has not been
obtained and a copy of which has been delivered to the Agent, except as
may be required under the "Blue Sky" or securities laws of various
jurisdictions.
(xxvi) None of the Company, the MHC, the Association, Ever-Green or
Valley Services is in violation of their respective organization
certificate, articles of incorporation or charter, as the case may be,
or bylaws or other written corporate governance requirements or
guidelines; and none of the Company, the MHC, the Association,
Ever-Green or Valley Services is in default (nor has any event occurred
which, with notice or lapse of time or both, would constitute a
default) in the performance or observance of any obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage,
loan agreement, note, lease or other instrument to which the Company,
the MHC, the Association, Ever-Green or Valley Services is a party or
by which it or any of them may be bound, or to which any of the
property or assets of the Company, the MHC or the Association is
subject, except for such defaults that would not, individually or in
the aggregate, have a Material Adverse Effect; and there are no
contracts or documents of the Company, the MHC, the Association,
Ever-Green or Valley Services which are required to be filed as
exhibits to the Registration Statement or the MHC Application which
have not been so filed.
(xxvii) The execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated herein, have been
duly authorized by all necessary corporate action on the part of the
Company, the MHC and the Association, and do not and will not conflict
with or constitute a breach of, or default under, or result in the
creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company, the MHC or the Association pursuant
to, any contract, indenture, mortgage, loan agreement, note, lease or
other instrument to which the Company, the MHC or the Association is a
party or by which it or any of them may be bound, or to which any of
the property or assets of the Company, the MHC or the Association is
subject, except for such conflicts, breaches or defaults that would
not, individually or in the aggregate, have a Material Adverse Effect,
nor will such action result in any violation of the provisions of the
respective charter or bylaws of the Company, the MHC or the
Association, or any applicable law, administrative regulation or
administrative or court decree.
(xxviii) No labor dispute with the employees of the Company, the
MHC, the Association, Ever-Green or Valley Services exists or, to the
knowledge of the Company, the MHC, the Association, Ever-Green or
Valley Services, is imminent or threatened; and the Company, the MHC,
the Association, Ever-Green and Valley Services are not aware of any
existing or threatened labor disturbance by the employees of any of its
principal suppliers or contractors which might be expected to have a
Material Adverse Effect.
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(xxix) Each of the Company, the MHC, the Association, Ever-Green
and Valley Services has good and marketable title to all of its
properties and assets for which ownership is material to the business
of the Company, the MHC, the Association, Ever-Green or Valley Services
and to those properties and assets described in the Prospectus as owned
by them, free and clear of all liens, charges, encumbrances or
restrictions, except such as are described in the Prospectus or are not
material in relation to the business of the Company, the MHC, the
Association, Ever-Green or Valley Services, considered as one
enterprise; and all of the leases and subleases material to the
business of the Company, the MHC, the Association, Ever-Green or Valley
Services under which the Company, the MHC, the Association, Ever-Green
or Valley Services hold properties, including those described in the
Prospectus, are valid and binding agreements of the Company, the MHC,
the Association, Ever-Green or Valley Services, in full force and
effect, enforceable in accordance with their terms except as may be
limited by bankruptcy, insolvency or other laws affecting the
enforceability of the rights of creditors generally and judicial
limitations on the right of specific performance and except as the
enforceability of indemnification and contribution provisions may be
limited by applicable securities laws.
(xxx) None of the Company, the MHC, the Association, Ever-Green or
Valley Services is in violation of any order or directive from the OTS,
the Commission or any regulatory authority to make any material change
in the method of conducting its respective businesses; the Company, the
MHC, the Association, Ever-Green and Valley Services have conducted and
are conducting their respective businesses so as to comply in all
material respects with all applicable statutes, regulations and
administrative and court decrees (including, without limitation, all
regulations, decisions, directives and orders of the OTS, the FDIC and
the Commission). Neither the Company, the MHC, the Association,
Ever-Green nor Valley Services is subject or is party to, or has
received any notice or advice that any of them may become subject or
party to, any investigation with respect to any cease-and-desist order,
agreement, consent agreement, memorandum of understanding or other
regulatory enforcement action, proceeding or order with or by, or is a
party to any commitment letter or similar undertaking to, or is subject
to any directive by, or has been a recipient of any supervisory letter
from, or has adopted any board resolutions at the request of, any
Regulatory Agency (as defined below) that currently restricts the
conduct of their business or that in any manner relates to their
capital adequacy, their credit policies, their management or their
business (each, a "Regulatory Agreement"), nor has the Company, the
MHC, the Association, Ever-Green or Valley Services been advised by any
Regulatory Agency that it is considering issuing or requesting the
issuance of any such Regulatory Agreement; and there is no unresolved
violation, criticism or exception by any Regulatory Agency with respect
to any report or statement relating to any examinations of the Company,
the MHC, the Association, Ever-Green or Valley Services which is
expected to have a Material Adverse Effect, or which might materially
and adversely affect the properties or assets thereof or which might
adversely affect the consummation of the Offerings or the performance
of this Agreement. As used herein, the term "Regulatory Agency" means
any federal or state agency charged with the supervision or regulation
of depositary institutions or holding companies of depositary
institutions, or engaged in the insurance of depositary institution
deposits, or any court, administrative agency or commission or other
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governmental agency, authority or instrumentality having supervisory or
regulatory authority with respect to the Company, the MHC, the
Association, Ever-Green or Valley Services.
(xxxi) There is no action, suit or proceeding before or by any
court or governmental agency or body, domestic or foreign, now pending,
or, to the knowledge of the Company, the MHC, the Association,
Ever-Green, or Valley Services, threatened, against or affecting the
Company, the MHC, the Association, Ever-Green or Valley Services which
is required to be disclosed in the Registration Statement (other than
as disclosed therein), or which might have a Material Adverse Effect,
or which might materially and adversely affect the properties or assets
thereof, or which might adversely affect the consummation of the
Offerings, or the performance of this Agreement; all pending legal or
governmental proceedings to which the Company, the MHC, the
Association, Ever-Green or Valley Services is a party or of which any
of their respective property or assets is the subject which are not
described in the Registration Statement, including ordinary routine
litigation incidental to their business, are in the aggregate not
material.
(xxxii) The Company, the MHC and the Association have obtained an
opinion of its counsel, Muldoon Murphy & Aguggia LLP, with respect to
the legality of the Securities to be issued and certain federal income
tax consequences of the Offerings and the Plan, a copy of which is
filed as an exhibit to the Registration Statement; all material aspects
of the aforesaid opinion on accurately summarized in the Prospectus
under "The Stock Offering - Material Income Tax Consequences," the
facts and representations upon which such opinions is based are
truthful, accurate and complete in all material respects, and neither
the Company, the MHC, the Association, Ever-Green, nor Valley Services
has taken or will take any action inconsistent therewith.
(xxxiii) The Company is not and, upon completion of the sale of the
Securities and the application of the net proceeds therefrom, will not
be, required to be registered as an "investment company" as that term
is defined under the Investment Company Act of 1940, as amended.
(xxxiv) 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 federal, state or local law pertaining to lending,
including without limitation truth in lending (including the
requirements of Regulations Z and 12 C.F.R. Part 226 and Section
560.210), 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.
(xxxv) To the knowledge of the Company, the MHC and the
Association, with the exception of the intended loan to the
Association's ESOP by the Company to enable the ESOP to purchase up to
3.92% of the Common Stock issued in the Offerings, none of the Company,
the MHC, the Association or their employees has made any payment of
funds of the Company, the MHC or the Association as a loan for the
purchase of the Common Stock or made any other payment of funds
prohibited by law, and no funds have been set aside to be used for any
payment prohibited by law.
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(xxxvi) Each of the Company, the MHC and the Association maintains
a system of internal accounting controls sufficient to provide
reasonable assurance that (a) transactions are executed in accordance
with management's general or specific authorizations; (b) transactions
are recorded as necessary to permit preparation of financial statements
in conformity with generally accepted accounting principles and to
maintain asset accountability; (c) access to assets is permitted only
in accordance with management's general or specific authorization; and
(d) the recorded accountability for assets is compared with the
existing assets at reasonable intervals and appropriate action is taken
with respect to any differences.
(xxxvii) The Company, the MHC and the Association are in compliance
in all material respects with the applicable financial recordkeeping
and reporting requirements of the Currency and Foreign Transaction
Reporting Act of 1970, as amended, and the rules and regulations
thereunder. The Association has established compliance programs and is
in compliance in all material respects with the requirements of the USA
PATRIOT Act and all applicable regulations promulgated thereunder.
