PENNFED CAPITAL TRUST I
(a Delaware business trust)
1,200,000 Preferred Securities
_____% Cumulative Trust Preferred Securities
(Liquidation Amount $25 per Preferred Security)
UNDERWRITING AGREEMENT
----------------------
________ __, 1997
Ryan, Beck & Co., Inc.
80 Main Street
West Orange, New Jersey 07052
Ladies and Gentlemen:
PennFed Capital Trust I (the "Trust"), a statutory business trust
organized under the Business Trust Act (the "Delaware Act") of the State of
Delaware (Chapter 38, Title 12, of the Delaware Business Code, 12 Del. C.
Section 3801 et seq.), and PennFed Financial Services, Inc., a New Jersey
corporation (the "Company"), as depositor of the Trust and as guarantor
(hereafter the Trust and the Company are referred to collectively as the
"Offerors"), hereby confirm their agreement (the "Agreement") with Ryan Beck &
Co., Inc. ("You" or the "Underwriter"), with respect to the issue and sale by
the Trust and the purchase by the Underwriter of 1,200,000 (the "Initial
Securities") of the Trust's ____% Cumulative Trust Preferred Securities (the
"Preferred Securities"). The Trust and the Company also propose to issue and
sell to the Underwriter, at the Underwriter's option, up to an additional
180,000 Preferred Securities (the "Option Securities") as set forth herein. The
term "Preferred Securities" as used herein, unless indicated otherwise, shall
mean the Initial Securities and the Option Securities.
The Preferred Securities and the Common Securities (as defined herein)
are to be issued pursuant to the terms of an Amended and Restated Trust
Agreement dated as of ______, 1997 (the "Trust Agreement"), among the Offerors,
The Bank of New York ("Trust Company"), a New York banking corporation, as
property trustee ("Property Trustee"), and The Bank of New York
(Delaware), as Delaware trustee ("Delaware Trustee"), and Lucy T. Tinker and
Jeffrey J. Carfora (the "Administrators" and, together with the Property Trustee
and the Delaware Trustee, the "Trustees") and the holders from time to time of
undivided interests in the assets of the Trust. The Preferred Securities will be
guaranteed by the Company, on a subordinated basis and subject to certain
limitations, with respect to distributions and payments upon liquidation,
redemption or otherwise (the "Guarantee") pursuant to the Guarantee Agreement
dated as of ________, 1997 (the "Guarantee Agreement"), between the Company and
the Trust Company, as guarantee trustee (the "Guarantee Trustee"). The assets of
the Trust will consist of ___% junior subordinated debentures due _______, 2027
(the "Junior Subordinated Debentures") of the Company which will be issued under
the Indenture dated as of ____ __, 1997 (the "Indenture"), between the Company
and the Trust Company, as trustee (the "Indenture Trustee"). Under certain
circumstances, the Junior Subordinated Debentures will be distributable to the
holders of undivided beneficial interests in the assets of the Trust. The entire
proceeds from the sale of the Preferred Securities will be combined with the
entire proceeds from the sale by the Trust to the Company of the Trust's common
securities (the "Common Securities"), and will be used by the Trust to purchase
an equivalent amount of the Junior Subordinated Debentures.
The initial public offering price for the Preferred Securities, the
purchase price to be paid by the Underwriter for the Preferred Securities, the
commission per Preferred Security to be paid by the Company to the Underwriters
and the rate of interest to be paid on the Preferred Securities shall be agreed
upon by the Company and the Underwriter, and such agreement shall be set forth
in a separate written instrument substantially in the form of Exhibit A hereto
(the "Price Determination Agreement"). The Price Determination Agreement may
take the form of an exchange of any standard form of written telecommunication
between the Company and the Underwriter and shall specify such applicable
information as is indicated in Exhibit A hereto. Such Price Determination
Agreement shall be executed no later than 5:30 p.m. on the first business day
following the date hereof. The offering of the Preferred Securities will be
governed by this Agreement, as supplemented by the Price Determination
Agreement. From and after the date of the execution and delivery of the Price
Determination Agreement, this Agreement shall be deemed to incorporate, and all
references herein to "this Agreement" shall be deemed to include, the Price
Determination Agreement.
The Offerors have prepared and filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-2 (File Nos.
333-______ and 333-_________) for the registration of the Preferred Securities,
the Guarantee and the Junior Subordinated Debentures under the Securities Act of
1933, as amended (the "1933 Act"), including the related preliminary prospectus
or prospectuses, and, if such registration statement has not become effective,
the Company will prepare and file, prior to the effective date of such
registration statement, an amendment to such registration statement, including a
final prospectus. Each prospectus used before the time such registration
statement becomes effective is herein called a "preliminary prospectus." Such
registration statement, including the exhibits thereto and the documents
incorporated by reference therein pursuant to Item 12 of Form S-2 under the 1933
Act, at the time
2
it becomes effective, is herein called the "Registration Statement," and the
prospectus, including the documents incorporated by reference therein pursuant
to Item 12 of Form S-2 under the 1933 Act, included in the Registration
Statement at the time it becomes effective is herein called the "Prospectus"
except that, if any revised prospectus provided to the Underwriter by the
Company for use in connection with the offering of the Preferred Securities
differs from the prospectus included in the Registration Statement at the time
it becomes effective (whether or not such prospectus is required to be filed
pursuant to Rule 424(b)), the term "Prospectus" shall refer to such revised
prospectus from and after the time it is first furnished to the Underwriter for
such use.
The Company understands that the Underwriter proposes to make a public
offering of the Preferred Securities (the "Offering") as soon as possible after
the Registration Statement becomes effective. The Underwriter may assemble and
manage a selling group of broker-dealers that are members of the National
Association of Securities Dealers, Inc. ("NASD") to participate in the
solicitation of purchase orders for the Preferred Securities under the form of a
master selected dealer agreement or similar form of dealer agreement, which the
Underwriter has entered into with such broker dealers.
Section 1. Representations and Warranties.
------------------------------
(a) The Offerors jointly and severally represent and warrant to and
agree with the Underwriter that:
(i) The Company meets the requirements for use of Form S-2 under the
1933 Act and when the Registration Statement on such form shall become
effective and at the Closing Time referred to below and, with respect to
Option Securities, on the Date of Delivery referred to below, (A) the
Registration Statement and any amendments and supplements thereto will
comply in all material respects with the requirements of the 1933 Act and
the rules and regulations of the Commission under the 1933 Act (the "1933
Act Regulations"); (B) neither the Registration Statement nor any amendment
or supplement thereto will 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 (C) neither the Prospectus nor any
amendment or supplement thereto will include an untrue statement of a
material fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading, except that none of the representations and
warranties in this Section 1(a)(i)(B) & (C) shall apply to statements or
omissions made in reliance upon and in conformity with information
furnished in writing to the Offerors by the Underwriter expressly for use
in the Registration Statement or the Prospectus, [or any information
contained in any Form T-1 which is an exhibit to the Registration
Statement.] The statements contained under the caption "Underwriting" in
the Registration Statement or the Prospectus constitute the only
information furnished to the
3
Offerors in writing by the Underwriter expressly for use in the
Registration Statement or the Prospectus.
(ii) The documents incorporated by reference in the Prospectus
pursuant to Item 12 of Form S-2 under the 1933 Act, at the time they were
filed with the Commission, complied in all material respects with the
requirements of the Securities Exchange Act of 1934, as amended (the "1934
Act"), and the rules and regulations of the Commission thereunder (the
"1934 Act Regulations") and, when read together and with the other
information in the Prospectus, at the time the Registration Statement
becomes effective and at all times subsequent thereto up to the Closing
Time, will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in order
to make the statements therein not misleading, in each case after excluding
any statement that does not constitute a part of the Registration Statement
or the Prospectus pursuant to Rule 412 of the 1933 Act Regulations.
(iii) Deloitte & Touche LLP, who are reporting upon the audited
financial statements included or incorporated by reference in the
Registration Statement, are independent public accountants as required by
the 1933 Act and the 1933 Act Regulations.
(iv) This Agreement has been duly authorized, executed and delivered
by the Offerors and, when duly executed by the Underwriter, will constitute
the valid and binding agreement of the Offerors enforceable against the
Offerors in accordance with its terms, except as enforcement thereof may be
limited by bankruptcy, insolvency, or reorganization, moratorium or other
similar laws relating to or affecting creditors' rights generally or by
general equitable principles. The Guarantee Agreement, the Junior
Subordinated Debentures, the Trust Agreement and the Indenture have each
been duly authorized by the Company and when validly executed and delivered
by the Company and, in the case of the Guarantee, by the Guarantee Trustee,
in the case of the Trust Agreement, by the Trustees, and in the case of the
Indenture, by the Indenture Trustee, will constitute valid and legally
binding obligations of the Company enforceable in accordance with their
respective terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency, or reorganization, moratorium or other similar laws
relating to or affecting creditors' rights generally or general equitable
principles; the Junior Subordinated Debentures are entitled to the benefits
of the Indenture; and the Guarantee Agreement, the Junior Subordinated
Debentures, the Trust Agreement and the Indenture conform, in all material
respects, to the descriptions thereof in the Prospectus. The Trust
Agreement, the Guarantee Agreement, and the Indenture have been duly
qualified under the Trust Indenture Act of 1939, amended (the "TIA").
