AMERICAN BANCORP OF NEW JERSEY, INC.
8,625,000 Shares
(Subject to increase up to 9,918,750 Shares)
COMMON STOCK
(Par Value $.0 1 Per Share)
Subscription Price $10.00 Per Share
AGENCY AGREEMENT
___________________, 2005
Keefe, Bruyette & Woods, Inc.
211 Bradenton Drive
Dublin, Ohio 430 17-5034
Ladies and Gentlemen:
ASB Holding Company, a federally chartered stock savings and loan
holding company (the "Holding Company"), American Savings, MHC, a federally
chartered mutual savings and loan holding company (the "MHC"), American Bank of
New Jersey, a federally chartered savings bank (the "Bank"), and American
Bancorp of New Jersey, Inc., a New Jersey chartered stock corporation ("American
Bancorp" or the "Company") (collectively, the "Parties"), hereby confirm,
jointly and severally, their agreement with Keefe, Bruyette & Woods, Inc., a New
York corporation ("KBW" or the "Agent"), as follows:
Section 1. The Offering. The Holding Company, in accordance with the
Plan of Conversion and Reorganization (the "Plan") adopted on May 17, 2005, will
convert into an interim federal stock savings bank, which will merge with and
into the Bank, and the MHC will convert into an interim federal stock savings
bank, and merge with and into the Bank, pursuant to which merger, the MHC will
cease to exist and the shares of the Holding Company held by the MHC will cease
to exist and will be canceled. The MHC will cease to exist, and a liquidation
account will be established for the benefit of members. The existing shares of
the Holding Company owned by public stockholders will be converted pursuant to
an exchange ratio into shares of common stock of American Bancorp. In connection
with the Conversion and Reorganization, 70% of the ownership interest of
American Bancorp currently owned by the MHC will be offered and sold to the
public. In connection with the conversion and reorganization, in compliance with
Office of Thrift Supervision ("OTS") regulations (together with such amendments
thereto and supplementary materials as may have been required through the date
hereof, the "Plan"), American Bancorp will offer and sell up to 8,625,000
(subject to increase up to 9,918,750 shares) shares of Common Stock in a
subscription offering to (1) eligible account holders of record as of the close
of business on March 31, 2004 ("Eligible Account Holders"); (2) the Parties'
Tax-Qualified Employee Plans; (3) supplemental eligible account holders of
record as of the close of business on March 31, 2005 ("Supplemental Eligible
Account Holders"); and (4) other account holders of record as of the close
of business on June 30, 2005 ("Other Members"). Any time during, or promptly
after the Subscription Offering, and on a lowest priority basis, an opportunity
to subscribe may also be offered to the general public in a direct community
offering (a "Direct Community Offering") and to the general public in a public
offering (a "Public Offering"), if necessary. The Subscription Offering, Direct
Community Offering and Public Offering are collectively referred to as the
"Offering," and the Common Stock to be sold by the Company in the Offering are
hereinafter called the "Shares." It is acknowledged that the purchase of Shares
in the Offering is subject to the maximum and minimum purchase limitations as
described in the Plan and that the Parties may reject, in whole or in part, any
orders received in the Direct Community Offering or Public Offering.
In connection with the Conversion, the Reorganization and the Offering,
the Parties have filed with the Office of Thrift Supervision (the "OTS") the
required applications and amendments thereto to complete the Conversion, the
Reorganization, the Offering and any other actions which require the approval of
the OTS (such applications, as they may be amended, supplemented or modified
from and after the date hereof (the "OTS Application"), in compliance with all
applicable laws and regulations).
The Company has also filed with the Securities and Exchange Commission
(the "SEC") a registration statement on Form S-1 (File No. 333-125957) (the
"Registration Statement") containing a prospectus relating to the Offering for
the registration of the Shares under the Securities Act of 1933 (the "1933
Act"), and has filed such amendments thereof and such amended prospectuses as
may have been required to the date hereof. The term "Registration Statement"
shall include any documents incorporated by reference therein and all financial
schedules and exhibits thereto, as amended, including post-effective amendments.
The prospectus, as amended, on file with the SEC at the time the Registration
Statement initially became effective is hereinafter called the "Prospectus,"
except that if any Prospectus is filed by the Holding Company pursuant to Rule
424(b) or (c) of the rules and regulations of the SEC under the 1933 Act (the
"1933 Act Regulations") differing from the prospectus on file at the time the
Registration Statement initially becomes effective, the term "Prospectus" shall
refer to the prospectus filed pursuant to Rule 424(b) or (c) from and after the
time said prospectus is filed with the SEC.
Section 2. Retention of Agent; Compensation; Sale and Delivery of the
Shares. Subject to the terms and conditions herein set forth, the Parties hereby
appoint the Agent as their exclusive financial advisor and marketing agent to
utilize its best efforts to solicit subscriptions for Shares and to advise and
assist the Parties with respect to the American Bancorp's sale of the Shares in
the Offering.
On the basis of the representations, warranties, and agreements herein
contained, but subject to the terms and conditions herein set forth, the Agent
accepts such appointment and agrees to consult with and advise the Parties as to
the matters set forth in the letter agreement, dated April 6, 2005, between the
Holding Company and KBW. It is acknowledged by the Parties that the Agent shall
not be required to purchase any Shares or be obligated to take any action that
is inconsistent with all applicable laws, regulations, rules, decisions or
orders.
The obligations of the Agent pursuant to this Agreement shall terminate
upon the completion or termination or abandonment of the Plan by the Parties or
upon termination of the Offering, but
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in no event later than 90 days after the completion of the Subscription Offering
(the "End Date"). All fees or expenses due to the Agent but unpaid will be
payable to the Agent in next day funds at the earlier of the Closing Date (as
hereinafter defined) or the End Date. In the event the Offering is extended
beyond the End Date, the Parties and the Agent may agree to renew this Agreement
under mutually acceptable terms and subject to the approval of any governmental
agency or regulatory authority having jurisdiction over such matters.
In the event the Holding Company is unable to sell a minimum of
6,375,000 Shares by the End Date, this Agreement shall terminate and the Company
shall refund to any persons who have subscribed for any of the Shares the full
amount that it may have received from them plus accrued interest, as set forth
in the Prospectus, and none of the parties to this Agreement shall have any
obligation to the other parties hereunder, except as set forth in this Section 2
and in Sections 6, 8 and 9 hereof.
In the event the Offering is terminated for any reason not attributable
to the action or inaction of the Agent, the Agent shall be paid the fees due to
the date of such termination pursuant to subparagraphs (a) - (d) below.
The Company agrees to issue, or have issued, the Shares sold in the
Offering and to release for delivery certificates for such Shares on the Closing
Date (as hereinafter defined) against payment to the Company by any means
authorized by the Plan; provided, however, that no funds shall be released to
the Holding Company until the conditions specified in Section 7 hereof shall
have been complied with to the reasonable satisfaction of the Agent and its
counsel. The release of Shares against payment therefor shall be made on a date
and at a place acceptable to the Parties and the Agent. Certificates for shares
shall be delivered directly to the purchasers in accordance with their
directions. The date upon which the Company shall release or deliver the Shares
sold in the Offering, in accordance with the terms herein, is called the
"Closing Date."
The Agent shall receive the following compensation for its services
hereunder:
(a) A management fee of $50,000, payable in four consecutive monthly
installments of $12,500, commencing with the adoption of the Plan
on May 17, 2005, of which $______________ has been paid. Such
fees shall be deemed to have been earned when due. Should the
Offering be terminated for any reason not attributable to the
action or inaction of the Agent, the Agent shall have earned and
be entitled to be paid fees accruing through the stage at which
the termination occurred.
(b) A success fee of 1.00% shall be charged based on the aggregate
purchase price of the Shares sold in the Subscription Offering
and the Direct Community Offering excluding shares purchased by
the officers, directors, or employees (or members of their
immediate families) of the Bank plus any ESOP, tax-qualified or
stock based compensation plans (except individual purchases
through IRAs or similar plan created by the Bank for some or all
of its directors or employees. The management fee described in
subparagraph 2(a) shall be applied against the success fee
described in this subparagraph 2(b).
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(c) If any of the Shares remain available after the Subscription
Offering and the Community Offering, at the request of the Bank,
KBW will seek to form a syndicate of registered broker-dealers
("Selected Dealers") to assist in the sale of such Shares on a
best efforts basis, subject to the terms and conditions set forth
in the selected dealers agreement. KBW will endeavor to
distribute the Shares among the Selected Dealers in a fashion
which best meets the distribution objectives of the Holding
Company and the Plan. KBW will be paid a fee not to exceed 5.5%
of the aggregate purchase price of the shares sold by the
Selected Dealers. From this fee, KBW will pass on to the Selected
Dealers who assist in such offering an amount competitive with
gross underwriting discounts charged at such time for comparable
amounts of stock sold at a comparable price per share in a
similar market environment. Fees with respect to purchases
affected with the assistance of Selected Dealers other than KBW
shall be transmitted by KBW to such Selected Dealers. The
decision to utilize Selected Dealers will be made by the Holding
Company upon consultation with KBW. In the event, with respect to
any stock purchases, fees are paid pursuant to this subparagraph
2(c), such fees shall be in lieu of, and not in addition to,
payment pursuant to subparagraph 2(b).
(d) KBW shall be reimbursed for reasonable out-of-pocket expenses,
including costs of travel, meals and lodging, photocopying,
telephone, facsimile and couriers, provided such expenses do not
exceed $30,000. The selection of KBW's counsel will be done by
KBW, with the approval of the Bank. The Holding Company and the
Bank will reimburse KBW for the fees and expenses of its counsel
which will not exceed $40,000. The Holding Company will bear the
expenses of the Offering customarily borne by issuers including,
without limitation, regulatory filing fees, SEC, "Blue Sky," and
National Association of Securities Dealers, Inc. ("NASD") filing
and registration fees; the fees of the Holding Company's
accountants, attorneys, appraiser, transfer agent and registrar,
printing, mailing and marketing and syndicate expenses associated
with the Offering; the fees set forth under this Section 2; and
fees for "Blue Sky" legal work. If KBW incurs expenses on behalf
of the Holding Company or the Bank, the Holding Company or the
Bank will reimburse KBW for such expenses.
Full payment of KBW's fees and expenses, as described above, shall be
made in next day funds on the earlier of the Closing Date or a determination by
the Holding Company to terminate or abandon the Plan.