There is no charge, investigation, action, suit or proceeding before
any court, regulatory authority or governmental agency or body pending
or, to the best knowledge of the Company, the MHC, and the Association,
threatened regarding the Association's compliance with the USA PATRIOT
Act or any regulations promulgated thereunder.
(xxxviii) None of the Company, the MHC, the Association, Ever-Green
or Valley Services nor any properties owned or operated by the Company,
the MHC, the Association, Ever-Green or Valley Services is in violation
of or liable under any Environmental Law (as defined below except for
such violations or liabilities that, individually or in the aggregate,
would not have a Material Adverse Effect). There are no actions, suits
or proceedings, or demands, claims, notices or investigations
(including, without limitation, notices, demand letters or requests for
information from any environmental agency) instituted or pending, or to
the knowledge of the Company, the MHC, the Association, Ever-Green or
Valley Services threatened, relating to the liability of any property
owned or operated by the Company, the MHC, the Association, Ever-Green
or Valley Services, under any Environmental Law, except for such
actions, suits or proceedings, or demands, claims, notices or
investigations that, individually or in the aggregate, would not have a
Material Adverse Effect. For purposes of this subsection, the term
"Environmental Law" means any federal, state, local or foreign law,
statute, ordinance, rule, regulation, code, license, permit,
authorization, approval, consent, order, judgment, decree, injunction
or agreement with any regulatory authority relating to (i) the
protection, preservation or restoration of the environment (including,
without limitation, air, water, vapor, surface water, groundwater,
drinking water supply, surface soil, subsurface soil, plant and animal
life or any other natural resource), and/or (ii) the use, storage,
recycling, treatment, generation, transportation, processing, handling,
labeling, production, release or disposal of any substance presently
listed, defined, designated or classified as hazardous, toxic,
radioactive or dangerous, or otherwise regulated, whether by type or by
quantity, including any material containing any such substance as a
component.
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(xxxix) The Company, the MHC, the Association, Ever-Green and
Valley Services have timely filed all federal, state and local income
and franchise tax returns required to be filed and have made timely
payments of all taxes shown as due and payable in respect of such
returns, and no deficiency has been asserted with respect thereto by
any taxing authority. No tax deficiency has been asserted, and the
Company, the MHC, the Association, Ever-Green and Valley Services have
no knowledge of any tax deficiency which could be asserted against the
Company, the MHC, the Association, Ever-Green or Valley Services.
(xl) The Company has received all approvals required to consummate
the Offerings and to have the Securities quoted on the OTC Bulletin
Board effective as of the Closing Time referred to in Section 2 hereof.
(xli) The Company has filed a registration statement for the
Securities under Section 12(g) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), and such registration statement was
declared effective concurrent with the effectiveness of the
Registration Statement.
(xlii) There are no affiliations or associations (as such terms are
defined by the National Association of Securities Dealers, Inc.
("NASD")) between any member of the NASD and any of the MHC's,
Company's or Association's officers or directors.
(xliii) The Company, the MHC, the Association, Ever-Green and
Valley-Services carries, or is covered by, insurance in such amounts
and covering such risks as is adequate for the conduct of their
respective businesses and the value for their respective properties as
is customary for companies engaged in similar industries.
(xliv) The Company, the MHC, the Association, Ever-Green and Valley
Services have not relied on Agent or its counsel for any legal, tax or
accounting advice in connection with the Offerings.
(xlv) The records of eligible account holders, supplemental
eligible account holders, and other members are accurate and complete
in all material respects.
(xlvi) The Company, the MHC and the Association are each in
compliance in all material respects with all presently applicable
provisions of the Employee Retirement Income Security Act of 1974, as
amended, including the regulations and published interpretations
thereunder ("ERISA"); no "reportable event" (as defined in ERISA) has
occurred with respect to any "pension plan" (as defined in ERISA) for
which the Company, the MHC or the Association, respectively, would have
any liability; each of the Company, the MHC and the Association, has
not incurred and does not expect to incur liability under (i) Title IV
of ERISA with respect to termination of, or withdrawal from, any
"pension plan" or (ii) Sections 412 or 4971 of the Internal Revenue
Code of 1986, as amended, including the regulations and published
interpretations thereunder (the "Code"); and each "pension plan" for
which the Company, the MHC and the Association would have any liability
that is intended to be qualified under Section 401(a) of the Code is so
qualified and nothing
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has occurred, whether by action or by failure to act, which would cause
the loss of such qualification.
(xlvii) The Company has established and maintains disclosure
controls and procedures (as such term is defined in Rule 13a-14 and
15d-14 under the Exchange Act), which (i) are designed to ensure that
material information relating to the Company, including its
consolidated subsidiaries, is made known to the Company's principal
executive officer and its principal financial officer by others within
those entities; and (ii) are effective in all material respects to
perform the functions for which they were established. There (i) are no
significant deficiencies in the design or operation of internal
controls which could adversely affect the Company's ability to record,
process, summarize, and report financial data or (ii) has not been any
fraud, whether or not material, that involves management or other
employees who have a significant role in the Company's internal
controls. Since the date of the most recent evaluation of the Company's
disclosure controls and procedures, there have been no significant
changes in internal controls or in other factors that could
significantly affect internal controls, including any corrective
actions with regard to significant deficiencies and material
weaknesses.
(xlviii) The Company is in compliance with the applicable
provisions of the Sarbanes-Oxley Act of 2002, the rules and regulations
of the Commission thereunder, and the OTC Bulletin Board corporate
governance rules applicable to the Company, and will use its best
efforts to comply with those provisions of the Sarbanes-Oxley Act of
2002 and the OTC Bulletin Board corporate governance rules that will
become effective in the future upon their effectiveness.
(xlix) Any certificate signed by any officer of the Company, the
MHC, the Association, Ever-Green or Valley Services and delivered to
either of the Agent or counsel for the Agent shall be deemed a
representation and warranty by the Company, the MHC, the Association,
Ever-Green or Valley Services to the Agent as to the matters covered
thereby.
SECTION 2. APPOINTMENT OF SANDLER O'NEILL; SALE AND DELIVERY
OF THE SECURITIES; CLOSING. On the basis of the representations and
warranties herein contained and subject to the terms and conditions
herein set forth, the Company hereby appoints Sandler O'Neill as its
Agent to consult with and advise the Company, and to assist the Company
with the solicitation of subscriptions and purchase orders for
Securities, in connection with the Company's sale of Common Stock in
the Offerings. On the basis of the representations and warranties
herein contained, and subject to the terms and conditions herein set
forth, Sandler O'Neill accepts such appointment and agrees to use its
best efforts to assist the Company with the solicitation of
subscriptions and purchase orders for Securities in accordance with
this Agreement; PROVIDED, HOWEVER, that the Agent shall not be
obligated to take any action which is inconsistent with any applicable
laws, regulations, decisions or orders. The services to be rendered by
Sandler O'Neill pursuant to this appointment include the following: (i)
consulting as to the marketing implications of any aspect of the Plan
or related corporate documents; (ii) reviewing with the Board of
Directors of the Company, the MHC and the Association, the financial
impact on the Company of the Appraiser's appraisal of the Common Stock;
(iii) reviewing all offering documents, including
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the Prospectus, stock order forms and related offering materials (it
being understood that preparation and filing of such documents is the
sole responsibility of the Company and the Association and their
counsel); (iv) assisting in the design and implementation of a
marketing strategy for the Offerings; (v) if necessary, assisting
management of the Company and the Association in preparing for meetings
with potential investors and broker-dealers; and (vi) providing such
other general advice and assistance as may be requested to promote the
successful completion of the Offering.
The appointment of the Agent hereunder shall terminate upon
the earlier to occur of (a) forty-five (45) days after the last day of
the Subscription and Community Offering, unless the Company and the
Agent agree in writing to extend such period and the OTS agrees to
extend the period of time in which the Securities may be sold, or (b)
the receipt and acceptance of subscriptions and purchase orders for all
of the Securities, or (c) the completion of the Syndicated Community
Offering.