(v) The consolidated financial statements, audited and unaudited
(including the Notes thereto), included or incorporated by reference in the
Registration Statement present fairly the consolidated financial position
of the Company and its subsidiaries as of the dates
4
indicated therein and the consolidated statements of income and cash flows
of the Company and its subsidiaries for the periods specified therein. Such
financial statements have been prepared in conformity with generally
accepted accounting principles applied on a consistent basis throughout the
periods involved, except as otherwise stated therein. The financial
statement schedules, if any, included in the Registration Statement present
fairly the information required to be stated therein. The selected
financial, pro forma and statistical data included in the Prospectus are
accurate in all material respects and present fairly the information shown
therein and have been compiled on a basis consistent with that of the
audited consolidated financial statements included or incorporated by
reference in the Registration Statement.
(vi) The Company is a corporation duly organized, validly existing and
in good standing under the laws of Delaware with corporate power and
authority under such laws to own, lease and operate its properties and
conduct its business as described in the Prospectus. The Company is duly
qualified to transact business as a foreign corporation and is in good
standing in each other jurisdiction in which it owns or leases property of
a nature, or transacts business of a type, that would make such
qualification necessary, except to the extent that the failure to so
qualify or be in good standing would not have a material adverse effect on
the condition (financial or otherwise), earnings, business affairs, assets
or business prospects of the Company and its subsidiaries, considered as
one enterprise.
(vii) The Company is duly registered as a savings and loan holding
company under the Home Owners' Loan Act of 1936, as amended ("HOLA"); each
subsidiary of the Company that conducts business as a bank is duly
authorized to conduct such business in each jurisdiction in which such
business is currently conducted, except to the extent that the failure to
be so authorized would not have a material adverse effect on the Company
and its subsidiaries, considered as one enterprise; and the deposit
accounts of Penn Federal Savings Bank (the "Bank") are insured by the
Savings Association Insurance Fund of the Federal Deposit Insurance
Corporation ("FDIC") up to the maximum allowable limits thereof. The
Offerors have all such power, authority, authorization, 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 Preferred
Securities.
(viii) The Bank is a national banking association duly organized,
validly existing and in good standing under the laws of the United States
with corporate power and authority under such laws to own, lease and
operate its properties and conduct its business; the Bank is duly qualified
to transact business as a foreign corporation and is in good standing in
each other jurisdiction in which it owns or leases property of a nature, or
transacts business of a type, that would make such qualification necessary,
except to the extent that the failure to so qualify or be in good standing
would not have a material adverse effect on the condition (financial or
otherwise), earnings, business affairs, assets or business prospects of the
Company and its subsidiaries, considered as one enterprise. All of the
outstanding shares
5
of capital stock of the Bank have been duly authorized and validly issued
and are fully paid and non-assessable and are owned by the Company
directly, free and clear of any pledge, lien, security interest, charge,
claim, equity or encumbrance of any kind.
(ix) Except for the Bank and __________________, the Company does not
have any "significant subsidiaries" as defined in Rule 1-02 of Regulation
S-X under the 1933 Act.
(x) The Company had at the date indicated a duly authorized and
outstanding capitalization as set forth in the Prospectus under the caption
"Capitalization"; the capital stock of the Company, and the Subordinated
Debentures conform in all material respects to the description thereof
contained or incorporated by reference in the Prospectus and such
description conforms to the rights set forth in the instruments defining
the same.
(xi) The Preferred Securities have been duly and validly authorized by
the Trust for issuance and sale to the Underwriter pursuant to this
Agreement and, when executed and authenticated in accordance with the terms
of the Trust Agreement and delivered by the Trust to the Underwriter
pursuant to this Agreement against payment of the consideration set forth
herein, will be validly issued and fully paid and non-assessable. The
Trust Agreement has been duly authorized by the Trust and, when executed by
the Property Trustee and the Administrators of the Trust and delivered by
the Trust, will have been duly executed and delivered by the Trust and will
constitute the valid and legally binding instrument of the Trust,
enforceable in accordance with its terms, except as enforcement thereof may
be limited by bankruptcy, insolvency, reorganization, moratorium or other
laws relating to or affecting enforcement of creditors' rights generally or
by general principles of equity (regardless of whether enforcement is
sought in a proceeding in equity or at law). The Preferred Securities
conform, in all material respects, to the statements relating thereto
contained in the Prospectus and such description conforms, in all material
respects, to the rights set forth in the instruments defining the same; the
holders of the Preferred Securities (the "Security holders") will be
entitled to the same limitation of personal liability extended to
stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware; and the issuance of the Preferred
Securities is not subject to the preemptive or other similar rights of any
security holder of the Company.
(xii) The Common Securities have been duly and validly authorized by
the Trust and upon delivery by the Trust to the Company against payment
therefor as described in the Prospectus, will be duly and validly issued
and fully paid undivided beneficial interests in the assets of the Trust
and will conform, in all material respects, to the description thereof
contained in the Prospectus and such description conforms, in all material
respects, to the rights set forth in the instruments defining the same; the
issuance of the Common Securities is not subject to preemptive or other
similar rights; and at the Closing Time, all of the issued and outstanding
Common Securities of the Trust will be directly owned by the Company free
and clear of any security interest, mortgage, pledge, lien, encumbrance,
claim or equity.
6
(xiii) The Trust has been duly created and is validly existing as a
statutory business trust in good standing under the Delaware Act with the
power and authority to own, lease and operate its properties and conduct
its business as described in the Prospectus, and the Trust has conducted no
business to date, and it will conduct no business in the future that would
be inconsistent with the description of the Trust set forth in the
Prospectus; the Trust is not a party to or bound by any agreement or
instrument other than this Agreement, the Trust Agreement and the
agreements and instruments contemplated by the Trust Agreement or described
in the Prospectus; the Trust has no liabilities or obligations other than
those arising out of the transactions contemplated by this Agreement and
the Trust Agreement and described in the Prospectus; and the Trust is not a
party to or subject to any action, suit or proceeding of any nature.
(xiv) The issuance and sale of the Preferred Securities and the
Common Securities by the Trust, the compliance by the Trust with all of the
provisions of this Agreement, the purchase of the Junior Subordinated
Debentures by the Trust, and the consummation of the transactions herein
contemplated will not conflict with or result in a breach of any of the
terms or provisions of, or constitute a default under, any indenture, loan
agreement, mortgage, deed of trust or other agreement or instrument to
which the Trust is a party or by which the Trust is bound or to which any
of the property or assets of the Trust is subject, nor will such action
result in any violation by the Trust of the provisions of the Trust
Agreement or any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Trust or any of
its properties, except in any case for such conflicts, breaches, defaults
or violations that would not have a material adverse effect on the
condition (financial or otherwise), earnings, business affairs, assets or
business prospects of the Company and its subsidiaries, considered as one
enterprise; and no consent, approval, authorization, order, license,
certificate, permit, registration or qualification of or with any such
court or other governmental agency or body is required to be obtained by
the Trust for the issue and sale of the Preferred Securities and the Common
Securities by the Trust, the purchase of the Junior Subordinated Debentures
by the Trust or the consummation by the Trust of the transactions
contemplated by this Agreement and the Trust Agreement, except for such
consents, approvals, authorizations, licenses, certificates, permits,
registrations or qualifications as have already been obtained, or as may be
required under the 1933 Act or the 1933 Act Regulations, 1934 Act or 1934
Act Regulations, state securities laws or under the TIA.
The issuance by the Company of the Guarantee and the Junior
Subordinated Debentures, the compliance by the Company with all of the
provisions of this Agreement, the execution, delivery and performance by
the Company of the Trust Agreement, the Junior Subordinated Debentures, the
Guarantee Agreement and the Indenture, and the consummation of the
transactions herein and therein contemplated will not conflict with or
result in a breach or violation of any of the terms or provisions of, or
constitute a default under, any material indenture, loan agreement,
mortgage, deed of trust, or other material
7
agreement or instrument to which the Company is a party or by which the
Company is bound or to which any of the property or assets of the Company
is subject, nor will such action result in any violation by the Company of
the provisions of the Articles of Incorporation or by-laws of the Company
or any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or any of
its properties, except in any case for such conflicts, breaches, defaults
or violations that would not have a material adverse effect on the
condition (financial or otherwise), earnings, business affairs, assets or
business prospects of the Company and its subsidiaries, considered as one
enterprise; and no consent, approval, authorization, order, license,
certificate, permit, registration or qualification of or with any such
court or other governmental agency or body is required to be obtained by
the Company for the issue of the Guarantee and the Junior Subordinated
Debentures or the consummation by the Company of the other transactions
contemplated by this Agreement, except for such consents, approvals,
authorizations, licenses, certificates, permits, registrations or
qualifications as have already been obtained, or as may be required under
the 1933 Act or the 1933 Act Regulations, 1934 Act or 1934 Act Regulations,
state securities laws or under the TIA.
(xv) The Trust is not, and after giving effect to the offering and
sale of the Preferred Securities will not be, an "investment company," or
an entity "controlled" by an "investment company," as such terms are
defined in the Investment Company Act of 1940, as amended (the "Investment
Company Act").