Section 3. Prospectus; Offering. The Shares are to be initially offered
in the Conversion at the purchase price set forth on the cover page of the
Prospectus.
Section 4. Representations and Warranties.
(a) The Parties jointly and severally represent and warrant to and
agree with the Agent as follows:
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(i) The Registration Statement, which was prepared by the
Parties and filed with the SEC, was declared effective by
the SEC on _________________, 2005. At the time the
Registration Statement, including the Prospectus contained
therein (including any amendment or supplement), became
effective, the Registration Statement contained all
statements that were required to be stated therein in
accordance with the 1933 Act and the 1933 Act Regulations,
complied in all material respects with the requirements of
the 1933 Act and the 1933 Act Regulations, and the
Registration Statement, including the Prospectus contained
therein (including any amendment or supplement thereto), and
any information regarding the Parties contained in Sales
Information (as such term is defined in Section 8 hereof)
authorized by the Parties for use in connection with the
Offering, did not contain an untrue statement of a material
fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not
misleading, and at the time any Rule 424(b) or (c)
Prospectus was filed with the SEC and at the Closing Date
referred to in Section 2, the Registration Statement,
including the Prospectus contained therein (including any
amendment or supplement thereto), and any information
regarding the Parties contained in Sales Information (as
such term is defined in Section 8 hereof) authorized by the
Parties for use in connection with the Offering will contain
all statements that are required to be stated therein in
accordance with the 1933 Act and the 1933 Act Regulations
and will not contain an untrue statement of a material fact
or omit to state a material fact necessary in order to make
the statements therein, in light of the circumstances under
which they were made, not misleading; provided, however,
that the representations and warranties in this Section
4(a)(i) shall not apply to statements or omissions made in
reliance upon and in conformity with written information
furnished to the Parties by the Agent or its counsel
expressly regarding the Agent for use in the Prospectus
under the caption "The Stock Offering - Subscription
Offering - Community Offering and Syndicated Community
Offering" and "- Plan of Distribution/Marketing
Arrangements" or in any Sales Information.
(ii) Pursuant to the rules and regulations of the OTS, as from
time to time amended or supplemented (the "OTS
Regulations"), the Parties have filed the Plan and the Proxy
Statement with the OTS, and have filed such amendments
thereto and supplementary materials as may have been
required through the date hereof the Plan and the Proxy
Statement have been approved by the OTS. At the date of such
approval and at the Closing Time, the Plan and the Proxy
Statement complied and will comply with the applicable
provisions of the OTS Regulations.
(iii)Pursuant to the OTS Regulations, the Plan has been duly
adopted by the Boards of Directors of the Parties and such
adoption has not since been rescinded or revoked; at the
Closing Date, the offer and sale of the Shares will have
been conducted in all material respects in accordance with
the Plan,
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the OTS Regulations, and all other applicable laws,
regulations, decisions and orders, including all terms,
conditions, requirements and provisions precedent to the
Offering imposed upon the Parties by the OTS, the SEC or any
other regulatory authority and in the manner described in
the Prospectus. No person has sought to obtain review of the
final action of the OTS in approving the Plan or in
approving the Conversion pursuant to the Home Owners' Loan
Act, as amended ("HOLA") or any other statute or regulation.
(iv) No order has been issued by the SEC, the OTS, any state
securities administrator, or the Federal Deposit Insurance
Corporation (the "FDIC") preventing or suspending the use of
the Prospectus, and no action by or before any such
government entity to revoke any approval, authorization or
order of effectiveness related to the Offering is pending
or, to the best knowledge of the Parties, threatened.
(v) The Bank has been duly organized and is a validly existing
federally chartered savings bank and a wholly-owned
subsidiary of the Holding Company, duly authorized to
conduct its business and own its property as described in
the Registration Statement and the Prospectus; the Bank has
obtained all licenses, permits and other governmental
authorizations currently required for the conduct of its
business, except those that individually or in the aggregate
would not materially adversely affect the financial
condition, earnings, capital, assets, properties or business
of the Parties; all such licenses, permits and governmental
authorizations are in full force and effect; the Bank is
duly qualified as a foreign corporation to transact business
and is in good standing in each jurisdiction in which its
ownership of property or leasing of property or the conduct
of its business requires such qualification, unless the
failure to be so qualified in one or more of such
jurisdictions would not individually or in the aggregate
have a material adverse effect on the financial condition,
earnings, capital, assets, properties or business of the
Bank. The Bank does not own equity securities or any equity
interest in any other active business enterprise except as
described in the Prospectus or as would not be material to
the operations of the Bank. Upon completion of the Offering,
(i) all of the authorized and outstanding capital stock of
the Bank will be owned by the Holding Company and (ii) the
Holding Company will have no direct subsidiaries other than
the Bank. At the Closing Date, the Offering will have been
effected in all material respects in accordance with all
applicable statutes, regulations, decisions and orders; and,
except with respect to the filing of certain post-sale,
post-Offering reports, and documents in compliance with the
1933 Act Regulations, all terms, conditions, requirements
and provisions with respect to the Offering imposed by the
SEC or the OTS if any, will have been complied with by the
Parties in all material respects or appropriate waivers will
have been obtained and all material notice and waiting
periods will have been satisfied, waived or elapsed.
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(vi) The Holding Company has been duly organized and is a validly
existing federally chartered stock savings and loan holding
company with corporate power and authority to own, lease and
operate its properties and to conduct its business as
described in the Registration Statement and the Prospectus.
The Company has been duly organized as a validly existing
New Jersey- chartered stock company with corporate power and
authority to own, lease and operate its properties and to
conduct its business described in the Registration Statement
and Prospectus. The Holding Company is qualified to do
business as a foreign corporation in each jurisdiction in
which the conduct of its business requires such
qualification, except where the failure to so qualify would
not have a material adverse effect on the financial
condition, earnings, capital, assets, properties or business
of the Holding Company. The Holding Company has obtained all
licenses, permits and other governmental authorizations
currently required for the conduct of its business except
those that individually or in the aggregate would not
materially adversely affect the financial condition,
earnings, capital, assets, properties or business of the
Parties; all such licenses, permits and governmental
authorizations are in full force and effect, and the Holding
Company is in all material respects complying with all laws,
rules, regulations and orders applicable to the operation of
its business.
(vii)The MHC has been duly organized and is a validly existing
federally chartered mutual holding company, with corporate
power and authority to own, lease and operate its properties
and to conduct its business as described in the Registration
Statement and the Prospectus, and the MHC is qualified to do
business as a foreign corporation in each jurisdiction in
which the conduct of its business requires such
qualification, except where the failure to do so would not
have a material adverse effect on the business, financial
condition or results of operations of the Parties. The MHC
has obtained all licenses, permits and other governmental
authorizations currently required for the conduct of its
business except where the failure to obtain such licenses,
permits and governmental authorizations would not have a
material adverse effect on the business, financial condition
or results of operations of the Parties; all such licenses,
permits and governmental authorizations are in full force
and effect, and the MHC is complying with all laws, rules,
regulations and order applicable to the operation of its
business except where the failure to comply would not have a
material adverse effect on the business, financial condition
or results of operations of the Parties.
(viii) The Bank is a member of the Federal Home Loan Bank of New
York ("FHLB"). The deposit accounts of the Bank are insured
by the FDIC up to the applicable limits and the Savings
Association Insurance Fund administered by the FDIC, and no
proceedings for the termination or revocation of such
insurance are pending or, to the best knowledge of the
Parties, threatened.
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(ix) The Parties have good and marketable title to all real
property and good title to all other assets material to the
business of the Parties, and to those properties and assets
described in the Registration Statement and Prospectus as
owned by them, in each case free and clear of all liens,
charges, encumbrances or restrictions, except such as are
described in the Registration Statement and Prospectus, or
are not material to the business of the Parties; and all of
the leases and subleases material to the business of the
Parties, under which the Parties hold properties, including
those described in the Registration Statement and
Prospectus, are in full force and effect and no default or
violation exists, and no event has occurred which with
notice or lapse of time, or both, would constitute a default
or violation on the part of the Parties.
(x) The Parties have received an opinion of their special
counsel, Silver, Freedman & Taff, L.L.P., with respect to
the legality of the Shares and certain federal income tax
consequences of the Offering and an opinion from Crowe,
Chizek and Company, LLC with respect to the New Jersey
income tax consequences of the Offering; all material
aspects of the opinions of Malizia, Spidi & Fisch, PC and
Crowe, Chizek and Company, LLC are accurately summarized in
the Registration Statement and Prospectus; the facts upon
which such opinions are based are truthful, accurate and
complete.
(xi) The Parties have all such power, authority, authorizations,
approvals and orders as may be required to enter into this
Agreement, to carry out the provisions and conditions hereof
and to issue and sell the Shares to be sold by the Holding
Company as provided herein and as described in the
Prospectus. The consummation of the Offering, the execution,
delivery and performance of this Agreement and the
consummation of the transactions herein contemplated have
been duly and validly authorized by all necessary corporate
action on the part of the Parties and this Agreement has
been validly executed and delivered by the Parties and is
the valid, legal and binding agreement of the Parties
enforceable in accordance with its terms (except as the
enforceability thereof may be limited by bankruptcy,
insolvency, moratorium, reorganization or similar laws
relating to or affecting the enforcement of creditors'
rights generally or the rights of creditors of savings and
loan holding companies, the accounts of whose subsidiaries
are insured by the FDIC, or by general equity principles,
regardless of whether such enforceability is considered in a
proceeding in equity or at law, and except to the extent, if
any, that the provisions of Sections 8 and 9 hereof may be
unenforceable as against public policy).
(xii)The Parties are in compliance in all material respects with
all applicable material laws, rules, regulations, order,
decrees and judgments (including, without limitation, all
regulations and orders of, or agreements with, the OTS, the
FDIC, the Federal Housing Finance Board, HOLA, the Equal
Credit Opportunity Act, the Fair Housing Act, the Community
Reinvestment Act
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and any applicable state law precluding the denial of credit
due to the neighborhood in which a property is situated, the
Home Mortgage Disclosure Act, all other applicable fair
lending laws or other laws relating to discrimination and
the Bank Secrecy Act and Title III of the U.S.A. Patriot
Act, and the applicable provisions of the Sarbanes-Oxley Act
of 2002, and none of the Parties has received any written
communication from any governmental authority asserting that
any of the Parties is not in compliance with such laws,
rules, regulations, orders, decrees and judgments, which
assertion has not been rescinded, or which non-compliance
has not been cured or resolved in all material respects,
and, except as set forth in the Registration Statement and
the Prospectus, there is no suit, proceeding, charge or
action before or by any court, regulatory authority or
governmental agency or body, pending or, to the best
knowledge of the Parties, threatened, which might materially
and adversely affect the Offering, the performance of this
Agreement or the consummation of the transactions
contemplated in the Plan and as described in the
Registration Statement and the Prospectus or which might
result in any material adverse change in the financial
condition, earnings, capital, assets, properties or business
of the Parties.