If any of the Securities remain available after the expiration
of the Subscription and Community Offering, at the request of the
Company and the Association, Sandler O'Neill will seek to form a
syndicate of registered brokers or dealers ("Selected Dealers") to
assist in the solicitation of purchase orders of such Securities on a
best efforts basis. Sandler O'Neill will endeavor to limit the
aggregate fees to be paid by the Company, the MHC and the Association
to an amount competitive with gross underwriting discounts charged at
such time for underwritings of comparable amounts of stock sold at a
comparable price per share in a similar market environment; PROVIDED,
HOWEVER, that the aggregate fees payable to Selected Dealers shall not
exceed 5.5% of the aggregate dollar amount of the Securities sold in
the Syndicated Community Offering by such Selected Dealers. Sandler
O'Neill will endeavor to distribute the Securities among the Selected
Dealers in a fashion which best meets the distribution objectives of
the Company and the Association, which may result in limiting the
allocation of stock to certain Selected Dealers. It is understood that
in no event shall Sandler O'Neill be obligated to act as a Selected
Dealer or to take or purchase any Securities.
In the event the Company is unable to sell at least the total
minimum of the Securities, as set forth on the cover page of the
Prospectus, within the period herein provided, this Agreement shall
terminate and the Company shall refund to any persons who have
subscribed for any of the Securities the full amount which it may have
received from them, together with interest as provided in the
Prospectus, and no party to this Agreement shall have any obligation to
the others hereunder, except for the obligations of the Company, the
MHC and the Association as set forth in Sections 4, 6(a) and 7 hereof
and the obligations of the Agent as provided in Sections 6(b) and 7
hereof. Appropriate arrangements for placing the funds received from
subscriptions for Securities or other offers to purchase Securities in
special interest-bearing accounts with the Association until all
Securities are sold and paid for were made prior to the commencement of
the Subscription Offering, with provision for refund to the purchasers
as set forth above, or for delivery to the Company if all Securities
are sold.
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If at least the total minimum of Securities, as set forth on
the cover page of the Prospectus, are sold, the Company agrees to issue
or have issued the Securities sold and to release for delivery
certificates for such Securities at the Closing Time against payment
therefor by release of funds from the special interest-bearing accounts
referred to above. The closing shall be held at the offices of Muldoon
Murphy & Aguggia LLP, at 10:00 a.m., Eastern Time, or at such other
place and time as shall be agreed upon by the parties hereto, on a
business day to be agreed upon by the parties hereto. The Company shall
notify the Agent by telephone, confirmed in writing, when funds shall
have been received for all the Securities. Certificates for Securities
shall be delivered directly to the purchasers thereof in accordance
with their directions. Notwithstanding the foregoing, certificates for
Securities purchased through Selected Dealers shall be made available
to the Agent for inspection at least 48 hours prior to the Closing Time
at such office as the Agent shall designate. The hour and date upon
which the Company shall release for delivery all of the Securities, in
accordance with the terms hereof, is herein called the "Closing Time."
The Company will pay any stock issue and transfer taxes which
may be payable with respect to the sale of the Securities.
In addition to the reimbursement of the expenses specified in
Section 4 hereof, the Agent will receive the following compensation for
its services hereunder:
(a) A fee of $135,000; and
(b) With respect to any Securities sold by a NASD member firm
in the Syndicated Community Offering, the compensation payable to
Selected Dealers.
If this Agreement is terminated by the Agent in accordance
with the provisions of Section 9(a) hereof, no fee shall be payable by
the Company to Sandler O'Neill; provided, however, that the Company
shall reimburse the Agent for all of its reasonable out-of-pocket
expenses incurred prior to termination, including the reasonable fees
and disbursements of counsel for the Agent in accordance with the
provisions of Section 4 hereof. In addition, the Company shall be
obligated to pay the fees and expenses as contemplated by the
provisions of Section 4 hereof in the event of any such termination.
All fees payable to the Agent hereunder shall be payable in
immediately available funds at Closing Time, or upon the termination of
this Agreement, as the case may be. In recognition of the long lead
times involved in the reorganization offering process, the Association
agrees to make an advance payment to the Agent in the aggregate amount
of $25,000 which has been previously paid. Such advance payment shall
be credited against any fees or reimbursement of expenses payable
hereunder and any unearned portion thereof shall be refunded.
SECTION 3. COVENANTS OF THE COMPANY, THE MHC AND THE
ASSOCIATION. The Company, the MHC and the Association covenant with the
Agent as follows:
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(a) The Company, the MHC and the Association will prepare and
file such amendments or supplements to the Registration Statement, the
Prospectus and the MHC Application as may hereafter be required by the
Securities Act Regulations or the OTS Regulations or as may hereafter
be requested by the Agent. Following completion of the Subscription and
Community Offering, in the event of a Syndicated Community Offering,
the Company, the MHC and the Association will (i) promptly prepare and
file with the Commission a post-effective amendment to the Registration
Statement relating to the results of the Subscription and Community
Offering, any additional information with respect to the proposed plan
of distribution and any revised pricing information or (ii) if no such
post-effective amendment is required, will, if required, file with the
Commission a prospectus or prospectus supplement containing information
relating to the results of the Subscription and Community Offering and
pricing information pursuant to Rule 424 of the Securities Act
Regulations, in either case in a form acceptable to the Agent. The
Company, the MHC and the Association will notify the Agent immediately,
and confirm the notice in writing, (i) of the effectiveness of any
post-effective amendment of the Registration Statement, the filing of
any supplement to the Prospectus and the filing of any amendment to the
MHC Applications, (ii) of the receipt of any comments from the OTS or
the Commission with respect to the transactions contemplated by this
Agreement or the Plan, (iii) of any request by the Commission or the
OTS for any amendment to the Registration Statement or the Plan or any
amendment or supplement to the Prospectus or for additional
information, (iv) of the issuance by the OTS of any order suspending
the Offerings or the use of the Prospectus or the initiation of any
proceedings for that purpose, (v) of the issuance by the Commission of
any stop order suspending the effectiveness of the Registration
Statement or the initiation of any proceedings for that purpose, and
(vi) of the receipt of any notice with respect to the suspension of any
qualification of the Securities for offering or sale in any
jurisdiction. The Company, the MHC and the Association will use their
best efforts to prevent the issuance of any stop order and, if any stop
order is issued, to obtain the lifting thereof at the earliest possible
moment.
(b) The Company, represents and agrees that, unless it obtains
the prior written consent of the Agent and the Agent represents and
agrees that, unless it obtains the prior written consent of the
Company, it has not made and will not make any offer relating to the
offered Securities that would constitute an "issuer free writing
prospectus," as defined in Rule 433 of the Securities Act Regulations,
or that would constitute a "free writing prospectus," as defined in
Rule 405 of the Securities Act Regulations, required to be filed with
the Commission. Any such free writing prospectus consented to by the
Company and the Agent is hereinafter referred to as a "Permitted Free
Writing Prospectus." The Company represents that it has and will comply
with the requirements of Rule 433 of the Securities Act Regulations
applicable to any Permitted Free Writing Prospectus, including timely
Commission filing where required, legending and record keeping. The
Company need not treat any communication as a free writing prospectus
if it is exempt from the definition of prospectus pursuant to Clause
(a) of Section 2(a)(10) of the 1933 Act without regard to Rule 172 or
173 of the Securities Act Regulations. The Company represents that it
will satisfy the conditions in Rule 433 to avoid a requirement to file
with the Commission any electronic road show. The Company, the MHC and
the Association will give the Agent notice of its
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intention to file or prepare any amendment to the OTS Applications or
Registration Statement (including any post-effective amendment) or any
amendment or supplement to the Prospectus (including any revised
prospectus which the Company proposes for use in connection with the
Syndicated Community Offering of the Securities which differs from the
prospectus on file at the Commission at the time the Registration
Statement becomes effective, whether or not such revised prospectus is
required to be filed pursuant to Rule 424(b) of the Securities Act
Regulations), will furnish the Agent with copies of any such amendment
or supplement a reasonable amount of time prior to such proposed filing
or use, as the case may be, and will not file any such amendment or
supplement or use any such prospectus to which the Agent or counsel for
the Agent may object.
(c) The Company, the MHC and the Association will deliver to
the Agent as many signed copies and as many conformed copies of the MHC
Application and the Registration Statement as originally filed and of
each amendment thereto (including exhibits filed therewith or
incorporated by reference therein) as the Agent may reasonably request,
and from time to time such number of copies of the Prospectus as the
Agent may reasonably request.
(d) During the period when the Prospectus is required to be
delivered, the Company, the MHC and the Association will comply, at
their own expense, with all requirements imposed upon them by the
Commission, the OTS, by the applicable OTS Regulations, as from time to
time in force, and by the OTC Bulletin Board, the Securities Act, the
Securities Act Regulations, the Exchange Act, and the rules and
regulations of the Commission promulgated thereunder, including,
without limitation, Regulation M under the Exchange Act, so far as
necessary to permit the continuance of sales or dealing in shares of
the Securities during such period in accordance with the provisions
hereof and the Prospectus.