(xvi) All of the outstanding shares of capital stock of the Company
have been duly authorized and validly issued and are fully paid and non-
assessable, and none of the outstanding shares of capital stock was issued
in violation of the preemptive rights of any stockholder of the Company.
(xvii) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, except as otherwise stated
therein, there has not been (A) any material adverse change in the
condition (financial or otherwise), earnings, business affairs, assets or
business prospects of the Company and its subsidiaries, considered as one
enterprise, whether or not arising in the ordinary course of business, (B)
any transaction entered into by the Company or any subsidiary, other than
in the ordinary course of business, that is material to the Company and its
subsidiaries, considered as one enterprise, or (C) any dividend or
distribution of any kind declared, paid or made by the Company on its
capital stock, excluding the regular quarterly dividend paid on its common
stock. Neither the Company nor the Bank has any material liability of any
nature, contingent or otherwise, except as set forth in the Prospectus.
(xviii) Neither the Company nor the Bank is in violation of any
provision of its charter or by-laws or in default in the performance or
observance of any obligation, agreement, covenant or condition contained in
any contract, indenture, mortgage, loan
8
agreement, note, lease or other agreement or instrument to which it is a
party or by which it may be bound or to which any of its properties may be
subject, except for such defaults that would not have a material adverse
effect on the condition (financial or otherwise), earnings, business
affairs, assets or business prospects of the Company and its subsidiaries,
considered as one enterprise.
(xix) Except as disclosed in the Prospectus, there is no action, suit
or proceeding before or by any government, governmental instrumentality or
court, domestic or foreign, now pending or, to the knowledge of the
Company, threatened against the Company or the Bank that is required to be
disclosed in the Prospectus or that could reasonably be expected to result
in any material adverse change in the condition (financial or otherwise),
earnings, business affairs, assets or business prospects of the Company and
its subsidiaries, considered as one enterprise, or that could reasonably be
expected to materially and adversely affect the properties or assets of the
Company and its subsidiaries, considered as one enterprise, or that could
reasonably be expected to materially and adversely affect the consummation
of the transactions contemplated in this Agreement; all pending legal or
governmental proceedings to which the Company or the Bank is a party that
are not described in the Prospectus, including ordinary routine litigation
incidental to its business, if decided in a manner adverse to the Company,
would not have a material adverse effect on the condition (financial or
otherwise), earnings, business affairs or business prospects of the Company
and its subsidiaries, considered as one enterprise.
(xx) There are no material contracts or documents of a character
required to be described in the Registration Statement or the Prospectus or
to be filed as exhibits to the Registration Statement that are not
described and filed as required.
(xxi) The Company and the Bank each has good and marketable title to
all properties and assets described in the Prospectus as owned by it, free
and clear of all liens, charges, encumbrances or restrictions, except such
as (A) are described in the Prospectus or (B) are neither material in
amount nor materially significant in relation to the business of the
Company and its subsidiaries, considered as one enterprise; all of the
leases and subleases material to the business of the Company and its
subsidiaries, considered as one enterprise, and under which the Company or
the Bank holds properties described in the Prospectus, are in full force
and effect, and neither the Company nor the Bank has any notice of any
material claim that has been asserted by anyone adverse to the rights of
the Company or the Bank under any of the leases or subleases mentioned
above, or affecting or questioning the rights of such corporation to the
continued possession of the leased or subleased premises under any such
lease or sublease.
(xxii) Each of the Company and the Bank owns, possesses or has
obtained all material governmental licenses, permits, certificates,
consents, orders, approvals and other authorizations necessary to own or
lease, as the case may be, and to operate its properties and
9
to carry on its business as presently conducted, and neither the Company
nor the Bank has received any notice of any restriction upon, or any notice
of proceedings relating to revocation or modification of, any such
licenses, permits, certificates, consents, orders, approvals or
authorizations.
(xxiii) Except as disclosed in the Prospectus, no labor problem
exists with the employees of the Company or with employees of the Bank or,
to the best knowledge of the Company, is imminent that could, materially
adversely affect the Company and its subsidiaries, considered as one
enterprise, and the Company is not aware of any existing or imminent labor
disturbance by the employees of any of its or the Bank's principal
suppliers, contractors or customers that could reasonably be expected to
materially adversely affect the condition (financial or otherwise),
earnings, business affairs or business prospects of the Company and its
subsidiaries, considered as one enterprise.
(xxiv) There are no persons with registration or other similar rights
to have any securities of the Company registered pursuant to the
Registration Statement or otherwise registered by the Company under the
1933 Act.
(xxv) Except as disclosed in the Prospectus, the Company and the Bank
own or possess all patents, patent rights, licenses, inventions,
copyrights, know-how (including trade secrets or other unpatented and/or
unpatentable proprietary or confidential information systems or
procedures), trademarks, servicemarks and tradenames (collectively, "patent
and proprietary rights") currently employed by them in connection with the
business now operated by them except where the failure to so own, possess
or acquire such patent and proprietary rights would not have a material
adverse effect on the condition, financial or otherwise, or the earnings,
business affairs, assets or business prospects of the Company and its
subsidiaries considered as one enterprise, and neither the Company nor the
Bank has received any notice nor is otherwise aware of any infringement of
or conflict with asserted rights of others with respect to any patent or
proprietary rights, and which infringement or conflict (if the subject of
any unfavorable decision, rule and refinement, singly or in the aggregate)
could reasonably be expected to result in any material adverse change in
the condition, financial or otherwise, or in the earnings, business
affairs, assets or business prospects of the Company and its subsidiaries
considered as one enterprise.
(xxvi) The Company and each subsidiary of the Company have filed all
Federal, state and local income, franchise or other tax returns required to
be filed and have made timely payments of all taxes due and payable in
respect of indicated by such returns and no material deficiency has been
asserted with respect thereto by any taxing authority.
(xxvii) The Company has filed with NASD all documents and notices
required by NASD of companies that have issued securities that are traded
in the over-the-counter market
10
and quotations for which are reported by the Nasdaq National Market of the
Nasdaq Stock Market, Inc. ("Nasdaq Stock Market").
(xxviii) Neither the Trust nor the Company or any Subsidiary has
taken or will take, directly or indirectly, any action designed to cause or
result in, or which has constituted or which might reasonably be expected
to constitute, the stabilization or manipulation, under the Exchange Act or
otherwise, of the price of the Preferred Securities.
(xxix) Neither the Company nor the Bank is or has been (by virtue of
any action, omission to act, contract to which it is a party or by which it
is bound, or any occurrence or state of facts whatsoever) in violation of
any applicable Federal, state, municipal, or local statutes, laws,
ordinances, rules, regulations and/or orders issued pursuant to foreign,
federal, state, municipal, or local statutes, laws, ordinances, rules, or
regulations (including those relating to any aspect of banking, bank
holding companies, environmental protection, occupational safety and
health, and equal employment practices) heretofore or currently in effect,
except such violation that has been fully cured or satisfied without
recourse or that is not reasonably likely to have a material adverse effect
on the Company or the Bank.
(xxx) The Company and the Bank have no agreement or understanding
with any entity concerning the future acquisition by the Company or the
Bank of a controlling interest in any entity that is required by the 1933
Act or the 1933 Act Regulations to be disclosed by the Company that is not
disclosed in the Prospectus; the Company and the Bank have no agreement or
understanding with any entity concerning the future acquisition of a
controlling interest in the Company or the Bank by any entity that is
required by the 1933 Act or the 1933 Act Regulations to be disclosed by the
Company that is not disclosed in the Prospectus.
(b) Any certificate signed by any authorized officer of the Company or
the Bank and delivered to the Underwriter or to counsel for the Underwriter
pursuant to this Agreement shall be deemed a representation and warranty by the
Company to the Underwriter as to the matters covered thereby.
Section 2. Sale and Delivery to the Underwriter; Closing.
---------------------------------------------
(a) On the basis of the representations and warranties herein
contained, and subject to the terms and conditions herein set forth, the Trust
agrees to sell to the Underwriter, and the Underwriter agrees to purchase from
the Trust 1,200,000 Initial Securities at the purchase price and terms set forth
herein and in the Price Determination Agreement.
In addition, on the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth, the Trust
hereby grants an option to the Underwriter to purchase up to 180,000 Option
Securities in accordance with the terms set forth herein and in the Price
Determination Agreement. The option hereby granted will expire at 5:00 p.m. on
the 30th day after the date the Registration Statement is declared effective by
the
11
Commission (or at 5:00 p.m. on the next business day if such 30th day is not a
business day) and may be exercised, on one occasion only, solely for the purpose
of covering over-allotments which may be made in connection with the offering
and distribution of the Initial Securities upon notice by you to the Company
setting forth the number of Option Securities as to which the Underwriter is
exercising the option and the time, date and place of payment and delivery for
the Option Securities. Such time and date of delivery (the "Option Closing
Date") shall be determined by the Underwriter but shall not be later than five
full business days after the date on which the notice of the exercise of the
option shall have been given, nor in any event prior to Closing Time, as
hereinafter defined, nor earlier than the second business day after the date on
which the notice of the exercise of the option shall have been given.