(xiii) The financial statements, schedules and notes related
thereto that are included in the Prospectus fairly present
the financial condition, results of operations, equity and
cash flows of the Holding Company and the Bank at the
respective dates indicated and for the respective periods
covered thereby and comply as to form in all material
respects with the applicable accounting requirements of
Regulation S-X of the SEC and generally accepted accounting
principles for financial reporting in the United States
("GAAP") (including those requiring the recording of certain
assets at their current market value). Such financial
statements, schedules and notes related thereto have been
prepared in accordance with GAAP consistently applied
through the periods involved, present fairly in all material
respects the information required to be stated therein and
are consistent with the most recent financial statements and
other reports filed by the Company and the Bank with the
OTS, the SEC, and any other applicable regulatory authority,
except that accounting principles employed in such
regulatory filings conform to the requirements of the OTS
and not necessarily to GAAP. The other financial,
statistical and pro forma information and related notes
included in the Prospectus present fairly the information
shown therein on a basis consistent with the audited and
unaudited financial statements of the Bank included in the
Prospectus, and as to the pro forma adjustments, the
adjustments made therein have been properly applied on the
basis described therein.
(xiv)Since the respective dates as of which information is given
in the Registration Statement including the Prospectus: (i)
there has not been any material adverse change in the
financial condition, earnings, capital, assets, deposits,
properties or business of the Parties, whether or not
arising in the ordinary course of business; (ii) there has
not been any material increase in the long-
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term debt of the Bank or in the principal amount of the
Bank's assets that are classified by the Bank as
substandard, doubtful or loss or in loans past due 90 days
or more or real estate acquired by foreclosure, by
deed-in-lieu of foreclosure or deemed in-substance
foreclosure or any material decrease in equity capital or
total assets of the Bank, nor has the Holding Company or the
Bank issued any securities or incurred any liability or
obligation for borrowing other than in the ordinary course
of business; (iii) there have not been any material
transactions entered into by the Parties; (iv) there has not
been any material adverse change in the aggregate dollar
amount of the Bank's deposits or its consolidated net worth;
(v) there has been no material adverse change in the
Parties' relationships with their insurance carriers,
including, without limitation, cancellation or other
termination of the Parties' fidelity bond or any other type
of insurance coverage; (vi) there has been no material
change in management of the Parties; (vii) neither American
Bancorp, the Holding Company, the MHC nor the Bank has
sustained any material loss or interference with its
respective business or properties from fire, flood,
windstorm, earthquake, accident or other calamity, whether
or not covered by insurance; (viii) neither American
Bancorp, the Holding Company, the MHC nor the Bank is in
default in the payment of principal or interest on any
outstanding debt obligations; (ix) the capitalization,
liabilities, assets, properties and business of the Parties
conform in all material respects to the descriptions thereof
contained in the Prospectus; and (x) neither American
Bancorp, the Holding Company, the MHC nor the Bank has any
material contingent liabilities, except as set forth in the
Prospectus.
(xv) All documents made available to or delivered or to be made
available to or delivered by the Parties or their
representatives in connection with the issuance and sale of
the Shares, including records of account holders, depositors
and borrowers of the Bank, or in connection with the Agent's
exercise of due diligence (except for those documents which
were prepared by parties other than American Bancorp, the
Holding Company, the MHC, the Bank or their
representatives), were on the dates on which they were
delivered, or will be on the dates on which they are to be
delivered, true, complete and correct in all material
respects.
(xvi)None of the Parties is (i) in violation of its articles of
incorporation, organization or charter or bylaws, as
applicable, or (ii) in default in the performance or
observance of any material obligation, agreement, covenant,
or condition contained in any material contract, lease, loan
agreement, indenture or other instrument to which it is a
party or by which it or any of its property may be bound.
The execution and delivery of this Agreement and the
consummation of the transactions herein contemplated will
not: (i) conflict with or constitute a breach of, or default
under, or result in the creation of any material lien,
charge or encumbrance upon any of the assets of the Parties
pursuant to their articles of incorporation, organization,
charter or bylaws, as applicable, or any material contract,
lease or other instrument
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in which the Parties has a beneficial interest, or any
applicable law, rule, regulation or order; (ii) violate any
authorization, approval, judgment, decree, order, statute,
rule or regulation applicable to the Parties, except for
such violations which would not have a material adverse
effect on the financial condition and results of operations
of the Parties on a consolidated basis; (iii) result in the
creation of any material lien, charge or encumbrance upon
any property of the Parties; or (iv) is in violation or has
received written notice of any violation with respect to,
any applicable environmental, safety or similar law
applicable to the business of the Parties.
(xvii) No default exists, and no event has occurred which with
notice or lapse of time, or both, would constitute a default
on the part of the Parties in the due performance and
observance of any term, covenant or condition of any
indenture, mortgage, deed of trust, note, bank loan or
credit agreement or any other instrument or agreement to
which any of the Parties is a party or by which any of them
or any of their property is bound or affected, except such
defaults which would not have a material adverse effect on
the financial condition or results of operations of the
Parties on a consolidated basis; such agreements are in full
force and effect; and no other party to any such agreements
has instituted or, to the best knowledge of the Parties,
threatened any action or proceeding wherein the Parties
would or might be alleged to be in default thereunder, where
such action or proceeding, if determined adversely to the
Parties, would have a material adverse effect on the
financial condition, earnings, capital, assets, properties
or business of the Parties.
(xviii) Upon consummation of the Offering, the authorized, issued
and outstanding equity capital of the Holding Company will
be within the range set forth in the Prospectus under the
caption "Capitalization"; the Shares will have been duly and
validly authorized for issuance and, when issued and
delivered by the Holding Company pursuant to the Plan
against payment of the consideration calculated as set forth
in the Plan and in the Prospectus, will be duly and validly
issued, fully paid and non-assessable, except for shares
purchased by the Tax-Qualified Employee Stock Benefit Plans
with funds borrowed from the Holding Company to the extent
payment therefor in cash has not been received by the
Holding Company; except to the extent that subscription
rights and priorities pursuant thereto exist pursuant to the
Plan, no preemptive rights exist with respect to the Shares;
and the terms and provisions of the Common Stock conform in
all material respects to the description thereof contained
in the Registration Statement and the Prospectus. Upon the
issuance of the Shares, good title to the Shares will be
transferred from the Holding Company to the purchasers
thereof against payment therefor, subject to such claims as
may be asserted against the purchasers thereof by
third-party claimants.
(xix)No approval of any regulatory or supervisory or other
public authority is required in connection with the
execution and delivery of this Agreement or
11
the issuance of the Shares, except for the approval of the
SEC or the OTS, and any necessary qualification,
notification, registration or exemption under the securities
or blue sky laws of the various states in which the Shares
are to be offered, and except as may be required under the
rules and regulations of the NASD and the Nasdaq Stock
Market.
(xx) Crowe, Chizek and Company LLC, which has certified the
audited financial statements and schedules of the Bank as of
and for the year ended December 31, 2004 included in the
Prospectus, has advised the Holding Company in writing that
they are, with respect to the Holding Company, independent
public accountants within the meaning of the Code of
Professional Ethics of the American Institute of Certified
Public Accountants and applicable regulations of the SEC.
(xxi)RP Financial, LC, which has prepared the Company's
Independent Appraisal as of May 31, 2005 (as amended or
supplemented, if so amended or supplemented) (the
"Appraisal"), has advised the Holding Company in writing
that it is independent of the Parties within the meaning of
the OTS Regulations.
(xxii) The Parties have timely filed all required federal, state
and local tax returns; the Parties have paid all taxes that
have become due and payable in respect of such returns,
except where permitted to be extended, have made adequate
reserves for similar future tax liabilities and no
deficiency has been asserted with respect thereto by any
taxing authority.
(xxiii) The Parties are in compliance in all material respects
with the applicable financial record-keeping and reporting
requirements of the Currency and Foreign Transactions
Reporting Act of 1970, as amended, and the regulations and
rules thereunder.
(xxiv) To the knowledge of the Parties, none of American Bancorp,
the Holding Company, the MHC, the Bank or employees of the
Parties has made any payment of funds of the Parties as a
loan for the purchase of the Shares, except the loan by the
Holding Company to the ESOP for the purchase of Shares in
accordance with the Plan, 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.
(xxv)None of the Parties has: (i) issued any securities within
the last 18 months except for notes to evidence bank loans
and reverse repurchase agreements or other liabilities in
the ordinary course of business and as described in the
Prospectus; (ii) had any material dealings within the 12
months prior to the date hereof with any member of the NASD,
or any person related to or associated with such member,
other than discussions and meetings relating to the proposed
Offering and routine purchases and sales of United States
12
government and agency and other securities in the ordinary
course of business; (iii) entered into a financial or
management consulting agreement except as contemplated
hereunder; and (iv) engaged any intermediary between the
Agent and the Parties in connection with the offering of the
Shares, and no person is being compensated in any manner for
such service. Appropriate arrangements have been made for
placing the funds received from subscriptions for Shares in
a special interest-bearing account with the Bank until all
Shares are sold and paid for, with provision for refund to
the purchasers in the event that the Offering is not
completed for whatever reason or for delivery to the Holding
Company if all Shares are sold.
(xxvi) The Parties have not relied upon the Agent or its legal
counsel or other advisors for any legal, tax or accounting
advice in connection with the Offering.
(xxvii) None of the Holding Company, the Company or the MHC are
required to be registered under the Investment Holding
Company Act of 1940, as amended.
(xxviii) Each of the Parties maintains insurance (issued by
insurers of recognized financial responsibility) of the
types and in the amounts reasonably believed by the Holding
Company to be adequate for their respective businesses,
including, but not limited to, insurance covering real and
personal property owned or leased by the Parties against
theft, damage, destruction, acts of vandalism and all other
risks customarily insured against, all of which insurance is
in full force and effect in all material respects.