(e) If any event or circumstance shall occur as a result of
which it is necessary, in the opinion of counsel for the Agent, to
amend or supplement the Registration Statement or Prospectus in order
to make the Prospectus not misleading in the light of the circumstances
existing at the time it is delivered to a purchaser, the Company, the
MHC and the Association will forthwith amend or supplement the
Registration Statement or Prospectus (in form and substance
satisfactory to counsel for the Agent) so that, as so amended or
supplemented, the Registration Statement or Prospectus will not include
an untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances existing at the time it is delivered to a purchaser, not
misleading, and the Company, the MHC and the Association will furnish
to the Agent a reasonable number of copies of such amendment or
supplement. For the purpose of this subsection, the Company, the MHC
and the Association will each furnish such information with respect to
itself as the Agent may from time to time reasonably request.
(f) The Company, the MHC and the Association will take all
necessary action, in cooperation with the Agent, to qualify the
Securities for offering and sale under the applicable securities laws
of such states of the United States and other jurisdictions as the OTS
Regulations may require and as the Agent and the Company have agreed;
PROVIDED,
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HOWEVER, that none of the Company, the MHC or the Association shall be
obligated to file any general consent to service of process or to
qualify as a foreign corporation in any jurisdiction in which it is not
so qualified. In each jurisdiction in which the Securities have been so
qualified, the Company, the MHC and the Association will file such
statements and reports as may be required by the laws of such
jurisdiction to continue such qualification in effect for a period of
not less than one year from the effective date of the Registration
Statement.
(g) The Company authorizes Sandler O'Neill and any Selected
Dealer to act as agent of the Company in distributing the Prospectus to
persons entitled to receive subscription rights and other persons to be
offered Securities having record addresses in the states or
jurisdictions set forth in a survey of the securities or "blue sky"
laws of the various jurisdictions in which the Offerings will be made
(the "Blue Sky Survey").
(h) The Company will make generally available to its security
holders as soon as practicable, but not later than 60 days after the
close of the period covered thereby, an earnings statement covering a
twelve month period beginning not later than the first day of the
Company's fiscal quarter next following the effective date of the
Registration Statement (as defined in Rule 158 of the Securities Act
Regulations) that will satisfy the provisions of Section 11(a) of the
Securities Act.
(i) During the period ending on the third anniversary of the
expiration of the fiscal year during which the closing of the
transactions contemplated hereby occurs, the Company will furnish to
its stockholders as soon as practicable after the end of each such
fiscal year an annual report (including consolidated statements of
financial condition and consolidated statements of income,
stockholders' equity and cash flows, certified by a independent
registered public accounting firm) and, as soon as practicable after
the end of each of the first three quarters of each fiscal year
(beginning with the fiscal quarter ending after the effective date of
the Registration Statement), the Company will make available to its
stockholders consolidated summary financial information of the Company
and the Association for such quarter in reasonable detail. In addition,
the Company will use its reasonable best efforts to make public such
annual report and quarterly consolidated summary financial information
through the issuance of appropriate press releases at the same time or
prior to the time of the furnishing thereof to stockholders of the
Company.
(j) During the period ending on the third anniversary of the
expiration of the fiscal year during which the closing of the
transactions contemplated hereby occurs, the Company will furnish to
the Agent: (i) as soon as publicly available, a copy of each report or
other document of the Company furnished generally to stockholders of
the Company or furnished to or filed with the Commission under the
Exchange Act or any national securities exchange or system on which any
class of securities of the Company is listed, and (ii) from time to
time, such other information concerning the Company as the Agent may
reasonably request. For purposes of this paragraph, any document filed
electronically with the Commission shall be deemed furnished to the
Agent.
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(k) The Company, the MHC and the Association will conduct the
Offerings in all material respects in accordance with the Plan, the OTS
Regulations and all other applicable regulations, decisions and orders,
including all applicable terms, requirements and conditions precedent
to the Offerings imposed upon the Company, the MHC or the Association
by the OTS.
(l) The Company will promptly inform the Agent upon its
receipt of service with respect to any material litigation or
administrative action instituted with respect to the Offerings.
(m) Each of the Company and the Association will use the net
proceeds received by it from the sale of the Securities in the manner
specified in the Prospectus under "Use of Proceeds."
(n) The Company will report the use of proceeds from the
Offerings on its first periodic report filed pursuant to Sections 13(a)
and 15(d) of the Exchange Act and on any subsequent periodic reports as
may be required pursuant to Rule 463 of the Securities Act Regulations.
(o) The Company will maintain the effectiveness of the
Exchange Act Registration Statement for not less than three years and
will comply in all material respects with its filing obligations under
the Exchange Act during such period. The Company will use its best
efforts to effect and maintain the listing of the Common Stock on the
OTC Bulletin Board for not less than three years and, once listed on
the OTC Bulletin Board, the Company will comply with all applicable
corporate governance standards required by the OTC Bulletin Board
during such period. The Company will file with the OTC Bulletin Board
all documents and notices required by the OTC Bulletin Board of
companies that have issued securities that are traded in the
over-the-counter market and quotations for which are reported by the
OTC Bulletin Board.
(p) The Company and the Association will take such actions and
furnish such information as are reasonably requested by the Agent in
order for the Agent to ensure compliance with Rule 2790 of the National
Association of Securities Dealers, Inc.'s Conduct Rules.
(q) Other than in connection with any employee benefit plan or
arrangement described in the Prospectus, the Company will not, without
the prior written consent of the Agent, sell or issue, contract to sell
or otherwise dispose of, any shares of Common Stock other than the
Securities and the shares of Common Stock issued to the MHC for a
period of 180 days following the Closing Time.
(r) During the period beginning on the date hereof and ending
on the later of the fifth anniversary of the Closing Time or the date
on which the Agent receives full payment in satisfaction of any claim
for indemnification or contribution to which it may be entitled
pursuant to Sections 6 or 7 , respectively, none of the Company, the
MHC or the Association shall, without the prior written consent of the
Agent, take or permit to be taken
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any action that could result in the Association Common Stock becoming
subject to any security interest, mortgage, pledge, lien or
encumbrance.
(s) The Company, the MHC and the Association will comply with
the conditions imposed by or agreed to with the OTS in connection with
its approval of the MHC Application including the Plan.
(t) During the period ending on the first anniversary of the
Closing Time, the Association will comply with all applicable laws and
regulations necessary for the Association to continue to be a
"qualified thrift lender" within the meaning of 12 U.S.C. Section
1467a(m).
(u) The Company shall not deliver the Securities until the
Company, the MHC and the Association have satisfied each condition set
forth in Section 5 hereof, unless such condition is waived by the
Agent.
(v) The Company, the MHC and the Association will furnish to
Sandler O'Neill as early as practicable prior to the Closing Date, but
no later than two (2) full business days prior thereto, a copy of the
latest available unaudited interim financial statements of the Company
which have been read by Beard Miller, as stated in their letters to be
furnished pursuant to subsections (f) and (g) of Section 5 hereof.
(w) During the period in which the Prospectus is required to
be delivered, each of the Company, the MHC and the Association will
conduct its business 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 OTC Bulletin Board and the OTS.
(x) The Association will not amend the Plan in any manner that
would affect the sale of the Securities or the terms of this Agreement
without the consent of the Agent.
(y) The Company, the MHC and the Association will not, prior
to the Closing Time, incur any liability or obligation, direct or
contingent, or enter into any material transaction, other than in the
ordinary course of business consistent with past practice, except as
contemplated by the Prospectus.
(z) The Company, the MHC and the Association will use all
reasonable efforts to comply with, or cause to be complied with, the
conditions precedent to the several obligations of the Agent specified
in Section 5 hereof.
(aa) The Company, the MHC and the Association will provide the
Agent with any information necessary to carry out the allocation of the
Securities in the event of an oversubscription, and such information
will be accurate and reliable in all material respects.
(bb) The Company, the MHC and the Association will notify the
Agent when funds have been received for the minimum number of
Securities set forth in the Prospectus.
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(cc) The Company, the MHC and the Association will (i)
complete the conditions precedent to the Offerings in accordance with
the Plan, the applicable OTS Regulations and all other applicable laws,
regulations, decisions and orders, including all material terms,
conditions, requirements and provisions precedent to the Offerings
imposed upon the Company, the MHC or the Association by the Commission,
the OTS or any other regulatory authority or Blue Sky authority, and to
comply with those which the regulatory authority permits to be
completed after the Offerings; and (ii) conduct the Offerings in the
manner described in the Prospectus and in accordance with the Plan, the
OTS Regulations and all other applicable material laws, regulations,
decisions and orders, including in compliance with all terms,
conditions, requirements and provisions precedent to the Offerings
imposed upon the Company, the MHC and the Association by the
Commission, the OTS or any other regulatory or Blue Sky authority.