(b) Payment of the purchase price for, and delivery of certificates
for, the Initial Securities shall be made at the offices of Thacher Proffitt &
Wood, or at such other place as shall be agreed upon by the Company and the
Underwriter, at 9:30 a.m. on the third full business day after the effective
date of the Registration Statement, or at such other time not more than seven
full business days thereafter as you and the Company shall determine (such date
and time of payment and delivery being herein called the "Closing Time"). In
addition, in the event that any or all of the Option Securities are purchased by
the Underwriter, payment of the purchase price for, and delivery of certificates
for, such Option Securities shall be made at the above-mentioned office of
Thacher Proffitt & Wood, or at such other place as shall be agreed upon by the
Company and the Underwriter, on the Option Closing Date as specified in the
notice from the Underwriter to the Company. Payment for the Initial Securities
and the Option Securities, if any, shall be made to the Company by wire transfer
of immediately available funds, against delivery to the Underwriter for the
account of the Underwriter of Preferred Securities to be purchased by it.
(c) The Initial Securities shall be issued in the form of one or more
fully registered global securities (the "Global Securities") in book-entry form
in such denominations and registered in the name of the nominee of The
Depository Trust Company (the "DTC") or in such names as the Underwriter may
request in writing at least two business days before the Closing Date or the
Option Closing Date, as the case may be. The Global Securities representing the
Initial Securities or the Option Securities to be purchased will be made
available in New York City for examination by the Underwriter and counsel to the
Underwriter not later than 10:00 A.M. on the business day prior to the Closing
Time or the Option Closing Date, as the case may be.
Section 3. Certain Covenants of the Offerors. Each of the Offerors
----------------------------------
covenants jointly and severally with the Underwriter as follows:
(a) The Offerors will use their best efforts to cause the Registration
Statement to become effective and will notify the Underwriter immediately, and
confirm the notice in writing, (i) when the Registration Statement, or any post-
effective amendment to the Registration Statement, shall have become effective,
or any supplement to the Prospectus or any amended Prospectus shall have been
filed, (ii) of the receipt of any comments from the Commission (iii) of any
request of the
12
Commission to amend the Registration Statement or amend or supplement the
Prospectus or for additional information and (iv) of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or of any order preventing or suspending the use of any preliminary
prospectus, or of the suspension of the qualification of the Preferred
Securities or capital stock, for offering or sale in any jurisdiction, or of the
institution or threatening of any proceedings for any of such purposes. The
Offerors will use every reasonable effort to prevent the issuance of any such
stop order or of any order preventing or suspending such use and, if any such
order is issued, to obtain the lifting thereof at the earliest possible moment.
(b) The Offerors will not at any time file or make any amendment to
the Registration Statement, or any amendment or supplement, if the Offerors have
elected to rely upon Rule 430A, to the Prospectus (including documents
incorporated by reference into such prospectus or to the Prospectus) of which
the Underwriter shall not have previously been advised and have previously been
furnished a copy, or to which the Underwriter or counsel for the Underwriter
shall reasonably object.
(c) The Offerors have furnished or will furnish to you as many signed
and conformed copies of the Registration Statement as originally filed and of
each amendment thereto, whether filed before or after the Registration Statement
becomes effective, copies of all exhibits and documents filed therewith
(including documents incorporated by reference into the Prospectus pursuant to
Item 12 of Form S-2 under the 1933 Act) and signed copies of all consents and
certificates of experts as you may reasonably request.
(d) The Offerors will deliver or cause to be delivered to the
Underwriter, without charge, from time to time until the effective date of the
Registration Statement, as many copies of each preliminary prospectus as the
Underwriter may reasonably request, and the Offerors hereby consent to the use
of such copies for purposes permitted by the 1933 Act. The Offerors will deliver
or cause to be delivered to the Underwriter, without charge, as soon as the
Registration Statement shall have become effective (or, if the Offerors have
elected to rely upon Rule 430A, as soon as practicable after the Price
Determination Agreement has been executed and delivered) and thereafter from
time to time as requested during the period when the Prospectus is required to
be delivered under the 1933 Act, such number of copies of the Prospectus (as
supplemented or amended) as the Underwriter may reasonably request.
(e) The Company will comply to the best of its ability with the 1933
Act and the 1933 Act Regulations, and the 1934 Act and the 1934 Act Regulations,
so as to permit the completion of the distribution of the Preferred Securities
as contemplated in this Agreement and in the Prospectus. If, at any time when a
prospectus is required by the 1933 Act to be delivered in connection with sales
of the Preferred Securities, any event shall occur or condition exist as a
result of which it is necessary, in the reasonable opinion of counsel for the
Underwriter or counsel for the Offerors, to amend the Registration Statement or
amend or supplement the Prospectus in order that the Prospectus will not include
an untrue statement of a material fact or omit to state a material fact
13
necessary in order to make the statements therein not misleading in the light of
the circumstances existing at the time it is delivered to a purchaser, or if it
shall be necessary, in the reasonable opinion of either such counsel, at any
such time to amend the Registration Statement or amend or supplement the
Prospectus in order to comply with the requirements of the 1933 Act or the 1933
Act Regulations, the Company will promptly prepare and file with the Commission,
subject to Section 3(b), such amendment or supplement as may be necessary to
correct such untrue statement or omission or to make the Registration Statement
or the Prospectus comply with such requirements.
(f) The Offerors will use their best efforts, in cooperation with the
Underwriter, to qualify the Preferred Securities and the Junior Subordinated
Debentures for offering and sale under the applicable securities laws of such
states and other jurisdictions as the Underwriter may designate in writing and
to maintain such qualifications in effect for a period of not less than one year
from the effective date of the Registration Statement; provided, however, that
------------------
the Company shall not be obligated to file any general consent to service of
process or to qualify as a foreign corporation or as a dealer in securities in
any jurisdiction in which it is not so qualified or to subject itself to
taxation in respect of doing business in any jurisdiction in which it is not
otherwise so subject. The Company will file such statements and reports as may
be required by the laws of each jurisdiction in which the Preferred Securities
have been qualified as above provided.
(g) The Company will make generally available (within the meaning of
Rule 158) as soon as practible, but not later than the Availability Date (as
defined below) to its security holders, the Underwriter and the Security holders
an earnings statement (which need not be audited) of the Company and its
subsidiary (in form complying with the provisions of Rule 158 of the 1933 Act
Regulations) covering a period of at least 12 months beginning after the
effective date of the Registration Statement. For the purpose of the preceding
sentence, "Availability Date" means the 45th day after the end of the fourth
fiscal quarter following the fiscal quarter that includes such effective date,
except that, if such fourth fiscal quarter is the last quarter of the Company's
fiscal year, "Availability Date" means the 90th day after the end of such fourth
fiscal quarter.
(h) The Trust shall apply the proceeds from its sale of the Preferred
Securities, combined with the entire proceeds from the issuance by the Trust to
the Company of the Trust's Common Securities, to purchase an equivalent amount
of Junior Subordinated Debentures. The Company and the Bank will use the net
proceeds received by them from the sale of the Junior Subordinated Debentures in
the manner specified in the Prospectus under the caption "Use of Proceeds".
(i) The Offerors, during the period when the Prospectus is required to
be delivered under the 1933 Act, will file promptly all documents required to be
filed with the Commission pursuant to Section 13 or 14 of the 1934 Act
subsequent to the time the Registration Statement becomes effective.
14
(j) For a period of five years after the Closing Time, the Company
will furnish to the Underwriter, copies of all annual reports, quarterly reports
and current reports filed with the Commission on Forms 10-K, 10-Q and 8-K, or
such other similar forms as may be designated by the Commission, and such other
documents, reports, Proxy Statements, and information as shall be furnished by
the Company to its stockholders generally.
(k) The Offerors will cause the Preferred Securities to be listed and
will file with the Nasdaq Stock Market all documents and notices required by the
Nasdaq Stock Market of companies that have issued securities that are traded in
the over-the-counter market and quotations for which are reported by the Nasdaq
Stock Market.
(l) The Company shall pay for the legal fees and related filing fees
to your counsel to prepare one or more "blue sky" surveys (each, a "Blue Sky
Survey") for use in connection with the offering of the Preferred Securities as
contemplated by the Prospectus and a copy of such Blue Sky Survey or surveys
shall be delivered to each of the Company and the Underwriter.
(m) If, at the time the Registration Statement becomes effective, any
information shall have been omitted therefrom in reliance upon Rule 430A of the
1933 Act Regulations, then the Offerors will prepare, and file or transmit for
filing with the Commission in accordance with such Rule 430A and Rule 424(b),
copies of an amended Prospectus, or, if required by such Rule 430A, a post-
effective amendment to the Registration Statement (including an amended
Prospectus), containing all information so omitted.
(n) The Company will, at its expense, subsequent to the issuance of
the Preferred Securities, prepare and distribute to each of the Underwriter and
counsel to the Underwriter, copies of all the documents used in connection with
the issuance of the Preferred Securities in the form of a Closing Bound Volume.
(o) The Offerors will not, prior to the Option Closing Date or thirty
(30) days after the date of this Agreement, whichever occurs first, incur any
material liability or obligation, direct or contingent, or enter into any
material transaction, other than in the ordinary course of business, or any
transaction with a related party which is required to be disclosed in the
Prospectus pursuant to Item 404 of Regulation S-K under the Securities Act,
except as contemplated by the Prospectus.