(xxix) The Holding Company and American Bancorp are in compliance
with the applicable provisions of the Sarbanes-Oxley Act of
2002 (the "Sarbanes- Oxley Act") and all applicable rules,
regulations, guidelines and interpretations promulgated
thereunder by any governmental authority.
(b) Any certificates signed by an officer of the Parties pursuant to the
conditions of this Agreement and delivered to the Agent or their
counsel that refer to this Agreement shall be deemed to be a
representation and warranty by the Parties to the Agent as to the
matters covered thereby with the same effect as if such representation
and warranty were set forth herein.
(c) The Agent represents and warrants to the Parties that:
(i) KBW is a corporation validly existing in good standing under the
laws of the State of New York and licensed to conduct business in
the State of New Jersey with full power and authority to provide
the services to be furnished to the Parties hereunder.
(ii) The execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby have been duly and
validly authorized by
13
all necessary action on the part of the Agent, and this Agreement
has been duly and validly executed and delivered by the Agent and
is a legal, valid and binding agreement of the Agent, enforceable
in accordance with its terms (except as the enforceability
thereof may be limited by bankruptcy, insolvency, moratorium,
reorganization or similar laws relating to or affecting the
enforcement of creditors' rights generally, or by general equity
principles, regardless of whether such enforceability is
considered in a proceeding in equity or at law, and except to the
extent, if any, that the provisions of Sections 8 and 9 hereof
may, with respect to the Agent, be unenforceable as against
public policy).
(iii)Each of the Agent and its employees, agents and representatives
who shall perform any of the services hereunder shall be duly
authorized and empowered, and shall have all licenses, approvals
and permits necessary to perform such services; and the Agent is
a registered selling agent in each of the jurisdictions in which
the Shares are to be offered by the Holding Company in reliance
upon the Agent as a registered selling agent as set forth in the
blue sky memorandum prepared with respect to the Offering.
(iv) All funds received by the Agent, and the Agent's employees,
agents and representatives from the sale of the Shares in the
Offering will be transmitted to a segregated, interest-bearing
account by noon of the next business day following the receipt of
the funds.
(v) The execution and delivery of this Agreement by the Agent, the
consummation of the transactions contemplated hereby and
compliance with the terms and provisions hereof will not conflict
with, or result in a breach of, any of the terms, provisions or
conditions of, or constitute a default (or an event which with
notice or lapse of time or both would constitute a default)
under, the Articles of Incorporation or Bylaws of the Agent or
any material agreement, indenture or other instrument to which
the Agent is a party or by which it or its property is bound.
(vi) No approval of any regulatory or supervisory or other public
authority is required in connection with the Agent's execution
and delivery of this Agreement, or performance of its obligations
hereunder, except as may have been received.
(vii)There is no suit or proceeding or charge or action before or by
any court, regulatory authority or government agency or body or,
to the knowledge of the Agent, pending or threatened, which might
materially adversely affect the Agent's performance of this
Agreement.
Section 5. Covenants of the Parties. The Parties hereby jointly and
severally covenant with the Agent as follows:
14
(a) The Company has filed the Registration Statement with the SEC. The
Company will not file any amendment or supplement to the Registration
Statement without providing the Agent and its counsel an opportunity
to review such amendment or supplement or file any amendment or
supplement to which amendment or supplement the Agent or its counsel
shall reasonably object.
(b) The Parties will use their best efforts to cause any post-effective
amendment to the Registration Statement to be declared effective by
the SEC and will immediately upon receipt of any information
concerning the events listed below notify the Agent: (i) when the
Registration Statement, as amended, has become effective; (ii) when
the Company receives any comments from the SEC, the OTS or any other
governmental entity with respect to the Offering or the transactions
contemplated by this Agreement; (iii) when the SEC, the OTS or any
other governmental entity requests any amendment or supplement to the
Registration Statement or any additional information; (iv) the
issuance by the SEC, the OTS or any other governmental entity of any
order or other action suspending the Offering or the use of the
Registration Statement or the Prospectus or any other filing of the
Parties under the OTS Regulations, or other applicable law, or the
threat of any such action; (v) the issuance by the SEC, the OTS or any
authority of any stop order suspending the effectiveness of the
Registration Statement or of the initiation or threat of initiation or
threat of any proceedings for that purpose; or (vi) the occurrence of
any event mentioned in paragraph (h) below. The Parties will make
every reasonable effort (i) to prevent the issuance by the SEC, the
OTS or any other regulatory authority of any such order and, if any
such order shall at any time be issued, (ii) to obtain the lifting
thereof at the earliest possible time.
(c) The Parties will deliver to the Agent and to its counsel two conformed
copies of the Registration Statement, as originally filed and of each
amendment or supplement thereto, including all exhibits. Further, the
Parties will deliver such additional copies of the foregoing documents
to counsel to the Agent as may be required for any NASD filings.
(d) The Parties will furnish to the Agent, from time to time during the
period when the Prospectus (or any later prospectus related to this
offering) is required to be delivered under the 1933 Act or the
Securities Exchange Act of 1934, as amended (the "1934 Act"), such
number of copies of such Prospectus (as amended or supplemented) as
the Agent may reasonably request for the purposes contemplated by the
1933 Act, the 1933 Act Regulations, the 1934 Act or the rules and
regulations promulgated under the 1934 Act (the "1934 Act
Regulations"). The Parties authorize the Agent to use the Prospectus
(as amended or supplemented, if amended or supplemented) in any lawful
manner contemplated by the Plan in connection with the sale of the
Shares by the Agent.
(e) The Parties will comply with any and all material terms, conditions,
requirements and provisions with respect to the Offering and the
transactions contemplated thereby imposed by the SEC, the OTS or the
OTS Regulations, and by the 1933 Act, the 1933
15
Act Regulations, the 1934 Act and the 1934 Act Regulations to be
complied with prior to or subsequent to the Closing Date and when the
Prospectus is required to be delivered, and during such time period,
the Parties will comply, at their own expense, with all material
requirements imposed upon them by the SEC, the OTS or the OTS
Regulations, and by the 1933 Act, the 1933 Act Regulations, the 1934
Act and the 1934 Act Regulations, including, without limitation, Rule
10b-5 under the 1934 Act, in each case as from time to time in force,
so far as necessary to permit the continuance of sales or dealing in
the Common Stock during such period in accordance with the provisions
hereof and the Prospectus.
(f) If, at any time during the period when the Prospectus is required to
be delivered, any event relating to or affecting the Parties shall
occur, as a result of which it is necessary or appropriate, in the
reasonable opinion of the Agent's counsel, to amend or supplement the
Registration Statement or Prospectus in order to make the Registration
Statement or Prospectus not misleading in light of the circumstances
existing at the time the Prospectus is delivered, the Parties will at
their own expense, prepare and file with the SEC and the OTS and
furnish to the Agent a reasonable number of copies of an amendment or
amendments of, or a supplement or supplements to, the Registration
Statement or Prospectus (in form and substance reasonably satisfactory
to the Agent and its counsel after a reasonable time for review) which
will amend or supplement the Registration Statement or Prospectus so
that as amended or supplemented it will not contain an untrue
statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in light of the
circumstances existing at the time the Prospectus is delivered to a
purchaser, not misleading. For the purpose of this Agreement, the
Parties each will timely furnish to the Agent such information with
respect to itself as the Agent may from time to time reasonably
request.
(g) The Parties will take all necessary actions in cooperating with the
Agent and furnish to whomever the Agent may direct such information as
may be required to qualify or register the Shares for offering and
sale by the Company or to exempt such Shares from registration, or to
exempt the Company as a broker-dealer and its officers, directors and
employees as broker-dealers or agents under the applicable securities
or blue sky laws of such jurisdictions in which the Shares are
required under the OTS Regulations to be sold or as the Agent and the
Parties may reasonably agree upon; provided, however, that the Company
shall not be obligated to file any general consent to service of
process, to qualify to do business in any jurisdiction in which it is
not so qualified, or to register its directors or officers as brokers,
dealers, salesmen or agents in any jurisdiction. In each jurisdiction
where any of the Shares shall have been qualified or registered as
above provided, the Company will make and file such statements and
reports in each fiscal period as are or may be required by the laws of
such jurisdiction.
(h) The Parties will not sell or issue, contract to sell or otherwise
dispose of, for a period of 180 days after the Closing Date, without
the Agent's prior written consent, any of
16
their capital stock, other than in connection with any plan or
arrangement described in the Prospectus.
(i) The Company shall register the Shares under Section 12(g) of the 1934
Act concurrently with the Offering and shall request that such
registration be effective prior to or upon completion of the Offering.
The Company shall maintain the effectiveness of such registration for
not less than three years or such shorter period as may be required by
applicable law.
(j) During the period during which the Shares are registered under the
1934 Act or for three (3) years from the date hereof, whichever period
is greater, the Company will furnish to its shareholders as soon as
practicable after the end of each fiscal year an annual report of the
Company in accordance with the 1934 Act Regulations (including a
consolidated balance sheet and statements of consolidated income,
shareholders' equity and cash flows of the Company and its
subsidiaries as at the end of and for such year, certified by
independent public accountants in accordance with Regulation S-X under
the 1933 Act and the 1934 Act).
(k) During the period of three years from the date hereof, the Company
will furnish to the Agent: (i) as soon as practicable after such
information is publicly available, a copy of each report of the
Company furnished to or filed with the SEC under the 1934 Act or any
national securities exchange or system on which any class of
securities of the Company is listed or quoted (including, but not
limited to, reports on Forms 10-K, 10-Q and 8-K and all proxy
statements and annual reports to stockholders), (ii) a copy of each
other non-confidential report of the Company mailed to its
shareholders or filed with the SEC, the OTS or any other supervisory
or regulatory authority or any national securities exchange or system
on which any class of securities of the Company is listed or quoted,
each press release and material news items and additional documents
and information with respect to the Company or the Bank as the Agent
may reasonably request; and (iii) from time to time, such other
nonconfidential information concerning the Company or the Bank as the
Agent may reasonably request.
(l) The Parties will use the net proceeds from the sale of the Shares in
the manner set forth in the Prospectus under the caption "Use of
Proceeds."
(m) Other than as permitted by the OTS Regulations, the HOLA, the 1933
Act, the 1933 Act Regulations and its rules and regulations and the
laws of any state in which the Shares are registered or qualified for
sale or exempt from registration, none of the Parties will distribute
any prospectus, offering circular or other offering material in
connection with the offer and sale of the Shares.
(n) The Company will use its best efforts to list and maintain its listing
of the Shares on a national securities exchange effective on or prior
to the Closing Date.