SECTION 4. PAYMENT OF EXPENSES. The Company, the MHC and the
Association jointly and severally agree to pay all expenses incident to
the performance of their obligations under this Agreement, including
but not limited to (i) the cost of obtaining all securities and bank
regulatory approvals, (ii) the preparation, printing and filing of the
Registration Statement and the Plan as originally filed and of each
amendment thereto, (iii) the preparation, issuance and delivery of the
certificates for the Securities purchased in the Offerings, (iv) the
fees and disbursements of the Company's, the MHC's and the
Association's counsel, conversion agent, accountants, appraiser and
other advisors, (v) the qualification of the Securities under
securities laws in accordance with the provisions of Section 3(f)
hereof, including filing fees and the fees and disbursements of counsel
in connection therewith and in connection with the preparation of the
Blue Sky Survey, (vi) the printing and delivery to the Agent of copies
of the Registration Statement as originally filed and of each amendment
thereto and the printing and delivery of the Prospectus and any
amendments or supplements thereto to the purchasers in the Offerings
and the Agent (in such quantities as the Agent shall reasonably
request), (vii) the printing and delivery to the Agent of copies of a
Blue Sky Survey, and (viii) the fees and expenses incurred in
connection with the listing of the Securities on the OTC Bulletin
Board. In the event the Agent incurs any such fees and expenses on
behalf of the Company, the MHC or the Association, the Association will
reimburse the Agent for such fees and expenses whether or not the
Offerings are consummated; PROVIDED, HOWEVER, that the Agent shall not
incur any substantial expenses on behalf of the Company, the MHC or the
Company pursuant to this Section without the prior approval of the
Association or the Company.
The Company, the MHC and the Association jointly and severally
agree to pay certain expenses incident to the performance of the
Agent's obligations under this Agreement, regardless of whether the
Offerings are consummated, including (i) the filing fees paid or
incurred by the Agent in connection with all filings with the NASD, and
(ii) all reasonable out-of-pocket expenses up to $60,000 incurred by
the Agent relating to the Offerings, including without limitation, fees
and expenses of the Agent's counsel, advertising, promotional,
syndication and travel expenses; provided, however, that Agent shall
document such expenses to the reasonable satisfaction of the Company,
the MHC and the Association. All fees and expenses to which the Agent
is entitled to reimbursement under this paragraph of this Section 4
shall be due and payable upon receipt by the Company,
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the MHC or the Association of a written accounting therefor setting
forth in reasonable detail the expenses incurred by the Agent.
SECTION 5. CONDITIONS OF AGENT'S OBLIGATIONS. The Company, the
MHC, the Association and the Agent agree that the issuance and the sale
of Securities and all obligations of the Agent hereunder are subject to
the accuracy of the representations and warranties of the Company, the
MHC and the Association herein contained as of the date hereof and the
Closing Time, to the accuracy of the statements of officers and
directors of the Company, the MHC and the Association made pursuant to
the provisions hereof, to the performance by the Company, the MHC and
the Association of their obligations hereunder, and to the following
further conditions:
(a) No stop order suspending the effectiveness of the
Registration Statement shall have been issued under the Securities Act
or proceedings therefor initiated or threatened by the Commission, no
order suspending the Offerings or the authorization for final use
effectiveness of the Prospectus shall have been issued or proceedings
therefor initiated or threatened by the Commission or the OTS, and no
order suspending the sale of the Securities in any jurisdiction shall
have been issued.
(b) At Closing Time, the Agent shall have received:
(1) The written opinion, dated as of Closing Time,
of Muldoon Murphy & Aguggia LLP, counsel for the Company, the
MHC and the Association, in form and substance satisfactory to
counsel for the Agent, to the effect that:
(i) The Company has been duly organized and
is validly existing as a federal stock holding
company chartered under the laws of the United
States of America.
(ii) The MHC has been duly organized and is
validly existing as a federal mutual holding
company chartered under the laws of the United
States of America.
(iii) The Association has been duly
organized and is validly existing as a federal
savings association in stock form chartered under
the laws of the United States of America.
(iv) Each of the Company, the MHC and the
Association has the corporate power and authority
to own, lease and operate its properties and to
conduct its business as described in the
Registration Statement and the Prospectus and to
enter into and perform its obligations under this
Agreement and the transactions contemplated hereby.
(v) The Association has authority to
transact its business in the State of New York.
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(vi) The authorized capital stock of the
Company consists of 7,000,000 shares of Common
Stock and 3,000,000 shares of preferred stock, par
value $.01 per share, of which no shares are issued
and outstanding; immediately upon consummation of
the Offerings, all of the issued and outstanding
shares of capital stock of the Company owned
beneficially and of record by the MHC will be owned
free and clear of any security interest, mortgage,
pledge, lien or encumbrance; and immediately upon
consummation of the Offerings the issued and
outstanding capital stock of the Company will be
within the range set forth in the Prospectus under
"Capitalization".
(vii) The authorized capital stock of the
Association consists of 1,000 shares of common
stock, par value $1.00 per share, all of the issued
and outstanding capital stock of the Association is
duly authorized and validly issued, fully paid and
non-assessable and owned beneficially and of record
by the Company free and clear of any security
interest, mortgage, pledge, lien or encumbrance and
exempt from registration under the Securities Act
pursuant to Section (3)(a)(5) thereof.
(viii) The Securities have been duly
authorized for issuance and sale; the Securities,
when issued and delivered by the Company pursuant
to the Plan against payment of the consideration
calculated as set forth in the Plan, will be
validly issued, fully paid and nonassessable.
(ix) The issuance of the Securities is not
subject to preemptive rights arising by operation
of federal laws and regulations or the Company's
charter.
(x) To such counsel's actual knowledge, the
Company, the MHC and the Association have conducted
the Offerings in accordance with applicable
requirements of the OTS Regulations (except to the
extent that the requirement to comply therewith was
specifically waived by the OTS), the Plan and the
letters from the OTS dated May 14, 2007 and May 14,
2007 approving the MHC Application and declaring
the Prospectus effective (which letters, to such
counsel's actual knowledge, are the only such
letters received from the OTS relating to the
approval of the MHC Application and the
effectiveness of the Prospectus), and have
satisfied all conditions precedent to the issuance
of the Securities imposed upon them by the OTS
under the terms of the OTS's written approval of
the MHC Application.
(xi) The Association is a member in good
standing of the Federal Home Loan Bank of New York.
(xii) The deposit accounts of the
Association are insured by the FDIC up to the
applicable limits.
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(xiii) The OTS has approved the MHC
Application; to such counsel's actual knowledge,
such approval remains in full force and effect and
no action by the OTS to suspend the effectiveness
of such approval or to suspend the Offerings is
pending or threatened and no person has sought to
obtain review of the final action of the OTS in
approving the MHC Application; MHC Application
complies as to form in all material respects with
the applicable requirements of the application Form
MHC-2 (it being understood, however, that (i) no
opinion need be rendered with respect to the
financial statements or other financial and
statistical data included in, or omitted from, the
MHC Application, (ii) in passing upon the
compliance as to form of the MHC Application,
counsel need not assume any responsibility for the
accuracy, completeness or fairness of the
statements contained therein, and (iii) no opinion
need be rendered with respect to the business plan
or the appraisal report) and, to counsel's actual
knowledge, includes all documents required to be
filed as exhibits thereto.
(xiv) The execution and delivery of this
Agreement, the incurrence of the obligations herein
set forth, and the consummation of the transactions
contemplated hereby, (A) have been duly authorized
by all necessary corporate action on the part of
each of the Company, the MHC and the Association,
(B) will not violate the charter or bylaws of the
Company, the MHC or the Association and, (C) will
not result in a breach of or default, or result in
the creation of any lien, charge or encumbrance
under any agreement filed as an exhibit to the
Registration Statement.
(xv) The Agreement constitutes the legal,
valid and binding agreement of each of the Company,
the MHC and the Association, enforceable in
accordance with its terms, except as rights to
indemnity and contribution thereunder may be
limited under applicable law, and subject to the
qualification that (i) enforcement thereof may be
limited by bankruptcy, insolvency, moratorium,
reorganization or other laws (including the laws of
fraudulent conveyance) or judicial decisions
affecting the enforceability of creditors' rights
generally or the rights of creditors of savings
banks or financial institutions, the accounts of
which are insured by the FDIC, and (ii) enforcement
thereof is subject to general equity principles
(regardless of whether such enforceability is
considered in a proceeding in equity or at law) and
to the effect of certain laws and judicial
decisions upon the availability of injunctive
relief and enforceability of equitable remedies,
including the remedies of specific performance and
self-help.