(p) During a period of ten days from the date of the Prospectus,
neither the Trust nor the Company will, without the prior written consent of the
Underwriter, directly or indirectly, offer, sell, offer to sell, or otherwise
dispose of any Preferred Securities, any other beneficial interests in the
assets of the Trust, or any preferred securities or other securities of the
Trust or the Company which are substantially similar to the Preferred
Securities, including any guarantee of such securities. The foregoing sentence
shall not apply to any of the Preferred Securities to be sold hereunder.
15
Section 4. Payment of Expenses and Advisory Fee.
-------------------------------------
(a) The Company will pay and bear all costs and expenses incident to
the performance of its and the Trust's obligations under this Agreement,
including (a) the preparation, printing and filing of the Registration Statement
(including financial statements and exhibits), as originally filed and as
amended, the preliminary prospectuses and the Prospectus and any amendments or
supplements thereto, and the cost of furnishing copies thereof to the
Underwriter, (b) the preparation, printing and distribution of this Agreement,
the Preferred Securities and the Blue Sky Survey, (c) the issuance and delivery
of the Preferred Securities to the Underwriter, including any transfer taxes
payable upon the sale of the Preferred Securities to the Underwriter, (d) the
fees and disbursements of the Company's counsel and accountants, (e) NASD filing
fees, (f) fees and disbursements of counsel in connection with the Blue Sky
Survey, (g) the qualification of the Preferred Securities under the applicable
securities laws in accordance with Section 3(f) and any filing fee for review of
the offering with the NASD, (h) the legal fees and expenses of the Underwriter's
counsel (such counsel's fees shall not exceed $65,000 (exclusive of out-of-
pocket expenses of counsel) and general out-of-pocket expenses of the
Underwriter not to exceed $5,000, (i) the fees and expenses of the Indenture
Trustee, including the fees and disbursements of counsel for the Indenture
Trustee, in connection with the Indenture and the Junior Subordinated
Debentures; (j) the fees and expenses of the Property Trustee and Delaware
Trustee, including the fees and disbursements of counsel for the Property
Trustee and the Delaware Trustee, in connection with the Trust Agreement and the
Certificate of Trust, and (k) all other costs incident to the performance of the
Offerors' obligations hereunder.
If (i) the Closing Time does not occur on or before August 31, 1997,
(ii) the Company abandons or terminates the Offering, or (iii) this Agreement is
terminated by the Underwriter in accordance with the provisions of Section 5 or
11(a), the Company shall reimburse the Underwriter for all its reasonable out-
of-pocket expenses, as set forth in this Section 4, including the reasonable
fees and disbursements of counsel for the Underwriter.
Section 5. Conditions of Underwriter's Obligations. The obligations
---------------------------------------
of the Underwriter to purchase and pay for the Preferred Securities that it has
agreed to purchase pursuant to this Agreement are subject to the accuracy, of
the representations and warranties of the Offerors contained herein or in
certificates of the officers or trustees of the Offerors or any subsidiary
delivered pursuant to the provisions hereof to the execution of the Price
Determination Agreement no later than 5:30 p.m. on the first business day
following the date hereof, or at such later time as you may agree in writing (in
your sole discretion), to the performance by the Offerors of their obligations
hereunder and to the following further conditions:
(a) The Registration Statement shall have become effective not later
than 5:30 P.M. on the date of this Agreement or, with your consent, at a later
time and date not later, however, than 5:30 P.M. on the first business day
following the date hereof, or at such later time or on such later date as you
may agree to in writing; at the Closing Time no stop order suspending the
16
effectiveness of the Registration Statement shall have been issued under the
1933 Act and no proceedings for that purpose shall have been instituted or shall
be pending or, to the Underwriter's knowledge or the knowledge of the Offerors
shall be contemplated by the Commission, and any request on the part of the
Commission for additional information shall have been complied with to the
satisfaction of counsel for the Underwriter. If the Offerors have elected to
rely upon Rule 430A, a prospectus containing the Rule 430A Information shall
have been filed with the Commission in accordance with Rule 424(b) (or a post-
effective amendment providing such information shall have been filed and
declared effective in accordance with the requirements of Rule 430A).
(b) At the Closing Time, you shall have received:
(i) The favorable opinion, dated as of Closing Time, of Silver,
Freedman & Taff, L.L.P, counsel for the Company, in form and substance
reasonably satisfactory to counsel for the Underwriter, substantially in
the form set forth in Exhibit B.
(ii) The favorable opinion, dated as of Closing Time, of Richards,
Layton & Finger, special Delaware counsel for the Offerors, in form and
substance satisfactory to counsel for the Underwriter, substantially in the
form set forth in Exhibit C.
(iii) The favorable opinion, dated as of Closing Time,
of_____________, counsel for the Indenture Trustee and the Delaware
Trustee, in form and substance satisfactory to counsel for the Underwriter,
substantially in the form set forth in Exhibit D.
(iv) The favorable opinion, dated as of Closing Time, of Thacher
Proffitt & Wood, counsel for the Underwriter, in form and substance
satisfactory to the Underwriter.
In giving such opinion, such counsel may rely, as to all matters
governed by the laws of jurisdictions other than the federal law of the United
States, upon opinions of other counsel, who shall be counsel satisfactory to
counsel for the Underwriter (the Underwriter agrees and acknowledges that
Silver, Freedman & Taff, L.L.P., and Thacher Proffitt & Wood will rely on the
opinion of Richards, Layton & Finger with respect to matters of Delaware law),
in which case the opinion shall state that counsel believes that you and your
counsel are entitled to so rely. Such counsel may also state that, insofar as
such opinion involves factual matters, they have relied, to the extent they deem
proper, upon certificates of officers of the Company, the Bank and the Trust and
certificates of public officials.
(c) At the Closing Time and again at the Option Closing Date, (i) the
Registration Statement and the Prospectus, as they may then be amended or
supplemented, shall contain all statements that are required to be stated
therein under the 1933 Act and the 1933 Act Regulations and in all material
respects shall conform to the requirements of the 1933 Act and the 1933 Act
Regulations, the Offerors shall have complied in all material respects with Rule
430A (if they shall have elected to rely thereon) and neither the Registration
Statement nor the Prospectus, as they may then be amended or supplemented, shall
contain an untrue statement of a material fact or omit to
17
state a material fact required to be stated therein or necessary to make the
statements therein not misleading, (ii) there shall not have been, since the
respective dates as of which information is given in the Registration Statement,
any material adverse change in the condition (financial or otherwise), earnings,
business affairs, assets or business prospects of the Company and its
subsidiaries, considered as one enterprise, whether or not arising in the
ordinary course of business, (iii) no action, suit or proceeding at law or in
equity shall be pending or, to the knowledge of the Offerors, threatened against
the Company or any subsidiary or the Trust that would be required to be set
forth in the Prospectus other than as set forth therein and no proceedings shall
be pending or, to the knowledge of the Offerors, threatened against the Offerors
or any subsidiary before or by any federal, state or other commission, board or
administrative agency wherein an unfavorable decision, ruling or finding could
reasonably be expected to materially adversely affect the condition (financial
or otherwise), earnings, business affairs, assets or business prospects of the
Company and its subsidiaries, considered as one enterprise, other than as set
forth in the Prospectus, (iv) each of the Offerors shall have complied, in all
material respects, with all agreements and satisfied all conditions on its part
to be performed or satisfied at or prior to the Closing Time, (v) the other
representations and warranties of the Offerors set forth in Section l(a) shall
be accurate in all material respects as though expressly made at and as of the
Closing Time, and (vi) no stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceeding for that purpose
been initiated or to the best knowledge of the Offerors threatened by the
Commission. At the Closing Time, the Underwriter shall have received a
certificate of the Chairman or the President, and the Chief Financial Officer or
Controller, of the Company, dated as of the Closing Time, to such effect.
(d) At the time that this Agreement is executed by the Company, you
shall have received from Deloitte & Touche LLP a letter or letters, dated such
date, in form and substance satisfactory to you, confirming that they are
independent certified public accountants with respect to the Company within the
meaning of the 1933 Act and the published 1933 Act Regulations, and stating in
effect that:
With respect to the Company:
(i) in their opinion, the consolidated financial statements as of June
30, 1997 and 1996, and for each of the years in the three year period ended
June 30, 1997 and the related financial statement schedules, if any,
included or incorporated by reference in the Registration Statement and the
Prospectus and covered by their opinions included therein comply as to form
in all material respects with the applicable accounting requirements of the
1933 Act and the published 1933 Act Regulations;
(ii) on the basis of a reading of the minutes of all meetings of the
stockholders of the Company and the Bank, of the Board of Directors of the
Company and the Bank and of the Audit and Executive Committees of the Board
of Directors of the Bank since June 30, 1997, inquiries of certain
officials of the Company and its subsidiaries responsible for financial and
18
accounting matters, and such other inquiries and procedures as may be
specified in such letter, nothing came to their attention that caused them
to believe that:
(A) at a specified date not more than three days prior to the
date of this Agreement, there was any increase in notes or
subordinated debentures payable, advances from the Federal Home Loan
Bank, real estate owned, or any decrease in allowance for loan losses
of the Company and its consolidated subsidiaries or any decrease in
total assets, total deposits or stockholders' equity of the Company
and its consolidated subsidiaries or any increase in the number of
outstanding shares of capital stock of the Company and its
consolidated subsidiaries, in each case as compared with amounts shown
in the financial statements at ____ __, 1997 in the Registration
Statement; or
(B) for the period from ____ __, 1997 to a specified date not
more than three days prior to the date of this Agreement, there was
any decrease in consolidated net interest income, non-interest income
or net income or the (split-adjusted) total or fully diluted per share
amounts of net income or any increase in the consolidated provision
for loan losses, in each case as compared with the comparable period
in the preceding year.