17
(o) The Bank will maintain appropriate arrangements for depositing all
funds received from persons mailing subscriptions for or orders to
purchase Shares in the Offering in a segregated, interest-bearing
account at the rate described in the Prospectus until the Closing Date
and satisfaction of all conditions precedent to the release of the
Bank's obligation to refund payments received from persons subscribing
for or ordering Shares in the Offering in accordance with the Plan and
as described in the Prospectus or until refunds of such funds have
been made to the persons entitled thereto or withdrawal authorizations
canceled in accordance with the Plan and as described in the
Prospectus. The Bank will maintain such records of all funds received
to permit the funds of each subscriber to be separately insured by the
FDIC (to the maximum extent allowable) and to enable the Bank to make
the appropriate refunds of such funds in the event that such refunds
are required to be made in accordance with the Plan and as described
in the Prospectus.
(p) The Parties will take such actions and furnish such information as are
reasonably requested by the Agent in order for the Agent to ensure
compliance with the NASD's "Interpretation Relating to Free Riding and
Withholding."
(q) None of the Parties will amend the Plan without notifying the Agent
prior thereto.
(r) The Parties shall assist the Agent, if necessary, in connection with
the allocation of the Shares in the event of an oversubscription and
shall provide the Agent with any information necessary to assist the
Parties in allocating the Shares in such event and such information
shall be accurate and reliable in all material respects.
(s) Prior to the Closing Date, the Parties will inform the Agent of any
event or circumstances of which it is aware as a result of which the
Registration Statement and/or Prospectus, as then amended or
supplemented, would contain an untrue statement of a material fact or
omit to state a material fact necessary in order to make the
statements therein not misleading.
(t) Subsequent to the date the Registration Statement is declared
effective by the SEC and prior to the Closing Date, except as
otherwise may be indicated or contemplated therein or set forth in an
amendment or supplement thereto, neither American Bancorp, the Holding
Company, the MHC nor the Bank will have: (i) issued any securities or
incurred any liability or obligation, direct or contingent, for
borrowed money, except borrowings from the same or similar sources
indicated in the Prospectus in the ordinary course of its business, or
(ii) entered into any transaction which is material in light of the
business and properties of the Parties.
Section 6. Payment of Expenses. Whether or not the Offering is
completed or the sale of the Shares by the Holding Company is consummated, the
Parties jointly and severally agree to pay or reimburse the Agent for: (a) all
filing fees in connection with all filings related to the Offering with the
NASD; (b) any stock issue or transfer taxes which may be payable with respect to
the sale of the Shares; (c) all reasonable expenses of the Offering, including
but not limited to the Parties' and the Agent's attorneys' fees (subject to
Section 2 of this Agreement) and expenses, blue sky fees,
18
transfer agent, registrar and other agent charges, fees relating to auditing and
accounting or other advisors and costs of printing all documents necessary in
connection with the Offering. In the event the Company is unable to sell a
minimum of _______________ Shares or the Offering is terminated or otherwise
abandoned, the Holding Company shall promptly reimburse the Agent in accordance
with Section 2(d) hereof
Section 7. Conditions to the Agent's Obligations. The obligations of
the Agent hereunder are subject, to the extent not waived in writing by the
Agent, to the condition that all representations and warranties of the Parties
herein are, at and as of the commencement of the Offering and at and as of the
Closing Date, true and correct in all material respects, the condition that the
Parties shall have performed all of their obligations hereunder to be performed
on or before such dates, and to the following further conditions:
(a) At the Closing Date, the Parties shall have conducted the Offering in
all material respects in accordance with the Plan, the OTS Regulations
and all other applicable laws, regulations, decisions and orders,
including all terms, conditions, requirements and provisions precedent
to the Offering imposed upon them by the SEC, the OTS and any state
securities agency.
(b) The Registration Statement shall have been declared effective by the
SEC not later than 5:30 p.m. on the date of this Agreement, or with
the Agent's consent at a later time and date; and at the Closing Date,
no stop order suspending the effectiveness of the Registration
Statement shall have been issued under the 1933 Act or proceedings
therefor initiated or threatened by the SEC or any state authority,
and no order or other action suspending the authorization of the
Prospectus or the consummation of the Offering shall have been issued
or proceedings therefor initiated or, to the Holding Company's or the
Bank's knowledge, threatened by the SEC or any other governmental
authority.
(c) At the Closing Date, the Agent shall have received the favorable
opinion, dated as of the Closing Date and addressed to the Agent and
for its benefit, of Malizia, Spidi & Fisch, PC, special counsel for
the Parties, in form and substance to the effect that:
(i) The Company has been duly organized and is a validly existing New
Jersey chartered stock savings and loan holding company. The
Holding Company has been duly organized and is a validly existing
federally chartered stock savings and loan holding company.
(ii) Each of the Holding Company and the Company 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 the Prospectus; and both the Company and the
Holding Company are qualified to transact business as a foreign
corporation in each jurisdiction in which the failure to so
qualify would have a material adverse effect upon the financial
condition, results of operations or business affairs of the
Parties.
19
(iii)The Bank has been duly organized and is a validly existing
federally chartered savings bank in stock form, duly authorized
to conduct its business and own its property as described in the
Registration Statement and the Prospectus; the Bank is not
prohibited or restricted, directly or indirectly, from paying
dividends to the Holding Company, or from making any other
distribution with respect to the Bank's capital stock or from
repaying to the Holding Company any amounts which may form time
to time become due under any loans or advances to the Bank from
the Holding Company, or from transferring any of the Bank's
property or assets to the Holding Company. All of the capital
stock of the Bank outstanding upon completion of the Offering
will be duly authorized and will be validly issued, fully paid
and non- assessable and will be owned by the Holding Company free
and clear of any liens, encumbrances, claims or other
restrictions.
(iv) The MHC has been duly organized and is a validly existing
federally chartered mutual holding company duly authorized to
conduct its business and own its property as described in the
Registration Statement and Prospectus and is duly qualified as a
foreign corporation to transact business in each jurisdiction in
which the failure to so qualify would have a material adverse
effect upon the financial condition, results of operations or
business of the Parties; and the activities of the MHC, as
described in the Registration Statement and the Prospectus, are
permitted to a federally chartered mutual holding company under
the rules, regulations, policies and practices of the OTS and all
other federal banking or non-federal governmental agencies and
regulatory authorities having jurisdiction thereover.
(v) The Bank is a member in good standing of the FHLB. The deposit
accounts of the Bank are insured by the FDIC up to the maximum
amount allowed under law and no proceedings for the termination
or revocation of such insurance are pending or, to such counsel's
Actual Knowledge, threatened.
(vi) Immediately following the consummation of the Offering, the
authorized, issued and outstanding Common Stock of the Company
will be within the range set forth in the Prospectus under the
caption "Capitalization"; the Shares subscribed for pursuant to
the Offering have been duly and validly authorized for issuance,
and when issued and delivered by the Company pursuant to the Plan
against payment of the consideration calculated as set forth in
the Plan and the Prospectus, will be duly and validly issued and
fully paid and non-assessable, except for Shares purchased by the
Tax-Qualified Employee Stock Benefit Plans with funds borrowed
from the Company to the extent payment therefor in cash has not
been received by the Company; except to the extent that
subscription rights and priorities pursuant thereto exist
pursuant to the Plan, the issuance of the Shares is not subject
to preemptive rights and the terms and provisions of the Common
Stock conform in all material respects to the description thereof
contained in the Prospectus. The form of certificate used to
evidence the Common Stock
20
complies with applicable laws. Upon the issuance of the Shares,
good title to the Shares will be transferred from the Holding
Company to the purchasers thereof against payment therefor,
subject to such claims as may be asserted against the purchasers
thereof by third-party claimants.
(vii)The Parties have full corporate power and authority to enter
into this Agreement and to consummate the transactions
contemplated hereby and by the Plan. The execution and delivery
of this Agreement and the consummation of the transactions
contemplated hereby have been duly and validly authorized by all
necessary action on the part of the Parties; and this Agreement
is a valid and binding obligation of the Parties, enforceable
against the Parties in accordance with its terms, except as the
enforceability thereof may be limited by (i) bankruptcy,
insolvency, reorganization, moratorium, conservatorship,
receivership or other similar laws now or hereafter in effect
relating to or affecting the enforcement of creditors' rights
generally or the rights of creditors of federally-chartered
savings institutions, (ii) general equitable principles, (iii)
laws relating to the safety and soundness of insured depository
institutions, and (iv) applicable law or public policy with
respect to the indemnification and/or contribution provisions
contained herein and except that no opinion need be expressed as
to the effect or availability of equitable remedies or injunctive
relief (regardless of whether such enforceability is considered
in a proceeding in equity or at law).
(viii) Each of the Holding Company and the MHC is registered as a
savings and loan holding company under HOLA. Upon consummation of
the Conversion, American Bancorp will be registered as a savings
and loan holding company under HOLA.
(ix) No approval, registration, authorization, consent or other order
of any federal or state regulatory agency is required in
connection with the execution and delivery of this Agreement, the
issuance of the Common Stock and the consummation of the
Offering, except as may be required under the securities or blue
sky laws of various jurisdictions (as to which no opinion need be
rendered) and except as may be required under the rules and
regulations of the NASD (as to which no opinion need be
rendered).
(x) The Registration Statement is effective under the 1933 Act and no
stop order suspending the effectiveness has been issued under the
1933 Act or proceedings therefor initiated or, to such counsel's
Actual Knowledge, threatened by the SEC.
(xi) At the time that the Registration Statement became effective, (i)
the Registration Statement (as amended or supplemented, if so
amended or supplemented) (other than the financial statements,
the notes thereto, and other tabular, financial, statistical and
appraisal data included therein, as to which no opinion need be
rendered), complied as to form in all material
21
respects with the requirements of the 1933 Act and the 1933 Act
Regulations, and (ii) the Prospectus (other than the financial
statements, the notes thereto, and other tabular, financial,
statistical and appraisal data included therein, as to which no
opinion need be rendered) complied as to form in all material
respects with the requirements of the 1933 Act, the 1933 Act
Regulations, the OTS Regulations and federal law.
(xii)There are no legal or governmental proceedings pending or to
such counsel's Actual Knowledge, threatened which are required to
be disclosed in the Registration Statement and Prospectus, other
than those disclosed therein.