(xvi) The Registration Statement has been
declared effective by the Commission under the
Securities Act, and such counsel has been advised
by the Commissioner's staff that no stop order
suspending the effectiveness of the Registration
Statement has been issued under the Securities Act
and no proceedings for such purpose have been
initiated or threatened by the Commission.
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(xvii) The Prospectus has been declared
effective and, such counsel has been advised by the
OTS' staff that no order suspending the
effectiveness of the Prospectus has been issued by
the OTS and no proceedings for such purpose have
been initiated or threatened by the OTS.
(xviii) No further approval, authorization,
consent or other order of any public board or body
is required in connection with the execution and
delivery of this Agreement and the issuance of the
Securities pursuant to the Plan, except as may be
required under the securities or "Blue Sky" laws of
various jurisdictions as to which no opinion need
be rendered.
(xix) At the time the Registration Statement
became effective, the Registration Statement
complied as to form in all material respects with
the applicable requirements under the Securities
Act and the Securities Act Regulations; it being
understood, however, that (i) no opinion need be
rendered with respect to the financial statements
or other financial and statistical data included
in, or omitted from, the Registration Statement and
(ii) in passing upon the compliance as to form of
the Registration Statement, such counsel may assume
that the statements made therein are correct and
complete, except as otherwise set forth in
paragraph (xxii).
(xx) The form of certificate used to
evidence the Common Stock complies with the
requirements of federal laws and regulations.
(xxi) To such counsel's actual knowledge,
there are no legal or governmental proceedings
pending or threatened against or affecting the
Company, the MHC or the Association which are
required to be disclosed in the Registration
Statement and Prospectus, other than those
disclosed therein.
(xxii) The statements in the Prospectus
under the captions "Risk Factors - Risks Related to
this Offering -" "- Hometown Bancorp MHC's majority
control of our common stock will enable it to
exercise voting control over most matters put to a
vote of stockholders and will prevent stockholders
from forcing a sale or second-step conversion
transaction you may find advantageous," "- Office
of Thrift Supervision policy on remutualization
transactions could prohibit acquisition of Hometown
Bancorp, which may adversely effect our stock
price," "- There may be a limited market for our
common stock, which may adversely affect our stock
price," "Our Dividend Policy," "Regulation and
Supervision," "Federal and State Taxation," "The
Stock Offering," "Restrictions on Acquisition of
Hometown Bancorp and Walden Federal Savings and
Loan Association," and "Description of Hometown
Bancorp, Inc. Capital Stock" insofar as they
purport to summarize matters of law or to describe
documents referred to therein, are accurate
summaries and descriptions in all material
respects.
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(xxiii) To such counsel's actual knowledge,
there are no contracts or documents of a character
required to be described in the Registration
Statement or Prospectus or to be filed as exhibits
thereto that are not described or filed, and no
default exists, and no event has occurred which,
with notice or lapse of time or both, would
constitute a default, in the due performance or
observance of any material obligation, agreement or
covenant contained in any contract or document so
described or filed.
(xxiv) The Plan has been duly authorized by
all necessary corporate action by the Company, the
MHC and the Association.
(xxv) To such counsel's actual knowledge,
the Company, the MHC and the Association are
currently not in violation of their respective
charters and bylaws.
(xxvi) The Company is not and, after giving
effect to the offer and the sale of the Securities
and the application of the net proceeds as
described in the Prospectus under the caption "Use
of Proceeds", will not be, required to be
registered as an "investment company" as such term
is defined in the Investment Company Act of 1940,
as amended.
(2) The written opinion, dated as of Closing Time,
of Elias, Matz, Tiernan & Herrick L.L.P., counsel for the
Agent, with respect to the matters set forth in Section
5(b)(1)(i), (ii), (iii), (vi), (vii), (xvii) and (xviii) and
such other matters as the Agent may reasonably require.
(3) In addition to giving their opinions required
by subsections (b)(l) and (b)(2), respectively, of this
Section, Muldoon Murphy & Aguggia LLP and Elias Matz Tiernan &
Herrick L.L.P. shall each additionally state that nothing has
come to their attention that would lead them to believe that
the Registration Statement (except for financial statements
and schedules and other financial or statistical data included
therein, as to which counsel need make no statement), at the
time it became effective, 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
not misleading or that the Prospectus (except for financial
statements and schedules and other financial or statistical
data included therein, as to which counsel need make no
statement) and the General Disclosure Package at the time the
Registration Statement became effective and at the Closing
Time, included or includes an untrue statement of a material
fact or omitted or omits to state a material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
In giving their opinions, Muldoon Murphy & Aguggia LLP and Elias, Matz,
Tiernan & Herrick L.L.P. may rely as to matters of fact on certificates of
officers and directors of the Company, the MHC and the Association and
certificates of public officials, and Elias, Matz, Tiernan & Herrick
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L.L.P. may also rely on the opinion of Muldoon Murphy & Aguggia LLP with respect
to matters set forth in paragraphs (i), (ii), (iii), (vi), (vii), (xvii) and
(xviii) of Section 5(b)(1).
(c) At Closing Time referred to in Section 2, the Company, the MHC and
the Association shall have completed in all material respects the conditions
precedent to the Offerings in accordance with the Plan, the applicable OTS
Regulations and all other applicable laws, regulations, decisions and orders,
including all terms, conditions, requirements and provisions precedent to the
Offerings imposed upon the Company, the MHC or the Association by the OTS, or
any other regulatory authority other than those which the OTS permits to be
completed after the Offerings.
(d) At Closing Time, there shall not have been, since the date hereof
or since the respective dates as of which information is given in the
Registration Statement and the Prospectus, any material adverse change in the
financial condition, results of operations, business affairs or prospects of the
Company, the MHC and the Association, considered as one enterprise, whether or
not arising in the ordinary course of business consistent with past practice,
and the Agent shall have received a certificate of the President and Chief
Executive Officer of the Company, of the MHC and of the Association and the
chief financial or chief accounting officer of the Company, of the MHC and of
the Association, dated as of Closing Time, to the effect that (i) there has been
no such material adverse change, (ii) there shall have been no material
transaction entered into by the Company, the MHC or the Association from the
latest date as of which the financial condition of the Company, the MHC or the
Association, as set forth in the Registration Statement and the Prospectus other
than transactions referred to or contemplated therein and transactions in the
ordinary course of business consistent with past practice (iii) neither the
Company, the MHC nor the Association shall have received from the OTS any order
or direction (oral or written) to make any material change in the method of
conducting its business with which it has not complied (which order or
direction, if any, shall have been disclosed in writing to the Agent) or which
materially and adversely would affect the business, financial condition, results
of operations or prospects of the Company, the MHC or the Association,
considered as one enterprise, (iv) the representations and warranties in Section
1 hereof are true and correct with the same force and effect as though expressly
made at and as of the Closing Time, (v) each of the Company, the MHC and the
Association have complied with all agreements and satisfied all conditions on
their part to be performed or satisfied at or prior to Closing Time, (vi) no
stop order suspending the effectiveness of the Registration Statement has been
issued and no proceedings for that purpose have been initiated or, to the best
of their knowledge after due inquiry, threatened by the Commission, and (vii) no
order suspending the Subscription and Community Offering or Syndicated Community
Offering or the authorization for final use of the Prospectus has been issued
and no proceedings for that purpose have been initiated or, to the best of their
knowledge after due inquiry, threatened by the OTS and no person has sought to
obtain regulatory or judicial review of the action of the OTS in approving the
MHC Application in accordance with the OTS Regulations nor has any person sought
to obtain regulatory or judicial review of the action of the OTS in approving
the MHC Application.
(e) At the Closing Time, the Agent shall have received a certificate of
the Chief Executive Officer and President of the Company, of the MHC and of the
Association and the Chief Financial Officer of the Company, of the MHC and of
the Association, dated as of Closing Time, to the effect that (i) they have
reviewed the contents of the Registration Statement and the Prospectus; (ii)
based on each of their knowledge, the Registration Statement and the Prospectus
do not contain
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any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements made therein, in light of the
circumstances under which such statements were made, not misleading; and (iii)
based on each of their knowledge, the financial statements and other financial
information included in the Registration Statement and the Prospectus fairly
present the financial condition and results of operations of the Association as
of and for the dates and periods covered by the Registration Statement and the
Prospectus.