(iii) in addition to the procedures referred to in clause (ii) above,
they have performed other specified procedures, not constituting an audit,
with respect to certain amounts, percentages, numerical data and financial
information appearing in the Registration Statement (including the Selected
Consolidated Financial Data) (having compared such items with, and have
found such items to be in agreement with, the financial statements of the
Company or general accounting records of the Company, as applicable, which
are subject to the Company's internal accounting controls or other data and
schedules prepared by the Company from such records).
(iv) on the basis of a review of schedules provided to them by the
Company, nothing came to their attention that caused them to believe that
the pro forma information, set forth in the Prospectus under the headings
"Capitalization" on page __ had not been correctly calculated on the basis
described therein.
(e) At the Closing Time, the Underwriter shall have received from
Deloitte & Touche LLP letters, in form and substance satisfactory to the
Underwriter and dated as of the Closing Time, to the effect that they reaffirm
the statements made in the letter(s) furnished pursuant to Section 5(d), except
that the inquiries specified in Section 5(d) shall be made based upon the latest
available unaudited interim consolidated financial statements and the specified
date referred to shall be a date not more than three days prior to the Closing
Time.
(f) At the Closing Time, counsel for the Underwriter shall have been
furnished with all such documents, certificates and opinions as they may request
for the purpose of enabling
19
them to pass upon the issuance and sale of the Preferred Securities as
contemplated in this Agreement and the matters referred to in Section 5(c) and
in order to evidence the accuracy and completeness of any of the
representations, warranties or statements of the Offerors, the performance of
any of the covenants of the Offerors, or the fulfillment of any of the
conditions herein contained; all proceedings taken by the Company at or prior to
the Closing Time in connection with the authorization, issuance and sale of the
Preferred Securities and the Junior Subordinated Debentures as contemplated in
this Agreement shall be satisfactory in form and substance to the Underwriter
and to counsel for the Underwriter.
(g) Between the date of this Agreement and the Closing Time, (i) no
downgrading shall have occurred in the rating accorded any securities of the
Company or any deposit instruments of the Bank by any "nationally recognized
statistical rating organization," as that term is defined by the Commission for
purposes of Rule 436(g) (2) under the 1933 Act and (ii) no such organization
shall have given any notice of any intended or potential downgrading or of any
surveillance or review, with possible negative implications, of its rating of
any of the Company's securities or any deposit instruments of the Bank.
(h) The Company shall have paid, or made arrangements satisfactory to
the Underwriter for the payment of, all such expenses as may be required by
Section 4 hereof.
(i) In the event the Underwriter exercises its option provided in
Section 2 hereof to purchase all or any portion of the Option Securities, the
obligations of the Underwriter to purchase the Option Securities that it has
agreed to purchase shall be subject to the accuracy of the representations and
warranties of the Offerors contained herein and of the statements in any
certificates furnished by the Offerors hereunder as of such Option Closing Date
(as if made on such date), to the performance by the Offerors of their
obligations hereunder and to the receipt by you on the Option Closing Date of:
(1) A certificate, dated the Option Closing Date, of the Chairman
or the President and the Chief Financial Officer or Controller of the
Company confirming that the certificate delivered on the Closing Time
pursuant to Section 5(c) hereof remains true as of the Option Closing
Date;
(2) The favorable opinion of Silver, Freedman & Taff L.L.P.,
counsel for the Company, addressed to you and dated the Option Closing
Date, in form satisfactory to Thacher Proffitt & Wood, your counsel,
relating to the Option Securities and otherwise to the same effect as
the opinion required by Section 5(b) hereof;
(3) The favorable opinion of Richards, Layton & Finger, special
Delaware counsel for the Offerors, addressed to you and dated the
Option Closing Date, in form satisfactory to Thacher Proffitt & Wood,
your counsel,
20
relating to the Option Securities and otherwise to the same effect as
the opinion required by Section 5(b) hereof;
(4) The favorable opinion of ______________, counsel for the
Indenture Trustee and the Delaware Trustee, addressed to you and dated
the Option Closing Date, relating to the Option Securities and
otherwise to the same effect as the opinion required by Section 5(b)
hereof;
(5) The favorable opinion of Thacher Proffitt & Wood, dated the
Option Closing Date, relating to the Option Shares and otherwise to
the same effect as the opinion required by Section 5(b) hereof; and
(6) Letters from Deloitte & Touche LLP addressed to the
Underwriter and dated the Option Closing Date, in form and substance
satisfactory to the Underwriter and substantially the same in form and
substance as the letters furnished to the Underwriter pursuant to
Section 5(d) hereof.
(j) The Preferred Securities, the Guarantee and the Junior
Subordinated Debentures shall have been qualified or registered for sale, or
subject to an available exemption from such qualification or registration, under
the Blue Sky Laws of such jurisdictions as shall have been reasonably specified
by the Underwriter and the offering contemplated by this Agreement shall have
been cleared by the NASD.
If any of the conditions specified in this Section 5 shall not have
been fulfilled when and as required by this Agreement to be fulfilled, this
Agreement may be terminated by the Underwriter on notice to the Offerors at any
time at or prior to the Closing Time, and such termination shall be without
liability of any party to any other Party, except as provided in Section 4.
Notwithstanding any such termination, the provisions of Sections 6, 7, 10 and 12
shall remain in effect.
21
Section 5A. Conditions of Offeror's Obligations. The obligations of
-----------------------------------
the Offerors to sell and deliver the portion of the Preferred Securities
required to be delivered as and when specified in this Agreement are subject to
the conditions that the Registration Statement shall have become effective and
that as of the Closing Time (or the Option Closing Date with respect to the
Option Securities) no stop order suspending the effectiveness of the
Registration Statement shall have been issued and in effect or proceedings
therefor initiated or threatened, and there shall have been no change in the
Internal Revenue Code of 1986 or the regulations promulgated thereunder that
reasonably would be expected to adversely effect the ability of the Company to
deduct the interest paid by it under the Junior Subordinated Debentures.
Section 6. Indemnification.
---------------
(a) The Company agrees to indemnify and hold harmless the Underwriter,
officers, directors, employees, agents, and counsel of the Underwriter, and each
person, if any, who controls the Underwriter within the meaning of Section 15 of
the 1933 Act or Section 20(a) of the 1934 Act, against any loss, liability,
claim, damage, and expense whatsoever (which shall include, but not be limited
to amounts incurred in investigating, preparing, or defending against any
litigation, commenced or threatened, or any claim or investigation whatsoever
and any and all amounts paid in settlement of any claim or litigation), as and
when incurred, arising out of, based upon, or in connection with (i) any untrue
statement or alleged untrue statement of a material fact or any omission or
alleged omission to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, contained in (A) any
Preliminary Prospectus, the Registration Statement, or the Prospectus (as from
time to time amended and supplemented), or any amendment or supplement thereto
or in any document incorporated by reference therein or required to be delivered
with any Preliminary Prospectus or the Prospectus or (B) in any application or
other document or communication (collectively called an "application") executed
by or on behalf of the Company or based upon written information furnished by or
on behalf of the Company filed in any jurisdiction in order to qualify the
Preferred Securities under the "blue sky" or securities laws thereof or filed
with the Commission or any securities exchange; unless such statement or
omission or alleged statement or omission was made in reliance upon and in
conformity with written information concerning the Underwriter, the Underwriting
Agreement or the compensation of the Underwriter furnished to the Company by or
on behalf of the Underwriter expressly for inclusion in any Preliminary
Prospectus, the Registration Statement or the Prospectus, or any amendment or
supplement thereto, or in any application, as the case may be, or (ii) any
breach of any representation, warranty, covenant, or agreement of the Company
contained in the Underwriting Agreement. The foregoing indemnification with
respect to any preliminary prospectus shall not inure to the benefit of the
Underwriter (or its directors, officers, employees and controlling persons
within the meaning of the federal securities laws) if the person asserting any
such losses, claims, damages or liabilities against the Underwriter (or such
other persons) purchased Preferred Securities and a copy of the Prospectus (as
then amended or supplemented if the Company shall have furnished any amendments
or supplements thereto) was not sent or given by or on behalf of the Underwriter
to such person, if such is required by law, in connection with the written
confirmation of the sale of
22
such Preferred Securities to such person and if the Prospectus (as so amended or
supplemented) would have cured the defect giving rise to such loss, claim,
damage or liability, provided that the Company delivered the Prospectus, as
amended or supplemented, to the Underwriter on a timely basis to permit such
delivery or sending. For purposes of this section, the term "expense" shall
include, but not be limited to, counsel fees and costs, court costs, out-of-
pocket costs and compensation for the time spent by the Underwriter's directors,
officers, employees and counsel according to his or her normal hourly billing
rates. The indemnification provisions shall also extend to all affiliates of
the Underwriter, its respective directors, officers, employees, legal counsel,
agents and controlling persons within the meaning of the federal securities
laws. The foregoing agreement to indemnify shall be in addition to any
liability the Company may otherwise have to the Underwriter or the persons
entitled to the benefit of these indemnification provisions.