(xiii) There are no material contracts, indentures, mortgages, loan
agreements, notes, leases or other instruments required to be
described or referred to in the Registration Statement or the
Prospectus or required to be filed as exhibits thereto other than
those described or referred to therein or filed as exhibits
thereto in the Registration Statement or the Prospectus. The
description in the Registration Statement and the Prospectus of
such documents and exhibits is accurate in all material respects
and fairly presents the information required to be shown.
(xiv)The OTS has duly approved the Plan; such approval remains in
full force and effect and no action is pending, or to the best of
such counsel's Actual Knowledge, threatened, respecting the Plan.
The Plan complies in all material respects with all applicable
laws, rules, regulations, decisions and orders including, but not
limited to, the OTS Regulations; no order has been issued by the
SEC, the OTS or any other governmental authority to suspend the
Offering or the use of the Prospectus, and no action for such
purposes has been instituted, or to such counsel's Actual
Knowledge, threatened by the SEC, the OTS or any other
governmental authority and, to such counsel's Actual Knowledge,
no person has sought to obtain regulatory or judicial review of
the final action of the OTS approving the Plan or the Prospectus.
(xv) The Parties have obtained all material licenses, permits and
other governmental authorizations currently required for the
conduct of their businesses and all such licenses, permits and
other governmental authorizations are in full force and effect,
and the Parties are in all material respects complying therewith.
(xvi)None of the Parties is in violation of its respective Charter
and Bylaws or in default or violation of any obligation,
agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or other
instrument to which it is a party or by which it or its property
may be bound, except for such defaults or violations which would
not have a material adverse impact on the financial condition or
results of operations of the Parties on a consolidated basis; the
execution and delivery of this Agreement, the incurrence of the
obligations herein set forth and the consummation of the
22
transactions contemplated herein do not (a) 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 Parties pursuant to any material
contract, indenture, mortgage, loan agreement, note, lease or
other instrument to which the Parties is a party or by which any
of them may be bound, or to which any of the property or assets
of the Parties are subject, (b) result in any violation of the
provisions of the Charter or Bylaws of the Parties or, (c) result
in any violation of any applicable federal or state law, act,
regulation (except that no opinion with respect to the securities
and blue sky laws of various jurisdictions or the rules or
regulations of the NASD and the Nasdaq Stock Market need be
rendered) or order or court order, writ, injunction or decree.
(xvii) The Holding Company's, the Bank's and the MHC's respective
Charter and Bylaws comply in all material respects with federal
law, and American Bancorp's Charter and Bylaws comply in all
material respects with New Jersey law.
(xviii) None of the Parties is in violation of any directive from the
OTS or the FDIC or any other governmental authority to make any
material change in the method of conducting its respective
business.
(xix)The information in the Prospectus under the captions "Dividend
Policy," "Regulation," "Taxation," "The Conversion," "The Stock
Offering," "Restrictions on Acquisition of American Bancorp of
New Jersey, Inc." and "Description of Capital Stock" to the
extent that such information constitutes matters of law,
summaries of legal matters, documents or proceedings, or legal
conclusions, has been reviewed by such counsel and is correct in
all material respects. The description of the Conversion process
in the Prospectus under the caption "The Conversion" and the
description of the Offering process in the Prospectus under the
caption "The Stock Offering," to the extent that such information
constitutes matters of law, summaries of legal matters, documents
or proceedings, or legal conclusions, has been reviewed by such
counsel and fairly describes such process in all material
respects. The descriptions in the Prospectus of statutes or
regulations are accurate summaries and fairly present the
information required to be shown. The information under the
caption "The Stock Offering - Tax Effects of the Offering" has
been reviewed by such counsel and fairly describes the opinions
rendered by them to the Parties with respect to such matters.
In addition, such counsel shall state that during the
preparation of the Offering Application, the Registration
Statement and the Prospectus they participated in conferences
with certain officers of, the independent public and internal
accountants for, and other representatives of, the Parties, at
which conferences the contents of the Conversion and
Reorganization Application, the Registration Statement and the
Prospectus and related matters were discussed and, while such
counsel have not
23
confirmed the accuracy or completeness of or otherwise verified
the information contained in the Conversion and Reorganization
Application, the Registration Statement and the Prospectus and do
not assume any responsibility for such information, based upon
such conferences and a review of documents deemed relevant for
the purpose of rendering their opinion (relying as to materiality
as to factual matters on certificates of officers and other
factual representations by the Parties), nothing has come to
their attention that would lead them to believe that the
Conversion and Reorganization Application, the Registration
Statement and the Prospectus or any amendment or supplement
thereto (other than the financial statements, the notes thereto,
and other tabular, financial, statistical and appraisal data
included therein as to which no view need be rendered) contained
an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which
they were made, not misleading.
In giving such opinion, such counsel may rely as to
all matters of fact on certificates of officers or trustees or
directors of the Parties and certificates of public officials.
Such counsel's opinion shall be limited to matters governed by
federal laws and laws of the State of New Jersey. The term
"Actual Knowledge" as used herein shall have the meaning set
forth in the Legal Opinion Accord of the American Bar Association
Section of Business Law. For purposes of such opinion, no
proceedings shall be deemed to be pending, no order or stop order
shall be deemed to be issued, and no action shall be deemed to be
instituted unless, in each case, a trustee, director or executive
officer of any of the Parties shall have received a copy of such
proceedings, order, stop order or action. In addition, such
opinion may be limited to present statutes, regulations and
judicial interpretations and to facts as they presently exist; in
rendering such opinion, such counsel need assume no obligation to
revise or supplement it should the present laws be changed by
legislative or regulatory action, judicial decision or otherwise;
and such counsel need express no view, opinion or belief with
respect to whether any proposed or pending legislation, if
enacted, or any proposed or pending regulations or policy
statements issued by any regulatory agency, whether or not
promulgated pursuant to any such legislation, would affect the
validity of the Offering or any aspect thereof Such counsel may
assume that any agreement is the valid and binding obligation of
any parties to such agreement other than each of the Parties.
(d) At the Closing Date, the Agent shall receive a certificate of the
Chief Executive Officer and the principal accounting officer of
each of the Parties in form and substance reasonably satisfactory
to the Agent's Counsel, dated as of such Closing Date, to the
effect that: (i) they have carefully examined the Prospectus and,
in their opinion, at the time the Prospectus became authorized
for final use, the Prospectus did not contain any untrue
statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading;
(ii) since the date the Prospectus became authorized for final
use, no event has occurred which should have been set forth in an
amendment or supplement to the Prospectus which has not been so
set forth,
24
including specifically, but without limitation, any material
adverse change in the condition, financial or otherwise, or in
the earnings, capital, properties or business of the Parties and
the conditions set forth in this Section 7 have been satisfied;
(iii) since the respective dates as of which information is given
in the Registration Statement and the Prospectus, there has been
no material adverse change in the condition, financial or
otherwise, or in the earnings, capital or properties of the
Parties independently, or of the Parties, whether or not arising
in the ordinary course of business; (iv) the representations and
warranties in Section 4 are true and correct with the same force
and effect as though expressly made at and as of the Closing
Date; (v) the Parties have complied in all material respects with
all agreements and satisfied all conditions on their part to be
performed or satisfied at or prior to the Closing Date and will
comply in all material respects with all obligations to be
satisfied by them after the Offering; (vi) no stop order
suspending the effectiveness of the Registration Statement has
been initiated or, to the best knowledge of the Parties,
threatened by the SEC or any state authority; (vii) no order
suspending the Offering or the effectiveness of the Prospectus
has been issued and no proceedings for that purpose are pending
or, to the best knowledge of the Holding Company or the Bank,
threatened by the SEC, the OTS or any governmental authority; and
(viii) to the best knowledge of the Parties, no person has sought
to obtain review of the final action of the OTS approving the
Plan.
(e) At the Closing Date: (i) in the reasonable opinion of the Agent,
there shall have been no material adverse change in the
condition, financial or otherwise, or in the earnings or business
of the Parties independently, or of the Holding Company and the
Bank, from that as of the latest dates as of which such condition
is set forth in the Prospectus, other than transactions referred
to or contemplated therein; (ii) the Parties shall not have
received from the OTS or the FDIC any direction (oral or written)
to make any material change in the method of conducting their
business with which it has not complied (which direction, if any,
shall have been disclosed to the Agent) or which materially and
adversely would affect the business, operations or financial
condition or income of the Parties; (iii) none of the Parties
shall have been in default (nor shall an event have occurred
which, with notice or lapse of time or both, would constitute a
default) under any provision of any agreement or instrument
relating to any outstanding indebtedness; (iv) no action, suit or
proceeding, at law or in equity or before or by any federal or
state commission, board or other administrative agency, shall be
pending or, to the knowledge of the Parties, threatened against
the Parties or affecting any of their properties wherein an
unfavorable decision, ruling or finding would materially and
adversely affect the business, operations, financial condition or
income of the Parties; and (v) the Shares shall have been
qualified or registered for offering and sale or exempted there
from under the securities or blue sky laws of the jurisdictions
as the Agent shall have reasonably requested and as agreed to by
the Parties.
(f) Concurrently with the execution of this Agreement, the Agent
shall receive a letter from Crowe, Chizek and Company LLC, dated
as of the date of the Prospectus and addressed to the Agent: (i)
confirming that such entity is a firm of independent public
25
accountants within the meaning of Rule 101 of the Code of
Professional Ethics of the American Institute of Certified Public
Accountants and applicable regulations of the SEC and the Public
Holding Company Accounting Oversight Board ("PCAOB") and stating
in effect that in their opinion the financial statements,
schedules and related notes of the Bank as of and for the year
ended September 30, 2004 and 2003, included in the Prospectus and
covered by respective opinion included therein, comply as to form
in all material respects with the applicable accounting
requirements and related published rules and regulations of the
1933 Act; (ii) stating in effect that, on the basis of certain
agreed upon procedures (but not an audit in accordance with
generally accepted auditing standards) consisting of a reading of
the latest available unaudited interim financial statements of
the Company prepared by the Company, a reading of the minutes of
the meetings of the Board of Directors of the Company and
consultations with officers of the Company responsible for
financial and accounting matters, nothing came to their attention
which caused them to believe that: (A) the unaudited financial
statements included in the Prospectus are not in conformity with
the 1933 Act, and GAAP applied on a basis substantially
consistent with that of the audited financial statements included
in the Prospectus; or (B) during the period from the date of the
latest unaudited financial statements included in the Prospectus
to a specified date not more than three business days prior to
the date of the Prospectus, except as has been described in the
Prospectus, there was any increase in borrowings, other than
normal deposit fluctuations, by the Company; or (C) there was any
decrease in the net assets or retained earnings of the Company at
the date of such letter as compared with amounts shown in the
latest unaudited balance sheets included in the Prospectus or
there was any decrease in net income or net interest income of
the Company for the number of full months commencing immediately
after the period covered by the latest audited income statement
included in the Prospectus and ended on the latest month end
prior to the date of the Prospectus as compared to the
corresponding period in the preceding year; and (iii) stating
that, in addition to the audit referred to in their respective
opinions included in the Prospectus and the performance of the
procedures referred to in clause (ii) of this subsection (f),
they have compared with the general accounting records of the
Company, which are subject to the internal controls of the
Company, the accounting system and other data prepared by the
Company, directly from such accounting records, to the extent
specified in such letter, such amounts and/or percentages set
forth in the Prospectus as the Agent may reasonably request, and
they have found such amounts and percentages to be in agreement
therewith.