(f) At the time of the execution of this Agreement, the Agent shall
have received from Beard Miller a letter dated such date, in form and substance
satisfactory to the Agent, to the effect that: (i) they are independent public
accountants with respect to the Company, the MHC, the Association within the
meaning of the Code of Ethics of the AICPA, the Securities Act and the
Securities Act Regulations and the OTS Regulations, they are registered with the
PCAOB, and they are not in violation of the auditor independence requirements of
the Sarbanes-Oxley Act; (ii) it is their opinion that the financial statements
and supporting schedules included in the Registration Statement and covered by
their opinions therein comply as to form in all material respects with the
applicable accounting requirements of the Securities Act and the Securities Act
Regulations; (iii) based upon limited procedures as agreed upon by the Agent and
Beard Miller set forth in detail in such letter, nothing has come to their
attention which causes them to believe that (A) the unaudited financial
statements and supporting schedules of the Company included in the Registration
Statement do not comply as to form in all material respects with the applicable
accounting requirements of the Securities Act, the Securities Act Regulations
and the OTS Regulations or are not presented in conformity with generally
accepted accounting principles applied on a basis substantially consistent with
that of the audited financial statements included in the Registration Statement
and the Prospectus, (B) the unaudited amounts of net interest income and net
income set forth under "Selected Financial and Other Data" in the Registration
Statement and Prospectus do not agree with the amounts set forth in unaudited
financial statements as of and for the dates and periods presented under such
captions or such amounts were not determined on a basis substantially consistent
with that used in determining the corresponding amounts in the audited financial
statements included in the Registration Statement, (C) at a specified date not
more than five (5) business days prior to the date of this Agreement, there has
been any change in the capital stock of the Company, any increase in the
long-term or short-term debt of the Company or any decrease in consolidated
total assets, the allowance for loan losses, total deposits or consolidated
stockholder's equity of the Company, in each case as compared with the amounts
shown in the consolidated balance sheets included in the Registration Statement
or, (D) during the period from December 31, 2006 to a specified date not more
than five (5) business days prior to the date of this Agreement, there were any
decreases, as compared with the corresponding period in the preceding fiscal
year, in total interest income, net interest income, net interest income after
provision for loan losses, noninterest income, income before income tax expense
or net income of the Company, except in all instances for increases or decreases
which the Registration Statement and the Prospectus disclose have occurred or
may occur; and (iv) in addition to the examination referred to in their opinions
and the limited procedures referred to in clause (iii) above, they have carried
out certain specified procedures, not constituting an audit, with respect to
certain amounts, percentages and financial information which are included in the
Registration Statement and Prospectus and which are specified by the Agent, and
have found such amounts, percentages and financial information to be in
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agreement with the relevant accounting, financial and other records of the
Company, the MHC and the Association identified in such letter.
(g) At Closing Time, the Agent shall have received from Beard Miller a
letter, dated as of Closing Time, to the effect that they reaffirm the
statements made in the letter furnished pursuant to subsection (f) of this
Section, except that the specified date referred to shall be a date not more
than five (5) business days prior to Closing Time.
(h) At Closing Time, the Securities shall have been approved for
quotation on the OTC Bulletin Board upon notice of issuance.
(i) At Closing Time, the Agent shall have received a letter from the
Appraiser, dated as of the Closing Time, confirming its appraisal.
(j) At Closing Time, counsel for the Agent shall have been furnished
with such documents and opinions as they may require for the purpose of enabling
them to pass upon the issuance and sale of the Securities as herein contemplated
and related proceedings, or in order to evidence the accuracy of any of the
representations or warranties, or the fulfillment of any of the conditions,
herein contained; and all proceedings taken by the Company in connection with
the issuance and sale of the Securities as herein contemplated shall be
satisfactory in form and substance to the Agent and counsel for the Agent.
(k) At any time prior to Closing Time, (i) there shall not have
occurred any material adverse change in the financial markets in the United
States or elsewhere or any outbreak of hostilities or escalation thereof or
other calamity or crisis the effect of which, in the judgment of the Agent, is
so material and adverse as to make it impracticable to market the Securities or
to enforce contracts, including subscriptions or orders, for the sale of the
Securities, and (ii) trading generally on either the American Stock Exchange,
the New York Stock Exchange or the Nasdaq Stock Market shall not have been
suspended, and minimum or maximum prices for trading shall not have been fixed,
or maximum ranges for prices for securities have been required, by either of
said Exchanges or by order of the Commission or any other governmental
authority, and a banking moratorium shall not have been declared by either
Federal or New York authorities.
SECTION 6. INDEMNIFICATION.
(a) The Company, the MHC and the Association, jointly and severally,
agree to indemnify and hold harmless the Agent, each person, if any, who
controls the Agent, within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act, and its respective partners, directors,
officers, employees and agents as follows:
(i) from and against any and all loss, liability, claim,
damage and expense whatsoever, as incurred, related to or arising out
of the Offerings or any action taken by the Agent where acting as agent
of the Company, the MHC or the Association or otherwise as described in
Section 2 hereof provided, however, that this indemnity agreement shall
not apply to any loss, liability, claim, damage, or expense found in a
final judgment by a court of
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competent jurisdiction to have resulted primarily from the bad faith,
willful misconduct or gross negligence of the Agent;
(ii) from and against any and all loss, liability, claim,
damage and expense whatsoever, as incurred, based upon or arising out
of any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement , the General Disclosure
Package, any Issuer Represented Free Writing or Limited Use Free
Writing Prospectus, when considered together with the General
Disclosure Package, (or any amendment or supplement thereto), or the
omission or alleged omission therefrom of a material fact required to
be stated therein or necessary to make the statements therein not
misleading or arising out of any untrue statement or alleged untrue
statement of a material fact contained in the Prospectus (or any
amendment or supplement thereto), or any Issuer Represented Free
Writing Prospectus, or the omission or alleged omission therefrom of a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
(iii) from and against any and all loss, liability, claim,
damage and expense whatsoever, as incurred, to the extent of the
aggregate amount paid in settlement of any litigation, or any
investigation or proceeding by any governmental agency or body,
commenced or threatened, or of any claim whatsoever described in
clauses (i) or (ii) above, if such settlement is effected with the
written consent of the Company, the MHC or the Association, which
consent shall not be unreasonably withheld; and
(iv) from and against any and all expense whatsoever, as
incurred (including, subject to Section 6(c) hereof, the fees and
disbursements of counsel chosen by the Agent), reasonably incurred in
investigating, preparing or defending against any litigation, or any
investigation, proceeding or inquiry by any governmental agency or
body, commenced or threatened, or any claim pending or threatened
whatsoever described in clauses (i) or (ii) above, to the extent that
any such expense is not paid under clause (i), (ii) or (iii) above;
PROVIDED, HOWEVER, that the indemnification provided for in this paragraph (a)
shall not apply to any loss, liability, claim, damage or expense that arises out
of any untrue statement or alleged untrue statement of a material fact contained
in the Prospectus (or any amendment or supplement thereto), or any Issuer
Represented Free Writing Prospectus, or the omission or alleged omission
therefrom of a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading
which was made in reliance upon and in conformity with the Agent Information.
(b) The Agent agrees to indemnify and hold harmless the Company, the
MHC and the Association, their directors, each of their officers who signed the
Registration Statement, and each person, if any, who controls the Company within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act against any and all loss, liability, claim, damage and expense described in
the indemnity contained in subsection (a) of this Section, as incurred, but only
with respect to untrue statements or omissions, or alleged untrue statements or
omissions, of a material fact made in the Prospectus (or any amendment or
supplement thereto), the General Disclosure
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Package, the Limited Use Free Writing Prospectus or any Issuer Represented Free
Writing Prospectus, in reliance upon and in conformity with the Agent
Information.
(c) Each indemnified party shall give notice as promptly as reasonably
practicable to each indemnifying party of any action commenced against it in
respect of which indemnity may be sought hereunder, but failure to so notify an
indemnifying party shall not relieve such indemnifying party from any liability
which it may have otherwise than on account of this indemnity agreement. An
indemnifying party may participate at its own expense in the defense of any such
action. In no event shall the indemnifying parties be liable for fees and
expenses of more than one counsel (in addition to no more than one local counsel
in each separate jurisdiction in which any action or proceeding is commenced)
separate from their own counsel for all indemnified parties in connection with
any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances.