(b) The Underwriter agrees to indemnify and hold harmless the
Offerors, their directors, officers who signed the Registration Statement, and
each person, if any, who controls the Offerors 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 and expense described in the indemnity contained in
subsection (a) above, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the Registration
Statement (or any amendment thereto) or any Preliminary Prospectus or the
Prospectus (or any amendment or supplement thereto) or any application in
reliance upon and in conformity with written information about the Underwriter,
the Underwriting Agreement, or the compensation of the Underwriter, furnished to
either of the Offerors by the Underwriter expressly for use in the Registration
Statement (or any amendment thereto) or such Preliminary Prospectus or the
Prospectus (or any amendment or supplement thereto) or in any application.
(c) An indemnified party shall give prompt notice to the indemnifying
party if any action, suit, proceeding or investigation is commenced in respect
of which indemnity may be sought hereunder, but failure to so notify an
indemnifying party shall not relieve the indemnifying party from its obligations
to indemnify hereunder, except to the extent that the indemnifying party has
been prejudiced in any material respect by such failure. If it so elects within
a reasonable time after receipt of such notice, an indemnifying party may assume
the defense of such action, including the employment of counsel satisfactory to
the indemnified parties and payment of all expenses of the indemnified party in
connection with such action. Such indemnified party or parties shall have the
right to employ its or their own counsel in any such case, but the fees and
expenses of such counsel shall be at the expense of such indemnified party or
parties unless the employment of such counsel shall have been authorized in
writing by the indemnifying party in connection with the defense of such action
or the indemnifying party shall not have promptly employed counsel satisfactory
to such indemnified party or parties or such indemnified party or parties shall
have reasonably concluded that there may be one or more legal defenses available
to it or them or to other indemnified parties which are different from or
additional to those available to one or more of the indemnifying parties, in any
of which events such fees and expenses shall be borne by the indemnifying party
and the indemnifying party shall not have the right to direct the defense of
such
23
action on behalf of the indemnified party or parties. The Company shall be
liable for any settlement of any claim against the Underwriter (or its
directors, officers, employees, affiliates or controlling persons), made with
the Company's written consent, which consent shall not be unreasonably withheld.
The Company shall not, without the written consent of the Underwriter, settle or
compromise any claim against it based upon circumstances giving rise to an
indemnification claim against the Company hereunder unless such settlement or
compromise provides that the Underwriter and the other indemnified parties shall
be unconditionally and irrevocably released from all liability in respect to
such claim.
(d) In order to provide for just and equitable contribution, if a
claim for indemnification pursuant to these indemnification provisions is made
but it is found in a final judgment by a court that such indemnification may not
be enforced in such case, even though the express provisions hereof provide for
indemnification in such case, then the Company, on the one hand, and the
Underwriter, on the other hand, shall contribute to the amount paid or payable
by such indemnified persons as a result of such loss, liability, claim, damage
and expense in such proportion as is appropriate to reflect the relative
benefits received by the Company, on the one hand, and the Underwriter, on the
other hand, from the underwriting, and also the relative fault of the Company,
on the one hand, and the Underwriter, on the other hand, in connection with the
statements, acts or omissions which resulted in such loss, liability claim,
damage and expense, and any other relevant equitable considerations shall also
be considered. No person found liable for a fraudulent misrepresentation or
omission shall be entitled to contribution from any person who is not also found
liable for such fraudulent misrepresentation or omission. Notwithstanding the
foregoing, the Underwriter shall not be obligated to contribute any amount
hereunder that exceeds the amount of the underwriting commission paid by the
Company to the Underwriter with respect to the Preferred Securities purchased by
the Underwriter.
(e) The indemnity and contribution agreements contained herein are in
addition to any liability which the Company may otherwise have to the
Underwriter.
(f) Neither termination nor completion of the engagement of the
Underwriter nor any investigation made by or on behalf of the Underwriter shall
affect the indemnification obligations of the Company or the Underwriter
hereunder, which shall remain and continue to be operative and in full force and
effect.
Section 7. Representations, Warranties and Agreements to Survive
-----------------------------------------------------
Delivery. The representations, warranties, indemnities, agreements and other
- --------
statements of the Offerors or its officers or trustees set forth in or made
pursuant to this Agreement will remain operative and in full force and effect
regardless of any investigation made by or on behalf of the Offerors or the
Underwriter or any controlling person and will survive delivery of and payment
for the Preferred Securities.
24
Section 8. Offering by the Underwriter. The Trust and the Company
---------------------------
are advised by the Underwriter that the Underwriter proposes to make a public
offering of the Preferred Securities, on the terms and conditions set forth in
the Registration Statement from time to time as and when the Underwriter deems
advisable after the Registration Statement becomes effective. Because the NASD
is expected to view the Preferred Securities as interests in a direct
participation program, the offering of the Preferred Securities is being made in
compliance with the applicable provisions of Rule 2810 of the NASD's Conduct
Rules.
Section 9. Termination of Agreement.
------------------------
(a) You may terminate this Agreement, by notice to the Offerors, at
any time at or prior to the Closing Time (i) if there has been, since the
respective dates as of which information is given in the Registration Statement,
any material adverse change in the condition (financial or otherwise), earnings,
business affairs or business prospects of the Company and its subsidiaries,
considered as one enterprise, whether or not arising in the ordinary course of
business, or (ii) if there has occurred any outbreak or escalation of existing
hostilities or other national or international calamity or crisis the effect of
which on the financial markets of the United States is such as to make it, in
the Underwriter's reasonable judgment, impracticable to market the Preferred
Securities or enforce contracts for the sale of the Preferred Securities, or
(iii) if trading in any securities of the Company has been suspended by the
Commission or the National Association of Securities Dealers, Inc., or if
trading generally on the New York Stock Exchange or in the over-the-counter
market has been suspended, or minimum or maximum prices for trading have been
fixed, or maximum ranges for prices for securities have been required, by such
exchange or by order of the Commission, the National Association of Securities
Dealers, Inc. or any other governmental authority with appropriate jurisdiction
over such matters, or (iv) if a banking moratorium has been declared by federal,
New Jersey or New York authorities, or (v) if there shall have been such
material and substantial change in the market for securities in general or in
political, financial or economic conditions as in your reasonable judgment makes
it inadvisable to proceed with the Offering, sale and delivery of the Preferred
Securities on the terms contemplated by the Prospectus, (vi) if you reasonably
determine (which determination shall be in good faith) that there has not been
satisfactory disclosure of all relevant financial information relating to the
Offerors in the Offerors' disclosure documents and that the sale of the
Preferred Securities is unreasonable given such disclosures or (vii) if the
Price Determination Agreement has not been executed by all the parties hereto to
5:30 p.m. on the first business day following the date of this Agreement.
(b) If this Agreement is terminated pursuant to this Section, such
termination shall be without liability of any party to any other party, except
to the extent provided in Section 4. Notwithstanding any such termination, the
provisions of Sections 6 and 7 shall remain in effect.
Section 10. Notices. All notices and other communications under this
-------
Agreement shall be in writing and shall be deemed to have been duly given if
delivered, mailed or transmitted by any standard form of telecommunication.
Notices shall be addressed as follows:
25
If to the Underwriter:
Ryan, Beck & Co., Inc.
80 Main Street
West Orange, New Jersey 07052
Attention: Bruce G. Miller, Senior Vice President
with a copy to:
Robert C. Azarow
Thacher Proffitt & Wood
Two World Trade Center
New York, New York 10048
If to the Company or the Trust:
PennFed Financial Services, Ltd.
622 Eagle Rock Avenue
West Orange, New Jersey 07052
Attention: President
with a copy to:
Dave M. Muchnikoff, P.C.
Silver, Freedman & Taff, L.L.P.
1100 New York Avenue, N.W.
Washington, D.C. 20005-3934
Section 11. Parties. This Agreement is made solely for the benefit of
-------
the Underwriter, and the officers, directors, employees, agents and counsel of
the Underwriter specified in Section 6, the Trust and the Company and, to the
extent expressed, any person controlling the Trust, the Company or the
Underwriter, and the directors of the Company, or administrators of the Trust,
their respective officers who have signed the Registration Statement, and their
respective executors, administrators, successors and assigns, and no other
person shall acquire or have any right under or by virtue of this Agreement. The
term "successors and assigns" shall not include any purchaser, as such
purchaser, from the Underwriter of the Preferred Securities.