(g) At the Closing Date, the Agent shall receive a letter from Crowe,
Chizek and Company LLC dated the Closing Date, addressed to the
Agent, confirming the statements made by such firm in the letter
delivered by it pursuant to subsection (f) of this Section 7, the
"specified date" referred to in clause (ii) of subsection (f) to
be a date specified in the letter required by this subsection (g)
which for purposes of such letter shall not be more than three
business days prior to the Closing Date.
(h) At the Closing Date, the Agent shall receive a letter from RP
Financial, LC, dated the Closing Date and addressed to the Agent
(i) confirming that said firm is independent
26
of the Parties and is experienced and expert in the area of
corporate appraisals within the meaning of the OTS Regulations
stating in effect that the Appraisal prepared by such firm
complies in all material respects with the applicable
requirements of the OTS Regulations, and (iii) further stating
that its opinion of the aggregate pro forma market value of the
Parties expressed in its Appraisal, as most recently updated,
remains in effect.
(i) The Parties shall not have sustained since the date of the latest
financial statements included in the Prospectus any material loss
or interference with its business from fire, explosion, flood or
other calamity, whether or not covered by insurance, or from any
labor dispute or court or governmental action, order or decree,
otherwise than as set forth or contemplated in the Registration
Statement and Prospectus and since the respective dates as of
which information is given in the Registration Statement and
Prospectus, there shall not have been any change in the long-term
debt of the Parties other than debt incurred in relation to the
purchase of Shares by the Bank's eligible plans, or any change,
or any development involving a prospective change, in or
affecting the general affairs, management, financial position,
shareholders' equity or results of operations of the Parties,
otherwise than as set forth or contemplated in the Registration
Statement and Prospectus, the effect of which, in any such case
described above, is in KBW's reasonable judgment sufficiently
material and adverse as to make it impracticable or inadvisable
to proceed with the Offering or the delivery of the Shares on the
terms and in the manner contemplated in the Prospectus.
(j) At or prior to the Closing Date, the Agent shall receive: (i) a
copy of the order from the SEC declaring the Registration
Statement effective; (ii) a certificate from the OTS evidencing
the existence of the Bank; (iii) a certificate from the FDIC
evidencing the Bank's insurance of accounts; (iv) a certificate
from the FHLB evidencing the Bank's membership in good standing
therein; (v) a certified copy of the Bank's Charter and Bylaws;
(vi) a certified copy of the Holding Company's Charter and
Bylaws; (vii) a certified copy of the MHC's Charter and Bylaws;
and (viii) any other documents that the Agent shall reasonably
request.
(k) Subsequent to the date hereof, there shall not have occurred any
of the following: (i) a suspension or limitation in trading in
securities generally on the New York Stock Exchange, American
Stock Exchange or in the over-the-counter market, or quotations
halted generally on The Nasdaq Stock Market, or minimum or
maximum prices for trading have been fixed, or maximum ranges for
prices for securities have been required by either of such
exchanges or the NASD or by order of the SEC or any other
governmental authority; (ii) the engagement by the United States
in hostilities which have resulted in the declaration, on or
after the date hereof, of a national emergency or war; or (iii) a
material decline in the price of equity or debt securities if the
effect of such a declaration or decline, in the Agent's
reasonable judgment, makes it impracticable or inadvisable to
proceed with the Offering or the delivery of the Shares on the
terms and in the manner contemplated in the Registration
Statement and the Prospectus.
27
(1) At or prior to the Closing Date, counsel to the Agent shall have
been furnished with such documents and opinions as they may
reasonably require for the purpose of enabling them to pass upon
the sale of the Shares as herein contemplated and related
proceedings or in order to evidence the occurrence or
completeness of any of the representations or warranties, or the
fulfillment of any of the conditions, herein contained; and all
proceedings taken by the Parties in connection with the Offering
and the sale of the Shares as herein contemplated shall be
satisfactory in form and substance to KBW and its counsel.
Section 8. Indemnification.
(a) The Parties jointly and severally agree to indemnify and hold
harmless the Agent, its officers and directors, employees and
agents, and each person, if any, who controls the Agent within
the meaning of Section 15 of the 1933 Act or Section 20(a) of the
1934 Act, against any and all loss, liability, claim, damage or
expense whatsoever (including, but not limited to, settlement
expenses), joint or several, that the Agent or any of them may
suffer or to which the Agent and any such persons may become
subject under all applicable federal or state laws or otherwise,
and to promptly reimburse the Agent and any such persons upon
written demand for any expenses (including reasonable fees and
disbursements of counsel) incurred by the Agent or any of them in
connection with investigating, preparing to defend or defending
any actions, proceedings or claims (whether commenced or
threatened) to the extent such losses, claims, damages,
liabilities or actions: (i) arise out of or are related to the
Offering or any action taken by the Agent where acting as agent
of the Parties; (ii) arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact
contained in the Registration Statement (or any amendment or
supplement thereto), preliminary or final Prospectus (or any
amendment or supplement thereto), or any instrument or document
executed by the Parties or based upon written information
supplied by the Parties filed in any state or jurisdiction to
register or qualify any or all of the Shares or to claim an
exemption there from or provided to any state or jurisdiction to
exempt the Holding Company as a broker- dealer or its officers,
directors and employees as broker-dealers or agent, under the
securities laws thereof (collectively, the "Blue Sky
Application"), or any document, advertisement, oral statement or
communication ("Sales Information") prepared, made or executed by
or on behalf of the Parties with their consent or based upon
written or oral information furnished by or on behalf of the
Parties, whether or not filed in any jurisdiction, in order to
qualify or register the Shares or to claim an exemption there
from under the securities laws thereof (iii) arise out of or are
based upon the omission or alleged omission to state in any of
the foregoing documents or information a material fact required
to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not
misleading; or (iv) arise from any theory of liability whatsoever
relating to or arising from or based upon the Registration
Statement (or any amendment or supplement thereto), preliminary
or final Prospectus (or any amendment or supplement thereto), any
Blue Sky Application or Sales Information or other documentation
distributed in connection with the Offering; provided, however,
that no indemnification is
28
required under this paragraph (a) to the extent such losses,
claims, damages, liabilities or actions arise out of or are based
upon any untrue material statement or alleged untrue material
statement in, or material omission or alleged material omission
from, the Registration Statement (or any amendment or supplement
thereto), preliminary or final Prospectus (or any amendment or
supplement thereto), any Blue Sky Application or Sales
Information made in reliance upon and in conformity with
information furnished in writing to the Parties by the Agent or
its counsel regarding the Agent, provided, that it is agreed and
understood that the only information furnished in writing to the
Parties by the Agent regarding the Agent is set forth in the
Prospectus under the caption "The Stock Offering - Subscription
Offering and Subscription Rights," "- Direct Community Offering,"
"- Public Offering" and "-Marketing Arrangements"; and, provided
further, that the Holding Company and the Bank shall not be
liable under clause (i) of the foregoing indemnification
provision to the extent that any loss, claim, damage, liability
or action is found in a final judgment by a court of competent
jurisdiction to have resulted from the Agent's bad faith or gross
negligence.
(b) The Agent agrees to indemnify and hold harmless, the Parties,
their directors and officers and each person, if any, who
controls the Parties within the meaning of Section 15 of the 1933
Act or Section 20(a) of the 1934 Act against any and all loss,
liability, claim, damage or expense whatsoever (including but not
limited to settlement expenses), joint or several, which they, or
any of them, may suffer or to which they, or any of them may
become subject under all applicable federal and state laws or
otherwise, and to promptly reimburse the Parties, and any such
persons upon written demand for any expenses (including
reasonable fees and disbursements of counsel) incurred by them,
or any of them, in connection with investigating, preparing to
defend or defending any actions, proceedings or claims (whether
commenced or threatened) to the extent such losses, claims,
damages, liabilities or actions: (i) arise out of or are based
upon any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement (or any
amendment or supplement thereto), the preliminary or final
Prospectus (or any amendment or supplement thereto), any Blue Sky
Application or Sales Information, (ii) are based upon the
omission or alleged omission to state in any of the foregoing
documents a material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or
(iii) arise from any theory of liability whatsoever relating to
or arising from or based upon the Registration Statement (or any
amendment or supplement thereto), preliminary or final Prospectus
(or any amendment or supplement thereto), or any Blue Sky
Application or Sales Information or other documentation
distributed in connection with the Offering; provided, however,
that the Agent's obligations under this Section 8(b) shall exist
only if and only to the extent that such untrue statement or
alleged untrue statement was made in, or such material fact or
alleged material fact was omitted from, the Registration
Statement (or any amendment or supplement thereto), the
preliminary or final Prospectus (or any amendment or supplement
thereto), any Blue Sky Application or Sales Information in
reliance upon and in conformity with information furnished in
writing to the Holding Company or
29
the Bank by the Agent or its counsel regarding the Agent,
provided, that it is agreed and understood that the only
information furnished in writing to the Holding Company or the
Bank by the Agent regarding the Agent is set forth in the
Prospectus under the caption "The Stock Offering -Subscription
Offering and Subscription Rights," "- Direct Community Offering,"
"- Public Offering" and "- Marketing Arrangements."