(d) The Company, the MHC and the Association also agree that the Agent
shall not have any liability (whether direct or indirect, in contract or tort or
otherwise) to the MHC and its members, the Company, the Association, the
Company's security holders, the Company's, the MHC's or the Association's
creditors relating to or arising out of the engagement of the Agent pursuant to,
or the performance by the Agent of the services contemplated by, this Agreement,
except to the extent that any loss, claim, damage or liability is found in a
final judgment by a court of competent jurisdiction to have resulted primarily
from the Agent's bad faith, willful misconduct or gross negligence.
(e) In addition to, and without limiting, the provisions of Section
(6)(a)(iv) hereof, in the event that the Agent, any person, if any, who controls
the Agent within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act or any of its partners, directors, officers, employees or
agents is requested or required to appear as a witness or otherwise gives
testimony in any action, proceeding, investigation or inquiry brought by or on
behalf of or against the Company, the MHC, the Association, the Agent or any of
its respective affiliates or any participant in the transactions contemplated
hereby in which the Agent or such person or agent is not named as a defendant,
the Company, the MHC, and the Association, jointly and severally, agree to
reimburse the Agent and its partners, directors, officers, employees or agents
for all reasonable and necessary out-of-pocket expenses incurred by them in
connection with preparing or appearing as a witness or otherwise giving
testimony and to compensate the Agent and its partners, directors, officers,
employees or agents in an amount to be mutually agreed upon.
SECTION 7. CONTRIBUTION. In order to provide for just and equitable
contribution in circumstances in which the indemnity agreement provided for in
Section 6 hereof is for any reason held to be unenforceable by the indemnified
parties although applicable in accordance with its terms, the Company, the MHC,
the Association, and the Agent shall contribute to the aggregate losses,
liabilities, claims, damages and expenses of the nature contemplated by said
indemnity agreement incurred by the Company, the MHC or the Association and the
Agent, as incurred, in such proportions (i) that the Agent is responsible for
that portion represented by the percentage that the aggregate marketing fees
appearing in the Prospectus bears to the maximum aggregate gross proceeds
appearing on the cover page thereof and the Company, the MHC and the Association
are jointly and severally responsible for the balance or (ii) if, but only if,
the allocation provided for in clause (i) is for any reason held unenforceable,
in such proportion as is appropriate to reflect not only
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the relative benefits to the Company, the MHC and the Association on the one
hand and the Agent on the other, as reflected in clause (i), but also the
relative fault of the Company, the MHC and the Association on the one hand and
the Agent on the other, as well as any other relevant equitable considerations;
PROVIDED, HOWEVER, that no person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section, each person, if any, who
controls the Agent within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act shall have the same rights to contribution as the
Agent, and each director of the Company, the MHC and the Association, each
officer of the Company who signed the Registration Statement, and each person,
if any, who controls the Company, the MHC or the Association within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange Act shall have
the same rights to contribution as the Company, the MHC and the Association.
Notwithstanding anything to the contrary set forth herein, to the extent
permitted by applicable law, in no event shall the Agent be required to
contribute an aggregate amount in excess of the aggregate marketing fees to
which the Agent is entitled and actually paid pursuant to this Agreement.
SECTION 8. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE
DELIVERY. All representations, warranties and agreements contained in this
Agreement, or contained in certificates of officers of the Company, the MHC or
the Association submitted pursuant hereto, shall remain operative and in full
force and effect, regardless of any investigation made by or on behalf of the
Agent or any controlling person, or by or on behalf of the Company, and shall
survive delivery of the Securities.
SECTION 9. TERMINATION OF AGREEMENT.
(a) The Agent may terminate this Agreement, by notice to the Company,
at any time at or prior to Closing Time (i) if there has been, since the date of
this Agreement or since the respective dates as of which information is given in
the Registration Statement, any material adverse change in the financial
condition, results of operations, business affairs or prospects of the Company,
the MHC or the Association, considered as one enterprise, whether or not arising
in the ordinary course of business, (ii) if there has occurred any material
adverse change in the financial markets in the United States or elsewhere or any
outbreak of hostilities or escalation thereof or other calamity or crisis the
effect of which, in the judgment of the Agent, is so material and adverse as to
make it impracticable to market the Securities or to enforce contracts,
including subscriptions or orders, for the sale of the Securities, (iii) if
trading generally on the Nasdaq Stock Market, the American Stock Exchange or the
New York Stock Exchange has been suspended, or minimum or maximum prices for
trading have been fixed, or maximum ranges for prices for securities have been
required, by either of said Exchanges or by order of the Commission or any other
governmental authority, or if a banking moratorium has been declared by either
Federal or New York authorities, (iv) if any condition specified in Section 5
shall not have been fulfilled when and as required to be fulfilled; (v) if there
shall have been such material adverse changes in the condition or prospects of
the Company, the MHC or the Association or the prospective market for the
Company's Securities as in the Agent's good faith opinion would make it
inadvisable to proceed with the offering, sale or delivery of the Securities;
(vi) if, in the Agent's good faith opinion, the price for the Securities
established by the Appraiser is not reasonable or equitable under then
prevailing market conditions, or (vii) if the Offerings are not consummated on
or prior to June 30, 2008.
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(b) If this Agreement is terminated pursuant to this Section, such
termination shall be without liability of any party to any other party except as
provided in Sections 2 and 4 hereof relating to the reimbursement of expenses
and except that the provisions of Sections 6 and 7 hereof shall survive any
termination of this Agreement.
SECTION 10. NOTICES. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the Agent
shall be directed to the Agent at 919 Third Avenue, 6th Floor, New York, New
York 10022, attention of General Counsel, with a copy to Elias, Matz, Tiernan &
Herrick L.L.P., 734 15th Street, NW, 12th Floor, Washington, DC 20005,
Attention: Philip R. Bevan; notices to the Company, the MHC and the Association
shall be directed to any of them at 12 Main Street, Walden, New York 12586,
Attention: Thomas F. Gibney, with a copy to Muldoon Murphy & Aguggia LLP, 5101
Wisconsin Avenue, N.W., Washington, D.C. 20016, Attention: Lawrence M.F.
Spaccasi.
SECTION 11. PARTIES. This Agreement shall inure to the benefit of and
be binding upon the Agent, the Company, the MHC and the Association and their
respective successors. Nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any person, firm or corporation, other
than the Agent, the Company, the MHC and the Association and their respective
successors and the controlling persons and the partners, officers and directors
referred to in Sections 6 and 7 and their heirs and legal representatives, any
legal or equitable right, remedy or claim under or in respect of this Agreement
or any provision herein or therein contained. This Agreement and all conditions
and provisions hereof and thereof are intended to be for the sole and exclusive
benefit of the Agent, the Company, the MHC and the Association and their
respective successors, and said controlling persons, partners, officers and
directors and their heirs, partners, legal representatives, and for the benefit
of no other person, firm or corporation.
SECTION 12. 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 the engagement letter dated December 7, 2006, by and
between the Agent and the Company, the MHC and the Association, relating to the
Agent's providing conversion agent services to the Company and the Association.
No waiver, amendment or other modification of this Agreement shall be effective
unless in writing and signed by the parties hereto.
SECTION 13. GOVERNING LAW AND TIME. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York applicable to
agreements made and to be performed in said State without regard to the
conflicts of laws provisions thereof. Unless otherwise noted, specified times of
day refer to Eastern time.
SECTION 14. SEVERABILITY. Any term or provision of this Agreement which
is invalid or unenforceable in any jurisdiction shall, as to that jurisdiction,
be ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of this
Agreement is so broad as to be unenforceable, the provision shall be interpreted
to be only so broad as is enforceable.
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SECTION 15. HEADINGS. Sections 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.
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If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
between the Agent on the one hand, and the Company, the MHC and the Association
on the other in accordance with its terms.
Very truly yours,
HOMETOWN BANCORP, INC.
By:/s/ Thomas F. Gibney
------------------------------------------------
Name: Thomas F. Gibney
Title: President and Chief Executive Officer
WALDEN FEDERAL SAVINGS
AND LOAN ASSOCIATION
By:/s/ Thomas F. Gibney
------------------------------------------------
Name: Thomas F. Gibney
Title: President and Chief Executive Officer
HOMETOWN BANCORP, MHC
By:/s/ Thomas F. Gibney
------------------------------------------------
Name: Thomas F. Gibney
Title: President and Chief Executive Officer
CONFIRMED AND ACCEPTED,
as of the date first above written:
SANDLER O'NEILL & PARTNERS, L.P.
By: Sandler O'Neill & Partners Corp.,
the sole general partner
By: /s/ Michael Lacovara
--------------------------------------
Authorized Signatory
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