Section 12. Arbitration. Any claims, controversies, demands,
-----------
disputes or differences between or among the parties hereto or any persons bound
hereby arising out of, or by virtue of, or in connection with, or otherwise
relating to this Agreement shall be submitted to and settled by arbitration
conducted in New Jersey before one or three arbitrators, each of whom shall be
knowledgeable in the field of securities law and investment banking. Such
arbitration shall otherwise
26
be conducted in accordance with the rules then obtaining of the American
Arbitration Association. The parties hereto agree to share equally the
responsibility for all fees of the arbitrators, abide by any decision rendered
as final and binding, and waive the right to appeal the decision or otherwise
submit the dispute to a court of law for a jury or non-jury trial. The parties
hereto specifically agree that neither party may appeal or subject the award or
decision of any such arbitrator to appeal or review in any court of law or in
equity or in any other tribunal, arbitration system or otherwise. Judgment upon
any award granted by such arbitrator may be enforced in any court having
jurisdiction thereof.
Section 13. Governing Law and Time. This Agreement shall be governed
----------------------
by the laws of the State of New Jersey. Specified times of the day refer to New
York City time.
Section 14. Counterparts. This Agreement may be executed in one or
------------
more counterparts, and when a counterpart has been executed by each party, all
such counterparts taken together shall constitute one and the same agreement.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us a counterpart hereof, whereupon this
instrument will become a binding agreement among the Company, the Trust and the
Underwriter in accordance with its terms.
Very truly yours,
PENNFED CAPITAL TRUST I
By:
-------------------------------------------
Name:
Title: Administrator
PENNFED FINANCIAL SERVICES, INC.
By:
-------------------------------------------
Name: Joseph L. LaMonica
Title: President and CEO
Confirmed and accepted as of
the date first above written:
RYAN, BECK & CO., INC.
By:
--------------------------
Name: David P. Downs
Title: Senior Vice President
27
EXHIBIT A
PENNFED CAPITAL TRUST I
(a Delaware business trust)
_________ Preferred Securities
___% Cumulative Trust Preferred Securities
(Liquidation Amount $25 per Preferred Security)
PRICE DETERMINATION AGREEMENT
-----------------------------
_______, 1997
Ryan, Beck & Co., Inc.
80 Main Street
West Orange, New Jersey 07052
Ladies and Gentlemen:
Reference is made to the Underwriting Agreement dated the date hereof
(the "Underwriting Agreement") among PennFed Capital Trust I, a Delaware
business trust, (the "Trust"), PennFed Financial Services, Inc. (the "Company"
and together with the Trust, the "Offerors") and the Underwriter named above
(the "Underwriter"). The Underwriting Agreement provides for the purchase by
the Underwriter from the Trust, subject to the terms and conditions set forth
therein, of _________ shares, subject to a _______ adjustment (to cover over-
allotments, if any), of the _____% Cumulative Trust Preferred Securities of the
Trust (the "Preferred Securities"). This Agreement is the Price Determination
Agreement referred to in the Underwriting Agreement.
Pursuant to Section 2 of the Underwriting Agreement, the Offerors
agree with the Underwriter as follows:
1. The public offering price per Preferred Security shall be $25.
2. The purchase price for the Preferred Securities to be paid by
the Underwriter shall be $25 per Preferred Security.
3. The commission per Preferred Security to be paid by the Company
to the Underwriter for their commitments hereunder shall be $_____ per
Preferred Security.
4. The interest rate on the Preferred Securities shall be _____%
per annum.
The Offerors represent and warrant to the Underwriter that the
representations and warranties of the Offerors set forth in Section 1(a) of the
Underwriting Agreement are accurate as though expressly made at and as of the
date hereof.
This Agreement shall be governed by the laws of the State of New Jersey.
If the foregoing is in accordance with the understanding of the Underwriter
of the agreement between the Underwriter and the Offerors, please sign and
return to the Company a counterpart hereof, whereupon this instrument, along
with all counterparts and together with the Underwriting Agreement, shall be a
binding agreement between the Underwriter and the Offerors in accordance with
its terms and the terms of the Underwriting Agreement.
Very truly yours,
PENNFED CAPITAL TRUST I
By:
--------------------------------
Name:
Title: Administrator
PENNFED FINANCIAL SERVICES, INC.
By:
--------------------------------
Joseph L. LaMonica
President and CEO
Confirmed and accepted as of
the date first above written:
RYAN, BECK & CO., INC.
By:
----------------------------
David M. Downs
Senior Vice President
EXHIBIT B
---------
[to be attached]
EXHIBIT C
---------
The opinion of counsel, as special Delaware counsel to the Company and the Trust
to be delivered pursuant to Section 5(b)(ii) of the Underwriting Agreement shall
be substantially to the effect that:
1. The Trust has been duly created and is validly existing in good standing as a
business trust under the Delaware Business Trust Act, 12 Del. C. Section 3801 et
seq. (the "Delaware Act"), and all filings required under the laws of the State
of Delaware with respect to the creation and valid existence of the Trust as a
business trust have been made.
2. Under the Delaware Act and the Trust Agreement the Trust has the trust power
and authority to own its property and to conduct its business, all as described
in the Prospectus.
3. The Trust Agreement constitutes a valid and binding obligation of the Company
and the Property Trustee and the Delaware Trustee, and is enforceable against
the Company and the Trustees, in accordance with its terms.
4. Under the Delaware Act and the Trust Agreement, the Trust has the trust power
and authority to execute and deliver, and to perform its obligations under, the
Underwriting Agreement and to issue and perform its obligations under the
Preferred Securities and the Common Securities.
5. Under the Delaware Act and the Trust Agreement, the execution and delivery by
the Trust of the Underwriting Agreement, and the performance by the Trust of its
obligations thereunder, have been duly authorized by all necessary trust action
on the part of the Trust.
6. The Preferred Securities have been duly authorized by the Trust Agreement and
are duly and validly issued and, subject to the qualifications set forth herein,
fully paid and nonassessable undivided beneficial interests in the assets of the
Trust and are entitled to the benefits of the Trust Agreement. The Holders, as
beneficial owners of the Trust, will be entitled to the same limitations of
personal liability extended to stockholders of private corporations for profit
organized under the General Corporation Law of the State of Delaware. We note
that the Holders may be obligated pursuant to the Trust Agreement, (i) to
provide indemnity and/or security in connection with and pay taxes or
governmental charges arising from transfers or exchanges of Preferred Securities
Certificates and the issuance of replacement Preferred Securities Certificates,
and (ii) to provide security or indemnity in connection with requests of or
directions to the Property Trustee to exercise its rights and powers under the
Trust Agreement.
7. Under the Delaware Act and the Trust Agreement, the issuance of the Preferred
Securities and Common Securities is not subject to preemptive rights.
8. The Common Securities have been duly authorized by the Trust Agreement and
are duly and validly issued undivided beneficial interests in the assets of the
Trust and are entitled to the benefits of the Trust Agreement.
9. The issuance and sale by the Trust of the Preferred Securities and Common
Securities, the purchase by the Trust of the Subordinated Debentures, the
execution, delivery and performance by the Trust of the Underwriting Agreement,
the consummation by the Trust of the transactions
contemplated by the Underwriting Agreement and the compliance by the Trust with
its obligations thereunder will not violate (i) any of the provisions of the
Certificate of Trust or the Trust Agreement or (ii) any applicable Delaware law
or administrative regulation.
10. The Delaware Trustee is duly incorporated and is validly existing in good
standing as a banking corporation with trust powers under the laws of the State
of Delaware.
11. The Delaware Trustee has the requisite power and authority to execute and
deliver the Trust Agreement, and has taken all necessary corporate action to
authorize the execution and delivery of the Trust Agreement.
2
EXHIBIT D
---------
The opinion of counsel to Trust Company and Delaware Trustee to be delivered
pursuant to Section 5(b)(iii) of the Underwriting Agreement shall be
substantially to the effect that:
1. The Trust Company is duly incorporated and is validly existing in good
standing as a banking corporation with trust powers under the laws of the State
of New York.
2. The Indenture Trustee has the requisite power and authority to execute,
deliver and perform its obligations under the Indenture, and has taken all
necessary corporate action to authorize the execution, delivery and performance
by it of the Indenture.
3. The Guarantee Trustee has the requisite power and authority to execute,
deliver and perform its obligations under the Guarantee Agreement, and has taken
all necessary corporate action to authorize the execution, delivery and
performance by it of the Guarantee Agreement.
4. The Property Trustee has the requisite power and authority to execute and
deliver the Trust Agreement, and has taken all necessary corporate action to
authorize the execution and delivery of the Trust Agreement.
5. Each of the Indenture and the Guarantee Agreement has been duly executed and
delivered by the Indenture Trustee and the Guarantee Trustee, respectively, and
constitutes a legal, valid and binding obligation of the Indenture Trustee and
the Guarantee Trustee, respectively, enforceable against the Indenture Trustee
and the Guarantee Trustee, respectively, in accordance with its respective
terms, except that certain payment obligations may be enforceable solely against
the assets of the Trust and except that such enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium, liquidation, fraudulent
conveyance and transfer or other similar laws affecting the enforcement of
creditors' rights generally, and by general principles of equity, including,
without limitation, concepts of materiality, reasonableness, good faith and fair
dealing (regardless of whether such enforceability, is considered in a
proceeding in equity or at law), and by the affect of applicable public policy
on the enforceability of provisions relating to indemnification or contribution.
6. The Subordinated Debentures delivered on the date hereof have been duly
authenticated by the Indenture Trustee in accordance with the terms of the
Indenture.