(c) Each indemnified party shall give prompt written notice to each
indemnifying party of any action, proceeding, claim (whether
commenced or threatened), or suit instituted against it in
respect of which indemnity may be sought hereunder, but failure
to so notify an indemnifying party shall not relieve it from any
liability which it may have on account of this Section 8 or
otherwise. An indemnifying party may participate at its own
expense in the defense of such action. In addition, if it so
elects within a reasonable time after receipt of such notice, an
indemnifying party, jointly with any other indemnifying parties
receiving such notice, may assume defense of such action with
counsel chosen by it and approved by the indemnified parties that
are defendants in such action, unless such indemnified parties
reasonably object to such assumption on the ground that there may
be legal defenses available to them that are different from or in
addition to those available to such indemnifying party. If an
indemnifying party assumes the defense of such action, the
indemnifying parties shall not be liable for any fees and
expenses of counsel for the indemnified parties incurred
thereafter in connection with such action, proceeding or claim,
other than reasonable costs of investigation. In no event shall
the indemnifying parties be liable for the fees and expenses of
more than one separate firm of attorneys (and any special counsel
that said firm may retain) for each indemnified party in
connection with any one action, proceeding or claim or separate
but similar or related actions, proceedings or claims in the same
jurisdiction arising out of the same general allegations or
circumstances.
(d) The agreements contained in this Section 8 and in Section 9
hereof and the representations and warranties of the Parties set
forth in this Agreement shall remain operative and in full force
and effect regardless of: (i) any investigation made by or on
behalf of the Agent or its officers, directors or controlling
persons, agent or employees or by or on behalf of the Parties or
any officers, directors, trustees or controlling persons, agent
or employees of the Parties; (ii) delivery of and payment
hereunder for the Shares; or (iii) any termination of this
Agreement.
Section 9. Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnification provided for in
Section 8 is due in accordance with its terms but is for any reason held by a
court to be unavailable from the Parties or the Agent, the Parties and the Agent
shall contribute to the aggregate losses, claims, damages and liabilities
(including any investigation, legal and other expenses incurred in connection
with, and any amount paid in settlement of, any action, suit or proceeding, but
after deducting any contribution received by the Parties or the Agent from
persons other than the other parties thereto, who may also be liable for
contribution) in such proportion so that the Agent is responsible for that
portion represented by the percentage that the fees paid to the Agent pursuant
to Section 2 of this Agreement (not including
30
expenses) bears to the gross proceeds received by the Holding Company from the
sale of the Shares in the Offering, and the Parties shall be responsible for the
balance. If, however, the allocation provided above is not permitted by
applicable law, then each indemnifying party shall contribute to such amount
paid or payable by such indemnified party in such proportion as is appropriate
to reflect not only such relative fault of the Parties on the one hand and the
Agent on the other in connection with the statements or omissions which resulted
in such losses, claims, damages or liabilities (or actions, proceedings or
claims in respect thereto), but also the relative benefits received by the
Parties on the one hand and the Agent on the other from the Offering (before
deducting expenses). The relative fault shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Holding Company, the MHC and/or the Bank on the one
hand or the Agent on the other and the parties' relative intent, good faith,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Parties and the Agent agree that it would not be just
and equitable if contribution pursuant to this Section 9 were determined by
pro-rata allocation or by any other method of allocation which does not take
into account the equitable considerations referred to above in this Section 9.
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions, proceedings or claims in respect
thereof) referred to above in this Section 9 shall be deemed to include any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action, proceeding or claim.
It is expressly agreed that the Agent shall not be liable for any loss,
liability, claim, damage or expense or be required to contribute any amount
pursuant to Section 8(b) or this Section 9 which in the aggregate exceeds the
amount paid (excluding reimbursable expenses) to the Agent under this Agreement.
It is understood that the above stated limitation on the Agent's liability is
essential to the Agent and that the Agent would not have entered into this
Agreement if such limitation had not been agreed to by the parties to this
Agreement. No person found guilty of any fraudulent misrepresentation (within
the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution
from any person who was not found guilty of such fraudulent misrepresentation.
The obligations of the Parties and the Agent under this Section 9 and under
Section 8 shall be in addition to any liability which the Parties and the Agent
may otherwise have. For purposes of this Section 9, each of the Agent's, the
Holding Company's, the MHC's or the Bank's officers, trustees and directors and
each person, if any, who controls the Agent or the Parties within the meaning of
the 1933 Act and the 1934 Act shall have the same rights to contribution as the
Agent, the Parties. Any party entitled to contribution, promptly after receipt
of notice of commencement of any action, suit, claim or proceeding against such
party in respect of which a claim for contribution may be made against another
party under this Section 9, will notify such party from whom contribution may be
sought, but the omission to so notify such party shall not relieve the party
from whom contribution may be sought from any other obligation it may have
hereunder or otherwise than under this Section 9.
Section 10. Survival of Agreements, Representations and Indemnities.
The respective indemnities of the Parties and the Agent and the representations
and warranties and other statements of the Parties and the Agent set forth in or
made pursuant to this Agreement shall remain in full force and effect,
regardless of any termination or cancellation of this Agreement or any
investigation made by or on behalf of the Agent, the Parties or any controlling
person referred to in Section 8 hereof, and shall survive the issuance of the
Shares, and any successor or assign of the Agent, the Parties, and
31
any such controlling person shall be entitled to the benefit of the respective
agreements, indemnities, warranties and representations.
Section 11. Termination. The Agent may terminate this Agreement by
giving the notice indicated below in this Section 11 at any time after this
Agreement becomes effective as follows:
(a) In the event the Holding Company fails to sell the required
minimum number of the Shares by ________________________, 2005
(or such later date to which the Offering may extended pursuant
to the Plan and OTS Regulations), and in accordance with the
provisions of the Plan or as required by the OTS Regulations, and
applicable law, this Agreement shall terminate upon refund by the
Holding Company to each person who has subscribed for or ordered
any of the Shares the full amount which it may have received from
such person, together with interest as provided in the
Prospectus, and no party to this Agreement shall have any
obligation to the other hereunder, except as set forth in
Sections 2(a), 6, 8 and 9 hereof
(b) If any of the conditions specified in Section 7 shall not have
been fulfilled when and as required by this Agreement, unless
waived in writing, or by the Closing Date, this Agreement and all
of the Agent's obligations hereunder may be canceled by the Agent
by notifying the Parties of such cancellation in writing or by
telegram at any time at or prior to the Closing Date, and any
such cancellation shall be without liability of any party to any
other party except as otherwise provided in Sections 2(a), 6, 8
and 9 hereof
(c) In the event one of the Parties is in material breach of the
representations and warranties or covenants contained in Sections
4 and 5 and such breach has not been cured after the Agent has
provided the Parties with notice of such breach.
If the Agent elects to terminate this Agreement as provided in this
Section, the Parties shall be notified promptly by telephone or telegram,
confirmed by letter.
The Parties may terminate this Agreement in the event the Agent is in
material breach of the representations and warranties or covenants contained in
Section 5 and such breach has not been cured after the Holding Company and the
Bank have provided the Agent with notice of such breach.
This Agreement may also be terminated by mutual written consent of the
parties hereto.
Section 12. Notices. All communications hereunder, except as herein
otherwise specifically provided, shall be mailed in writing and if sent to the
Agent shall be mailed, delivered or telegraphed and confirmed to Keefe, Bruyette
& Woods, Inc., 211 Bradenton Drive, Dublin, Ohio 43017-5034, Attention: Mr.
Charles Sloane (with a copy to Malizia Spidi & Fisch, PC, Attention: Richard
Fisch, Esq.), and, if sent to the Parties, shall be mailed, delivered or
telegraphed and confirmed to the Parties at 365 Broad Street, Bloomfield, New
Jersey 07003, Attention: Fred G. Kowal, President (with a copy to Malizia, Spidi
& Fisch, PC, Attention: Richard Fisch, Esq.).
32
Section 13. Parties. The Parties shall be entitled to act and rely on
any request, notice, consent, waiver or agreement purportedly given on behalf of
the Agent when the same shall have been given by the undersigned. The Agent
shall be entitled to act and rely on any request, notice, consent, waiver or
agreement purportedly given on behalf of the Parties, when the same shall have
been given by the undersigned or any other officer of the Holding Company or the
Bank. This Agreement shall inure solely to the benefit of, and shall be binding
upon, the Agent, the Holding Company, the MHC, the Bank, and their respective
successors and assigns, and no other person shall have or be construed to have
any legal or equitable right, remedy or claim under or in respect of or by
virtue of this Agreement or any provision herein contained. It is understood and
agreed that this Agreement is the exclusive agreement among the parties hereto,
and supersedes any prior agreement among the parties (except for specific
references to the letter agreement with the Agent) and may not be varied except
in writing signed by all the parties.
Section 14. Closing. The closing for the sale of the Shares shall take
place on the Closing Date at such location as mutually agreed upon by the Agent
and the Parties. At the closing, the Parties shall deliver to the Agent in next
day funds the commissions, fees and expenses due and owing to the Agent as set
forth in Sections 2 and 6 hereof and the opinions and certificates required
hereby and other documents deemed reasonably necessary by the Agent shall be
executed and delivered to effect the sale of the Shares as contemplated hereby
and pursuant to the terms of the Prospectus.
Section 15. Partial Invalidity. In the event that any term, provision
or covenant herein or the application thereof to any circumstance or situation
shall be invalid or unenforceable, in whole or in part, the remainder hereof and
the application of said term, provision or covenant to any other circumstances
or situation shall not be affected thereby, and each term, provision or covenant
herein shall be valid and enforceable to the full extent permitted by law.
Section 16. Construction. This Agreement shall be construed in
accordance with the law of the State of New York.
Section 17. Counterparts. This Agreement may be executed in separate
counterparts, each of which so executed and delivered shall be an original, but
all of which together shall constitute but one and the same instrument.
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If the foregoing correctly sets forth the arrangement among the Holding
Company, the MHC, the Bank and the Agent, please indicate acceptance thereof in
the space provided below for that purpose, whereupon this letter and the Agent's
acceptance shall constitute a binding agreement.
Very truly yours,
AMERICAN BANCORP OF NEW JERSEY, INC.
By: ___________________________________
Name: ___________________________________
Its: ___________________________________
AMERICAN SAVINGS, MHC
By: ___________________________________
Name: ___________________________________
Its: ___________________________________
ASB HOLDING COMPANY
By: ___________________________________
Name: ___________________________________
Its: ___________________________________
AMERICAN BANK OF NEW JERSEY
By: ___________________________________
Name: ___________________________________
Its: ___________________________________
Accepted as of the date first above written
KEEFE, BRUYETTE & WOODS, INC.
By: ___________________________________
Name: ___________________________________
Its: ___________________________________